In Brief
Jaipur Vidyut Vitran Nigam (Rajasthan Discoms) appealed against an order requiring them to pay compensation to Adani Power Rajasthan Limited (APRL) under the "change in law" provisions of a power purchase agreement. APRL had bid for a 1200 MW power contract based on domestic coal but failed to obtain coal linkage from the government. Later, the New Coal Distribution Policy changed in 2013, reducing the assured coal supply. The Supreme Court held that APRL's bid was premised on domestic coal, the policy change constituted a "change in law" event, and APRL was entitled to compensation for the shortfall in coal supply. The Court moderated the interest rate from 2% above SBAR to SBAR (capped at 9% p.a.) to reduce Discoms' liability, partly allowing the appeals.
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