RKM Powergen Pvt. Ltd. vs Chairman, UP Power Corporation Ltd. & Ors on 13 October 2026

O R D E R

PER HON’BLE MR. VIRENDER BHAT, JUDICIAL MEMBER IA No.1270 OF 2026 in APL No.109 OF 2022 (For clarification)

1. The applicant/appellant is, by way of captioned application, seeking clarification of judgment dated 07.08.2025 passed by this Tribunal vide which the appeal no.109/2022 was disposed of.

2. The order dated 30.09.2020 passed by the Uttar Pradesh Electricity Regulatory Commission (hereinafter referred to as “the Commission”) in petition no.1365/2018 was under challenge in the above noted appeal. Vide the said impugned order, the Commission had rejected the claim of the appellant for acknowledging certain events pleaded therein as Change in Law (CIL) events in terms of Article 10 of the Power Purchase Agreement (PPA) dated 15.03.2016 executed between the appellant/applicant and the respondent nos.1-4. However, the Commission had acknowledged the increase in Electricity Duty on Auxiliary Consumption as Change in Law event and had allowed its impact to the appellant along with carrying cost.

3. In the judgment dated 07.08.2025 this Tribunal acknowledged (i) the increase in GST on O&M charges pursuant to notification dated 28.06.2017 issued by the Ministry of Power, and (ii) increase in transportation cost on

account of 100% fly ash disposal requirement as stipulated by notification dated 25.01.2016 issued by Ministry of Environment and Forests, as Change in Law events and remanded the matter back to the Commission for computation of impact of these Change in Law events upon the appellant. It needs to be noted that two more Change in Law claims had been made by the appellant in the appeal which were rejected in the said judgment.

4. The contention of the appellant/applicant is that while directing the Commission to compute compensation for the two Change in Law events as acknowledged by this Tribunal in the judgment dated 07.08.2025, this Tribunal did not make any observations on the aspect of carrying cost/interest to which the appellant is entitled with effect from the dates when these two Change in Law events had occurred, despite the appellant having specifically made a prayer for carrying cost in the prayer clause of the appeal and also having urged the same during the course of hearing of the appeal.

5. Learned senior counsel for the appellant Shri Sajan Poovayya submitted that absence of any express observation qua carrying cost in the said judgment is being construed by the respondents as rejection of the prayer regarding carrying cost, and therefore, necessity arose for filing the instant application seeking clarification on this aspect.

6. We find it relevant to note here that the appellant had assailed the said judgment dated 07.08.2025 of this Tribunal before the Hon'ble Supreme Court by way of Civil Appeal No.57880/2025 qua the Change in Law claims which were disallowed by this Tribunal in the said judgment. The Civil appeal has

been dismissed as withdrawn by the Hon'ble Supreme Court vide order dated 08.12.2025 while granting liberty to the appellant to avail such remedies as may be available to them as per the directions of this Tribunal. The said order dated 08.12.2025 passed by the Hon'ble Supreme Court is extracted hereinbelow: - “1. Mr. Sajan Poovayya, learned senior counsel appearing for the petitioner seeks permission to withdraw the appeal.

2. Permission, as sought for, is granted.

3. The Civil Appeal is, accordingly, dismissed as withdrawn. However, the appellant is at liberty to avail such remedies as may be available to them as per the directions of Appellant Tribunal for Electricity.”

(Emphasis supplied)

7. Mr. Nalin Kohli, learned senior counsel appearing on behalf of the respondents has vehemently resisted the application. He would submit that in the Civil Appeal filed by the appellant before the Hon'ble Supreme Court, rejection of the prayer for carrying cost/interest on the acknowledged Change in Law claims was also raked up and since the Hon'ble Supreme Court was inclined to dismiss the appeal at the threshold, the appellant withdrew the appeal and therefore, the claim for carrying cost/interest now agitated by the appellant in the instant application is in the teeth of limited liberty granted by the Hon'ble Supreme Court. He would further argue that instead of pointing out any ambiguity, clerical slip, accidental omission etc. in the judgment dated 07.08.2025 of this Tribunal or difficulty in its implementation, the appellant is

seeking to agitate a new substantive relief which cannot be granted in the garb of application for clarification. It is also argued by the learned counsel that even otherwise also this Tribunal has become functus officio and thus, precluded from entertaining the instant application of the appellant.

8. What is material to note here is that in the judgment dated 07.08.2025, this Tribunal, while allowing the two Change in Law claims of the appellant, has not considered or discussed the prayer of the appellant for carrying cost on the financial impact of Change in Law claims. The judgment is totally silent on this aspect.

9. We may note that as per the settled legal principle, the purpose and object of allowing a relief to a claimant for the Change in Law event is to restore affected party to the same economic position as if the Change in Law had not occurred. It cannot be gainsaid that when a Change in Law event occurs, the affected party starts incurring additional costs from the date of the said event, and therefore, if only the principal compensation i.e. the increased cost on account of Change in Law event is allowed to the affected party without carrying cost, the affected party cannot be said to have been restored to its original economic position. This would defeat the very purpose of having a Change in Law clause in the PPA.

10. The legal principle emanating from the various judgments of the Hon'ble Supreme Court namely Uttar Haryana Bijli Bitran Nigam Ltd. v. Adani Power Ltd. (2019) 5 SCC 325, Energy Watchdog v. Central Electricity Regulatory

Commission etc. is that a Change in Law clause in a PPA is an inbuilt restitutionary principle which compensates 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 had not occurred. The Commission or this Tribunal shall have due regard to this principle while determining the consequences of Change in Law event.

11. In the instant case, Article 10.2 of the PPA specifies the application and principles for computing impact of Change in Law and the same is extracted hereinbelow: - “10.2 Application and Principles for computing impact of Change in Law 10.2.1 While determining the consequence of Change in Law under this Article 10, the Parties shall have due regard to the principle that the purpose of compensating the Party affected by such Change in Law, is to restore t/1 rough monthly Tariff Payment, to the extent contemplated in this Article 10, the affected Party to the same economic position as if such Change in Law has not occurred” (Emphasis supplied)

12. It is, thus, evident that the Change in Law clause of the PPA also is in line with the legal principles enunciated by the Hon'ble Supreme Court in the above noted judgments entitling the affected party to be restored, through monthly

tariff payments, to the same economic position as if such Change in Law had not occurred.

13. Having said so, we are of the opinion that the judgment dated 07.08.2025 passed by this Tribunal in appeal no.109/2022 suffers from an ambiguity or an accidental omission on the aspect of carrying cost as the same has neither been noted nor discussed anywhere in the judgment. The impact of the Change in Law events allowed to the appellant in the said judgment would evidently be incomplete, in case, the carrying cost also is not granted on such impact of the Change in Law events to the appellant. In fact, carrying cost is the compensation for time value of money, and therefore, any compensation for a Change in Law event is totally inadequate if the same does not come with carrying cost. The object of carrying cost is to offset the impact of deferred recovery of legitimate expenses incurred by the affected party on account of incurring additional costs due to the impact of Change in Law event. Therefore, in case, carrying cost is not allowed to the appellant herein on the Change in Law claims which have been acknowledged by this Tribunal in the judgment dated 07.08.2025, the appellant would not be restored to the original economic position and thus, would defeat the entire purpose of the Change in Law clause contained in the PPA.

14. The argument advanced by Mr. Nalin Kohli, learned senior counsel that this Tribunal, after passing the judgment dated 07.08.2025, has become functus officio and therefore, cannot entertain this application, is without any force. It is

a trite law that every court or tribunal is empowered to clarify or rectify any ambiguity or inadvertent omissions in the order/judgment passed by it either on its own motion or on application submitted in this regard by any of the parties. Further, the order of the Hon'ble Supreme Court in Civil Appeal No.57880/2025 also does not put any embargo upon this Tribunal to entertain the instant application. The Apex Court has manifestly granted liberty to the appellant to avail the remedies as may be available to them as per the directions of this Tribunal. This indicates that the Apex Court has left it for this Tribunal to issue any directions as would be deemed fit and necessary in the fact and circumstances of the case.

15. Hence, in the light of the above discussion, we hereby allow the application and clarify that the Commission shall compute the impact of the two Change in Law claims, acknowledged by this Tribunal in the judgment dated 07.08.2025, upon the appellant along with carrying cost applicable under the relevant regulations.

Pronounced in the open court on this the 13th day of October, 2026.

(Ajay Talegaonkar)

(Virender Bhat)

Technical Member (Electricity)

Judicial Member

REPORTABLE / NON-REPORTABLE

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