Courts Should Be Slow In Interfering With Decisions Taken By Experts- SC While Dismissing Petitions Against Adani Power
A Supreme Court Bench of Justice BR Gavai and Justice Vikram Nath has observed that Courts should be slow in interfering with the decisions taken by the experts in the field.
The Bench further clarified that unless it is found that the expert bodies have failed to take into consideration the mandatory statutory provisions or the decisions taken are based on extraneous considerations, or they are ex facie arbitrary and illegal, it will not be appropriate for Courts to substitute their views with that of the expert bodies.
Senior Counsel Gopal Jain and Counsel G Sai Kumar appeared for the Appellant side. ASG Balbir Singh, Senior Counsel MG Ramachandran, Senior Counsel Dr Abhishek Manu Singhvi, and Counsel Vishrov Mukherjee appeared for the Respondent side.
In this case, Maharashtra State Electricity Distribution Company Limited (MSEDCL) entered into long-term Power Purchase Agreements (PPAs) with Adani Power Maharashtra Limited (AMPL). These PPAs were entered into in pursuance of the competitive bidding processes conducted by the MSEDCL under Section 63 of the Electricity Act, 2003 read with the Standard Bidding Guidelines issued by the Ministry of Power (MoP).
As per the agreement, for claiming relief on account of a Change in Law, the party was required to approach the Appropriate Commission along with documentary proof of such increase/decrease in the cost of the Power Station or revenue/expense for establishing the impact of such change in Law.
Subsequently, the Ministry of Coal issued the New Coal Distribution Policy, as per which 100% of the quantity as per the normative requirement of the consumers was to be considered for the supply of coal by Coal India Limited (CIL) at fixed prices to be declared/notified by CIL.
AMPL then contended that on account of the change in Law, they were entitled to compensation. They approached the Courts and eventually approached the Supreme Court
The Supreme Court noted that various expert bodies, including the CERC (Central Electricity Regulatory Commission) and the APTEL (Appellate Tribunal for Electricity), considered various relevant factors before deciding the issue. In that context, the Court observed that "Recently, the Constitution Bench of this Court in the case of Vivek Narayan Sharma v. Union of India has held that the Courts should be slow in interfering with the decisions taken by the experts in the field and unless it is found that the expert bodies have failed to take into consideration the mandatory statutory provisions or the decisions taken are based on extraneous considerations or they are ex facie arbitrary and illegal, it will not be appropriate for this Court to substitute its views with that of the expert bodies."
The Court also took the considered view that "on account of the Change in Law, the generating companies were entitled to compensation so as to restore the party to the same economic position as if such Change in Law had not occurred. Had the Change in Law not occurred, the generating companies would have been entitled to the supply as assured by the CIL/Coal Companies".
Further, the Court noted that "from the perusal of the orders passed by the learned APTEL in both the matters, it is clear that no such challenge was made before the learned APTEL, and, even in the present appeals, there is ground to this effect in the Memo of Appeals. Only oral submissions have been sought to be made in that regard."
In light of the same, the Court observed that "In view of the concurrent orders of the authorities with regard to the date on which the Change in Law compensation is to be given, we see no reason to entertain such a plea, which does not have a foundation in the pleadings."
The Court found no merit in the appeals and dismissed the same. No orders were passed as to costs.
Cause Title: Maharashtra State Electricity Distribution Company Limited v. Adani Power Maharashtra Limited & Ors.