In view of settlement between GUVNL, Adani Power, SC disposes of curative petition against termination of PPA

The Supreme Court on Tuesday accepted the out-of-court settlement between Gujarat Urja Vikas Nigam Ltd (GUVNL) and Adani Power (Mundra) Ltd over the supply of electricity and disposed of the curative plea in view of the settlement deed.

The curative petition was filed by GUVNL against a three-judge bench 2019 verdict of the top court which had upheld the termination of a Power Purchase Agreement (PPA) by Adani Power.

A five-judge Constitution Bench of Chief Justice of India NV Ramana, Justices UU Lalit, DY Chandrachud, BR Gavai and Surya Kant disposed of the curative plea in view of parties have reached a settlement and said parties will be governed by the settlement deed.

"After we issued a notice, it appears that during the pendency, parties have settled the dispute and filed joint application. After hearing, the settlement deed is taken on record. In view of the settlement, we dispose of the curative petition saying that both parties will be governed by the settlement entered into by parties. Accordingly, the petition stands disposed of," the bench stated in its order

At the outset, Attorney General of India KK Venugopal informed the apex court that the parties have settled the disputes on January 3. Termination of PPA will not be given the effect to and Adani will supply the electricity in terms of the old agreement with the state agency, the apex court was informed.

Senior advocate Mahesh Agarwal appearing for Adani informed the bench that they have agreed to continue supplying power to GUVNLband would resume supplying 2000 MW electricity to GUVNL as per the settlement deed.

During the hearing, CJI Ramana asked if the settlement can be accepted in the curative plea without interfering with the judgment. To this, Attorney General and senior advocate CA Sundaram, appearing for GUVNL submitted that the powers under Article 142 of the Constitution can be invoked to accept the settlement.

Last year, in a rare open court hearing of a curative plea in a commercial dispute, the bench had issued notices on the curative petition filed by GUVNL after noting that the plea raises significant questions of law.

In its September 16, 2021 order it had noted, "We have gone through the curative petition and the relevant documents. In our prima facie opinion, there are substantial questions of law raised in this curative petition, which require consideration."

A curative petition is the final legal remedy available to a litigant after the dismissal of the main petition and the review petition.

By its July 2019 judgment, a three-judge bench had underlined that Adani Power was justified in terminating the PPA since it could not get coal supply on time from the Naini block of Gujarat Mineral Development Corporation (GMDC).

It had ordered the Central Electricity Regulatory Commission (CERC) to determine compensatory tariffs for the power supplied by Adani Power to the state PSU.

Adani Power (Mundra) Ltd had signed a PPA with GUVNL in 2007 to supply 1,000 MW power from its project located in Korba, Chhattisgarh. In 2009 the private firm terminated the pact citing non-coal supply by Gujarat Mineral Development Corporation, claiming that the supply of electricity was conditional to coal supply.

In 2010, Gujarat Electricity Regulatory Commission (GERC) said Adani Power illegally terminated the PPA the latter had signed with GUVNL. The GERC's decision was later upheld by the Appellate Tribunal for Electricity, prompting Adani to approach the apex court. The top court had, however, reversed the findings.

( With inputs from ANI )

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