SC disposes of GUVL-Adani group curative, says their relationship will be governed by compromise terms

The case relates to Adani Power's termination of the power purchase agreement with GUVL because the Gujarat Mineral Development Corporation had failed to supply coal to it.

February 08, 2022 12:31 pm | Updated 12:51 pm IST - NEW DELHI

Supreme Court of India. File.

Supreme Court of India. File.

The Supreme Court on Tuesday disposed of a curative petition concerning the row between Gujarat Urja Vikas Nigam Ltd. (GUVNL), the State's power utility, and Adani Group’s power company after noting that both parties had reached an amicable out-of-court settlement and their relationship would be governed by the terms of the compromise.

A five-judge Special Bench led by Chief Justice of India N.V. Ramana passed the order in a curative petition filed by the GUVL against a July 2019 judgment of the Supreme Court upholding the termination of a power purchase agreement by Adani Power (Mundra) Limited.

In 2019, a three-judge Bench led by Justice Arun Mishra (now retired) had upheld the termination. Moreover, the Bench had held that Adani should be paid compensatory tariff in order to do "economic justice". This case, incidentally, finds mention in an August 2019 letter from senior advocate Dushyant Dave to the then Chief Justice of India. The senior lawyer had expressed his puzzlement at why the case was suddenly listed, heard and reserved for judgment in a matter of two days during vacations in May 2019.

In September last year, the Curative Bench led by CJI Ramana had, in a rare move, issued notice to the Adani group and decided to hear the case in open court. The other judges on the Bench include Justice U.U. Lalit, D.Y. Chandrachud, B.R. Gavai and Surya Kant.

However, both the GUVL and Adani reached an amicable settlement of the 1000 MW power purchase agreement in January 2022. It was reported that the Adani group had decided to waive the ₹12,000 crore compensation that the GUVL was ordered by the Supreme Court to pay in 2019.

Following the settlement, the GUVL and Adani moved the Supreme Court jointly, informing the court and seeking modification of the 2019 judgment.

"Once we take up the curative grounds... Once we have decided to consider the grounds of the curative, how can we just modify the judgment [2019]? How can we modify the decreetal part of that judgment," Chief Justice Ramana asked Attorney General K.K. Venugopal, who was appearing for the GUVL along with senior advocate Aryama Sundaram.

Mr. Venugopal submitted that the court could flex its extraordinary powers to do complete justice under Article 142 of the Constitution. References were made by the Attorney General to the Supreme Court Rules too in favour of modification.

‘Committed to supply power’

Adani group's counsel submitted that the company "was committed to supply power to the State immediately after the modification of the judgment".

The court said it was not concerned about the company's inclination to supply power, its focus was rather on the question of modification of the judgment.

Justice Lalit suggested that the court could dispose of the case by merely taking on record the settlement and by confining itself to observing that the "inter se relationship between the parties will be governed by the compromise".

"In view of the settlement, we are disposing of the curative petition by observing that both parties are governed by the compromise," the court recorded thereafter.

The case relates to Adani Power's termination of the power purchase agreement (PPA) with GUVL for the reason that the Gujarat Mineral Development Corporation had failed to supply coal to it.

Prior to the case reaching the Supreme Court, the GUVL had won its challenge against the termination in the Gujarat State Electricity Regulatory Commission. The commission's conclusion that the termination was illegal had been further upheld by the appellate tribunal.

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