RKM Powergen Pvt. Ltd vs Chairman, UP Power Corporation Ltd. & Ors on 7 August 2025

J U D G M E N T

PER HON’BLE MR. VIRENDER BHAT, JUDICIAL MEMBER

1. The appellant M/s RKM Powergen Private Limited is aggrieved by the order dated 30.09.2020 passed by the 6th respondent Uttar Pradesh

Electricity Regulatory Commission (hereinafter referred to as “the Commission”) in petition no.1365/2018 thereby considering some of the events pleaded by the appellant in the petition as Change in Law (CIL) in terms of Article 10 of the Power Purchase Agreement (PPA) dated 15.03.2016 executed between the appellant and the respondent nos.1 to 4 whereas rejecting the claim of the appellant with regards to certain other events.

2. Facts and circumstances giving rise of the instant appeal are stated briefly hereinbelow.

3. A coalfired thermal power plant with capacity of 1440MW comprising of four units with generating capacities of 360MW each is owned and operated by the appellant as a joint venture with Mudajaya Corporation Berhad, Malaysia. The power plant is located at Uchpinda, State of Chhattisgarh. Unit-1 of the power plant has been commissioned on 27.11.2015.

4. The 1st respondent Uttar Pradesh Power Corporation Limited (in short “UPPCL”) is the nodal agency/authorized representative for the respondent nos.2 to 5 which are UP Discoms. The respondent nos.2 to 5 have different allocations of power from the appellant’s power plant under the PPA.

Respondent no.3 is the lead procurer and authorized to act for and on behalf of other procurers i.e. respondent nos.2, 4 & 5.

5. In the year 2012, the 1st respondent UPPCL initiated a bid process for procurement of 6000MW power under Case-1 of the bidding guidelines issued under Section 63 of the Electricity Act, 2003. Accordingly, Request for Proposal was issued on 27.07.2012.

6. The appellant submitted its bid on 21.09.2012 for supply of 350MW power at a levelized tariff of Rs.5.088/kWh for a period of 25 years. In the bid, the appellant mentioned two sources for procurement of fuel namely South East Coal Fields Limited and Captive Coal Block being Fatehpur East in Mond-Raigarh area.

7. Based on the evaluation of non-financial bids, financial bids and the recommendations of the Bid Evaluation Committee as well as Energy Taskforce of Government of Uttar Pradesh, Letters of Intent (LOIs) were issued by the 1st respondent UPPCL to first seven successful bidders including the appellant, which had emerged as L-4 amongst the successful bidders.

8. On 23.05.2013, the appellant informed the UPPCL about the uncertainty of the availability of the captive coal block as a source of coal for

the power plant on account of some CBI inquiry. The appellant requested UPPCL to evaluate the bid on the basis of linkage coal source only. In its response dated 07.06.2013, UPPCL stated that the appellant has to accept the LOI unconditionally for the reason that the bid has been evaluated on coal block basis. Appellant was further informed that any deviation will attract the provisions of clause 2.19 of Request for Proposal (RFP) pertaining to fraudulent and corrupt practices.

9. Later on, the LOI issued to appellant was cancelled by UPPCL on 10.12.2013 on the ground of non-responsiveness of appellant.

10. It appears that the appellant challenged the cancellation of LOI dated 22.05.2013 issued to it before the Commission by way of petition no.946/2014. It further appears that some talks had taken place between the appellant and UPPCL during the pendency of that petition wherein UPPCL had agreed to consider restoration of LOI in case the appellant withdraws the said petition. Accordingly, the petition was dismissed as withdrawn by the Commission on 28.09.2015. Thereafter, UPPCL sent a letter dated 02.11.2015 to the appellant asking the appellant to submit an undertaking. The relevant portion of the letter is extracted hereinbelow: -

“… In view of the above, I have been directed to request M/s RKM Powergen Pvt. Ltd. to submit an undertaking that M/s RKM Powergen Pvt. Ltd. is committed to supply its quoted quantum of 350MW from its 4x360MW thermal power plant in Distt. Jangir Champa, Chattisgarh whereby M/s RKM Powergen Pvt. Ltd. had quoted levelised tariff of Rs. 5.088/unit from fuel source captive coal mine (Fatehpur East) and stands committed to supply the above quantum from same generation source from alternative coal linkage fuel source at its quoted tariff (i.e. Its year on year tariff stream as well as all other applicable parameters taken collectively for the purpose of evaluation on the basis of which it has been evaluated as L4 bidder) as per M/s RKM Powergen Pvt. Ltd. offer by way of RFP Bid submitted on 21-09-2012 against the Request for Proposal document dated 27-07-2012 issued to M/s RKM Powergen Pvt. Ltd. by UPPCL ….”

11. The requisite undertaking was duly submitted by the appellant vide communication dated 05.11.2015. Accordingly, the appellant’s LOI was restored by UPPCL. The restoration of LOI to appellant was also approved

by the Commission vide order dated 11.02.2016 passed in the petition no.1078/2015.

12. Thereafter, PPA dated 15.03.2016 was executed between appellant and the UP discoms i.e. respondent nos.2 to 5 with regards to the quantum of 350MW of power to be generated from Unit-1 of the appellant’s thermal power plant at levelized tariff of Rs.5.088 per unit. The PPA mentions the scheduled delivery date as 30.06.2016 extending up to 25 years.

13. The tariff quoted in the PPA was adopted by the Commission on 01.02.2017 in terms of Section 63 of the Electricity Act, 2003.

14. The appellant issued two Change in Law notices to the 1st respondent UPPCL on 26.12.2017 and 28.06.2018. A separate notice dated 01.09.2018 was issued in this regard by the appellant to the procurers i.e. respondent nos.2 to 5.

15. Subsequently, the appellant approached the Commission by way of petition no.1365/2018 under Section 86(1)(a) of the Electricity Act, 2003 read with Article 10 of the PPA dated 15.03.2016 and clause 4.7 of the Guidelines for Determination of Tariff by Bid Process for Procurement of Power by the Distribution Licensee (in short “competitive bid guidelines”) seeking a declaration that the events enumerated in the petition constitute “Change in

Law”, compensation in respect thereof and for prescribing mechanism for computing the compensation payable and its recovery for both past period as well as the future period.

16. The Change in Law events specified by the appellant in the petition were as under: - “ S. No. Change in Law Claim Basis for Change in Law Claim DURING CONSTRUCTION

1. New Environmental Norms. The Chhattisgarh Environment Conservation Board (the “CECB”) issued a renewal of its consent under section 21 of Air (Prevention and Control of Pollution) Act dated 6.10.2016 stipulating a new requirement for the installation of a High Concentration Slurry Disposal System (“HSCD System”). DURING OPERATIONS

2. Increase in the cost of G11 Grade Coal by The increase in the cost of coal from Rs. 730/MT in 2012 to Rs.

Coal India Limited (“CIL”) vide notification dated 29.5.2016.

810/MT in 2016 has increased the following costs up to Nov 2017:

(a) Increase in coal cost due to the Mines and Minerals Development Charges @ 2% of royalty payable and District Mineral Foundation charges @ 30% of royalty payable vide CIL’s notification (1936) dated 14.11.2015.

(b) Increase in coal sizing charges for 100MM size from Rs. 77/MT in 2012 to Rs. 79/MT in 2013 vide CIL’s notification (2784) dated 16.12.2013.

(c) Increase in coal transfer to siding charges (up to 10KM) from Rs. 44/MT in 2012 to Rs. 59/MT in 2013 vide CIL’s notification dated 13.11.2013.

(d) Increase in CG Paryavaran and Vikas Upkar Tax from 5% in 2012 to 7.5% in 2015 vide

Increase in the cost of G11 Grade Coal by CIL’s notification

dated 19.8.2015.

(e) Increase in Central Excise Duty from 5% in 2012 to 6% in 2015 vide CIL’s notification (1420) dated 19.8.2015.

(f) Increase in Clean Environmental Cess from Rs. 50/MT to Rs. 400/MT in 2016 vide CIL’s notification (440) dated 29.2.2016.

(g) Increase in ROM price in 2018 vide CIL’s notification (CIL:M&S/GM(F): Pricing) dated 8.1.2018.

(h) Increase in busy season surcharge from 12% in 2012 to 15% in 2013 vide Ministry of Railways notification (TCR/1078/2008/11) dated 18.9.2013. The increase in the cost of coal from Rs. 810/MT in 2012 to Rs. 955/MT in Jan has

Coal India Limited (“CIL”) vide notification dated 08.01.2018. increased the following costs From Jan 2018:

(a) Increase in coal cost due to the Mines and Minerals Development Charges @ 2% of royalty payable and District Mineral Foundation Charges @ 30% of royalty payable vide CIL’s notification (1936) dated 14.11.2015.

(b) Increase in coal sizing charges for 100MM size from Rs. 79/MT in 2016 to Rs.87/MT in 2018 vide South Eastern Coalfields Limited’s Mine wise price indicator dated 09.01.2018.

(c) Increase in coal transfer to siding charges (up to 10KM) from Rs. 57/MT in 2016 to Rs.87/MT in 2016 vide South Eastern Coalfields Limited’s Mine wise price indicator dated 09.01.2018.

(d) Introduction of Evacuation facility charges vide CIL’s notification

dated 19.12.2017.

3. Increase in the cost of coal due to new coal distribution policy. The new coal distribution policy was amended vide an office memorandum (F. No. 23011/90/2013-CPD) dated 26.7.2013 issued by the Ministry of Coal, fuel supply agreements would be executed for 75% of the ACQ for the remaining years of the 12 plan. Ministry of Coal Notification 23011/85/2011-CPD dated 17.02.2012 had fixed ACQ in FSA for category B projects at 90% trigger level. As such the Petitioner is being supplied only 57% (0.90*0.85*0.75) of FSA coal. The Petitioner has to source the remaining 43% of its coal requirement from E-Auction and other sources where coal is

offered at a premium of 20% over the CIL notified price though the actual premium while bidding is much higher. CERC has vide order in Petition 1/MP/2017 has issued formulation for mitigation of increase in cost due coal shortage.

4. Reduction of indirect tax on coal due to introduction of GST. On account of introduction of GST on 3.7.2017, the previous regime of excise duty of 6% and value added tax of 5% has been reduced to 5% GST.

5. Increase in Central Excise Duty and Value Added Tax on diesel. Under the Petroleum Planning and Analysis Cell notification dated 5.7.2017, the central excise duty on diesel has increased from Rs.3.46/litre in in Rs.17.33/litre in 2017. Under notification (664) dated 30.4.2015, value added tax on diesel has increased from 12.5% in 2012 to 17% in 2017.

6. Increase in indirect tax due to conversion of Under the GST notification (Notification No. 11/2017-Central Tax (Rate)) dated 28.6.2017, the

Service Tax to Goods and Services Tax (“GST”) on O&M charges. GST for operations and management charges has increased from 15% (under the service tax regime) to 18%.

7. Increase in costs due to immediate implementation of the 100% fly ash disposal. The MoEF has issued a notification on 25.1.2016 under which the condition for 100% fly ash utilization must be complied with immediately on the start of commercial operations instead of 3 years under the previous regime.

8. Increase in Electricity Duty. The Government of Chhattisgarh (Energy Department) increased the electricity duty on auxiliary consumption from 8% in 2012 to 15% in 2016 vide endorsement number (2520/F/29/01/2016/13/2/ED) dated 12.8.2016. ”

17. The petition has been disposed off by the Commission vide the impugned order dated 30.09.2020. The summary of the conclusion arrived at by the Commission with regards to the said Change in Law events is given in the table below: -

“ Sl. No. Change in Law Claim Commission’s decision

1. New Environmental Norms. Liberty granted

2. Increase in the cost of G11 Grade Coal by Coal India Limited (“CIL”) vide notification dated 29.5.2016.

Increase in the cost of G11 Grade Coal by Coal India Limited (“CIL”) vide notification dated 08.01.2018.

Not allowed as these notifications are applicable only on linkage coal and Petitioner’s bid was approved as captive coal block.

3. Increase in the cost of coal due to new coal distribution policy.

4. Reduction of indirect tax on coal due to introduction of GST.

5. Increase in Central Excise Duty and Value Added Tax on diesel. Not Allowed

6. Increase in indirect tax due to conversion of Service Tax to Goods and Services Tax (“GST”) on O&M. Not Allowed

7. Increase in costs due to immediate implementation of the 100% fly ash disposal. Not Allowed

8. Increase in Electricity Duty. Allowed ”

18. We may note that while rejecting the claim of the appellant for the events mentioned at sl.no.2, 3 & 4 in the above table, the Commission has relied upon the undertaking dated 05.11.2015 given by the appellant to UPPCL ( in pursuance to which LOI was restored to the appellant) wherein the fuel source was stated to be captive coal mine (Fatehpur East) and has observed that the appellant cannot be permitted to claim impact of “Change in Law” in relation to linkage coal in total disregard to the said undertaking. The relevant portion of the impugned order on this aspect is reproduced hereinbelow: - “56. Accordingly, the Petitioner having accepted the restoration of LOI by providing the undertaking and based on that later having executed the PPA with Respondents and having been billing on monthly basis to UPPCL based on escalation indices for "domestic captive coal mine" category, cannot now in complete disregard of its undertaking permitted to be allowed impact of "Change in law" in relation to linkage coal. When base obligation of the Petitioner is to supply from Domestic Captive Coal mine on the basis of which the bid was evaluated and ongoing payment are also being made on related escalation indices, the incremental compensation over

and above the base obligation by way of "Change in Law" with regard to linkage coal doesn't hold ground. When the Petitioner knowingly accepted the LOI restoration by providing the undertaking now it is estopped to deny the validity or binding effect of the same and claim Change in Law for items pertaining to Linkage Coal. The undertaking expressly bars the Petitioner to claim any additional tariff vis-à-vis Linkage coal. Accordingly, the instant claim of the Petitioner seeking Change in law claim on items applicable for Linkage Coal is devoid of merit and the same is rejected holding the same to be baseless and against the express provisions of the PPA Including the undertaking which forms an integral and fundamental basis of the contract.

57. As regards to the question of change in law with regard to Captive coal, Commission is of the clear opinion that the bidding as well as subsequent Undertaking dated 05.11.2015 places the Petitioner as a Generating plant based on Captive Coal mine even it is procuring coal from alternate source. Accordingly, the Petitioner has created a "legal fiction" for himself, when it has ascribed itself a

status of a generating plant based on Captive coal mine irrespective of existing realty. Thus, a deeming provision has been carved out wherein the Petitioner should be treated as a generator based on deemed captive coal mine, with all necessary consequences of the deeming provision. This position can be observed in various judgements of Hon'ble Supreme Court: "G. Viswanathan Vs. T. N. Legislative Assembly {(1996) 2 SCC 253)}: "9. The scope of the legal fiction enacted in the explanation (a) to para 2 (1) of the Tenth Schedule assumes importance in this context. BY the decision of this Court it is fairly well settled that a deeming provision is an admission of the non- existence of the fact deemed. The Legislature is competent to enact a deeming provision for the purpose of assuming the existence of a fact which does not even exist. It means that the courts must assume that such a state of affairs exists as real and should imagine as real the

consequences and incidents which inevitably flow therefore and give effect to the same.

10. The deeming provision may be intended to enlarge the meaning of a particular word or to include matters which otherwise may or may fall within the main provision. The law laid down in this regard in East End Dwellings Co. Ltd. Case (East End Dwellings Co. Ltd. V. Finsbury Borough Council, 1952 AC 109: (1951) 2 all ER 587) has been followed by this court in a number of cases, beginning from State of Bombay V. Pandurang Vinayak (AIR1953 SC 244: 1953 Cri LJ 1094: 55 Bom LR 526) and ending with a recent decision of a three-Judge Bench in M. Venugopal V. Divisional Manager, LIC ()1994) 2 SCC 323: 1994 SCC (L&S) 664: (1994) 27 ATC 84). N.P. Singh, J, speaking for the bench, stated the law thus at page 329: (SCC para 11)-" Therefore, the Commission is of the view that bid of the Petitioner shall be treated as based on "deemed Captive

Coal mine" and accordingly, all necessary consequences will follow.”

19. Accordingly, the appellant is before us in this appeal, being aggrieved by the said order of the Commission.

20. The primary ground agitated in the appeal by the appellant to assail the said impugned order of the Commission is that the Commission has erred in holding that on account of the undertaking dated 05.11.2015 and acceptance of the restoration of LOI thereafter the appellant is precluded from claiming Change in Law in relation to the linkage coal. It is stated that there is nothing in the said undertaking which would restrict or preclude the appellant from claiming Change in Law event vis-à-vis linkage coal and the Commission has misinterpreted its contents. It is also stated that the Commission has erred in imposing a base obligation doctrine of supply of electricity using captive coal mine whereas actually there was no obligation upon the appellant to generate and supply power using domestic coal only at any point of time. It is further contended that the only object of giving the undertaking dated 05.11.2015 was to keep levelized tariff as the same as quoted in the bid and nothing else. Therefore, no legal fiction could have been carved out of its contents to the effect that the source of fuel was only

captive coal block. It is also stated that the said undertaking is a part and parcel of the PPA and there is nothing in the PPA to suggest, even remotely, that schedule 14 contained therein overrides clause 10 relating to Change in Law.

21. It is, therefore, manifest that the appeal proceeds on the main contention that the Commission has misread as well as mis-interpreted the contents of the undertaking dated 05.11.2015 of the appellant, the object of which was only to assure levelized tariff as per the tariff quoted in the bid and not to convey that fuel source for the power plant would only be captive coal mine. It is on this ground that the appellant had assailed the findings of the Commission on the claims at sl.no.2 to 4 in the above table.

22. During the course of hearing of the appeal, it was submitted by the learned counsel for the appellant before us on 04.03.2024 that the appellant intends to forego/not press some of its claims. Accordingly, the appellant was directed to file an affidavit in this regard.

23. An affidavit dated 15.03.2024 came to be filed on behalf of the appellant on this aspect wherein the appellant sought to forego/withdraw components in relief with regards to following Change in Law events which, according to it, are purely related to linkage coal: -

“(a) Increase in cost of G11 Grade Coal by CIL, on account of the following notifications: i. Increase in Coal Sizing Charges; ii. Increase in coal transfer due to increase in siding charges; iii. Increase in ROM price; iv. Introduction of Evacuation Facility Charges; (b) Increase in expenditure due to amendment of National Coal Distribution Policy;

(c) Reduction of Indirect Tax on Coal due to introduction of GST;”

24. At the same time, by way of the said affidavit the appellant sought compensation based on following Change in Law events which, according to it, are based solely on captive coal block: - (a) Increase in captive cost on account of following notifications: -

(i) Increase in cost due to Mines and Minerals Development Charges in terms of the Mines and Minerals (Development and Regulations) Amendment Act, 2015.

(ii) Increase in CG Paryavaran and Vikas Upkar in view of amendment dated 08.09.2015 and 15.08.2019 to the

Chhattisgarh (Adhosanrachna Vikas Evam Paryavaran) Upkar Adhiniyam, 2005.

(iii) Increase in Central Excise duty on coal due to revision in Chapter 27 Section V of Finance Act, 2015 through series of notifications issued by Ministry of Finance dated 01.03.2016.

(iv) Increase in Clean Energy Cess through notification dated 01.03.2016 issued by Ministry of Finance.

(v) Increase in Busy Season Surcharge by way of notification dated 18.09.2015 issued by Ministry of Railways.

25. Supporting documents were sought to be filed by appellant by way of IA No.85/2024 which was allowed vide order dated 14.05.2024.

26. Thus, hearing of the appeal proceeded thereafter with regards to the following events which the appellant had claimed to be Change in Law events and sought to be compensated accordingly: - (a) Increase in captive cost on account of following notifications: -

(i) Increase in cost due to Mines and Minerals Development Charges in terms of the Mines and Minerals (Development and Regulations) Amendment Act, 2015.

(ii) Increase in CG Paryavaran and Vikas Upkar in view of amendment dated 08.09.2015 and 15.08.2019 to the Chhattisgarh (Adhosanrachna Vikas Evam Paryavaran) Upkar Adhiniyam, 2005.

(iii) Increase in Central Excise duty on coal due to revision in Chapter 27 Section V of Finance Act, 2015 through series of notifications issued by Ministry of Finance dated 01.03.2016.

(iv) Increase in Clean Energy Cess through notification dated 01.03.2016 issued by Ministry of Finance.

(v) Increase in Busy Season Surcharge by way of notification dated 18.09.2015 issued by Ministry of Railways.

(b) Increase in Excise Duty and VAT for secondary fuel through notifications dated 30.04.2015 and 05.07.2017 issued by Petroleum Planning and Analysis Cell.

(c) Change of Service Tax regime to VAT for O&M charges on account of notification dated 28.06.2017 issued by Ministry of Power.

(d) Increase in cost of transportation for 100% Fly Ash Disposal Requirement as stipulated by way of notification dated 25.01.2016 issued by Ministry of Environment and Forests.

27. We have heard the learned senior counsel for the appellant as well as the learned senior counsel for the respondent nos.1 to 5. We have also gone through the written submissions filed on behalf of the parties and the citations relied upon by the learned senior counsels.

28. It has been vehemently submitted by learned senior counsel appearing on behalf of the respondent nos.1 to 5 that having sought permission from this Tribunal to forego/withdraw/relinquish some of its claims agitated in the instant appeal, the appellant has, by way of the affidavit dated 15.03.2024 filed in pursuance to the order dated 04.03.2024 of this Tribunal, changed its entire case set up by it before the Commission and initially before this Tribunal in the memorandum of appeal. It is argued that the Change in Law events for which the appellant had sought to be compensated before the Commission related to notifications issued by Coal India Limited which affected only linkage coal. Even in the pleadings before the Commission as well as in the instant appeal, the appellant has claimed compensation for the Change in Law events vis-à-vis linkage coal. It is submitted that the appellant has now sought to be compensated for altogether different Change in Law events which affect the coal obtained from captive coal block and thus has gone beyond its own pleadings before the Commission and in the instant appeal. The learned senior counsel would submit that the appellant cannot

be permitted to put up a case which is totally distinct from the pleadings as well as the evidence on record. He further pointed out that the claims now being agitated by the appellant are not only barred by limitation but are otherwise also bound to fail for the reason that no mandatory notice as required under Article 10.4.1 of the PPA has been served by the appellant upon the respondents.

29. On this aspect, it has been argued by the learned senior counsel for the appellant that the objection raised on behalf of the respondents is without any logical reasoning. It is submitted that appellant has decided to accept the findings rendered by the Commission in Paragraph nos.56 and 57 of the impugned order whereby a deeming fiction was created and it was held that the bid of the appellant will be treated as based on “deemed captive coal mine”. It is argued that as per the settled law where a deeming fiction is created, the same has to be given full effect. It is further submitted that the appellant being dominus litus in the present appeal, there is no impediment before it preventing it from reducing the scope of appeal at any stage. It is also submitted that the Change in Law notices dated 28.12.2017 and 28.06.2018 issued by the appellant are in respect of both (i) claims which have been given up by the appellant vide affidavit dated 15.03.2024 and (ii) claims which have been retained/set up by the appellant. It is argued that

the appellant has not pleaded any new claim in its affidavit dated 25.03.2024, rather has only given up its claims regarding certain Change in Law events.

30. The learned senior counsel has cited the judgments of the Supreme Court in Bhavnagar University v. Palitana Sugar Mills (P) Ltd & Ors. (2003) 2 SCC 111 and Harish Tandon v. The Addl. District Magistrate, Allahabad, U.P. & Ors., 1995 1 SCC 537 to buttress his submissions that when a legal fiction is created, it must be given its full effect.

31. We have considered the rival submission made by the learned senior counsels on this aspect and have also perused the relevant record.

Our Analysis: -

32. Having given thoughtful consideration to the rival submissions of the learned senior counsels and having perused the record, we are unable to countenance the submissions of the learned senior counsel for the appellant that by way of affidavit dated 15.03.2024, the appellant has only given up/withdrawn its claim with regards to certain Change in Law events and has not set up or introduced a new case by agitating altogether difference Change in Law events. The claim of the appellant in its amended petition no.1365/2018 before the Commission was as below: -

“5. The present petition has been filed because there are certain change in law events which have occurred both during the construction of the Project and during its operation that has had an impact on the cost/revenue of the Petitioner. A summary of these change in law events are set out below: Table No. 1: Snapshot of Change in Law events S. No. Change in Law Claim Basis for Change in Law Claim … DIRING OPERATIONS

2. Increase in the cost of G11 Grade Coal by Coal India Limited (“CIL”) vide notification dated 29.5.2016.

The increase in the cost of coal from Rs. 730/MT in 2012 to Rs. 810/MT in 2016 has increased the following costs upto Nov 2017:

(a) Increase in coal cost due to the Mines and Minerals Development Charges @ 2% of royalty payable and District Minerals Foundation Charges @ 30% of royalty payable vide CIL’s notification (1936) dated 14.11.2015.

(b) Increase in coal sizing charges for 100MM size from Rs. 77/MT in 2012 to Rs. 79/MT in 2013 vide CIL’s notification (2784) dated 16.12.2013.

(c) Increase in coal transfer to siding charge (upto 10 KM) from Rs. 44/MT in 2012 to Rs. 59/MT in 2013 vide CIL’s notification (2340) dated 13.11.2013.

(d) Increase in CG Paryavaran and Vikas Upkar Tax from 5% in 2012 to 7.5% in vide CIL’s notification (1420) dated 19.8.2015.

(e) Increase in Central Excise Duty from 5% in 2012 to 6% in 2015 vide CIL’s notification (1420) dated 19.8.2015.

(f) Increase in Clean Environmental Cess from

Increase in the cost of GII Grade Coal by Coal India Limited (“CIL”) vide notification dated 08.01.2018. Rs. 50/MT to Rs. 400/MT in

vide CIL’s notification (440) dated 29.2.2016.

(g) Increase in ROM price in 2018 vide CIL’s notification (CIL:M&S/GM(F): Pricing dated 8.1.2018.

(h) Increase in busy season surcharge from 12% in 2012 to 15% in 2013 vide Ministry of Railways notification (TCR/1078/2008/11) dated 18.9.2013.

The increase in the cost of coal from Rs.810/MT in 2012 to Rs.955/MT in Jan 2018 has increased the following costs from Jan 2018:

(a) Increase in coal cost due to the Mines and Minerals

Development Charges @ 2% of royalty payable and District Mineral Foundation Charge @ 30% of royalty payable vide CIL’s notification (1936) dated 14.11.2015.

(b) Increase in coal sizing charges for 100MM size from Rs.79/MT in 2016 to Rs.87/MT in 2018 vide South Eastern Coalfields Limited’s Minewise price indicator dated 09.01.2018.

(c) Increase in coal transfer to siding charges (upto 10KM) from Rs.57/MT in 2016 to Rs.87/MT in 2016 vide South Eastern Coalfields Limited’s Minewise price indicator dated 09.01.2018.

(d) Introduction of evacuation facility charges vide CIL’s

notification (1005) dated 19.12.2017 … … … ”

33. In rejoinder dated 20.01.2020 to the additional reply filed by UPPCL in the said petition, the appellant averred as under: - “XI There is no question of waiver or of approbate- reprobate because the Petitioner never waived his rights, either directly or indirectly and moreover, the undertaking dated 5.11.2015 does not preclude the Petitioner from claiming change in law events vis a vis linkage coal. …

29. The contents of paragraph 29 are a matter of record insofar as the execution of the undertaking dated 5.11.2015 by the Petitioner is concerned. It is submitted however, that the Respondent UPPCL is misinterpreting and misreading the undertaking dated 05.11.2015. In point of fact the claim for change in law vis a vis linkage coal nowhere detracts from or is dectracted by the undertaking. The undertaking as its stands merely states as follows:- …

This undertaking was accepted by the Respondent UPPCL and was also made an integral part of the PPA. The above undertaking merely replaces the source of fuel from captive coal mine to alternative coal linkage fuel, all other parameters of the bid remaining unchanged. This was so accepted by this Hon'ble Commission while appearing the restoration of the LOI. There is nothing in the said undertaking to even remotely suggest that the provisions of the PPA pertaining to change in law would not apply. The only affect of the said undertaking being to change the source of coal from Coal mines to Linkage, the only claim of change in law on fuel being made by the Petitioner is with respect to linkage. It is well settled that nothing can be read into a document if there is no ambiguity or confusion as per the language of a document. The document has to be read as it stands without adding or deleting any word from the document. The petitioner craves leave to rely on its undertaking dated 5.11.2015 at the time of the hearing to make its submissions. …

50. The contents of para 50 are denied. It is submitted that the correspondences prior to the PPA cannot be relied upon due to Article 15.6.1 read with Article 15.6.2. The Respondent UPPCL had executed the PPA which contained Article 10. As

stated above, Article 10 contained no exceptions for change in law vis a vis coal linkage. Therefore, the Respondent UPPCL cannot avoid its contractual obligation to compensate the Petitioner for change in law events arising out of linkage coal.

51. The contents of para. 51 are denied. The Petitioners undertaking dated 5.11.2015, in no way amounts to a waiver of its right to claim compensation arising out of change in law vis a vis linkage coal. …

57. The contents of para. 57 are denied. As stated above, the change in law claim vis a vis linkage coal has no connection with the Petitioners undertaking dated 5.11.2015. The Petitioner re- iterates that its claim for compensation for change in law events arising out of linkage coal are valid and deserve to be allowed by this Hon’ble Commission…”

34. Perusal of these pleadings of the appellant before the Commission clearly reveal that the case of the appellant before the Commission was founded upon various notifications issued by Coal India Limited linked to linkage coal. In the rejoinder, the appellant has made it clear that its claims

regarding Change in Law events are with respect to linkage coal. There is no mention at all about any Change in Law events related to captive coal in the entire petition or the rejoinder filed by the appellant before the Commission.

35. In the memorandum of appeal, the appellant has assailed the impugned order of the Commission mainly on the ground that the Commission has erred by misreading and misinterpreting the contents of undertaking dated 05.11.2015 which nowhere precluded the appellant from claiming relief with regards to Change in Law even vis-à-vis linkage coal. Therefore, the case set up by the appellant in the memorandum of appeal also was that the Commission has erred in refusing relief to it in respect of the Change in Law events lined to linkage coal.

36. The Change in Law events regarding which the appellant is now seeking relief by way of affidavit dated 15.03.2024 have already been noted in Paragraph no.26 hereinabove. The Change in Law events agitated now by the appellant at sl. no. a(i) to a(v) relate to the captive coal alone for which there were no pleadings on behalf of the appellant before the Commission nor were those agitated in the memorandum of appeal. These events are seeing light of the day for the first time after the filing of affidavit dated 15.03.2024 by the appellant. It is true that by way of said affidavit dated

15.03.2024 the appellant has given up/withdrawn its claim for compensation with regards to certain Change in Law events related to linkage coal (for which no relief was given to appellant by the Commission in the impugned order) but it is equally true that by way of said affidavit, the appellant has introduced/setup altogether new claims with regards to the Change in Law events related to captive coal for which there are absolutely no pleadings before this Tribunal.

37. It is a settled law that in the garb of giving up / withdrawing some of the claims, a petitioner or appellant cannot be permitted to introduce fresh claims without seeking permission to amend the pleadings suitably. It is also a settled legal principle that fresh claims set up during the appeal proceedings which are in total variance to the original pleadings before the Commission and the memorandum of appeal, do not merit any consideration and are liable to be rejected straightaway.

38. Vide order dated 04.03.2024, this Tribunal had directed the appellant to file an affidavit stating as to which of its claims does it intend to give up. Neither had the appellant sought permission to agitate any fresh claim/Change in Law event nor was any such permission given by this Tribunal. The conduct of the appellant in setting up fresh claims with regards

to altogether different Change in Law events is inexplicable. These claims do not merit any consideration at all.

39. It cannot be gainsaid that the appellant is dominus litus in the present appeal and competent to give up or withdraw some of its claims. However, what the appellant has done in the instant appeal is to substitute its earlier claims by fresh claims, which cannot be permitted at all in the appeal proceedings. This is not a case of simple giving up/withdrawal of some of the claims by the appellant. It is a case where the appellant, while giving up / withdrawing some of its claims related to linkage coal has set up/introduced altogether fresh claims related to captive coal for which there are no pleadings at all. If the appellant had actually made up its mind to accept the findings rendered by the Commission in Paragraph nos.56 & 57 of the impugned order (which have already been extracted hereinabove in Paragraph no. 18) the proper course available to it was to file an application for amendment of the memorandum of appeal including the grounds of appeal, which would have been decided by this Tribunal as per law.

40. We may note that an appeal is the extension of the original suit/petition filed before the subordinate court/forum, which is the Commission in the instant case. Therefore, this appeal is an extension of the petition filed before the Commission by the appellant and has to be decided on the basis

of pleadings of the parties before the Commission and the documents filed in support thereof. The Change in Law events now sought to be agitated by the appellant in this appeal were neither pleaded before the Commission nor was any document in support thereof filed before the Commission. Hence, these Change in Law events cannot be looked into or considered in this appeal. The scope of this appeal, as initially filed, was to examine the legality and validity of the impugned order of the Commission in the light of the pleadings of the parties and the documents filed by them. The appellant cannot be permitted to change altogether the scope of appeal by agitating fresh Change in Law events which were never pleaded before the Commission in the original petition.

41. The judgments of the Supreme Court in Bhavnagar University case (supra) and Harish Tandon case (supra) relied up by the learned senior counsel for the appellant are not material at all for the reason that these judgments deal with “legal fiction” created by a statute, which is not the case herein. In the instant case, the legal/deeming fiction has been created by the Commission in the impugned order. Even otherwise also the legal/deeming fiction can be given full effect only as per the procedure prescribed under law. As already observed hereinabove, the appellant has failed to follow the proper procedure prescribed under law for substitution/amendment of its claims.

42. Arguments had been advanced by the learned senior counsels for the parties on two more aspects namely (a) whether the claim of the appellant in respect of Change in Law events now sought to be agitated by way of affidavit dated 25.03.2024 are within limitation and (b) whether the Change in Law notices dated 28.12.2017 and 28.06.2018 issued by the appellant are in respect of these Change in Law events also? Once we have held that the Change in Law events sought to be agitated by the appellant by way of affidavit dated 15.03.2024 are not only beyond the scope of this appeal but also de hors the pleadings of the parties before the Commission and thus, do not merit any consideration, we do not find it appropriate to discuss these two aspects. We leave these two aspects to be decided by the Commission in a fresh petition to be filed by the appellant, if so advised, to claim relief with regards to the Change in Law events related to captive coal block. Any discussion by us on these two aspects in this judgment may prejudice the case of either of the parties in the proceedings to be initiated by the appellant in future, if any.

43. Hence, we are of the considered opinion that the Change in Law events mentioned at sl.nos. a(i) to a(v) in Paragraph no.26 of this judgment do not

merit any consideration and no relief can be given to the appellant regarding those events in this appeal.

(b) Increase in Excise Duty and VAT for secondary fuel through notifications dated 30.04.2015 and 05.07.2017 issued by Petroleum Planning and Analysis Cell.

44. It is submitted on behalf of the appellant that as on bid cutoff date, Central Excise Duty on diesel was Rs.3.46/liter and VAT was 12.5%/liter. However, post the bid cutoff date, Central Excise Duty on diesel has been increased to Rs.17.33/liter and VAT has been increased to 17%. It is submitted that on account of said increase in the rates of Central Excise Duty and VAT on diesel, cost of generation of the appellant’s power project has increased by Rs.0.0009/kWh. It is further argued that such increase in Central Excise Duty and VAT on diesel has been held to be a Change in Law event by this Tribunal in judgment dated 19.04.2017 in Sasan Power Limited v. CERC & Ors. (Appeal no.161/2015) and therefore, in view of Article 10 of the PPA dated 15.03.2016, appellant is entitled to be compensated for the same.

45. The claim of the appellant under this head has been rejected by the Commission in the impugned order on the ground that the appellant has not

clarified if the use of diesel as secondary fuel is permissible as per design specifications of the power plant and that appellant has not placed on record any document to show that the increase in the price of diesel has been in pursuance to any notification issued by Indian Government Instrumentality as specified in Article 10 of the PPA.

46. We are constrained to note that the appellant has not placed on record in this appeal also any document in support of its stand that diesel can be used by it as secondary fuel as per design specification of its power project. Therefore, we are unable to find any error or infirmity in the impugned order of the Commission on this aspect.

(c) Change of Service Tax regime to VAT for O&M charges on account of notification dated 28.06.2017 issued by Ministry of Power.

47. It is argued on behalf of the appellant that as on cutoff date, GST for Operation and Maintenance (O&M) charges was contemplated at 15% but post the cutoff date, GST has been increased to 18% with effect from 01.07.2017 by way of notification dated 28.06.2017 issued by Ministry of Power. It is submitted that the said notification having been issued by a instrumentality of government, constitutes Change in Law event for which the appellant is entitled to be compensated. It is also submitted that this

notification has been held to be a Change in Law event by this Tribunal in judgment dated 29.01.2020 passed in appeal nos.284/2017 & 09/2018 titled Adani Power Rajasthan Limited v. Rajasthan Electricity Regulatory Commission & Ors.

48. The claim of the appellant under this head has been rejected by the Commission on the following reasoning: - “The Commission is of the view that in the Competitive Bidding Scenario, the Petitioner bids various parts of tariff viz; capacity, energy and transportation charge without disclosing the details of the calculations of the project cost. Petitioner had the option to quote these charges under escalable / non-escalable components with escalation of escalable component governed by escalation indices for payment purposes published by CERC. The Commission does not find merit in the argument of the Petitioner that compensation on O&M expenses should be allowed on the lines of Central Electricity Regulatory Commission (Terms and Conditions for Tariff) Regulations, 2014. The present Petitions relates

to section 63 of the Electricity Act, 2003 and as such drawing reference to cost plus tariff fixation principles, is misplaced. Therefore, Commission is not inclined to allow any increase in cost on this account.”

49. It cannot be disputed that the notification dated 28.06.2017 issued by Ministry of Power whereby the GST for O&M charges was increased from 15% (under service tax regime) to 18% constitutes a Change in Law event. However, the Commission has refused to grant compensation to the appellant on this count on the ground that the appellant had option to quote these charges under escalable/non-escalable components in the bid. We are unable to accept the reasoning of the Commission in declining relief to the appellant under this head. Once it is held by this Tribunal that the said notification dated 28.06.2017 constitutes a Change in Law event, compensation for the same cannot be denied to the appellant on any ground whatsoever particularly on the ground that the appellant did not mention these charges under escabable component in the bid, as held by the Commission in the impugned order.

50. Therefore, the findings of the Commission on this count are set aside. We hold the appellant entitled to compensation on account of increase in

GST on O&M charges from 15% to 18% by way of notification dated 28.06.2017 issued by Ministry of Power and direct the Commission to allow the increase in cost of power project to the appellant accordingly.

(d) Increase in cost of transportation for 100% Fly Ash Disposal Requirement as stipulated by way of notification dated 25.01.2016 issued by Ministry of Environment and Forests.

51. The Commission, in the impugned order, has declined to accept the notification dated 25.01.2016 issued by Ministry of Environment and Forests as a Change in Law event on the following reasoning: - “In Commission’s view, as per MOEF notifications, Petitioner was always under an obligation to ensure 100% utilization of Fly Ash and the Notification dated 25.01.2016 is further amendment to the Notification dated 14.09.1999 mainly to the effect that the area within which the fly ash is to be utilized has been increased from 100 kms to 300 kms. Therefore, in pursuance to the documents available on record, Commission is not inclined to accept the said notification dated 25.01.2016 as change in law.”

52. In this regard, we may note that the said notification dated 25.01.2016 issued by Ministry of Environment, Forests and Climate Change along with subsequent notifications dated 31.12.2021, 30.12.2022 and 01.01.2024 have been held to be Change in Law events by this Tribunal in judgment dated 08.05.2025 passed in appeal no.345/2021 titled Rattan India Power Limited v. Maharashtra Electricity Regulatory Commission & Anr. Therefore, in view of the said judgment of this Tribunal, the impugned order of the Commission on this aspect cannot be sustained. The same is hereby set aside. The Commission is directed to calculate the impact of said notification upon the power project of the appellant and allow compensation to the appellant accordingly.

53. We summarize our findings in the following table: - Sl. No. Issue No. & Issue Our decision

1. Issue No.a(i) to (v):

(a) Increase in captive cost on account of following notifications: - Not considered as being beyond the scope of this appeal and de hors the

(i) Increase in cost due to Mines and Minerals Development Charges in terms of the Mines and Minerals (Development and Regulations) Amendment Act, 2015.

(ii) Increase in CG Paryavaran and Vikas Upkar in view of amendment dated 08.09.2015 and 15.08.2019 to the Chhattisgarh (Adhosanrachna Vikas Evam Paryavaran) Upkar Adhiniyam, 2005.

(iii) Increase in Central Excise duty on coal due to revision in Chapter 27 Section V of Finance Act, 2015 through series of notifications issued by Ministry of Finance dated 01.03.2016.

(iv) Increase in Clean Energy Cess through notification dated pleadings of the parties before the Commission.

01.03.2016 issued by Ministry of Finance.

(v) Increase in Busy Season Surcharge by way of notification dated 18.09.2015 issued by Ministry of Railways.

2.

(b) Increase in Excise Duty and VAT for secondary fuel through notifications dated 30.04.2015 and 05.07.2017 issued by Petroleum Planning and Analysis Cell.

Not allowed

3.

(c) Change of Service Tax regime to VAT for O&M charges on account of notification dated 28.06.2017 issued by Ministry of Power.

Allowed and remanded back to the Commission for computation of impact upon the appellant.

4.

(d) Increase in cost of transportation for 100% Fly Ash Disposal Allowed and remanded back to

Requirement as stipulated by way of notification dated 25.01.2016 issued by Ministry of Environment and Forests. the Commission for computation of impact upon the appellant.

54. The appeal stands disposed off accordingly.

Pronounced in the open court on this the 07th day of August, 2025.

(Virender Bhat) Judicial Member (Sandesh Kumar Sharma) Technical Member (Electricity)

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REPORTABLE / NON-REPORTABLE

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