In a major setback for Adani Power, the Supreme Court on Monday (March 18) rejected its plea seeking late payment surcharge (LPS) of ₹1,400 crore. Additionally, the top court has slapped costs of about ₹50,000 on Adani Power.
The dispute travels back to the hotly contested claim for compensatory tariff by power producers like Adani Power. In August 2020, the SC decided the issue in favour of Adani Power, holding that it was eligible to seek compensatory tariff from Rajasthan discoms, for power supplied since 2013. The Rajasthan Discoms had paid about ₹6,000 crore, as per the court's judgment of 2020.
But Adani Power had moved the apex court afresh seeking additional payment of ₹1,400 crore, citing LPS. As per Adani Power’s claims, the court had provided for the compensatory tariff to be paid for power supplied from 2013. For these delayed payments, Adani Power claims it is liable to charge an interest rate of State Bank Advance Rate (SBAR) + 2%. The existing SBAR or benchmark lending rate is 14.85%.
The Supreme Court heard and reserved its judgment in the case earlier on January 24. Abhishek Manu Singhvi who appeared for Adani Power earlier, argued in court that the orders by APTEL and SC, have only addressed the issue of compensatory tariff and carrying costs. Adani Power claimed that no decision has been made on the issue of the interest burden or the LPS.
Importantly, Abhishek Manu Singhvi clarified before the top court that Adani Power is seeking to withdraw the petition and pursue the claim for ₹1,400 LPS before an appropriate forum.
The hearing saw a bitter exchange of arguments between Abhishek Manu Singhvi and the counsel for Rajasthan Discoms, Dushyant Dave.
Dushyant Dave argued that Adani Power had misguided the court by submitting falsehoods and that it should be prosecuted for perjury. He further argued that Adani Power had accepted the initial payment of ₹6,000 crore from the discoms and had decided to raise the fresh claim of ₹1,400 crore as LPS, over two years after accepting the payment.
Dushyant Dave argued that the SC judgment of 2020, which granted a compensatory tariff, was clear in limiting the interest burden to 9%. He argued that Adani Power is now trying to achieve a higher interest burden, in the guise of a modification application, when it was denied by the SC judgment of 2020.
Dave had further submitted that any additional burden would eventually be passed on, and pinch the pockets of the end user.
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