In Brief
GUVNL, a power buyer, contracted with Essar Power Limited (EPL) for 300 MW of electricity from a 515 MW plant, with the balance (215 MW) allocated to Essar Steel Ltd. GUVNL claimed EPL wrongfully diverted power meant for it to Essar Steel. The Tribunal rejected the claim, finding no obligation to allocate proportionately. The Supreme Court held that the Power Purchase Agreement required EPL to declare total plant capacity and allocate supply in the contracted 58:42 ratio between the two beneficiaries. EPL's own letters admitting this obligation were binding. The Tribunal erred in ignoring the proportionate allocation principle and EPL's admissions. The Court allowed the appeal and restored the Regulatory Commission's order directing compensation.
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