The issue concerns Adani Power's decision to terminate its power purchase agreement with GUVL after the Gujarat Mineral Development Corporation failed to provide coal.
The Supreme Court dismissed a curative petition regarding the dispute between Gujarat Urja Vikas Nigam Ltd. (GUVNL), the state's power utility, and Adani Group's power company on Tuesday, stating that both parties had reached an out-of-court settlement and that their relationship would be governed by the terms of the agreement.
In a curative plea filed by the GUVL against a Supreme Court verdict upholding Adani Power (Mundra) Limited's termination of a power purchase agreement, a five-judge Special Bench chaired by Chief Justice of India N.V. Ramana issued the order.
The termination was upheld by a three-judge bench led by Justice Arun Mishra (since retired) in 2019. Furthermore, the Bench had ruled that Adani should be compensated in order to achieve "economic justice." In an August 2019 letter to the then-Chairman of the Supreme Court of India, senior counsel Dushyant Dave mentions this issue. The senior lawyer was perplexed as to why the case was listed, heard, and reserved for judgement in a matter of two days during the May 2019 vacations.
In an unprecedented step, the Curative Bench led by CJI Ramana issued notice to the Adani group in September last year and opted to hear the matter in open court. Justice U.U. Lalit, D.Y. Chandrachud, B.R. Gavai, and Surya Kant are among the other judges on the bench.
In January 2022, however, the GUVL and Adani struck an acceptable arrangement on the 1000 MW power purchase deal. According to reports, the Adani group has opted to forego paying the GUVL the $12,000 crore compensation that the Supreme Court ordered them to pay in 2019.
Following the settlement, the GUVL and Adani jointly petitioned the Supreme Court, alerting the court and requesting that the 2019 verdict be modified.
"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 argued that under Article 142 of the Constitution, the court might use its exceptional powers to accomplish perfect justice. The Attorney General also made a reference to the Supreme Court Rules in support of change.
‘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 stated that it was not concerned about the company's willingness to supply power, but rather focused on the issue of the judgment's modification.
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 issue concerns Adani Power's decision to terminate its power purchase agreement (PPA) with GUVL due to the Gujarat Mineral Development Corporation's failure to provide coal.
The GUVL had successfully challenged the termination at the Gujarat State Electricity Regulatory Commission before the case reached the Supreme Court. The commission's finding that the termination was unlawful was supported by the appellate panel as well.