UTTAR HARYANA BIJLI VITRAN NIGAM LIMITED AND ANOTHER versus ADANI POWER (MUNDRA) LIMITED AND ANOTHER on 20 April 2023

UTTAR HARYANA BIJLI VITRAN NIGAM LIMITED ANDANOTHER

v.

ADANI POWER (MUNDRA) LIMITED AND ANOTHER

(Civil Appeal No. 2908 of 2022)

APRIL 20, 2023

[B. R. GAVAI AND VIKRAM NATH, JJ.]

Electricity Laws : Change in Law –Inter Plant Transfer-IPTof coal, if qualifies as a Change in Law event – Respondent No.1-company entered into Power Project Agreements with the appellants-Haryana Utilities for supply of power – Respondent no.1 filedpetition claiming compensation on account of change in New CoalDistribution Policy, 2007 – Electricity Regulatory Commission-CERC allowed compensation towards certain ‘Change in Law’events – However, the appellate tribunal held that the communicationdated 19th June 2013 issued by Coal India Limited-CIL providingfor Inter Plant Transfer not to be a ‘Change in Law’ event; and thatchange in law compensation to be calculated as Assured CoalQuantity-actual supply – Sustainability of – Held: Finding of APTELthat the communication dated 19th June 2013 permitting Inter PlantTransfer is not a ‘Change in Law’, not sustainable – Saidcommunication refers to the decision of the CIL taken in its meetingwhereby the transfer of coal which was not allowed hitherto, hasbeen allowed only between the power plants owned by the purchaseror its wholly owned subsidiary – Communication reflects the decisionof CIL, which is an Government instrumentality having a force oflaw – As such, the tribunal erred in holding the said communicationproviding for IPT does not to amount to ‘Change in Law’, thus, thefinding of the APTEL is set aside – IPT amounts to ‘Change in Law’– Allowing ‘Change in Law’ compensation on the basis of ACQ-actual supply upheld –Matter remitted to CERC for working out theeffect of the ‘Change in Law’.

Words and Phrases: Law – Meaning thereof .

Partly allowing the appeal, the Court

HELD: 1.1 The definition of “Law” is wide enough toinclude all rules, regulations, orders, notifications by theGovernmental instrumentalities. [Para 24][1103-H]

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A1.2 The communication dated 19.06.2013 Modification inModel FSA applicable for New Power plants in respect ofInterplant transfer of coal refers to the decision of the CIL takenin its meeting held on 27th May 2013. A perusal thereof wouldreveal that the transfer of coal which was not allowed hitherto,has been allowed only between the power plants owned by theBpurchaser or its wholly owned subsidiary. It further provides thatno transfer of coal shall be allowed for a JV Company of thepurchaser; that the supply of coal shall, for all commercial purposeunder the FSA, remain unchanged and on account of the originalPower Plant; that both the Power Plants should have executedCFSA in the modified FSA Model applicable for new power plantsand not having any supplies linked to coal blocks. It furtherprovides that in case of IPPs, both the plants must have validlong term PPAs with DISCOMS. In no case the transferredquantity to a plant together with the quantity supplied under the applicable FSA shall exceed the ACQ of the Transferee Plant forDa particular year which is proportional to the long term PPA withDISCOMS. Transfer of coal will not be allowed to those plantswho are allotted coal blocks under this arrangement. In case ofchange in the ownership and no environmental clearance of theplant, this facility shall stand withdrawn. It could thus be seenEthat the said communication reflects the decision of CIL. TheCIL is an instrumentality of the Government of India. As such,APTEL erred in holding the said communication dated 19th June2013 not to amount to ‘Change in Law’. [Paras 26, 27][1105-B-F]

F1.3 APTEL held that the said communication is anadministrative instruction addressed to all the subsidiaries.APTEL failed to take into consideration that CERC had notdecided the said issue, inasmuch as the decision on the said issuewould have affected the other two DISCOMS, i.e., MSEDCL and

Rajasthan DISCOMS. It would be relevant to note that the veryGsame tribunal, immediately after three months, in the case ofRattan India Power Limited v. Maharashtra Electricity RegulatoryCommission and Another, took a totally contrary view. Videjudgment in Civil Appeal Nos. 5005 of 2022 and 4089 of 2022,the concurrent view of Maharashtra Electricity RegulatoryH

Commission and APTEL holding the said EFC to be ‘Change inLaw’ is upheld. In that view of the matter, the finding of APTELthat the communication dated 19th June 2013 permitting IPT isnot a ‘Change in Law’ would not be sustainable. [Paras 28-31][1105-F; 1106-D-E; 1107-B]

1.4 While submitting the bid, AP(M)L must have factoredin the cost of transportation of linkage coal from MCL Coal Mine,Talcher to its plant at Mundra. As per the details given in thePPA, the mode of transportation is through railway. As such, priorto the IPT being permitted, AP(M)L was bound to utilize thelinkage coal from MCL Coal Mine, Talcher, only for the purposeof its original power plant, i.e., AP(M)L. Only on account of theIPT would it be in a position to utilize the coal from MCL CoalMine, Talcher either for its plant in Maharashtra or in Rajasthan.Similarly, it would be entitled to utilize the coal linkages for itsplant in Maharashtra or in Rajasthan for production of energy inits other power plants. As such, there is bound to be a variancein the cost of transportation by railways. If the coal is to betransported from MCL Coal Mine, Talcher to AP(M)L, the costof railway transportation would be higher as compared to the costof railway transportation from MCL Coal Mine, Talcher to TirodaTPS. The savings made in the cost of transportation, i.e., thecost which would have been incurred for transporting the coalfrom MCL Coal Mine, Talcher to ‘X’ plant minus the actual costof transportation has to be passed on to the DISCOMS, which, inturn, has to be passed on to the end consumers. [Para 32][1107-C-G]

1.5 The changes occurring on account of permitting IPTwould affect AP(M)L as well as the appellants and two otherDISCOMS, i.e., MSEDCL and Rajasthan DISCOMS. This wasalso observed by the CERC in its order dated 8th July 2019. Noexpertise is there for working out as to what benefit any of theparties would be entitled to on account of the said ‘Change inLaw’. However, the cost of saving in the railway transportationon account of ‘Change in Law’ needs to be worked out and passedon to the appropriate DISCOMS, which can further be passed onto the consumers. CERC, which is a body of experts, is bestsuited to do so. [Para 33][1107-H; 1108-A-B]

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A1.6 Though the issue with regard to allowing ‘Change inLaw’ compensation on the basis of ACQ – actual supply is upheld,the issue with regard to IPT not being ‘Change in Law’ is setaside. The finding of the APTEL to the effect that thecommunication dated 19th June 2013 providing for IPT does notamount to ‘Change in Law’ is set aside. It is held that IPT amountsBto ‘Change in Law’. [Paras 34, 35][1108-C-D]

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1.7 The matter is remitted to CERC for working out theeffect of the said ‘Change in Law’ after giving notice to MSEDCLas well as Rajasthan DISCOMS and hearing all the partiesincluding the appellants and the respondents herein. However,Csince the said issue has been pending since a long time, CERCis directed to decide the said issue and calculate the benefitsthat would be accruable to any of the parties within the stipulatedperiod. [Paras 36, 37][1108-E-F]

Energy Watchdog v. Central Electricity RegulatoryCommission and Others(2017) 14 SCC 80;DMaharashtra State Electricity Distribution CompanyLimited v. Adani Power Maharashtra Limited andOthers 2023 SCC OnLine SC 233; Maharashtra StateElectricity Distribution Company Limited v. GMRWarora Energy Ltd. and Others Civil Appeal No. 6927Eof 2021; Rattan India Power Limited v. MaharashtraElectricity Regulatory Commission and Another AppealNos. 118 of 2021 and 40 of 2022 dated 22nd March2022 – referred to.

Case Law Reference

F(2017) 14 SCC 80referred toPara 3

CIVIL APPELLATE JURISDICTION : Civil Appeal No.2908of 2022.

From the Judgment and Order dated 21.12.2021 of the AppellateTribunal for Electricity at New Delhi in Appeal No. 231 of 2021.

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Balbir Singh, A.S.G., V. Giri, C. Aryama Sundaram, Niranjan Reddy,S.B. Upadhyay, Sr. Advs., Samir Malik, Ms. Nikita Choukse, AkashLamba, Chandra Prakash, Ms. Farha Malik, M/s. D.S.K. Legal,Pukhrambam Ramesh Kumar, Anand K. Ganesan, Ms. Poorva Saigal,Shubham Arya, Nikunj Dayal, Amal Nair, Ms. Pallavi Saigal, Ms. KritiSoni, Ravi Nair, Ms. Kritika Khanna, Ms. Ritu Apurva, Ms. Shikha Sood,H

Ms. Ankita Gupta, Zafar Inayat, Ms. Reeha Singh, Ms. Anumeha Smiti,Anushree Bardhan, Navin Prakash, Ms. Surbhi Kapoor, Mahesh Agarwal,Amit Kapur, Ms. Poonam Sengupta, Arshit Anand, Ms. Geetika Sharma,Saunak Rajguru, Ms. Sakshi Kapoor, E. C. Agrawala, Vishrov Mukherjee,Girik Bhalla, Yashaswi Kant, Ms. Akila Palem Ramireddy, Ms. JuhiSenguttuvan, Ms. Pallavi Sharma, Nishant Kumar, Vaibhav Kalra, Ms.Anisha Upadhyay, Advs. for the appearing parties.

The Judgment of the Court was delivered by

B. R. GAVAI, J.

1. The present appeal challenges the judgment and order dated21[st] December 2021 passed by the Appellate Tribunal for Electricity(hereinafter referred to as ‘APTEL’), in Appeal No. 231 of 2021, filedby the appellants herein, thereby challenging the order dated 8[th] July2019, passed by Central Electricity Regulatory Commission (hereinafterreferred to as ‘CERC’) in Petition No. 269/MP/2018. The APTEL hasheld the communication dated 19[th] June 2013, issued by Coal India Limited(for short, “CIL”) not to be a ‘Change in Law’ event.

2. The facts, in brief, giving rise to the present appeal are asunder:

The respondent No.1 – Adani Power (Mundra) Limited(hereinafter referred to as “AP(M)L”) had set up a generating stationof capacity 4620 MW (Phase I & II – 4 x 330 MW, Phase III – 2 x 660MW and Phase IV – 3 x 660 MW) at Mundra in the State of Gujarat.AP(M)L had entered into Power Project Agreements (hereinafterreferred to as “PPA”) dated 7[th] August 2008 with Uttar Haryana BijliVitran Nigam Limited and Dakshin Haryana Bijli Vidyut Nigam Limited(hereinafter referred to as “Haryana Utilities”), the appellants herein,for supply of 1424 MW power from Phase IV of the generating station.

3. CERC, vide its order dated 6[th] February 2017, allowed thecompensation towards certain ‘Change in Law’ events claimed byAP(M)L in Petition No. 156/MP/2014. AP(M)L has submitted thatHaryana Utilities were already making payments in terms of thesupplementary invoices raised by AP(M)L. Subsequently, on account ofthe judgment of this Court in the case of Energy Watchdog v. CentralElectricity Regulatory Commission and Others[1], AP(M)L filed another 1 (2017) 14 SCC 80

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Apetition being Petition No. 97/MP/2017 claiming compensation on accountof change in New Coal Distribution Policy, 2007 (for short, “NCDP2007”). Subsequently, certain interim directions were issued by CERC.Haryana Utilities, thereafter, filed I.A. No. 21 of 2018 in Petition No.97/MP/2017, stating therein that the compensation as claimed by AP(M)Lwas incorrect inasmuch as AP(M)L had not taken into consideration theBbenefits accruing to them on account of Inter Plant Transfer (for short,“IPT”) permitted under the communication dated 19[th]June 2013 issuedby CIL.

4. Per contra, it was claimed by AP(M)L that the Haryana Utilitiesunilaterally revised a huge amount from the monthly bills on the groundCof IPT. It was submitted by AP(M)L that the contention of the HaryanaUtilities with regard to IPT has already been rejected by CERC in itsorder dated 31[st]May 2018.

5. In this background, AP(M)L filed Petition No. 269/MP/2018before CERC claiming the following reliefs:D

“(a) Clarify and declare that the findings of this Ld. Commissionat paragraph 61 of the Order of the Commission dated 31.05.2018in Petition No. 97/MP/2017 and IA No. 21 of 2018, are applicableto the Change in Law compensation pertaining to taxes and dutiesapproved under Order dated 06.02.2017 in Petition No. 156/MP/E2014 as well; and (b) Direct the Respondents to pay Rs. 895.41 Crores (Rs. 566.83Crores related to Domestic Coal Shortfall + Rs. 328.58 Croresrelated to taxes and duties) unilaterally deducted from the monthlyFbills/supplementary invoices along with the applicable LatePayment Surcharge.”

6. CERC framed the following issues:

“Issue No.1: Whether the Petition is maintainable under Section142 of the Act?

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Issue No. 2: Whether our finding in respect of IPT coal at Para61 of the order dated 31.5.2018 in Petition No. 97/MP/2017 isapplicable for the compensation payable for various taxes andduties approved as change in law in the order dated 6.2.2017 inPetition No. 156/MP/2014?

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Issue No. 3: What should be the treatment of Inter Plant Transferof Coal, if it is considered as change in law?

Issue No. 4: What should be the basis for calculating shortfall ofdomestic coal?”

7. Insofar as Issue No. 1 is concerned, CERC held the dispute tobe maintainable.

8. Insofar as Issue No. 2 is concerned, CERC held that in view ofits order dated 6[th]February 2017 in Petition No. 156/MP/2014, the coalsupply, under Fuel Supply Agreement (for short, “FSA”) dated 9[th]June2012, to other plants has to be accounted for the generation and supplyof power to Haryana Utilities from Units 7, 8 and 9 of Mundra TPP forall commercial purposes. It, therefore, rejected the contention of HaryanaUtilities that it was liable to pay taxes and duties only for the coal that ithas actually consumed and not for IPT coal.

9. Insofar as Issue No. 3 is concerned, CERC held that the transferof coal by AP(M)L under IPT Policy also affects other generating stationsthat are consuming IPT coal and other distribution companies who arealso supplied power by the generating stations that have used IPT coal.Since other distribution companies were not parties to the proceedingsbefore CERC, it did not find it appropriate to deal with the issue.

10. Insofar as Issue No. 4 is concerned, CERC, in view of thejudgment of this Court in the case of Energy Watchdog (supra), heldthat the quantum of shortfall has to be calculated taking into considerationthe Assured Coal Quantity (for short, “ACQ”) and the quantity actuallysupplied by the coal companies.

11. Being aggrieved thereby, Haryana Utilities filed an appealbefore APTEL.

12. Insofar as Issue No. 4 is concerned, APTEL, vide its judgmentand order dated 21[st]December 2021, relying on the judgment of thisCourt in the case of Energy Watchdog (supra), held that ‘Change inLaw’ compensation needs to be calculated as ACQ – actual supply.

13. Insofar as the issue with regard to communication dated 19[th]June 2013 being ‘Change in Law’ is concerned, APTEL held the samenot to be ‘Change in Law’. Being aggrieved thereby, the present appeal.

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[2023] 4 S.C.R.

A14. We have heard Shri Shubham Arya, learned counsel appearingon behalf of the appellants and Dr. A.M. Singhvi, learned Senior Counselappearing on behalf of the respondents.

15. Shri Arya submitted that, considering the definition of “Law”given in the PPA, the communication dated 19[th]June 2013 would squarelyBfall under the term “Law”. He submitted that in any case, CERC hadrefused to answer the said issue in the absence of other distributors. It issubmitted that APTEL has grossly erred in holding the same not to be a‘Change in Law’ event.

16. Dr. Singhvi, on the other hand, submitted that the communicationCdated 19[th]June 2013 is an inter- departmental communication and thesame cannot be held to be ‘Change in Law’.

17. When we heard this batch of Electricity appeals, it was agreedbetween all the parties that this Court should first decide Civil AppealNo. 684 of 2021 (Maharashtra State Electricity Distribution CompanyDLimited v. Adani Power Maharashtra Limited and Others[2])[“MSEDCL v. APML and Others”, for short] and Civil Appeal No.6927 of 2021 (Maharashtra State Electricity Distribution CompanyLimited v. GMR Warora Energy Ltd. and Others) inasmuch as threeof the issues involved in all the appeals in the batch were common. Itwas submitted that those two appeals could be decided by deciding theEthree common issues. However, insofar as the other appeals areconcerned, it was submitted that, in addition to the three common issues,certain additional issues were also involved and it was agreed that afterthose two appeals are decided, the other appeals should be heard forconsidering these additional issues.

F18. The said three common issues are thus:

(i) Whether ‘Change in Law’ relief on account of NCDP 2013should be on ‘actuals’ viz. as against 100% of normativecoal requirement assured in terms of NCDP 2007 ORrestricted to trigger levels in NCDP 2013 viz. 65%, 65%,G67% and 75% of Assured Coal Quantity (ACQ)?

(ii) Whether for computing ‘Change in Law’ relief, theoperating parameters be considered on ‘actuals’ OR as pertechnical information submitted in bid?

H2 2023 SCC OnLine SC 233

(iii) Whether ‘Change in Law’ relief compensation is to begranted from 1[st]April 2013 (start of Financial Year) or 31[st]July 2013 (date of NCDP 2013)?

19. After extensively hearing all the learned counsel for the parties,vide the judgment and order dated 3[rd]March 2023 in the case ofMSEDCL v. APML and Others (supra), this Court decided those twoappeals after considering the aforesaid three issues.

20. The first issue was answered by this Court, holding that the‘Change in Law’ relief for domestic coal shortfall should be on ‘actuals’i.e. as against 100% of normative coal requirement assured in terms ofNCDP, 2007. Insofar as the second issue is concerned, it was held thatthe Station Heat Rate (“SHR” for short) and Auxiliary consumptionshould be considered as per the Regulations or actuals, whichever islower. The third issue was answered holding that the Start date for the‘Change in Law’ event for the NCDP, 2013 is 1[st]April 2013.

21. As such, Issue No. 4 stands squarely covered by our judgmentdated 3[rd]March 2023 in the case of MSEDCL v. APML and Others(supra) so also by the earlier judgment of this Court in the case of EnergyWatchdog (supra).

22. Insofar as Issue Nos. 2 and 3 are concerned, we find that thesaid issues are interlinked and the same would depend on the decision asto whether the communication dated 19[th]June 2013 providing for IPTwould amount to ‘Change in Law’ or not.

23. It will be relevant to refer to the definition of “Law” as definedunder the PPA, which reads thus:

“Law means, in relation to this Agreement, all taws includingElectricity Laws in force in India and any statute, ordinance,regulation, notification or code; rule, or any interpretation of anyof them by an Indian Governmental Instrumentality and havingforce of law and shall further include all applicable rules,regulations, orders, notifications by an Indian GovernmentalInstrumentality pursuant to or under any of them and shall includeall rules, regulations, decisions and orders of the AppropriateCommission.”

24. It can, thus, clearly be seen that the definition of “Law” iswide enough to include all rules, regulations, orders, notifications by theGovernmental instrumentalities.

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A25. It will be relevant to refer to the communication dated 19[th]June 2013, which reads thus:

“Sub: Modification in Model FSA applicable for New Power plantsin respect of “Interplant transfer of coal”

A proposal for allowing inter power plant transfer of coal fromone Power Plant to another under the modified FSA applicablefor New Power Plants (for both PSU/Govt. PUs and Private PUs)was placed before the 298th CIL Board in its Meeting held on27.5.13.

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CThe CIL Board while approving to the proposal allowed suchdispensation subject to the following conditions which stand asbelow after legal vetting.

a)Transfer of coal shall be allowed only between the powerplants wholly owned by the Purchaser or its wholly ownedDsubsidiary. No transfer of coal shall be allowed for a JVcompany of the Purchaser. The supply of coal, shall for allcommercial purpose under the FSA remain unchanged andon account of the original Power Plant.

b)Both the Power Plants should have executed FSA in theEmodified FSA Model applicable for new power plants andnot having any supplies linked to coal blocks. In case ofIPPs both the plants must have valid long term PPAs withDISCOMS.

c)In no case the transferred quantity to a plant together withFthe quantity supplied under the applicable FSA shall exceedthe ACQ of the Transferee Plant for a particular year whichis proportional to the long term PPA with DISCOMS.

d)Transfer of coal will not be allowed to those plants who areallotted coal blocks under this arrangement.

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e)In case of change in the ownership and no environmentalclearance of the plant this facility shall stand withdrawn,and f)Penalty/ incentive under this arrangement would beconsidered in terms of (a) above.H

A statement showing the modification in the FSA models applicablefor New Power plants (for both PSU/ Govt. PUs and PrivatePUs) is enclosed.”

26. It can thus be seen that the said communication refers to thedecision of the CIL taken in its meeting held on 27[th]May 2013. A perusalthereof would reveal that the transfer of coal which was not allowedhitherto, has been allowed only between the power plants owned by thepurchaser or its wholly owned subsidiary. It further provides that notransfer of coal shall be allowed for a JV Company of the purchaser. Itfurther provides that the supply of coal shall, for all commercial purposeunder the FSA, remain unchanged and on account of the original PowerPlant. It further provides that both the Power Plants should have executedFSA in the modified FSA Model applicable for new power plants andnot having any supplies linked to coal blocks. It further provides that incase of IPPs, both the plants must have valid long term PPAs withDISCOMS. It further provides that in no case the transferred quantityto a plant together with the quantity supplied under the applicable FSAshall exceed the ACQ of the Transferee Plant for a particular year whichis proportional to the long term PPA with DISCOMS. It further providesthat transfer of coal will not be allowed to those plants who are allottedcoal blocks under this arrangement. It further provides that in case ofchange in the ownership and no environmental clearance of the plant,this facility shall stand withdrawn.

27. It could thus be seen that the said communication reflects thedecision of CIL. The CIL is an instrumentality of the Government ofIndia. As such, we find that APTEL erred in holding the saidcommunication dated 19[th]June 2013 not to amount to ‘Change in Law’.

28. APTEL has held that the said communication is anadministrative instruction addressed to all the subsidiaries. It will beapposite to refer to the following findings of APTEL:

“109. There is no denial of the fact that the letter dated 19.06.2013addressed by CIL intimating to all subsidiaries the decision takenat its 298[th]board meeting (27.05.2013), allowing IPT of coal wasconditional upon transfer (of coal) to be allowed only between thepower plants wholly owned by the purchaser or its wholly ownedsubsidiary and supply of coal for all commercial purpose underthe FSAs to remain unchanged and on account of original powerplant. In particular context of the first respondent, it follows as a A

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Asequitur that IPT of coal is allowable if Mundra TPS transfers itsportion of linkage coal from MCL coal mine, Talcher to TirodaTPS (both owned by Adani group) for utilization of such coal atTiroda TPS and that even though linkage coal from MCL coalmine, Talcher of Mundra TPS (original power plant in terms ofthe FSA) was actually utilized at Tiroda TPS (transferee plant), itBwill be accounted as if it were consumed at Mundra TPS. To putit simply, the effect of IPT of coal is that IPT coal cost (linkagedomestic coal) will continue to be booked in the account of MundraTPS (original power plant in terms of the FSA/transferor plantunder IPT scheme) and alternate coal cost (imported coal orCmarket-based e-auction coal used in the absence of linkage coal)will continue to be booked on ‘attributed cost’ basis in the accountsof Tiroda TPS (transferee plant under IPT scheme).”

29. We find that APTEL has failed to take into consideration thatCERC had not decided the said issue, inasmuch as the decision on theDsaid issue would have affected the other two DISCOMS, i.e., MSEDCLand Rajasthan DISCOMS. It will further be relevant to note that thevery same Tribunal, immediately after three months, in the case of RattanIndia Power Limited v. Maharashtra Electricity RegulatoryCommission and Another[3], has taken a totally contrary view. In thesaid case, it was sought to be argued on behalf of MSEDCL that theEEvacuation Facility Charge (for short, “EFC”) imposed by CIL vide itscircular dated 19[th]December 2017 did not constitute ‘Change in Law’.It will be apposite to refer to the following observations:

“9. It is incorrect to argue that to be covered as a change in lawevent under such contractual clauses as quoted earlier, theFinstrument whereby the law is claimed to have undergone achange must have been published in official gazette to have theforce of law. In Energy Watchdog & Ors. (supra), for illustration,even a letter of the Ministry of Power in the Government ofIndia was accepted as an instrument having the “force of law”.GSimilarly, in Kusum Ingots & Alloys v. Union of India (2004) 6SCC 254 executive instructions without any statutory backingwere also considered as “law”. That Coal India is Governmentinstrumentality and the notifications, circulars, etc. issued by ithave a force of law under Regulation 77(3) of the Constitution H3 Appeal Nos. 118 of 2021 and 40 of 2022 dated 22nd March 2022

of India was accepted by this tribunal in GMR Kamalanga EnergyLtd. (supra).”

30. Vide judgment of even date, in Civil Appeal Nos. 5005 of2022 and 4089 of 2022, we have upheld the concurrent view ofMaharashtra Electricity Regulatory Commission (for short, “MERC”)and APTEL holding the said EFC to be ‘Change in Law’.

31. In that view of the matter, we are of the opinion that thefinding of APTEL that the communication dated 19[th]June 2013 permittingIPT is not a ‘Change in Law’ would not be sustainable.

32. It is to be noted that, while submitting the bid, AP(M)L musthave factored in the cost of transportation of linkage coal from MCLCoal Mine, Talcher to its plant at Mundra. As per the details given in thePPA, the mode of transportation is through railway. As such, prior to theIPT being permitted, AP(M)L was bound to utilize the linkage coal fromMCL Coal Mine, Talcher, only for the purpose of its original power plant,i.e., AP(M)L. Only on account of the IPT would it be in a position toutilize the coal from MCL Coal Mine, Talcher either for its plant inMaharashtra or in Rajasthan. Similarly, it will be entitled to utilize thecoal linkages for its plant in Maharashtra or in Rajasthan for productionof energy in its other power plants. As such, there is bound to be avariance in the cost of transportation by railways. For example, if thecoal is to be transported from MCL Coal Mine, Talcher to AP(M)L, thecost of railway transportation would be higher as compared to the costof railway transportation from MCL Coal Mine, Talcher to Tiroda TPS.We are only giving this example as an illustration. We find that the savingsmade in the cost of transportation, i.e., the cost which would have beenincurred for transporting the coal from MCL Coal Mine, Talcher to ‘X’plant minus the actual cost of transportation has to be passed on to theDISCOMS, which, in turn, has to be passed on to the end consumers.For example, if the cost of transportation per ton from MCL Coal Mine,Talcher to AP(M)L is Rs.100/- and from MCL Coal Mine, Talcher toTiroda TPS is Rs.50/- per ton, the benefit of Rs.50/- per ton will have tobe passed on.

33. We, however, find that the changes occurring on account ofpermitting IPT would affect AP(M)L as well as the appellants and twoother DISCOMS, i.e., MSEDCL and Rajasthan DISCOMS. This wasalso observed by the CERC in its order dated 8[th]July 2019. We do not A

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Apossess any expertise for working out as to what benefit any of theparties would be entitled to on account of the said ‘Change in Law’.However, we are of the considered view that cost of saving in the railwaytransportation on account of ‘Change in Law’ in the light of ourobservation in the aforesaid paragraph needs to be worked out and passedon to the appropriate DISCOMS, which can further be passed on to theBconsumers. CERC, which is a body of experts, is best suited to do so.

34. We, therefore, find that the present appeal deserves to bepartly allowed. Though the issue with regard to allowing ‘Change inLaw’ compensation on the basis of ACQ – actual supply deserves to beupheld, the issue with regard to IPT not being ‘Change in Law’ deservesCto be set aside.

35. In the result, we partly allow the appeal and pass the followingorder:

(i) The finding of the APTEL to the effect that theDcommunication dated 19[th]June 2013 providing for IPT doesnot amount to ‘Change in Law’ is set aside;

(ii) We hold that IPT amounts to ‘Change in Law’.

36. In the light of our observations made in paragraphs 32 and 33,the matter is remitted to CERC for working out the effect of the aforesaidE‘Change in Law’ after giving notice to MSEDCL as well as RajasthanDISCOMS and hearing all the parties including the appellants and therespondents herein.

37. However, since the said issue has been pending since a longtime, we direct CERC to decide the said issue and calculate the benefitsFthat would be accruable to any of the parties within a period of sixmonths from today.

38. Pending application(s), if any, shall stand disposed. No costs.

Nidhi JainG(Assisted by : Rakhi, LCRA)

Appeal partly allowed.

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