The Supreme Court has disposed of a Curative petition filed by Gujarat Urja Vikas Nigam Ltd (GUVNL) against Adani Group’s power company, in view of the settlement agreement between the parties to amicably resolve their decade-old dispute over a 1,000 MW power purchase agreement (PPA).
The Court was informed by Attorney General K.K. Venugopal that parties have settled the problem and they seek to modify the statement.
“There was a claim of Rs 10,000 crore compensation and it now stands withdrawn. So, we pray for settlement to be recorded,” he added.
The Bench, led by Chief Justice (CJI) N.V. Ramana said, “Our concern is once we take a stand in a curative petition. How can we change the judgement? Now you want the matter to be disposed off in view of the settlement.”
AG replied, “In Article 142, your lordship have the inherent power. This will be for the benefit of the parties.”
Justice UU Lalit suggested that the parties have simply come on the compromise. “We will record that they reach on the compromise and that compromise is taken on record and this curative petition is disposed off in that view.”
The five-Judge Bench, which also comprised of Justice D.Y. Chandrachud, Justice B.R. Gavai and Justice Surya Kant, noted that the parties have settled the matter between themselves. The settlement deed is taken on record.
“In view of that, we are disposing off the curative petition. By saying that both parties are governed by the settlement agreement,” said the Bench.
The Court had issued notice on previous hearing. The Court exercises its curative jurisdiction only in extraordinary circumstances, primarily to prevent miscarriage of justice and abuse of process.
The case dates back to 2010, when the Gujarat Electricity Regulatory Commission (GERC) decided that Adani Power Mundra had illegally terminated the PPA the latter had signed with GUVL. This decision of GERC was later upheld by the Appellate Tribunal for Electricity.
Adani contended that GMDC, again a state government entity, did not develop the Naini coal block. The block was allocated to the state agency by the ministry of coal but was de-allocated in 2014. GMDC was supposed to construct a power plant near the coal mine but decided to transport coal to Gujarat for two power units of Adani Power and Torrent Power.
Adani Power signed the PPA in 2007 with GUVNL for supply of 1,000 Mw at Rs 2.35/unit from its power project at Korba, Chhattisgarh, based on coal supply from Naini. GMDC had agreed to supply 4 million tonnes of coal a year to Adani.
Later in 2007, Adani told GUVL it would supply power from its Mundra power project in Kutch, Gujarat, instead of from Chhattisgarh, since GMDC was lagging in coal production. However, despite repeated reminders to the Gujarat government, GUVL and GMDC, the coal supply did not start. Due to which, the PPA Adani had signed was terminated. Adani argued the agreement for supply of power was based on the assurance given by GMDC.
GUVL held the company should have supplied power, irrespective of whether it got the coal or not. In appeal, the Apex Court observed that the findings of the Tribunal and Commission that termination clause can be invoked only when there is an agreement between the parties that there is violation of any of the conditions specified is totally incorrect.
The Court allowed the appeal filed by Adani and held that compensatory tariff be paid to Adani based on the principles of economic justice since Adani would have incurred huge losses.The review petition filed by the GUVL was dismissed by the same bench on September 3.
In its 2019 judgment, the Supreme Court has allowed Adani to seek a compensatory rate for electricity it had alternatively supplied to Gujarat from its Korba power project in Chhattisgarh. The rate will be decided by the Central Electricity Regulatory Commission within three months from the date it is approached by the company.