In a setback for Adani Power Rajasthan Ltd. (APRL), the Supreme Court of India dismissed their petition seeking over ₹1,300 crore as a late payment surcharge (LPS) from Jaipur Vidyut Vitran Nigam Limited (JVVNL). JVVNL is a power distribution company owned by the Rajasthan government.
A Long-Standing Power Purchase Agreement Dispute
The dispute stems from a Power Purchase Agreement (PPA) between APRL and JVVNL. PPAs dictate the terms under which electricity is sold from a generating company (like APRL) to a distribution company (like JVVNL) for further supply to consumers. A crucial aspect of PPAs is the timeline for payments. Late payments by the distribution company often incur Late Payment Surcharges (LPS) for the generating company.
2020 Verdict: Compensatory Tariff but No Late Fee
In 2020, the Supreme Court had already ruled on a similar petition by APRL arising from this PPA. The court’s verdict back then was a mixed bag for APRL. While it acknowledged that JVVNL’s delayed payments caused financial hardship for APRL, it awarded them a compensatory tariff instead of the Late Payment Surcharge. A compensatory tariff is an adjustment to the electricity price that aims to make up for the financial losses caused by late payments.
APRL’s Latest Attempt and Procedural Misstep
Unhappy with the 2020 verdict’s exclusion of the late payment surcharge, APRL filed a miscellaneous application in 2023 seeking to revive their claim for ₹1,300 crore. However, the Supreme Court, in its January 2024 judgment, dismissed this application. The court pointed out that a miscellaneous application was not the proper legal course for such a claim. This implies that APRL should have pursued a different legal route, likely a separate lawsuit, to make their case for the late payment surcharge.
Rapping on the Knuckles and Next Steps
The Supreme Court imposed a cost of ₹50,000 on APRL for this procedural error. The detailed judgment elaborating on the specific legal reasoning behind the dismissal is yet to be released. This recent verdict effectively ends APRL’s pursuit of the late payment surcharge through this particular route. It remains to be seen if APRL will choose to pursue the claim through a different legal channel.
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