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Deal: SUPREME COURT SETTLES CHANGE IN LAW ISSUES – Requests Ministry of Power to devise mechanism to avoid protracted/unwarranted litigation and ensure timely payment to generating companies

21 Apr 2023

The Supreme Court has finally put an end to the Change in Law issues plaguing the power sector by holding that notifications by Government entities such as Coal India and Indian Railways would qualify as change in law entitling the affected party to restitutive compensation.

While reiterating its earlier position allowing shortfall in supply of domestic coal as change in law, the Court also permitted additional levies such as busy season surcharge, add on premium and evacuation facility charges as change in law.

Pertinently, Supreme Court has reinforced the position that compensation for Change in Law is to include Carrying Cost which is to be compounded on monthly basis. The judgment also emphasises on due regard to be given to concurrent findings by expert bodies and held that statutory appeals under the Electricity Act should only be entertained if a substantial question of law is involved.

While deprecating unnecessary litigation resulting in delays, the Supreme Court took note of the submissions made by Mr. Vishrov Mukerjee on the systemic issue plaguing the sector and requested MoP to evolve a mechanism to avoid unnecessary litigation and timely payment of dues. This judgment should result in a streamlined adjudicatory process and reduce delays in recovery of costs.

The Trilegal Team was led by – Partner – Mr. Vishrov Mukerjee, Senior Associates – Yashaswi Kant and Girik Bhalla, Associates – Priyanka Vyas, Damodar Solanki and Juhi Senguttuvan. The matter was argued by Mr. Vishrov Mukerjee.

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