JSA secures a major win for Adani Power as Supreme Court settles the law on ‘rate’ and ‘effective date’ of Carrying Cost

JSA successfully defended Adani Power Limited (“Adani”) before Supreme Court in getting a Civil Appeal filed by distribution licensees of Rajasthan dismissed. By way of the Judgment dated 23.05.2025, the Supreme Court has laid down the following position of law:

1. Rate of Carrying Cost granted as part of restitution on account of Change in Law event –Carrying Cost shall be paid at the rate of Late Payment Surcharge provided under Power Purchase Agreement (“PPA”), on compounding basis.
2. Effective date from which Carrying Cost will be paid– from the date the Change in Law occurs i.e., from the date of promulgation of the Change in Law.
3. When a Supplementary Bill for Change in Law can be raised – It can be raised only after due adjudication by the competent forum.
4. Parameters for entertaining Civil Appeal under Section 125 of Electricity Act, 2003 – When a finding is (1) perverse or (2) rendered contrary to the records, or without assigning any reason, and/or on a total misconception of the fact seen apparently on the face of the record.
5. Principle of restitution incorporated into the PPAs, must be given effect to in letter and spirit on account of Change in Law.

The Civil Appeal arose out of a judgment dated 18.04.2024 passed by the Appellate Tribunal for Electricity (“APTEL”) wherein JSA had successfully represented Adani. Accepting all legal submissions by Adani, APTEL, in such judgment, held that the levy of Evacuation Facility Charges by Coal India qualifies as a Change in Law event, entitling Adani to Carrying Cost at the rate of Late Payment Surcharge, on compounding basis.

Supreme Court’s Judgment dated 23.05.2025 is a ‘landmark’ judgment, since it settles and puts to rest the contentious issues qua ‘Rate’ and ‘Effective Date’ of payment of Carrying Cost on account of Change in Law event. This Judgment applied the principle of restitution in letter and spirit, and clarified the contractual stipulation under the PPA regarding the stage of issuing a Supplementary Bill for Change in Law.

The matter was led by Amit Kapur and Poonam Verma Sengupta (Partners), with support from Saunak Kumar Rajguru (Principal Associate), Subham Bhut and Pradyumn Amit Sharma (Associates).