M/s Adani Power Limited, Raipur TPP vs Chhattisgarh State Electricity Regulatory Commission & Anr on 29 July 2026

JUDGEMENT

PER HON’BLE MRS. SEEMA GUPTA, OFFICIATING CHAIRPERSON

1. The present batch of Appeals has been filed by Adani Power Limited Raipur, TPP ( “Appellant”), challenging the common Order dated 20.01.2026 passed by the Chhattisgarh State Electricity Regulatory Commission (herein after referred as “State Commission/CSERC”) in Petition Nos. 71 of 2025 and 72 of 2025, whereby the State Commission disallowed recovery of Fly Ash Transportation Charges incurred pursuant to the MoEF&CC Notifications dated 25.01.2016 and 31.12.2021 and directed refund of the amounts recovered from Chhattisgarh State Power Distribution Company Limited (CSPDCL/Respondent no. 2), holding the same to be non-recoverable under the applicable regulatory framework. The details of the present Appeals are set out here in below: Description of Parties

2. The Appellant - Adani Power Limited, Raipur TPP is a generating company in terms of Section 2(28) of the Electricity Act, 2003 and, owns and operates

Thermal Power Plants (“TPP”), which in present appeals concerns Raigarh TPP (1x600 MW) and Raipur TPP (2x685), in the State of Chhattisgarh.

3. The Respondent No. 1- CSERC is the State Electricity Regulatory Commission in the State of Chhattisgarh with powers vested under Sections 86 and 181 of the Electricity Act, 2003.

4. The Respondent No. 2- CSPDCL is a Distribution Licensee in the State of Chhattisgarh and is purchasing 5% of the net power generated by the Appellant’s power projects at variable cost in terms of Power Purchase Agreement dated 09.02.2015 and 08.07.2020. Factual matrix of the Case(s):

5. Raipur Thermal Power Plant (Subject project in Appeal 65 of 2026) is situated in the State of Chhattisgarh. The Project comprises two generating units of 685 MW each. Unit-I achieved Commercial Operation Date (“COD”) on 01.06.2015 and Unit-II achieved COD on 01.04.2016. The Project was subsequently acquired by the Appellant in the year 2019 through a bidding process initiated by Axis Bank. On 08.07.2020, the Appellant entered into a Power Purchase Agreement (“PPA”) with Chhattisgarh State Power Distribution Company Limited (“CSPDCL”) for supply of 5% of the net power generated from the Project. Pursuant thereto, supply of power commenced on 21.07.2020.

6. Raigarh Thermal Power Plant (Subject project in Appeal 66 of 2026) is also situated in the State of Chhattisgarh having an installed capacity of 600 MW. The generating station achieved COD on 31.03.2014 and was subsequently acquired by the Appellant through the Corporate Insolvency Resolution Process. On 09.02.2015, the Appellant entered into a PPA with CSPDCL for supply of 5% of

the net power generated from the Project. Supply of power under the said arrangement commenced on 01.05.2015.

7. Ministry of Environment, Forest and Climate Change (“MoEF&CC”) issued Notifications dated 25.01.2016 and 31.12.2021 prescribing mandatory obligations relating to disposal and utilisation of fly ash generated from thermal power stations. The Notifications, inter alia, stipulated progressive utilization of fly ash and imposed obligations upon thermal power generators for transportation and utilization of fly ash in accordance with the prescribed environmental norms.

8. Following the issuance of the aforesaid Notifications, Appellant has claimed to incur additional expenditure incurred towards handling, transportation and utilization of fly ash for compliance with the statutory requirements.

9. On 14.02.2025, the Appellant raised a supplementary invoice upon CSPDCL for an amount of Rs.1,09,72,560/-(Rupees One Crore Nine Lakh Seventy-Two Thousand Five Hundred and Sixty Only) for Raipur Thermal Project and for Rs.1,85,94,781/- (Rupees One Crore Eighty Five Lakhs Ninety Four Thousand Seven Hundred Eighty One Only) for Raigarh Project for the payment of additional expenses incurred by the Appellant towards handling, transportation and utilization of fly ash for FY 2022-23 and FY 2023-24.

10. On 28.02.2025 CSPDCL disputed the claim made on the ground that fly ash transportation and utilization expenses formed part of Operation and Maintenance (“O&M”) expenses and were not recoverable under the PPA, as CSPDCL was procuring power only at variable charges. Notwithstanding its objections, CSPDCL subsequently released payment of the aforesaid amount under protest.

11. Aggrieved by the claims raised by the Appellant, Respondent No.2- CSPDCL on 04.10.25 filed Petition No.72 of 2025 for Raipur Project and Petition No.71 of 2025 for Raigarh Project before the State Commission seeking, inter alia, a declaration that fly ash transportation and utilization expenses formed part of fixed cost/O&M expenses and were not recoverable from CSPDCL, together with refund of the amounts already paid along with Carrying cost.

12. On 16.10.2025, Appellant raised another supplementary invoice for Rs.99,20,346/- for Raipur Project and Rs.1,30,44,960/- for Raigarh Project towards similar expenditure incurred during FY 2024-25.

13. State Commission passed the common Order dated 20.01.2026 in Petition Nos.71 of 2025 and 72 of 2025, (impugned order) and held that fly ash utilization expenses were recoverable only through fixed charges, and directed refund of the amounts already recovered by the Appellant together with applicable interest.

14. Aggrieved by the findings and directions contained in the common Order dated 20.01.2026, the Appellant has preferred the present batch of Appeals. Analysis and Discussion

15. Since the issues involved in Appeal Nos. 65 of 2026 and 66 of 2026 arise out of a common Impugned Order dated 20.01.2026 and involve identical questions of fact and law, both the Appeals were heard together and are being disposed of by this common judgment. Heard Mr Amit Kapur, learned Counsel for the Appellant, Mr Buddy Ranganathan, learned senior Counsel appearing on behalf of Discoms, Ms Swapna Sheshadri, learned Counsel on behalf of State

Commission, perused written submissions filed by parties, Impugned Order and other documents on record.

16. The State Commission, in the Impugned Order after noting the definition of change in law as per of MYT Regulations 2021, Notifications and Change in Law Rules, in paragraph 41 observed that “keeping in view the above definitions, the notifications of MOEF&CC dated 25.01.2016 and 31.12.2021 are coming under the purview of Change in Law”. With regard to applicability of such change in law in the case of Appellant herein, in paragraph 52, it is held that “any expenses towards ash Utilisation are required to be recovered through fixed charges only” and Appellant is not entitled to recover the same from the Discom and ordered refund of the payment, already received by Appellant, to the Discoms along with interest.

17. It has been contended by Appellant that in light of the judgment of the Supreme Court in “PTC India Ltd. v. Central Electricity Regulatory Commission” (2010) 4 SCC 603 ("PTC Judgment"), it is a settled position of law that statutory provisions override contractual stipulations, including the terms of a PPAs. Further the phrase "variable cost only" contained in PPA was intended merely to define the commercial billing structure for supply and did not impose an absolute bar on the recovery of statutory expenses. The Appellant has further relied upon the second proviso to Regulation 40.5.2.1 of the MYT Regulations, 2021, which expressly provides for pass-through of expenses arising from compliance with statutory directions, including fly ash transportation/utilization expenses, over and above routine O&M expenses. Moreover, while O&M expenses are incurred within the project premises, even during periods of no generation, fly ash transportation/utilization expenses are incurred outside the project premises and vary directly with the quantum of generation, thereby

making them variable in nature. Article 19.5 of the PPA, provides that notwithstanding anything contained in the PPA, if any provision thereof is inconsistent with the provisions of the Electricity Act or the Rules and Regulations framed thereunder, such provision shall be deemed to be amended to the extent required to bring about such consistency. The State Commission has also failed to consider various judgments of this Tribunal in Appeal No. 109 of 2022 dated 07.08.2025 and Appeal No. 345 of 2021 dated 08.05.2025, despite Appellant’s specific reliance upon the same during the course of hearing before State Commission as well as CERC order dated 22.12.2023 in Petition No. 202/MP/2022. By ignoring binding precedent, the Impugned Order violates the principle of judicial consistency. In particular, the Order dated 22.12.2023 passed by CERC which specifically recognizes the recovery of fly ash transportation charges separately from O&M expenses and Annual Fixed Charges.

18. Per Contra, it has been contended on behalf of Respondents that CSERC MYT Regulations, 2021 have undergone multiple amendments subsequent to the issuance of the 2021 MoEF&CC Notification concerning fly ash disposal, and provisions in the Regulation clearly demonstrates that fly ash cost component is included as part of fixed cost. The Regulation 45.5 of the CSERC MYT Regulations, 2021, which prescribes the methodology for determination of variable charges, also does not include expenditure incurred towards fly ash utilization within its ambit. Further, pass-through of fly ash transportation expenses has also been specifically qualified in the MoEF& CC notification dated 31.12.2021 itself, as Statutory obligation of 100 percent utilization of ash to be treated as change in law, wherever applicable. It is thus evident that there is no scope for any blanket recognition of the said notifications as Change in Law events, as such an interpretation contrary to the terms of the PPAs is neither envisaged under the notifications nor change in Law Rules. The expenses

relating to fly ash utilization are components of fixed cost and do not form part of variable charges. Therefore, in the absence of any provision under the PPA permitting payment of fixed cost expenses or any Change in Law expenses, the Respondent is not bound to pay the expenses incurred by the Appellant towards fly ash handling, disposal and transportation.

19. There is no dispute that considering the Change in Law provision in Regulation 3.14 of the MYT Regulation 2021 and Rule 2 (c) of Electricity Rules 2021, the notifications of MOEF&CC dated 25.01.2016 and 31.12.2021 shall come under the purview of Change in Law, as noted in the Impugned Order. Applicability of same in the present case is deliberated in following Paragraphs Provision of PPA Under the PPAs, Appellant is supplying 30 MW power from Raigarh TPP and 63 MW from Raipur TPP. Terms of both the PPAs are identical, and relevant provisions from PPA dated 08.07.2020 for Raipur TPP are extracted hereunder. “Article 1.1 (Definitions) “Tariff” shall mean the Energy Charge/Variable Charge/Variable cost as determined in accordance with the relevant regulations of CERC from time to time and approved by the Appropriate Commission or the Consultant/Committee as per Article 8.1, as the case may be” Article 8.1 (Applicable Tariff) “8.1.1 Both the Parties agree that the Tariff for supply of the Contracted Energy to CSPTradeco from the Generating Station of the Company under this Agreement shall be determined in accordance with CERC Regulations from time to time and approved by the Appropriate Commission and shall be calculated as per Schedule-6 hereof.” Article 14 (Change in Law

“14.1 The parties agree that the Variable charges being determined by the Appropriate Commission based on actual at the relevant time and there being no aspect of capacity or fixed charges payment under this agreement, there shall be no implication of the changes in law and no provision need to be made for the said purpose.” 19.5 Compliance with Law “Despite anything contained in this Agreement, if any provision of this Agreement shall be in deviation or inconsistent with or repugnant to the provisions contained in the Electricity Act, 2003, or any rules and regulations made there under, such provision shall be deemed to be amended to the extent required to bring it into compliance with the aforesaid relevant provisions as amended from time to time.” Provisions Under MYT Regulation 2021

20. Regulation 37 of MYT Regulations 2021 provides for the component of Annual Fixed Charges, in which under O&M expenses, Maintenance & General (M&G) Expenses are included. Under Regulation 40.5.2, defining M&G expenses, following is provided under 2nd Proviso: “Provided that in all cases the additional O & M cost incurred due to any change/compliance of law or any direction by in statutory authority including but not limited to expenses on ash utilisation (not covered in additional capitalisation) shall be pass through over and above the O & M charges allowed in tariff order” MOEF & CC notification dated 31.12.2021 Clause A (10) Statutory obligation of 100 percent utilisation of ash shall be treated as a change in law, wherever applicable

21. In view of above contentions raised, and the provisions of PPA, the applicable Regulations and MOEF&CC notification, following issue emerges for consideration:

Whether, in view of the provisions of the Power Purchase Agreement, the Appellant stands barred from seeking restitution under the doctrine of Change in Law on account of the Notifications issued by the Ministry of Environment, Forest and Climate Change, and whether the Appellant is entitled to recover from Respondent No. 2 (the Distribution Licensee), the charges incurred towards transportation and disposal of fly ash as a consequence of such statutory notifications?”

22. The doctrine of “Change in Law” is a well-recognized principle in regulatory jurisprudence, signifying the occurrence of a legislative enactment, subordinate legislation, regulation, notification, or binding judicial pronouncement, subsequent to the finalization of contractual arrangement between the parties including the cut-off date if any stipulated, which materially alters the legal position governing the rights and obligations of the contracting parties. The essence of the doctrine lies in ensuring that no party is unfairly prejudiced by supervening legal developments beyond its control. Accordingly, where a Change in Law event imposes additional financial burden, restricts performance, or otherwise modifies the contractual equilibrium, the affected party is entitled to restitutionary relief so as to restore it to the same economic position as if such change had not occurred. The principle thus operates as a shield against unforeseen statutory or regulatory interventions, mandating that the consequences of such change be equitably allocated, thereby preserving the sanctity of contract and ensuring that the party impacted by the Change in Law is duly compensated or relieved to the extent of such impact.

23. In the present case, admittedly, the Appellant supplies power only on variable cost, essentially covering actual fuel charges, and seems to have

consciously agreed not to pass fixed costs to the Respondents, including O&M charges which also includes ash handling charges. However, it is also a fact that Ash is produced only when power is generated. Thus, the burden arises directly from generation activity. In our view, by agreeing to supply power only on variable charges to the Respondent, Appellant after considering the known fixed cost including the O&M costs in generation of electricity at the time of signing of the PPA, agreed to bear the same. However, MoEF &CC Notifications imposes additional expenditure on ash utilisation. This notification is a statutory instrument, acknowledged as Change in Law under Rule 2(c) of the Electricity Rules 2021 and Regulation 3.14 of MYT Regulations, 2021 as also noted in the Impugned Order and not challenged.

24. The doctrine of Change in Law is not confined to the nomenclature of fixed or variable charges, but is anchored in the broader principle of restitution. Its object is to restore the affected party to the same economic position as if such change had not occurred. Thus, even where the incidence of Change in Law is reflected in the variable component of tariff, or arises as a derivative of fixed cost obligations, the entitlement of the impacted party to relief cannot be denied. The classification of tariff elements into fixed and variable is a matter of regulatory design, but the underlying doctrine of Change in Law operates across both, ensuring that unforeseen statutory or regulatory impositions do not distort the contractual equilibrium. To hold otherwise would defeat the very purpose of the doctrine, which is to neutralize the economic consequences of supervening legal developments and thereby preserve fairness and sanctity of contract. Thus in the present case, that Appellant has and is liable to incur extra cost on account of ash utilization in terms of MOEF&CC notification dated 26.12.2021, which being recognized as change in law, gets entitled to restitution.

25. The Reliance has been placed by Respondents on Hon'ble Supreme Court judgement in “Haryana Power Purchase Centre v. Sasan Power Ltd. and Ors.” (2024) 1 SCC 247 and “Chamundeshwari Electricity Supply Company Ltd. v. Saisudhir Energy Chitradurga (Pvt.) Ltd. and Anr.” 2025 SCC OnLine SC 1816 , to contend that the PPA has to be enforced strictly in accordance with its express stipulations. The Respondents have also contended that Electricity “Electricity Rules 2021”, specifically recognizes contractual exclusions while determining the entitlement to Change in Law relief. In support of the said contention, the Respondents have relied upon the relevant definition contained in the Electricity Rules, 2021, which is extracted hereinbelow: “2. De initions.— (1) In these rules, unless the context otherwise requires,— …

(c) “change in law”, in relation to tariff, unless otherwise de ined in the agreement, means any enactment or amendment or repeal of any law, made after the determination of tariff under section 62 or section 63 of the Act, leading to corresponding changes in the cost requiring change in tariff, and includes—

(i) a change in interpretation of any law by a competent court; or

(ii) a change in any domestic tax, including duty, levy, cess, charge or surcharge by the Central Government, State Government or Union territory administration leading to corresponding changes in the cost; or

(iii) a change in any condition of an approval or license obtained or to be obtained for purchase, supply or transmission of electricity, unless speci ically excluded in the agreement for the purchase, supply or transmission of electricity, which results in any change in the cost,………”

26. In the present case, under Article 14.1 of the PPA, it is stipulated that since the power is purchased at variable cost, which is being determined by the Appropriate Commission based on actual at the relevant time and there being no aspect of capacity or fixed charges payment under this agreement, there shall be no implication of the changes in law and no provision need to be made for the

said purpose. Thus, exclusion of change in law claim seems to be premised on the fact that since variable charges shall be on actual to be determined by the Commission at relevant time, there will be no implication of change in law. It can therefore be derived that Appellant has not assumed the responsibility of absorbing any liability which may occur on account of change in law. Thus, in our view there is no specific exclusion/prohibition for claiming restitution under change in law. In view of MoEF&CC notification, there is an impact of additional charges on ash utilization, as and when power is produced for the Respondents, Change in Law doctrine would entitle the Appellant for restitution.

27. Furthermore, although the Article 14.1 of the PPA stipulates that there shall be no implication of Change in Law under the Agreement, however, Article 19.5 of the PPA, as noted above, operates as a saving clause with overriding effect. It stipulates that notwithstanding any contractual provision, if there is inconsistency between the PPA and the Electricity Act, 2003 or the subordinate legislation framed thereunder, the PPA shall stand amended to the extent necessary to bring about conformity. This clause is not ornamental but substantive, ensuring that the contractual framework remains subservient to statutory mandates. It thereby secures the supremacy of law over private bargains, and obliges the parties to read the PPA in harmony with the governing statute and regulations. The MYT Regulations, 2021, framed under Section 181 of the Electricity Act, expressly recognize that additional O&M costs incurred due to compliance with statutory directions, including fly ash utilisation, shall be a pass-through over and above the O&M charges allowed in the tariff order. This statutory recognition cannot be negated by the exclusionary language of Article 14.1 of the PPA, which is contended to exclude Change in Law compensation. By virtue of Article 19.5, the PPA must be read as incorporating the statutory entitlement, and any contrary contractual stipulation must yield to the regulation. The Supreme Court in “PTC

India Ltd. v. CERC”, (2010) 4 SCC 603 has categorically affirmed that regulations framed under Section 178/181 have binding force and override inconsistent contractual terms.

28. The reliance placed by Respondents on the judgments of the Hon'ble Supreme Court in “Haryana Power Purchase Centre v. Sasan Power Ltd”. and “Chamundeshwari Electricity Supply Company Ltd. v. Saisudhir Energy Chitradurga (Pvt.) Ltd”. is misplaced. Those decisions reiterate the sanctity of contract in the absence of overriding statutory compulsion. In the present case, however, the Notification dated 31.12.2021 issued by MoEF&CC constitutes a statutory mandate under the Environment (Protection) Act, 1986. It is well settled that statutory provisions prevail over contractual stipulations where the two are in conflict. The Electricity Rules 2021, while recognizing contractual exclusions, cannot be construed to nullify statutory obligations. Accordingly, the expenses incurred towards fly ash disposal and utilization, being a direct consequence of a statutory notification, qualify as a Change in Law event and must be restituted in accordance with the statutory framework, notwithstanding contractual allocation of charges.

29. Accordingly, we are of the view that whether the burden manifests in fixed cost or variable charge as per regulatory scheme, the affected party is entitled to restitutionary adjustment so as to maintain parity with the pre-change economic position, unless expressly prohibited in the agreement. We refrain from making any observation with regard to the no Change in Law claim of the Appellant in other PPAs, as contended by the Respondents, since the same is not under challenge before us.

30. The Appellant has relied upon the judgment of this Tribunal dated 08.05.2025 in Appeal No. 345 of 2021 and Judgement dated 07.08. 2025, wherein it was held that the Notification dated 31.12.2021 and 25.01.2016 respectively, issued by the Ministry of Environment, Forest and Climate Change, imposing additional obligations upon generating companies in respect of transportation and utilization of fly ash, constitutes a Change in Law events, thereby entitling generators to restitutionary relief for the additional financial burden so imposed. There is no dispute in the present case that the said Notification qualifies as a Change in Law event. The Respondents have not contested this position, and indeed the Impugned Order also proceeds on the footing that the Notification dated 31.12.2021 is a Change in Law.

31. Before summarising the issues, it is to take note that both the Appellant and the Respondents have placed reliance on certain orders of the Central Electricity Regulatory Commission (CERC). The Appellant has cited the CERC’s Order dated 22.12.2023 in Petition No. 202/MP/2022 to contend that it recognizes recovery of fly ash transportation charges separately from O&M charges, whereas the Respondents have relied upon the CERC’s Order dated 05.11.2018 in Petition No. 172/MP/2016 and Order dated 28.10.2022 in Petition No. 205/MP/2021, which classified fly ash transportation cost as additional O&M expenses. It is well settled that the CERC, while exercising its adjudicatory powers under Section 79 of the Electricity Act, 2003, functions as a statutory tribunal of first instance. Its orders and pronouncements, though binding upon the parties to the lis until set aside, do not constitute binding precedent upon this Appellate Tribunal. The jurisdiction of this Tribunal under Section 111 of the Electricity Act,2003 is appellate in nature, and while a judicial pronouncement of the CERC cited by an appellant or respondent may have persuasive value, it cannot fetter the independent adjudicatory discretion of this Tribunal. Binding

precedent upon this Tribunal emanates only from the judgments of the Hon’ble Supreme Court under Article 141 of the Constitution of India, and from the High Courts within their territorial jurisdiction under Articles 226 and 227. Accordingly, we find it unnecessary to deliberate upon the CERC orders relied upon by either party, save to note that they may be of persuasive relevance but do not control the outcome of the present adjudication, which must be determined on the basis of statutory provisions, binding precedent, and the contractual framework under consideration.

32. In view of the above deliberation, we hold that Appellant is entitled to seek restitution under the doctrine of Change in Law on account of the Notifications issued by the Ministry of Environment, Forest and Climate Change, and consequently it is entitled to recover the charges incurred towards transportation and disposal of fly ash as a consequence of such statutory notifications from Respondent No. 2(CSPDCL).

33. It has been contended by the Respondents, and duly noted in the Impugned Order, that the Appellant never sought reimbursement of expenses towards ash disposal or transport/handling charges for fly ash in its tariff petitions filed subsequent to the MoEF&CC Notification dated 31.12.2021. In this regard, reliance has been placed upon Rule 1(c) of the “Electricity Rules 2021” which defines “Change in Law” as any event occurring after the determination of tariff under Section 62 or Section 63 of the Electricity Act 2003. The Respondents contended that since the Appellant excluded fly ash expenses from multiple tariff petitions filed after the notification, it failed to meet the strict procedural requirements prescribed under the Rules. Per contra, Appellants, placing reliance on the Electricity Rules, 2021 notified by the Ministry of Power on 22.10.2021, have contended that since the Rules were issued after execution of the PPAs,

compliance with the MoEF&CC notifications constitutes a Change in Law under the PPAs in terms of the said Rules.

34. In this regard, we note that these submissions agitated on behalf of the Respondents are beyond the pleadings of the parties before the Commission as well as the contentions raised before the Commission during the hearing of the petition. The petition Nos.71/2025 and 72/2025, in which the common order dated 20.01.2026, which has been impugned in these two appeals, was passed were filed by the Respondent no.2, CSPDCL claiming following reliefs: - “Petition No.71/2025: - i. To hold and declare that the expenses towards fly ash disposal/utilization forms part of fixed cost expense under the provisions of the MY Regulations, 2021; ii. To direct the respondent to reimburse amount of Rs. 1,85,94,781/- illegally recovered by it from the petitioner along with interest; iii. To direct the respondent to pay carrying cost to petitioner on the amount of Rs. 1,85,94,781/- from the date when such amount was recovered illegally form petitioner; iv. To direct the respondent to bear cost of the instant petition.” Petition No.72/2025: - i. To hold and declare that the expenses towards fly ash disposal/utilization forms part of fixed cost expense under the provisions of the MY Regulations, 2021; ii. To direct the respondent to reimburse amount of Rs. 1,09,72,560/- illegally recovered by it from the petitioner along with interest; iii. To direct the respondent to pay carrying cost to petitioner on the amount of Rs. 1,09,72,560/- from the date when such amount was recovered illegally form petitioner; iv. To direct the respondent to bear cost of the instant petition.”

35. Thus, the Respondent No.2, CSPDCL, had approached the Commission with the prayer that the expenses towards fly ash disposal/utilization may be declared to be forming part of fixed cost expenditure under the provisions of MYT Regulations, 2021 and to direct the Appellant to reimburse the amounts which had been paid to the Appellant on these counts along with carrying cost. It was nowhere contended in the petitions that the Appellant had failed to meet the procedural requirements prescribed under the Electricity Rules, 2021 for claiming relief under the change in law event. It is for this reason that the only issue framed by the Commission for its consideration in Paragraph No.17 was with regards to entitlement of the Appellant to recover fly ash disposal/transportation charges from the Respondent No.2 due to change in law event. We find it apposite to extract Paragraph no.18 of the impugned order of the Commission hereunder: “18. Now, on the basis of above-mentioned facts described in petitions, replies and rejoinders, we have to decide mainly the issue referred below: Whether the respondent is entitled to recover fly ash disposal/ transportation charges from the petitioner due to change in law event?”

36. Upon taking note of the rival submissions of the parties and perusal of the relevant contractual as well as statutory provisions, the Commission concluded as under:- “52. From the above discussion we conclude that:

(1) Any expenses towards ash utilization are required to be recovered through Fixed Charge only. Hence the respondent to not entitled to recover it from the petitioner;

(2) Amount of Rs. 1,85,94,781/- as claimed in petition No. 71 of 2025 and amount of Rs. 1,09,72,560/- as claimed in petition No. 72 of 2025, which has been recovered by the respondent is refundable to the petitioner;

(3) The respondent is liable to pay interest at the rate, which is applicable to the outstanding dues uploaded on the PRAAPTI portal. The interest

should be calculated from the date on which the amount has been recovered from the petitioner;

(4) The amount of Rs. 1,30,44,960/- as referred in petition No. 71 of 2025 and amount of Rs. 99,20,346/- as referred in petition No. 72 of 2025 are posted on PRAAPTI portal, for which the petitioner prayed for stay; if has been recovered from the petitioner, may be refundable with interest as per order mentioned above in sub para 1 and 2 of this para;

(5) The respondent is liable to reimburse the petition fee paid by the petitioner in both the petitions;

(6) The respondent is also liable to pay Rs. 50,000/- for each petition regarding expenses occurred to the petitioner;”

37. Thus, the Commission decided the issue framed by it against the Appellant herein and in favour of the Respondent No.2, which decision we have found erroneous and not sustainable as discussed hereinabove.

38. Therefore, we do not find it necessary to discuss any other contention raised on behalf of the Respondent No.2 in this appeal which was never raised before the Commission and which is dehors the pleadings of the parties before the Commission. It is a trite law that first appeal is continuation of the original proceedings and therefore, the first appellate court is bound to base its conclusion on the pleadings of the parties before the original court/forum as well as the contentions raised by the parties before the same. The Respondent No. 2 cannot be permitted to raise any fresh plea or contention in the appeal which was not raised before the Commission during the hearing of the petition. Therefore, all such contentions raised by the Respondent No.2 herein stand rejected outrightly.

Conclusion

In view of above deliberations, the Impugned Order is set aside on the issue raised in this Appeal. We hold that MOEF&CC Notification dated 31.12.2021, being Change in Law event, Appellant is entitled to restitutionary adjustment so as to maintain parity with the pre-change economic position. We further hold that the Commission has erred in observing in the impugned order that expenses towards ash utilization are required to be recovered through fixed charges only. We hold that the Appellant is entitled to recover such expenses towards ash utilization from the Discom i.e. Respondent No.2. Accordingly, the direction issued in the impugned order to the Appellant to refund the amounts received by it from the Respondent No.2 also stands quashed. The conclusion of the Commission in the Impugned Order that the Appellant is liable to reimburse the petition fee to Respondent No.2 and to pay expenses of Rs.50,000/- for each petition , is also hereby quashed. The Captioned appeals and pending IAs are disposed of in above terms. PRONOUNCED IN THE OPEN COURT ON THIS 29th DAY OF JULY, 2026. (Virender Bhat) Judicial Member (Seema Gupta) Officiating Chairperson REPORTABLE / NON-REPORTABLE Pr/dk/ag/ak