The Supreme Court has slammed the door on Jaipur Vidyut Vitran Nigam Ltd. (JVVNL), upholding Adani Power Rajasthan Ltd.’s (APRL) right to be paid for increased coal costs imposed by a regulatory twist in 2017. The ruling wasn’t just about money—it was about fairness etched into contract law.
At the heart of this power tussle was a fixed-tariff deal: APRL had agreed to supply 1200 MW to JVVNL. But then Coal India Ltd. issued a surprise notice in December 2017, slapping an additional ₹50 per tonne as Evacuation Facility Charges (EFC). APRL’s costs surged, and it turned to the Power Purchase Agreement’s (PPA) “Change in Law” clause—its built-in shock absorber for exactly this kind of regulatory jolt.
The Appellate Tribunal for Electricity had already sided with APRL. JVVNL tried to overturn it in the Supreme Court. That attempt has now failed.
In a no-nonsense judgment, the bench led by Justices M.M. Sundresh and Rajesh Bindal made it clear: if a state entity makes a post-contract move that inflates costs, the generator deserves to be made whole again. “Restitution” is the guiding light here—put the aggrieved party back in the same position as if the regulatory curveball had never landed.
The Court didn’t stop at compensation alone. It affirmed APRL’s right to collect a Late Payment Surcharge (LPS) too—specifically, 2% above the State Bank’s benchmark lending rate, compounded monthly. Why? Because financial delays cost money, and that loss must be repaid in full.
The judgment echoed precedent, notably GMR Warora Energy Ltd. v. CERC, where a similar hike in operating costs due to state-mandated levies was also held to be a “change in law” deserving restitution.
The message is now unmistakable: government-imposed cost escalations, if sprung after contract finalization, cannot be quietly absorbed by the generator. The price of power, like the contracts that govern it, must honor both law and equity.
With this ruling, the Supreme Court not only closed the case—it sent a clear signal to all power purchasers and suppliers across the country: contracts aren’t just paper promises; they’re legally binding shields against arbitrary shocks.