Adani Power's plea for Late Payment Surcharge

Supreme Court: In a miscellaneous application by Adani Power Rajasthan Limited (APRL), sought payment of Rs. 1376.35 crore towards Late Payment Surcharge (‘LPS’) from Jaipur Vidyut Vitran Nigam Ltd. and two other distribution companies (‘Rajasthan Discoms’), the Division Bench of Aniruddha Bose and Sanjay Kumar, JJ. dismissed the application and imposed costs of Rs. 50000/-. The Court said that a post disposal application for modification and clarification of the order of disposal shall lie only in rare cases, where the order passed by the Court is executory in nature and the directions of the Court may become impossible to be implemented because of subsequent events or developments.

The crux of the Dispute

A Power Purchase Agreement dated 28-01-2010 (‘PPA-2010’) was entered into between the Rajasthan Discoms and the APRL. As per the PPA-2010, the APRL was to supply electricity to the Rajasthan Discoms, generated by the APRL itself. It was postulated under the PPA-2010 that domestic coal would be the primary source of energy, while imported coal was to be used as a backup option. APRL’s complaint was that, due to non-availability of sufficient domestic coal, it could not be allocated a domestic coal linkage by the Government of India, and it was compelled to rely on imported coal from Indonesia, which had a higher cost. A claim for compensation for loss, caused on account of non-supply of domestic coal, was raised by APRL before the Rajasthan Electricity Regulatory Commission (‘RERC’), invoking the change in law clause of the PPA-2010. The change in law was one of the conditions under the PPA-2010, for which tariff adjustment payment could be made by the seller of electricity following the procedure stipulated. Vide order dated 17-05-2018, RERC held that APRL would be entitled to relief on account of change in law, which was held to be the difference between actual landed cost of alternative/imported coal (as certified by the auditor) and actual landed cost of domestic linkage coal.

The Appellate Tribunal for Electricity (‘APTEL’) found that APRL’s claim based on ‘change in law’ was valid and opined that APRL was entitled to compensation for the loss caused to it because of change in law under a subsequent coal supply scheme, termed as the SHAKTI scheme, which failed to provide domestic coal linkage. The Rajasthan Discoms had appealed against the common decision of APTEL before the Court. On 31-08-2020, the Court partly allowed the appeals and regarding the change in law, the Court concurred with the RERC and APTEL. However, regarding the late payment surcharge, the Court said that that in order to do complete justice and to reduce the liability of the Rajasthan Discoms payment of 2 per cent more than the applicable SBAR per annum with monthly rest would be on the higher side. Therefore, the Rajasthan Discoms were directed to pay interest/late payment surcharge as per the applicable SBAR for the relevant years, which should not exceed 9 per cent per annum.

Analysis and Decision

The Court said that the three-Judge Bench had already examined the question of LPS and by taking out a Miscellaneous Application, the APRL could not ask for reliefs which were not granted in the main judgment dated 31-08-2020, itself.

The Court referred to Ghanashyam Mishra & Sons (P) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd., (2021) 9 SCC 657 wherein it was said that there is a growing tendency of indirectly seeking review of the orders of the Court by filing applications either seeking modifications or clarifications of the orders passed by the Court. It was opined that such applications are a total abuse of process of law. On perusal of the Rule 6 of Order LV of the Supreme Court Rules, 2013, the Court said that maintainability of the present application could not be explained by invoking the inherent power of the Court as APRL did not apply for review of the main judgment and in the contempt action, it failed to establish any willful disobedience of the main judgment and order on account of non-payment of LPS.

The Court said that APRL sought withdrawal of the application on the last date of hearing, however, it was decided not to permit such simpliciter withdrawal, as the Rajasthan Discoms sought imposition of costs. The Court said that even if an applicant applies for withdrawal of an application, in exceptional cases, it would be within the jurisdiction of the Court to examine the application and pass appropriate orders and in the present proceedings, an important question of law arose regarding the jurisdiction of the Court to entertain an application taken out in connection with a set of statutory appeals which stood disposed of. The Court also relied on Supertech Ltd. v. Emerald Court Owner Resident Welfare Assn., (2023) 10 SCC 817 wherein the Court examined the maintainability of miscellaneous applications ‘for clarification, modification or recall’ and said that ratio of the said judgment was applicable to the present proceedings.

Regarding the question that when such post-disposal miscellaneous applications can be entertained after a matter is disposed of, the Court said that a post disposal application for modification and clarification of the order of disposal shall lie only in rare cases, where the order passed by the Court is executory in nature and the directions of the Court may become impossible to be implemented because of subsequent events or developments. In the matter at hand, the Court said that it became functus officio and did not retain jurisdiction to entertain an application after the appeal was disposed of by the judgment of a three-Judge Bench of the Court on 31-08-2020. The present application was not an application for correcting any clerical or arithmetical error, nor an application for extension of time.

The Court said that after the three-Judge Bench decision was delivered, APRL did not file any petition for review and the review petition by the Rajasthan Discoms was dismissed. The Court noted that in the contempt action instituted by the APRL, the question about payment of LPS was raised, but the Court found that the same was not the subject in question in the contempt proceedings regarding which no direction had been issued by the Court. The Court viewed that a miscellaneous application was not the proper legal course to make such a demand and such a relief could not be asked for in a miscellaneous application which was described in the course of hearing as an application for clarification.

The Court said that prima facie opinion in the order dated 14-12-2022, that APRL may be entitled to LPS as per Article 8.3.5 of PPA-2010, at least from 31-08-2020, till the actual payment, did not have any binding effect at the hearing stage.

Thus, the Court dismissed the present application and imposed costs of Rs. 50,000/- to be paid by APRL to the Supreme Court Legal Aid Committee.

[Jaipur Vidyut Vitran Nigam Ltd. v. Adani Power Rajasthan Ltd., 2024 SCC OnLine SC 313, Decided on: 18-03-2024]

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