Adani Power received a shot in the arm on Friday with the Supreme Court asking Rajasthan’s three state-run distribution companies to pay it “Rs 3,048 crore with interest since 2013” towards the balance amount in the compensation granted for higher fuel costs, within four weeks. The discoms will have to shell out Rs 4,312 crore to honour the order.

Holding the three Rajasthan discoms guilty of contempt of its August 31, 2020 order, a bench led by Justice Vineet Saran asked the top brass of the discom to be personally present before it for framing of charges if they failed to pay the power producer as directed.

The apex court had, in August 2020, upheld the rulings of the Rajasthan Electricity Regulatory Commission (RERC) and the Appellate Tribunal for Electricity (Aptel) that had allowed Adani Power’s 1,320-MW Kawai power plant to recover the additional cost incurred by it on importing coal. It had noted that the Rajasthan government could not keep its promise of making arrangements for domestic fuel supplies for the plant.

As the company estimated the loss at over Rs 5,000 crore (Rs 1,221 crore per annum between late 2013 and 2018 end), the discoms have so far paid only Rs 2,426 crore.

The officials, who the court said, would need to be personally present before it if the latest order is not complied with, are Rajasthan Urja Vikas Nigam chairman Subodh Agarwal and its MD Bhaskar Atmaram Sawant, Jaipur Vidyut Vitran Nigam MD Navin Arora, Ajmer Vidyut Vitran Nigam MD VS Bhati and Jodhpur MD Vidyut Nigam Avinash Singhvi.

The discoms had not paid the full dues despite their review petitions having been dismissed in March last year.

The Adani group firm had cited lack of domestic coal linkage and import of Indonesian coal to bat for higher compensatory tariff.

Adani Power had moved the SC seeking to initiate a contempt against the state discoms for recovery of the compensatory tariff of Rs 6,738 crore, including interest. Adani Power alleged that the Rajasthan discoms had failed to comply with the apex court’s judgment.

Adani said it is facing severe financial hardship and grave prejudice will be caused to it due to the continuous default by the power trading companies in clearing its legitimate dues. “Due to such a huge outstanding amount for a long time (since 2013), contempt petitioner (Adani Power Rajasthan) is unable to meet day-to-day operational expenses, debt service obligations and advance payments to coal suppliers,” Adani Power Rajasthan had stated in its contempt plea.

It further said that contemnors deserve to be held accountable for such wilful disobedience and ought to be punished so as to maintain the dignity of the SC in the eyes of people and the supremacy of law must prevail.

The Rajasthan government and Adani Group had in 2008 signed a contract for setting up the coal-based power project in Kawai, where the state assured support to get coal linkage from the Central government. But the power unit was left out of the Centre’s list for supply of coal in 2013. The company then made a claim before the state electricity regulatory commission for a compensatory tariff, as it had to depend on coal imported from Indonesia. However, it was only in 2018 when the firm could formally sign supply agreements with Coal India (CIL) subsidiaries for receiving domestic fuel under the 2017 Shakti policy.