GMR WARORA ENERGY LIMITED vs. CENTRAL ELECTRICITY REGULATORY COMMISSION

REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.11095 OF 2018 GMR WARORA ENERGY LIMITED ...APPELLANT (S) VERSUS CENTRAL ELECTRICITY REGULATORY COMMISSION (CERC) & ORS. ...RESPONDENT (S) WITH CIVIL APPEAL NOS.11910-11911 OF 2018 CIVIL APPEAL NOS.12055-12056 OF 2018 CIVIL APPEAL NO.3123 OF 2019 CIVIL APPEAL NO.5372 OF 2019 CIVIL APPEAL NO. 6641 OF 2019 CIVIL APPEAL NOS. 2935-2936 OF 2020 CIVIL APPEAL NOS. 4628-4629 OF 2021 CIVIL APPEAL NOS. 5583-5584 OF 2021 CIVIL APPEAL NO. 39 OF 2021 CIVIL APPEAL NO. 5005 OF 2022 Signature Not Verified Digitally signed by Narendra Prasad Date: 2023.04.20 11:59:43 IST Reason: CIVIL APPEAL NO. 4089 OF 2022 1 Index I. INTRODUCTION…………………………………………….. Paras 1 to 5 II. BRIEF FACTS AND SUBMISSIONS…………………….. Paras 6 to 91 III. ADDITIONAL ISSUES……………………………………… Para 92 IV. CONSIDERATION…………………………………………… Paras 93 to 130 V. CONCLUSION………………………………………………… Paras 131 to 168 VI. EPILOGUE…………………………………………………….. Paras 169 to 184 List of abbreviations:

2 J U D G M E N T B.R. GAVAI, J. I. INTRODUCTION 1. When we heard this batch of Electricity appeals, it was agreed between all the parties that this Court should first decide Civil Appeal No. 684 of 2021 ( Maharashtra State Electricity Distribution Company Limited v. Adani Power Maharashtra 1 Limited & Ors. ) [“ MSEDCL v. APML & Ors. ” for short] and Civil Appeal No. 6927 of 2021 ( Maharashtra State Electricity Distribution Company Limited v. GMR Warora Energy Ltd. & ors. ), inasmuch as three of the issues involved in all the appeals in the batch were common. It was submitted that those two appeals could be decided by deciding the three common issues. However, insofar as the other appeals are concerned, it was submitted that, in addition to the three common issues, certain 1 2023 SCC OnLine 233 3

4 3. After extensively hearing all the learned counsel for the rd parties, vide the judgment and order dated 3 March 2023 in the case of MSEDCL v. APML & Ors. (supra), this Court decided those two appeals after considering the aforesaid three issues. 4. The first issue was answered by this Court, holding that the ‘Change in Law’ relief for domestic coal shortfall should be on ‘actuals’, i.e. as against 100% of normative coal requirement assured in terms of the NCDP, 2007. Insofar as the second issue is concerned, it was held that the Station Heat Rate (“SHR” for short) and Auxiliary consumption should be considered as per the Regulations or actuals, whichever is lower. The third issue was answered holding that the Start date for the ‘Change in Law’ st event for the NCDP, 2013 is 1 April 2013. 5. After we decided those appeals, we have heard the present appeals in which some of the issues which were decided by us vide the said judgment in the case of MSEDCL v. APML & Ors. (supra) also arose for consideration along with other issues. However, most of the issues in all these appeals are overlapping 5 and, therefore, we propose to decide these appeals by this common judgment. II. BRIEF FACTS AND SUBMISSIONS Civil Appeal No. 11095 of 2018 and Civil Appeal Nos. 11910- 11911 of 2018 6. These cross appeals challenge the common judgment and th order dated 14 August 2018 passed by the learned Appellate Tribunal for Electricity, New Delhi (hereinafter referred to as “APTEL”) in Appeal No. 111 of 2017 & I.A. No.450 of 2018 and in Appeal No.290 of 2017 & I.A. No.519 of 2017. 7. Civil Appeal No.11095 of 2018 is filed by GMR Warora Energy Ltd. (hereinafter referred to as “GWEL”/”Generator”) to the extent it was denied compensatory benefits on certain components on the ground of ‘Change in Law’. 8. Civil Appeal Nos. 11910-11911 of 2018 have been filed by DNH Power Distribution Co. Ltd. (DPDCL) (hereinafter referred to as “DNH-DISCOM”), being aggrieved by the order of the learned 6 APTEL accepting the claim of GWEL on certain issues and holding the same to be ‘Change in Law’. 9. The facts, in brief, giving rise to these appeals are as under: 10. GWEL had set up a Thermal Power Station at Warora, District Chandrapur in the State of Maharashtra with an installed capacity of 600 MW (2 x 300 MW). The Commercial th Operation Date (“COD” for short) of Unit 1 was 19 March 2013 st and that of Unit 2 was 1 September 2013. 11. GWEL had entered into long term Power Purchase Agreements (“PPAs” for short) with DNH-DISCOM for supply of 200 MW power to Maharastra State Electricity Distribution th Company Limited (“MSEDCL” for short) on 17 March 2010 st [“MSEDCL PPA”) and for supply of 200 MW power on 21 March 2013 (“DNH PPA”), after it emerged as the successful bidder for supply of power to MSEDCL/ DNH-DISCOM. The Scheduled th delivery date under the MSEDCL PPA was 17 March 2014, st whereas under the DNH PPA, it was 1 April 2013. GWEL is also supplying 150 MW power from its power plant to Tamil Nadu 7

8 st 15. Vide Order dated 1 February 2017, certain claims were allowed and certain claims were disallowed by the CERC. 16. The claims which were allowed by the CERC are thus: “i. Increase in CVD from 8% to 10% and 10% to 12%; ii. Increase in Excise Duty; iii. Increase in Service Tax;

9 ii. Design changes in Coal Handling Plant (CHP); iii. Increase in the rate of Minimum Alternate Tax (MAT); iv. Increase in Busy Season Surcharge and Development surcharge on transportation of coal by Indian Railways (IR); v. Increase in sizing charges and surface transportation charges by Coal India Ltd. (CIL); vi. Increase in operating cost on account of specification of coal quality to be used for the TPS; vii. Change from UHV to GCV based pricing of coal; viii. Incremental increase in Interest on

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13 Development Surcharge, MoEF Notification on coal quality, Change in NCDP and Carrying Cost as ‘Change in Law’ events. He submits that when the Generator had submitted its bid, it was aware that there was a likelihood of variations on certain payments to be made and the same were factored in while submitting the bid. It is, therefore, submitted that the learned APTEL erred in granting ‘Change in Law’ benefits on the said issues. Civil Appeal Nos. 4628-4629 of 2021 26. These appeals have been filed by Uttar Haryana Bijli Vitran Nigam Limited and Dakshin Haryana Bijli Vitran Nigam Limited (hereinafter referred to as “Haryana Discoms”) challenging the th common judgment and order dated 7 June 2021 passed by the learned APTEL in Appeal No.158 of 2017 & I.A. No.575 of 2018 and Appeal No. 316 of 2017. Appeal No.158 of 2017 & I.A. No.575 of 2018 were filed by Adani Power (Mundra) Limited (hereinafter referred to as “AP(M)L”), being aggrieved by the order th passed by the CERC dated 6 February 2017, whereby the CERC 14 had denied certain claims for compensation on certain components on account of ‘Change in Law’, whereas Appeal No.316 of 2017 was filed by Haryana Discoms challenging grant of claim of compensation on certain components on the ground of ‘Change in Law’. 27. The Chart of claims which were allowed and disallowed by the CERC is as under: “107. Based on the above analysis and decisions, the summary of our decision under the Change in Law during the operating period of the project is as under:

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.” 28. Being aggrieved by the order of the CERC, cross-appeals were filed by AP(M)L so also by Haryana Discoms before the learned APTEL. The Haryana Discoms challenged that part of the order of the CERC which allowed claim on components on the ground of ‘Change in Law’, whereas AP(M)L challenged that part of the order of the CERC which disallowed its claim on various components. 17

18 33. Ms. Poorva Saigal submits that the learned APTEL grossly erred in reversing the well-reasoned findings of the CERC on the issue of Busy Season Surcharge and Developmental Surcharge on transportation of coal. She, therefore, submits that the finding of the learned APTEL with regard to the same needs to be set aside. 34. Dr. A.M. Singhvi, on the contrary, submits that the Busy Season Surcharge as well as the Developmental Surcharge are revised as per the Notifications/Circulars issued by the Ministry of Railways and as such, they would come within the definition of ‘Change in Law’. Civil Appeal Nos. 12055-12056 of 2018 35. These appeals, filed by Jaipur Vidyut Vitran Nigam Ltd., Ajmer Vidyut Vitaran Nigam Ltd. and Jodhpur Vidhyut Vitaran Nigam Ltd. (hereafter referred to as “Rajasthan Discoms”), th challenge the common judgment and order dated 14 August 2018, passed by the learned APTEL in Appeal No. 119 of 2016 & 19

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the appeal of the Rajasthan Discoms and partly allowed the appeal of APRL allowing its claims on the ground of ‘Busy Season 21 Surcharge’, ‘Development Surcharge’, ‘Port Congestion Surcharge, ‘Forest Tax’ and ‘Carrying Cost’. Being aggrieved thereby, the Rajasthan Discoms have approached this Court. 40. We have heard Mr. V. Giri, learned Senior Counsel appearing on behalf of the Rajasthan Discoms and Dr. A.M. Singhvi, learned Senior Counsel appearing on behalf of the APRL. 41. Mr. V. Giri submits that clause 10 in the PPA is referable only to taxes under Article 268 of the Constitution of India. He submits that the learned APTEL has, therefore, erred in allowing ‘Change in Law’ benefits on the issues related to Busy Season Surcharge, Development Surcharge, Port Congestion Charges, Forest Tax and Carrying Cost which are not taxes referable to Article 268 of the Constitution. 42. Dr. Singhvi made arguments on similar lines as have been made in the other appeals. Civil Appeal Nos. 2935-2936 of 2020 43. These appeals have been filed by the Rajasthan Discoms and Rajasthan Urja Vikas Nigam Ltd. challenging the common 22

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28 submitted that the change in mode of transportation from rail to road was on account of the notification issued by the MCL. Learned counsel submits that, since, on account of these notifications, the cost of transportation of coal increased, applying the restitutionary principle, the CERC as well as the learned APTEL ought to have granted claims on the basis of ‘Change in Law’. He further submits that increase in levy of MAT has also been increased by the Union of India and, as such, the same would also amount to ‘Change in Law’. It is further submitted that interest on working capital was also increased on account of the orders of the instrumentalities of the State and, as such, compensation also ought to have been granted for the same. 57. Learned counsel for the Bihar Discoms submits that the CERC as well as the learned APTEL have grossly erred in allowing claims on certain components on the ground of ‘Change in Law’. 29

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33 th 66. Upon remand, the CERC passed order dated 16 September 2019, thereby granting compensation on certain components on the ground of ‘Change in Law’ including carrying cost. 67. Contending that the order passed by the CERC did not give effect to the ‘Change in Law’ components as directed by the learned APTEL, an appeal being Appeal No. 423 of 2019 came to be preferred by GKEL before the learned APTEL. 68. Bihar Discoms had also filed an appeal being Appeal No.173 of 2021, before the learned APTEL, being aggrieved by the benefits which were granted by the CERC. 69. By the impugned order, the learned APTEL held that the GKEL was entitled to recover expenditure involved in procurement of alternate coal due to shortfall in domestic coal supply corresponding to scheduled generation pertaining to the obligations under the Bihar PPA. The learned APTEL held that this was required to be done in order to restore the appellant- GKEL to the same economic position as before as if no ‘Change in Law’ event had occurred. 34 70. We have heard Ms. Anushree Bardhan, learned counsel appearing on behalf of the appellant-Bihar Discoms and Mr. Maninder Singh, learned Senior Counsel appearing on behalf of GKEL. 71. Ms. Anushree Bardhan submits that the learned APTEL ought to have granted benefit of ‘Change in Law’ restricting it to shortfall for only 894.5 MW, which was the amount specified in the PPA, and not for the entire 1050 MW, which is the installed capacity. She further submits that the learned APTEL had also erred in granting add on premium on account of extension of tapering linkage by three years. 72. Shri Maninder Singh, learned Senior Counsel submits that insofar as the first issue with regard to shortfall of coal supply is concerned, the same is squarely covered by the judgments of this Court in the cases of Energy Watchdog v. Central Electricity 2 Regulatory Commission and others , Jaipur Vidyut Vitaran 2 (2017) 14 SCC 80 35 Nigam Ltd. and others v. Adani Power Rajasthan Limited 3 and another (hereinafter referred to as “ Adani Rajasthan case ”) and MSEDCL v. APML & Ors. (supra). 73. He further submits that the delay in operationalization of the captive mines was not on account of any reason attributable to GKEL . He submits that, since the allotment of coal blocks was cancelled on account of the judgment of this Court in the case of 4 Manohar Lal Sharma v. The Principal Secretary & Ors. , GKEL was also entitled for the benefit for the said period. 74. Insofar as Busy Season Surcharge is concerned, he submits that there is a concurrent finding of fact. He submits that, in any case, the said charges are issued by the Railway Board by issuing Notifications/Circulars. He submits that since the Railway is an instrumentality of the State, both the CERC and the learned APTEL have concurrently held that the Generator would be entitled to compensation on the ground of ‘Change in Law’. 3 2020 SCC Online SC 697 4 (2014) 9 SCC 516 and 2014 (9) SCC 614 36 Civil Appeal No. 39 of 2021 75. This appeal filed by the DNH-DISCOM arises out of the th judgment and order dated 13 October 2020, passed by the learned APTEL in Appeal No.283 of 2019 & I.A. Nos. 2188 & 1229 of 2019, thereby dismissing the said appeal arising out of the th judgment and order passed by the CERC dated 16 May 2019. 76. The DNH-DISCOM had initiated a competitive bidding process through issuance of a Request for Proposal (“RFP” for short) in March 2012 for procurement of power on Long Term Basis under Case-1 bidding procedure. As per the RFP, the cut- st off date was 1 June 2012. 77. The respondent-GWEL emerged as the successful bidder for supplying Aggregated Contracted Capacity of 200 MW at a levelized tariff of Rs.4.618 per Unit. 78. Accordingly, Letter of Intent (LoI) was issued by DNH- th DISCOM on 14 August 2012. An application/petition being Petition No.87/2012 came to be filed before the Joint Electricity Regulatory Commission (hereinafter referred to as “Joint 37 Commission”) for approval of the PPA and adoption of tariff. GWEL was also joined as a co-petitioner in the said Petition. The th Joint Commission, vide order dated 19 February 2013, approved the PPA. Accordingly, the PPA came to be executed on st 21 March 2013. 79. GWEL filed Petition No. 8/MP/2014 before the CERC seeking compensation on certain components on the ground of ‘Change in Law’. The same was decided by the CERC vide order st dated 1 February 2017. Aggrieved thereby, both the appellant- DNH-DISCOM and the respondent-GWEL filed appeals before the learned APTEL. In appeal, the learned APTEL remanded the th matter to the CERC vide order dated 14 August 2018 for considering certain issues. Being aggrieved by the order dated th 14 August 2018, the appellant-DNH-DISCOM filed an appeal, being Civil Appeal No.11910 of 2018, before this Court. The said appeal is also being decided in the present batch of appeals, by this common judgment. 38 th 80. On remand, the CERC passed an order dated 16 May 2019 and allowed the claim of GWEL/Generator on the ground of ‘Change in Law’ occurring on account of the enforcement of the ‘Scheme for Harnessing and Allocating Koyala (Coal) Transparently in India’ (“SHAKTI Policy” for short). Being aggrieved thereby, DNH-DISCOM had filed an appeal before the learned APTEL. As stated herein above, the same was dismissed by the learned APTEL vide the impugned judgment. 81. We have heard Mr. C.A. Sundaram, learned Senior Counsel appearing on behalf of the DNH-DISCOM and Mr. Niranjan Reddy, learned Senior Counsel appearing on behalf of the respondent-GWEL. 82. Mr. C.A. Sundaram submits that, from the presentation which was given by the GWEL, it was apparent that it was given on the basis that coal supply would be restricted only to 65%. He submits that, as such, the grant of benefit on account of ‘Change in Law’ on the ground that there was 100% assurance by CIL is 39 not permissible. He, therefore, submits that the judgment and order of the learned APTEL deserves to be set aside to that extent. 83. Mr. Niranjan Reddy, on the contrary, submits that the bid th of GWEL was submitted on 8 June 2012, on which date NCDP 2007 was in force. He submits that, subsequently, the NCDP st 2007 was modified on 31 July 2013 and thereafter SHAKTI nd Policy has come into effect on 22 May 2017 and, as such, judgment and order of the learned APTEL warrants no interference. Civil Appeal No. 5005 of 2022 and Civil Appeal No. 4089 of 2022 84. These appeals challenge the common judgment and order nd dated 22 March 2022 passed by the learned APTEL in Appeal No. 118 of 2021 and 40 of 2022, filed by Rattan India Power Limited (hereinafter referred to as “Rattan India”) and Adani Power Maharashtra Limited (for short, “APML”) respectively, st rd thereby challenging the orders dated 1 January 2019 and 3 August 2018, passed by Maharashtra Electricity Regulatory 40 Commission (hereinafter referred to as ‘MERC’) in Case No. 227 of 2018 and Case No. 124 of 2018 respectively. 85. The facts in brief giving rise to the present appeals are as under: nd Rattan India has entered into PPAs dated 22 April 2010 th and 5 June 2010 with MSEDCL for supply of 1200 MW aggregate power at levelized tariff of Rs.3.260 KWH for a period of 25 years. It filed a petition before MERC, being Case No. 227 of 2018, claiming compensation on the ground of ‘Change in Law’ th occurring on account of the circular dated 19 December 2017 issued by CIL, vide which it levied the Evacuation Facility Charges (for short, “EFC”). The same was rejected by MERC, vide st order dated 1 January 2019. A similar petition being Case No. 124 of 2018 was also filed by APML, raising a similar claim before MERC, which was also rejected by MERC, vide its earlier order rd dated 3 August 2018. 86. Being aggrieved thereby, Rattan India had filed an Appeal No. 118 of 2021 and APML had preferred an Appeal No. 40 of 41 2022. By the impugned order, the learned APTEL had held EFC th imposed by CIL vide Circular dated 19 December 2017 to be a ‘Change in Law’ event and, accordingly, held the Generators to be entitled to compensation on the said ground. Being aggrieved thereby, the MSEDCL has preferred these appeals. 87. We have heard Shri Balbir Singh, learned Additional Solicitor General (for short, “ASG”) and Shri G. Saikumar, learned counsel appearing on behalf of the appellant and Shri Sajan Poovayya, learned Senior Counsel for the respondents in Civil Appeal No. 5005 of 2022 and Shri Vishrov Mukherjee, learned counsel appearing on behalf of the respondents in Civil Appeal No. 4089 of 2022. 88. Shri Balbir Singh, relying on Clause 9.1 of the Coal Supply th Agreement (for short, “CSA”) dated 28 December 2012 entered into between Southeastern Coalfields Limited and APML, submitted that CSA defines as to what shall be the base price of coal. He submitted that Clause 9.2 of the said CSA specifically provides for other charges which are permissible. Relying on 42 Clause 9.4 of the CSA, he submitted that in all cases, the entire freight charges, irrespective of the mode of transportation of coal supplied, shall be borne by the purchaser. The learned ASG submitted that the EFC does not partake the character of a statutory levy. However, he submitted that, in any case, it does not have the force of law. He, therefore, submitted that APTEL th has grossly erred in holding the circular of CIL dated 19 December 2017 to qualify as ‘Change in Law’. 89. Shri Singh further submitted that the direction to pay the carrying cost at the rate provided for Late Payment Surcharge (for short, “LPS”) is also not permissible in law. He submitted that this Court, in Adani Rajasthan case (supra), has directed the carrying cost to be paid at the rate of 9% and as such, in the present case, it ought to have been directed to be paid at the same rate. 90. Shri Singh also relies on the judgment of this Court in the case of Ashoka Smokeless Coal India (P) Limited and Others 43 5 v. Union of India and Others in support of the proposition that CIL is free to fix the price of coal and that the Union of India has no control over it. 91. Shri Poovayya, on the contrary, submitted that the levy is mandatory in nature. Unless the said levies are paid, the coal would not be supplied. He further submitted that since the CIL is an instrumentality of the Government, the order issued by it would amount to a law within the definition of “Law” as defined in the PPA. He further submitted that insofar as the carrying cost is concerned, there is a specific provision in the PPA in Article 11.8.3, which is binding on the parties. He submitted that on account of non-payment of the dues of the generating companies by DISCOMS, the generating companies are required to borrow the funds at the market rate and as such, applying the restitutionary principle, it is entitled to carrying cost as provided under the agreement. 5 (2007) 2 SCC 640 44

45 by various State Governments would also fall under ‘Change in Law’ events or not. The other question that requires considerations is, as to whether at what rate the Generators would be entitled to ‘carrying cost’. IV. CONSIDERATION 93. For appreciating the rival submissions, we will have to construe the term “Law”, which has been defined in the PPAs, which reads thus: ““Law” means, in relation to this Agreement, all laws including Electricity Laws in force in India and any statute, ordinance, regulation, Notification or code, rule, or any interpretation of any of them by an Indian Governmental Instrumentality and having force of law and shall further include all applicable rules, regulations, orders, Notifications by an Indian Governmental Instrumentality pursuant to or under any of them and shall include all rules, regulations, decisions and orders of the CERC and the MERC.” 94. Perusal of the definition of the term “Law” itself would clearly show that the term “Law” would mean all laws including 46

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Watchdog (supra) has been approved by a Bench of three learned Judges of this Court in Adani Rajasthan case (supra) and also followed by this Court when the two linked matters out of this batch of appeals were decided by this Court in the case of MSEDCL v. APML & Ors. (supra). It cannot be denied that CIL is an instrumentality of the Government of India and its orders, insofar as price of fuel are concerned, are binding on all its subsidiaries. 97. It will further be relevant to refer to Clause 9.0 of the CSA, which reads thus: 48

49 100. Having held thus, we will now consider some of the components which are common in most of these appeals. Busy Season Surcharge, Development Surcharge And Port Congestion Surcharge 101. Insofar as increase in Busy Season Surcharge, Development Surcharge on transportation of coal, and Port Congestion Surcharge by the Indian Railways are concerned, the learned APTEL had found that the Indian Railways is an instrumentality of the State. It has been found that the Busy Season Surcharge, Development Surcharge and Port Congestion Surcharge were increased from time to time vide Circulars/Notifications issued by the Ministry of Railways, through the Railway Board. 102. A Constitution Bench of this Court, in the case of Railway Board, Government of India v. M/s Observer Publications (P) 6 Ltd. , has held the Railway Board to be a State within the meaning of Article 12 of the Constitution of India. 6 (1972) 2 SCC 266 50 103. As such, no error could be found in the finding of the learned APTEL that the revision of charges to be paid on Busy Season Surcharge, Development Surcharge and Port Congestion Charges from time to time by the ‘Railway Board’ would come within the ambit of ‘Change in Law’. MoEF Notification on Coal Quality 104. Insofar as MoEF notification on coal quality is concerned, nd the MoEF, vide Notification dated 2 January 2014, i.e. st subsequent to the particular cut-off date, i.e. 1 June 2012, has mandated power projects to use beneficiated coal with ash content lower than 34%. The draft notification of MoEF dated th nd 11 July 2012 culminated into the final Notification dated 2 January 2014. By no stretch of imagination, can it be said that MoEF is not an instrumentality of the State. 105. By the said Notification, MoEF has mandated power projects to use beneficiated coal with ash content lower than 34%. Admittedly, prior to the cut-off date, the same was not a th requirement. It is thus clear that the said Notifications dated 11 51 nd July 2012 and 2 January 2014 would amount to “Change in Law’. As such, no fault can be found with the finding of the learned APTEL that the same would amount to ‘Change in Law’. Shortfall in Linkage Coal due to Change in NCDP 106. Insofar as shortfall in linkage coal due to changes in the NCDP issued by the Ministry of Coal (“MoC” for short) is concerned, the issue is no more res integra . This Court in the case of Energy Watchdog (supra) so also in Adani Rajasthan case (supra) and recently in MSEDCL v. APML & Ors. (Supra) has held that the change in NCDP would amount to ‘Change in Law’. Forest Tax 107. Insofar as Forest Tax is concerned, perusal of the material placed on record would reveal that, as on the cut-off date, there was no Forest Tax applicable on coal mined and transported from South Eastern Coalfields Limited (“SECL” for short) mines located in Forest area. For the first time, vide Notification of the Chhattisgarh State Government, Department of Forest, under 52 the provisions of Chhattisgarh Transit (Forest Produce Rule) 2001, a fee at the rate of Rs.7 per ton was levied. Undisputedly, the said Notification is issued by the Forest Department of the Government of Chhattisgarh, which is an instrumentality of the State. As such, no error can be found with the finding of the learned APTEL in that regard. Add on Premium Price 108. Insofar as ‘Add on premium price’ is concerned, undisputedly, ‘add on premium’ was required to be paid on account of cancellation of captive coal blocks and inordinate delay on account of Go-No-Go policy. As such, it cannot be said that the reasoning adopted by the learned APTEL is perverse and arbitrary. Evacuation Facility Charges (EFC) 109. Undisputedly, EFC was imposed by CIL vide its Circular th dated 19 December 2017. 110. As already discussed herein above, CIL is an instrumentality of the State. It is thus clear that, on the cut-off 53 date, there was no requirement of EFC, which has been brought th into effect only on 19 December 2017. As such, the circular of th CIL dated 19 December 2017 would also amount to ‘Change in Law’. 111. As discussed herein above, it is also not in dispute that EFC has been paid by the generators while paying the base price, other charges and statutory charges at the time of delivery of coal. As such, no interference would be warranted with the said finding. 112. That leaves us with the issue with regard to carrying cost. Carrying Cost 113. This is the issue on which there is a serious contest between the DISCOMS and the Generators. 114. On one hand, it is the submission of the DISCOMS that since there is no description of the same in the PPAs, the rate for granting carrying cost should be a reasonable rate. On the contrary, it is the submission of the Generators that there is a specific provision in the PPAs, which provides that the carrying 54

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56 be paid by the other party. Article 11.8.3 of the PPA also provides that in the event of delay in payment of a supplementary bill by either party beyond one month from the date of billing, a late payment surcharge shall be payable at same terms applicable to the monthly bill in Article 11.3.4. 117. This Court in the case of Uttar Haryana Bijli Vitran Nigam Limited (UNHVNL) and another v. Adani Power 7 Limited and others , after considering the provisions of Article 11, which deals with ‘Billing’ and Article 13, which deals with ‘Change in Law’, has observed thus: “ 9. It will be seen that Article 13.4.1 makes it clear that adjustment in monthly tariff payment on account of change in law shall be effected from the date of the change in law [ see sub-clause ( i ) of clause 4.1], in case the change in law happens to be by way of adoption, promulgation, amendment , re-enactment or repeal of the law or change in law. As opposed to this, if the change in law is on account of a change in interpretation of law by a judgment of a Court or Tribunal 7 (2019) 5 SCC 325 57 or governmental instrumentality, the case would fall under sub-clause ( ii ) of clause 4.1, in which case, the monthly tariff payment shall be effected from the date of the said order/judgment of the competent authority/Tribunal or the governmental instrumentality. What is important to notice is that Article 13.4.1 is subject to Article 13.2 of the PPAs. 10. Article 13.2 is an in-built restitutionary principle which compensates the party affected by such change in law and which must restore, through monthly tariff payments, the affected party to the same economic position as if such change in law has not occurred. This would mean that by this clause a fiction is created, and the party has to be put in the same economic position as if such change in law has not occurred i.e. the party must be given the benefit of restitution as understood in civil law. Article 13.2, however, goes on to divide such restitution into two separate periods. The first period is the “construction period” in which increase/decrease of capital cost of the project in the tariff is to be governed by a certain formula. However, the seller has to provide to the procurer documentary proof of such increase/decrease in capital 58 cost for establishing the impact of such change in law and in the case of dispute as to the same, a dispute resolution mechanism as per Article 17 of the PPA is to be resorted to. It is also made clear that compensation is only payable to either party only with effect from the date on which the total increase/decrease exceeds the amount stated therein. 11. So far as the “operation period” is concerned, compensation for any increase/decrease in revenues or costs to the seller is to be determined and effected from such date as is decided by the appropriate Commission. Here again, this compensation is only payable for increase/decrease in revenue or cost to the seller if it is in excess of an amount equivalent to 1% of the Letter of Credit in aggregate for a contract year. What is clear, therefore, from a reading of Article 13.2, is that restitutionary principles apply in case a certain threshold limit is crossed in both sub-clauses ( a ) and ( b ). There is no dispute that the present case is covered by sub-clause ( b ) and that the aforesaid threshold has been crossed. The mechanism for claiming a change in law is then set out by Article 13.3 of the PPA.” 59 118. It could thus be seen that this Court has held that insofar as the “operation period” is concerned, compensation for any increase/decrease in revenues or costs to the seller is to be determined and effected from such date as is decided by the appropriate Commission. It has further been held that the compensation is only payable for increase/decrease in revenue or cost to the seller if it is in excess of an amount equivalent to 1% of the Letter of Credit in aggregate for a contract year. It has been held that restitutionary principles apply in case a certain threshold limit is crossed. It has been held that an in-built restitutionary principle compensates the party affected by such ‘Change in Law’ and the affected party must be restored through monthly tariff payment to the same economic position as if such ‘Change in Law’ had not occurred. 119. From the perusal of paragraph 9, it would also be clear that in case the ‘Change in Law’ happens to be by way of adoption, promulgation, amendment, re-enactment or repeal of the law or 60 ‘Change in Law’, it has to be effected from the date on which such change occurs. 120. In this respect, it will also be apposite to refer to the following observations of this Court in the case of Maharashtra State Electricity Distribution Company Limited v. Maharashtra Electricity Regulatory Commission and 8 Others : PTEL “ 173. The A correctly found that: ( Maharashtra Pradesh Electricity Regulatory Commission case [ Maharashtra State Electricity Distribution Co. Ltd. v. Maharashtra Pradesh Electricity Regulatory Commission , 2021 SCC OnLine APTEL 13] , SCC OnLine APTEL para 13) “ 13 . … On the contrary, there is a conscious exclusion regarding any suo motu change in the rate to be applied while calculating LPS , it being incorrect to argue on the assumption that the contract permits automatic change in system.” (emphasis supplied) 8 (2022) 4 SCC 657 61 174. This Court is unable to accept Mr Singh's submission that the conclusion PTEL of A that LPS is not tariff is erroneous. The meaning of the expression tariff has to be considered, and has rightly been PTEL considered by A in the context of the relevant provision of the power purchase agreements. The dictionary meaning of tariff may be charge. However, in Article 13 of the Stage 1 and Article 10 of the Stage 2 power purchase agreements, tariff means monthly tariff and tariff adjustment consequential to change in law, is of monthly tariff in respect of supply of electricity. 175. As argued by the respondent power generating companies appearing through Mr Rohatgi, Mr Singhvi, Mr Mukherjee and Ms Anand respectively, LPS is only payable when payment against monthly bills is delayed and not otherwise. 176. The object of LPS is to enforce and/or encourage timely payment of charges by the procurer i.e. the appellant. In other words, LPS dissuades the procurer from delaying payment of charges. The rate of LPS has no bearing or impact on tariff. Changes in the basis of the rates of LPS do not affect the rate at which power was agreed to be sold and purchased under the power purchase agreements. The principle of restitution 62 under the change in law provisions of the power purchase agreements are attracted in respect of tariff. 177. LPS cannot be equated with carrying cost or actual cost incurred for the supply of power. The appellant has a contractual obligation to make timely payment of the invoices raised by the power generating companies, subject, of course, to scrutiny and verification of the same. Mr Mukul Rohatgi has a point that if the funding cost was so much lesser than the rate of LPS, as contended by the appellant, the appellant could have raised funds at a lower rate of interest, made timely payment of the invoices raised by the power generating companies, and avoided LPS. 178. The proposition that courts cannot rewrite a contract mutually executed between the parties, is well settled. The Court cannot, through its interpretative process, rewrite or create a new contract between the parties. The Court has to simply apply the terms and conditions of the agreement as agreed between the parties, as observed by this Court in Shree Ambica Medical Stores v. Surat People's Coop. Bank [ Shree Ambica Medical Stores v. Surat People's Coop. Bank Ltd. , (2020) 13 SCC 564, para 20] , cited by Ms Divya Anand. This 63

64 the explicit terms of a contract are always the final word with regard to the intention of the parties. 122. As already discussed hereinabove, Article 11.8 of the PPA entitles either party to raise a supplementary bill on the other party on account of ‘Change in Law’ as provided in Article 13 and such bills are required to be paid by the either party. Article 11.8.3 of the PPA specifically provides that in the event of delay in payment of a supplementary bill by either party beyond one month from the date of billing, a late payment surcharge shall be payable at the same terms applicable to the monthly bill in Article 11.3.4. Article 11.3.4 of the PPA specifically provides a late payment surcharge to be paid by the procurer to the seller at the rate of 2% in excess of the applicable SBAR per annum on the amount of outstanding payment calculated on day to day basis (and compounded with monthly rest), for each day of the delay. 123. Recently, this Court, in the case of Uttar Haryana Bijli Vitran Nigam Limited and Another v. Adani Power (Mundra) 65

9 (2023) 2 SCC 624 66 compound interest basis. Grant of compound interest on carrying cost and that too from the date of the occurrence of the change in law event is based on sound logic. The idea behind granting interest on carrying cost is not far to see, it is aimed at restituting a party that is adversely affected by a change in law event and restore it to its original economic position as if such a change in law event had not taken place. xxx xxx xxx 23. We are not persuaded by the submission made on behalf of the appellants that since no fault is attributable to them for the delay caused in determination of the amount, they cannot be saddled with the liability to pay interest on carrying cost; nor is there any substance in the argument sought to be advanced that there is no provision in the PPAs for payment of compound interest from the date when the change in law event had occurred. 24. The entire concept of restitutionary principles engrained in Article 13 of the PPAs has to be read in the correct perspective. The said principle that governs compensating a party for the time value for money, is the very same principle that would be invoked and applied for grant of interest on carrying cost on account of a change in law event. Therefore, reliance on Article 11.3.4 read with Article 11.8.3 on the part of the 67

68 in Law’ event had occurred, has been specifically rejected by this Court. 126. In view of this consistent position of law and application of restitutionary principles and privity of contractual obligations between the parties as contained in the PPAs, we do not find that the view taken by the learned APTEL with regard to carrying cost warrants interference. Concurrent Finding of Fact 127. Apart from the aforesaid issues, there is one another common thread in all these appeals. Many of these appeals arise out of concurrent findings recorded by the Central/State Electricity Regulatory Commissions and the learned APTEL. 128. This Court, in the case of MSEDCL v. APML & Ors. (supra), after considering the statutory provisions in the Electricity Act, 2003, held that the CERC, SERCs and the learned APTEL are bodies consisting of experts in the field. 129. This Court, in the said case, observed thus: 69 “ 120. It could thus be seen that two expert bodies i.e. the CERC and the learned APTEL have concurrently held, after examining the material on record, that the factors of SHR and GCV should be considered as per the Regulations or actuals, whichever is lower. The CERC as well as the State Regulatory bodies, after extensive consultation with the stakeholders, had specified the SHR norms in respective Tariff Regulations. In addition, insofar as GCV is concerned, the CEA has opined that the margin of 85-100 kcal/kg for a non-pit head station may be considered as a loss of GCV measured at wagon top till the point of firing of coal in boiler. 121. In this respect, we may refer to the following observations of this Court in the case of Reliance Infrastructure Limited v. State of Maharashtra [ (2019) 3 SCC 352]. “ 38. MERC is an expert body which is entrusted with the duty and function to frame regulations, including the terms and conditions for the determination of tariff. The Court, while exercising its power of judicial review, can step in where a case of manifest unreasonableness or arbitrariness is made out. Similarly, where the delegate of the legislature has 70 failed to follow statutory procedures or to take into account factors which it is mandated by the statute to consider or has founded its determination of tariffs on extraneous considerations, the Court in the exercise of its power of judicial review will ensure that the statute is not breached. However, it is no part of the function of the Court to substitute its own determination for a determination which was made by an expert body after due consideration of material circumstances. 39. In Assn. of Industrial Electricity Users v. State of A.P. [ Assn. of Industrial Electricity Users v. State of A.P. , (2002) 3 SCC 711] a three-Judge Bench of this Court dealt with the fixation of tariffs and held thus : (SCC p. 717, para 11) “ 11 . We also agree with the High Court [ S. Bharat Kumar v. State of A.P. , 2000 SCC OnLine AP 565 : (2000) 6 ALD 217] that the judicial review in a matter with regard to fixation of tariff has not to be as that of an appellate authority in exercise of its jurisdiction under Article 226 of the Constitution. All that the High Court has to be satisfied with is that the Commission has followed the proper procedure and 71 unless it can be demonstrated that its decision is on the face of it arbitrary or illegal or contrary to the Act, the court will not interfere. Fixing a tariff and providing for cross-subsidy is essentially a matter of policy and normally a court would refrain from interfering with a policy decision unless the power exercised is arbitrary or ex facie bad in law.” xxx xxx xxx 123. Recently, the Constitution Bench of this Court in the case of Vivek Narayan Sharma v. Union of India [2023 SCC OnLine SC 1] has held that the Courts should be slow in interfering with the decisions taken by the experts in the field and unless it is found that the expert bodies have failed to take into consideration the mandatory statutory provisions or the decisions taken are based on extraneous considerations or they are ex facie arbitrary and illegal, it will not be appropriate for this Court to substitute its views with that of the expert bodies.” 130. As is indicated in the aforesaid judgments, this Court should be slow in interfering with the concurrent findings of fact 72 unless they are found to be perverse, arbitrary and either in ignorance of or contrary to the statutory provisions. V. CONCLUSION 131. In the light of our aforesaid findings, we will now consider each of the appeals independently. Civil Appeal No. 11095 of 2018 and Civil Appeal Nos. 11910- 11911 of 2018 132. In these batch of appeals, insofar as the appeal of DNH- DISCOM is concerned, they are aggrieved by the order of the learned APTEL allowing Busy Season Surcharge and Development Surcharge, MoEF Notification on coal quality and Change in NCDP. They are also aggrieved by the finding of the learned APTEL with regard to carrying cost. 133. Insofar as the compensation on the ground of Change in NCDP is concerned, as already discussed, the same is squarely covered by the judgment of this Court in the case of MSEDCL v. APML & Ors. (supra) 73 134. Insofar as the Busy Season Surcharge and Development Surcharge are concerned, they are issued under the Circulars/Notifications of Indian Railways. The notification on coal quality is issued by MoEF. All these are the instrumentalities of the State, and these would, therefore, amount to ‘Change in Law’. 135. Insofar as rest of the claims, which are concurrently allowed and disallowed by both the CERC and the learned APTEL, are concerned, in view of the judgments of this Court on this issue, as stated above, we do not find any reason to interfere with the same, not noticing any perversity, arbitrariness and/or any contravention of the statutory provisions. The appeals of both the Generator and the DNH-DISCOM are, therefore, liable to be dismissed. Civil Appeal Nos.4628-4629 of 2021 136. The learned APTEL allowed the claim of the Generator only on the ground of Busy Season Surcharge and Development Surcharge on transportation of coal, and the Carrying Cost. 74 137. In view of our finding on the issues as above, no error can be found with the finding of the learned APTEL in that regard. We find no merit in the appeals. The appeals are, accordingly, liable to be dismissed. Civil Appeal Nos. 12055-12056 of 2018 138. The issue of Busy Season Surcharge, Development Surcharge and Port Congestion Surcharge have already been considered by us herein above. All these are charges under the Notifications issued by the Indian Railways, through the Railway Board. As such, no error can be found with the finding of the learned APTEL that they would amount to ‘Change in Law’ events. 139. Insofar as levy of ‘Forest Tax’ is concerned, the same is levied by the State Government under the statutory provisions. 140. The issue with regard to ‘Carrying Cost’ has also been discussed by us herein above. 75 141. In that view of the matter, we do not find any reason to interfere with the order of the learned APTEL. The appeals are, accordingly, liable to be dismissed. Civil Appeal Nos. 2935-2936 of 2020 142. In addition to the ‘Change in Law’ benefits granted by the State Commission, ‘Coal Terminal Surcharge’, ‘Chhattisgarh Paryavaran Upkar’ and ‘Chhattisgarh Vikas Upkar’ were also considered to be ‘Change in Law’ events by the learned APTEL. 143. The ‘Coal Terminal Surcharge’ was levied by the Indian Railways subsequent to the cut-off date. Similarly, the Government of Chhattisgarh, under Section 8 of the Chhattisgarh Adhosanrachna Vikas Evam Paryavaran Upkar th Adhiniyam, 2005, vide Notification dated 16 June 2015, which is admittedly after the cut-off date, introduced ‘Chhattisgarh Paryavaran Upkar’ and ‘Chhattisgarh Vikas Upkar’. Even the Change in Swacch Bharat Cess at the rate of 0.5% on Service Tax for Operation Period and Change in Krishi Kalyan Cess at the rate of 5% on Service Tax for Operation Period, which had been 76

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78 150. Insofar as the issue with regard to ‘carrying cost’ is concerned, we have already discussed the issue at length in the foregoing paragraphs. As such, no interference is warranted on that finding also. 151. Insofar as other claims which were concurrently allowed and disallowed by the CERC and the learned APTEL are concerned, in view of the concurrent findings, we are not inclined to interfere with the same. 152. The appeals of both DISCOMS as well as Generating Companies are, therefore, liable to be dismissed. Civil Appeal No. 6641 of 2019 153. This appeal is filed by GKEL, being aggrieved by the concurrent denial of benefits on certain components. 154. As already discussed herein above by us, in view of the concurrent findings recorded by the CERC as well as the learned APTEL for disallowing the claims, we are not inclined to interfere with the same. The appeal is, accordingly, liable to be dismissed. 79

80

81 Energy Watchdog (supra), Adani Rajasthan case (supra) and MSEDCL v. APML & Ors. (supra). 162. Insofar as the benefit of ‘Change in Law’ on account of SHAKTI Policy is concerned, it is covered by the judgment and order of the even date of this Court in the case of Civil Appeal No. 10 5684 of 2021 and in the case of Civil Appeal Nos. 677-678 of 11 2021 . 163. The other components, i.e. change in coal quality pursuant to amendment of the Environment (Protection) Rules, 1986, and increase in Busy Season Surcharge and Development Surcharge on transportation of coal by Indian Railways, have already been considered by us herein to amount to ‘Change in Law’ events. We have also considered the issue regarding ‘Carrying Cost’. As such, no interference is warranted in the concurrent findings by the learned APTEL, especially in view of the judgments of this Court. The appeal is, accordingly, liable to be dismissed. 10 Uttar Haryana Bijli Vitran Nigam Limited and another v. Adana Power (Mundra) Limited and another 11 Maharashtra State Electricity Distribution Company Limited v. Adani Power Maharashtra Limited and another 82 Civil Appeal No. 5005 of 2022 and Civil Appeal No. 4089 of 2022 164. The appeals are filed being aggrieved by the order of the learned APTEL granting compensation on account of ‘EFC’ and ‘carrying cost’. 165. Undisputedly, the EFC was imposed by CIL vide its Circular th dated 19 December 2017. 166. As discussed herein above, it is not in dispute that EFC has been paid by the Generators while paying the base price, other charges and statutory charges at the time of delivery of coal. As such, no interference is warranted with the said finding. 167. Insofar as ‘carrying cost’ is concerned, we have elaborately discussed the said issue herein above. As such, no interference, therefore, is warranted on the said issue also. 168. We do not find any merit in the appeals. The same are, accordingly, liable to be dismissed. 83 VI. EPILOGUE 169. Before we part with the judgment, we must note that we have come across several appeals in the present batch which arise out of concurrent findings of fact arrived at by two statutory bodies having expertise in the field. We have also found that in some of the matters, the appeals have been filed only for the sake of filing the same. We also find that several rounds of litigation have taken place in some of the proceedings. 170. Recently, this Court, in the case of MSEDCL v. APML & Ors. (supra), has noted that one of the reasons for enacting the Electricity Act, 2003 was that the performance of the Electricity Boards had deteriorated on account of various factors. The Statement of Objects and Reasons of the Electricity Act, 2003 would reveal that one of the main features for enactment of the Electricity Act was delicensing of generation and freely permitting captive generation. In the said judgment, we have recorded the statement of the learned Attorney General made in the case of Energy Watchdog (supra) that the electricity sector, having been 84 privatized, had largely fulfilled the object sought to be achieved by the Electricity Act. He had stated that delicensed electricity generation resulted in production of far greater electricity than was earlier produced. The learned Attorney General had further urged the Court not to disturb the delicate balance sought to be achieved by the Electricity Act, i.e. that the producers or generators of electricity, in order that they set up power plants, be entitled to a reasonable margin of profit and a reasonable return on their capital, so that they are induced to set up more and more power plants. At the same time, the interests of the end consumers also need to be protected. 171. However, we find that, in spite of this position, litigations after litigations are pursued. Though the concurrent orders of statutory expert bodies cannot be said to be perverse, arbitrary or in violation of the statutory provisions, the same are challenged. 172. It will be relevant to note the following observations of the th CERC in its judgment and order dated 16 May 2019, passed in 85

its Report (dated 07.03.2018) on Energy titled ‘ Stressed/ Non-Performing Assets in Electricity Sector ’ has recognized the financial stress faced by generating companies on account of delay in recovery of Change in Law compensations and has recommended thus: “ The Committee, therefore, recommend that appropriate steps should be taken to ensure that there should be consistency and uniformity with 86 regard to orders emanating from the status of change in law. Provisions should also be made for certain percentage of payments of regulatory dues to be paid by Discoms in case the orders of regulators are being taken to APTEL/ higher judiciary for their consideration and decision” 116. The Report lays stress on the obligation of the distribution companies to pay the approved Change in Law compensation even while Regulatory Commission’s orders are challenged. The Policy directive dated 27.08.2018 issued in terms of Section 107 of the Electricity Act, 2003 by the Ministry of Power (MoP) to the CERC emphasized on the need to ensure expeditious recovery of Change in Law compensation. The desirability of this was recognized by this tribunal in its judgment dated 14.09.2019 in Jaipur Vidyut Vitran Nigam Limited vs. RERC & Ors, 2019 SCC Online APTEL 98. It is against such backdrop that Electricity (Timely Recovery of Costs due to Change in Law) Rules, 2021, notified by MoP on 22.10.2021, providing for timely recovery of compensation on account of occurrence of Change in Law events have been framed. The MoP, vide notification dated 09.11.2021, put in public domain the policy directive 87 on “ Automatic pass through of the fuel and power procurement cost in tariff for ensuring the viability of the power ” recognizing that in order to ensure that the power sector does not face any constraints in maintaining assured power supply to meet the demand, all the stakeholders in the value chain of power sector must ensure that there is timely recovery of cost. This involves the cost pass through by the generating companies to the distribution companies. 117. In sharp contrast, it is seen from the factual narrative of the events leading to the appeal at hand that the appellants (Haryana Utilities) have been adopting dilatory tactics which not only defeats the public policy but also has the undesirable fall-out of adding to the burden of the end-consumers they profess to serve on account of increasing Carrying Cost. 118. Concededly, in compliance with the Taxes and Duties Order dated 06.02.2017, the appellants paid to the generator the taxes and duties for certain period but, thereafter, unilaterally withheld such claims, raising issues (found merit-less) regarding IPT of coal for first time in January 2018. It is after the impugned order was passed that the appellants are stated to have started complying, to an 88 extent, by making payments. It is the case of the first respondent that the appellants have withheld past payments including towards taxes and duties its entitlement to recover corresponding Late Payment Surchage (“LPS”) being over and above the same to be computed after discharge of the former liability. We agree that such withholding is in violation of Articles 11.3.2 and 11.6.9 of the PPAs (quoted earlier) which cast a specific mandate on the procurer (Haryana Utilities) to honor the invoices raised, irrespective of dispute, and impose a specific bar against unilateral deductions/setting off. 119. We find the dilatory conduct of the Haryana Utilities, to delay the implementation of the binding orders concerning compensation on account of coal shortfall and corresponding taxes and duties, detrimental to the interest of end consumers since it burdens the consumers with incremental LPS for delay in making payments to the generator. This cannot be countenanced, given the earlier dispensation on the subject by the statutory regulator and appellate forum(s), since it smacks of approach that is designed to frustrate the legislative command, and extant State policy, as indeed constitutes abject indiscipline infringing the rule of law. 89 Borrowing THE WORDS OF Hon’ble Supreme Court in SEBI vs. Sahara India Real Estate Corpn. Ltd., (2014) 5 SCC 429 “ non-compliance with the orders passed … shakes the very foundation of our judicial system and undermines the rule of law” which this tribunal is also duty-bound to “honour and protect”, so essential “to maintain faith and confidence of the people of this country in the judiciary ”.” [emphasis supplied] 174. It could thus be seen that even the Standing Committee of Parliament, in its report, has recommended that there should be consistency and uniformity with regard to orders emanating from the status of ‘Change in Law’. It has also recommended that the provisions should also be made for certain percentage of payments of regulatory dues to be paid by DISCOMS in case the orders of regulators are being taken to learned APTEL/higher judiciary for their consideration and decision. The learned th APTEL has also referred to the Policy Directive dated 27 August 2018 issued in terms of Section 107 of the Electricity Act, 2003 by the MoP to the CERC, where it emphasized the need to ensure 90 expeditious recovery of ‘Change in Law’ compensation. The learned APTEL has also referred to the Electricity (Timely Recovery of Costs due to Change in Law) Rules, 2021, notified by nd MoP on 22 October 2021, which provide for timely recovery of compensation on account of occurrence of ‘Change in Law’ events. The learned APTEL found that the Haryana Utilities have been adopting dilatory tactics, which not only defeat the public policy but also have the undesirable fallout of adding to the burden of the end-consumers they profess to serve on account of increasing ‘Carrying Cost’. The learned APTEL further found that withholding of past payments, including towards taxes and duties by the DISCOMS, is in violation of the provisions of the PPAs, which casts a specific mandate on the procurer to honour the invoices raised, irrespective of dispute, and impose a specific bar against unilateral deductions/setting off. 175. It is further to be noted that this Court, in the case of Uttar Haryana Bijli Vitran Nigam Limited (UNHVNL) and another 91 12 v. Adani Power Limited and others , has specifically observed that the ‘Change in Law’ events will have to accrue from the date on which Rules, Orders, Notifications are issued by the instrumentalities of the State. Even in spite of this finding, the DISCOMS are pursuing litigations after litigations. 176. We find that, when the PPA itself provides a mechanism for payment of compensation on the ground of ‘Change in Law’, unwarranted litigation, which wastes the time of the Court as well as adds to the ultimate cost of electricity consumed by the end consumer, ought to be avoided. Ultimately, the huge cost of litigation on the part of DISCOMS as well as the Generators adds to the cost of electricity that is supplied to the end consumers. 177. We further find that non-quantification of the dues by the Electricity Regulatory Commissions and the untimely payment of the dues by the DISCOMS is also detrimental to the interests of the end consumers. If timely payment is not made by DISCOMS, 12 (2019) 5 SCC 325 92 under the clauses in the PPA, they are required to pay late payment surcharges, which are much higher. Even in case of ‘Change in Law’ claims, the same procedure is required to be followed. 178. Ultimately, these late payment surcharges are added to the cost of electricity supplied to the end consumers. It is, thus, the end consumers who suffer by paying higher charges on account of the DISCOMS not making timely payment to the Generators. 179. It is further to be noted that the appeal to this Court under Section 125 of the Electricity Act, 2003 is only permissible on any of the grounds as specified in Section 100 of the Code of Civil Procedure, 1908. As such, the appeal to this Court would be permissible only on substantial questions of law. However, as already observed herein, even in cases where well-reasoned concurrent orders are passed by the Electricity Regulatory Commissions and the learned APTEL, the same are challenged by the DISCOMS as well as the Generators. On account of pendency of litigation, which in some of the cases in this batch 93 has been more than 5 years, non-payment of dues would entail paying of heavy carrying cost to the Generators by the DISCOMS, which, in turn, will be passed over to the end consumer. As a result, it will be the end consumer who would be at sufferance. We are of the opinion that such unnecessary and unwarranted litigation needs to be curbed. 180. To a pointed query, the learned counsel for the DISCOMS fairly conceded the position that the prices at which the electricity is purchased from the ‘Independent Power Producers’ is substantially lesser than the power purchased from the ‘State Generating Companies’. 181. We, therefore, appeal to the Union of India through Ministry of Power (“MoP” for short) to evolve a mechanism so as to ensure timely payment by the DISCOMS to the Generating Companies, which would avoid huge carrying cost to be passed over to the end consumers. 94 182. The Union of India, through MoP, may also evolve a mechanism to avoid unnecessary and unwarranted litigation, the cost of which is also passed on to the ultimate consumer. 183. Before we part with the judgment, we place on record our appreciation for the valuable assistance rendered by Mr. Balbir Singh, learned Additional Solicitor General, Dr. A. M. Singhvi, Mr. V. Giri, Mr. M.G. Ramachandran, Mr. C.A. Sundaram, Mr. Maninder Singh, Mr. Sajan Poovayya and Mr. Niranjan Reddy, learned Senior Counsel, and Mr. Vishrov Mukerjee, Ms. Poorva Saigal, Ms. Anushree Bardhan, and Ms. Poonam Sengupta, learned counsel. 184. In view of the above, all the appeals are dismissed. No costs. …….........................J. [B.R. GAVAI] …….........................J. [VIKRAM NATH] NEW DELHI; APRIL 20, 2023 95