Electricity Act | Supreme Court Dismisses Discom Appeals, Affirms All Purchasers Must Share Coal Shortage Costs Equally

The Supreme Court on Monday (Sep.8) dismissed the batch of appeals filed by the discoms, upholding the APTEL's order, which held that coal shortages and associated costs must be shared fairly by all electricity purchasers from a power plant. The Court added that no DISCOMS can claim priority for power supply in an event of coal shortage.

A bench of Chief Justice of India BR Gavai and Justice K Vinod Chandran heard the dispute arose from a 'Change in Law' event involving a coal shortfall at Respondent-GKEL's 1050 MW Odisha plant, forcing reliance on costly imported coal. The question was whether the additional costs should be shared proportionally among all procurers or borne only by the affected discoms. Haryana Utilities argued its 300 MW linkage coal was exclusive to its PPA, while GRIDCO of Odisha claimed priority rights under its earlier agreement leading to the present appeal before the Supreme Court after the CERC's order to share the cost proportionally was affirmed by the APTEL.

“we have already upheld the concurrent findings of the CERC and the learned APTEL that the coal supply from all the sources has to be apportioned amongst all the three DISCOMS in proportion to the energy supplied to them. None of the DISCOMS can claim a priority for supply of power based either on the prior date of agreement or the recital as to the source of coal. In view of the findings given by us while discussing the appeal of the Haryana DISCOMS, we find no merit in the present appeal as well. The same is therefore liable to be dismissed.”, the court observed.

Further, on the point of law, the judgment authored by CJI Gavai observed that appeals under Section 125 of the Electricity Act can only be made on a “substantial question of law.”

“Unless it is found that the findings are perverse, arbitrary or in violation of the statutory provisions, it will not be permissible for this Court to interfere with the same.”, the court said.

“Though, it was sought to be argued on behalf of the appellants that in the present case question of interpretation of the documents arises and the same question would fall in the category of substantial question of law, we do not find that any substantial question of law arises for consideration in the present appeal.”, the court added.

Accordingly, the appeals were dismissed.

Cause Title: HARYANA POWER PURCHASE CENTRE (HPPC) AND OTHERS versus GMR KAMALANGA ENERGY LIMITED AND OTHERS

Citation : 2025 LiveLaw (SC) 877

Click here to read/download the judgment

Appearance:

M.G. Ramachandran, Senior Counsel for the appellants

Dr. Abhishek Manu Singhvi, Senior Counsel and Shri Vishrov Mukherjee, counsel appearing for Respondent No.1

Ms. Prerna Singh, counsel for Respondent No.2,

Shri Raj Kumar Mehta, counsel for Respondent No. 4

S.B. Upadhyay, Senior Counsel for Respondent No.5.