Adani Power: SC issues notice in PPA termination matter to Adani Power in rare curative order

Adani Power: SC issues notice in PPA termination matter to Adani Power in rare curative order

The Supreme Court has issued notice to while allowing a rare curative petition filed by Gujarat Urja Vikas Ltd (GUVNL) against an order passed in July 2019 letting the company terminate a power purchase agreement.

The curative order comes as a major relief to the Gujarat utility as according to industry estimates the payable compensation to Adani Power stood at nearly Rs 11,000 crore.

“We have gone through the curative petition and the relevant documents. In our prima facie opinion, there are substantial questions of law raised in this curative petition, which require consideration,” said the order passed on Thursday by a five-judge bench headed by chief justice N V Ramana.

Law experts said the curative judgments, particularly in power sector, are very rare.

The matter has been listed for next hearing on September 30.

The previous order passed by a three -judge bench headed by the then justice Arun Mishra had in July 2019 held that the notice of termination of a power purchase agreement by the Adani Power Mundra Ltd to the Gujarat Urja Vikas Nigam Ltd (GUVNL) in 2009 was legal and valid.

The order had also directed the Central Electricity Regulatory Commission (CERC) to determine compensatory tariff for the power supplied by Adani Power to GUVNL.

Adani Power had terminated the 1,000-Mw power purchase agreement with GUVNL from its plant in Mundra, citing non-coal supply by Gujarat Mineral Development Corporation. The company claimed that the power supply was conditional to coal supply.

The termination notice was challenged by GUVNL before the Gujarat Electricity Regulatory Commission which held the termination was illegal. The decision was upheld by the Appellate Tribunal for Electricity but was later reversed by the Supreme Court.

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