Adani Power Rs 1,300 Cr Rajasthan Plea Rejected by SC

In a setback for Adani Power Rajasthan Ltd. (APRL), the Supreme Court of India rejected their plea for over ₹1,300 crore as a late payment surcharge from Jaipur Vidyut Vitran Nigam Limited (JVVNL), a power distribution company owned by the Rajasthan government. The verdict, delivered on March 19, 2024, by a bench comprising Justices Aniruddha Bose and Sanjay Kumar, highlighted that filing a miscellaneous application was not the appropriate legal path for claiming a late payment surcharge (LPS). The court further imposed a cost of ₹50,000 on APRL.

A Long-Simmering Dispute with Historical Context

This case is the latest chapter in a long-running dispute between APRL and JVVNL regarding power tariffs and payment terms. In 2020, the Supreme Court upheld rulings by the Rajasthan Electricity Regulatory Commission and the Appellate Tribunal for Electricity. While the court allowed APRL to receive a compensatory tariff from JVVNL, it denied their claim for a late payment surcharge. This 2020 decision suggests a potential disagreement over the terms of the power purchase agreement (PPA) between the two parties. PPAs typically define the tariff rate, payment schedule, and potential penalties for late payments.

₹1,300 Crore Claim and Improper Legal Maneuver

Apparently unsatisfied with the 2020 verdict, APRL attempted to revive their claim for the late payment surcharge through a miscellaneous application. The Supreme Court, however, saw this as an improper legal recourse, emphasizing the need to follow established procedures for such claims. This detail highlights the importance of adhering to proper legal channels within the complex regulatory framework of the Indian power sector.

Impact on the Power Sector

The Supreme Court’s decision has significant ramifications for the power sector in India. It underscores the importance of clear and well-defined PPAs to minimize disputes between power generators and distribution companies. Additionally, it emphasizes the need for established legal procedures to resolve disagreements regarding tariffs and penalties. This verdict may prompt discussions about streamlining dispute resolution mechanisms within the sector to ensure efficient and cost-effective outcomes for all stakeholders.

The outcome of this case is likely to be closely monitored by other players in the Indian power sector, as it sets a precedent for handling similar disputes in the future.

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