APTEL recognizes unforeseeable, uncontrollable and unprecedented depreciation in Indian Rupee vis-à-vis US Dollar as ground for exercising general regulatory powers under Section 79(1)(b) of Electricity Act, 2003 by CERC to grant relief to Sasan Power

JSA represented Sasan Power Ltd. (“SPL”) in Appeal No. 222 of 2021 before Hon’ble Appellate Tribunal for Electricity (“Hon’ble APTEL”) challenging Order dated 25.01.2021 (“Impugned Order”) passed by the Ld. Central Electricity Regulatory Commission (“Ld. CERC”) in Petition No. 71/MP/2019 (“Petition 71”).

On 14.11.2022, Hon’ble APTEL by its Judgment in Appeal No. 222 of 2021 has inter alia:

  • allowed the Appeal filed by SPL and set aside Order dated 25.01.2021 passed by Ld. CERC in Petition 71; and
  • directed Ld. CERC to “pass necessary consequential order in the light of observation and conclusions recorded by us in the foregoing paragraphs.”


Salient findings of Hon’ble APTEL in Judgment dated 14.11.2022 are as under:-

  • Main issue was whether SPL is eligible for any compensation due to Foreign Exchange Rate Variation (“FERV”) vis-à-vis occurrence of Force Majeure Events (“FME”) or an event akin to FME due to steep depreciation of Indian Rupee (“INR”) as against the United States Dollar (“USD”) by: –
    • invocation of FME provision in the Power Purchase Agreement (“PPA”); or through
    • regulatory powers vested with the Ld. CERC under Section 79(1)(b) of the Electricity Act, 2003 (“Electricity Act”).
  • Depreciation in present case is unprecedented, unforeseeable and uncontrollable as CAGR of depreciation of INR vis-à-vis USD from July 2007 till date has been nearly 4.7% per annum, contrary to the Escalation Index of 0.74 % notified by Ld. CERC.
  • When neither bidding guidelines nor bid document provides any allocation of risk for an unprecedented, unforeseen and uncontrollable steep depreciation of INR vis-à-vis the USD, Ld. CERC can exercise its regulatory powers under Section 79(1)(b) of Electricity Act to grant relief by striking a judicious balance between the generator and the distribution licensee / consumers.
  • Hon’ble APTEL relied upon its earlier Judgment dated 31.05.2019 in Appeal No. 241 of 2016 titled as Adani Power Maharashtra Ltd. vs. Maharashtra Electricity Regulatory Commission & Ors. to hold that Hon’ble APTEL, in special circumstances, has the right to recast the relief by keeping justice, equity, and good conscience in mind.

Hon’ble APTEL has held that depreciation of INR vis-à-vis USD from July 2007 till date is unprecedented, unforeseeable and uncontrollable, and hence relief must be given to Sasan Power Ltd.

JSA Team comprised Lead Partner & Joint Managing Partner Amit Kapur, Partner – Rahul Kinra, Associate – Aditya Ajay, and Associate – Girdhar Gopal Khattar.