Closing contempt proceedings initiated by Adani Power against three Rajasthan state-run distribution companies and their top brass, the Supreme Court (SC) on Tuesday noted that the discoms had paid over Rs 5,996 crore towards full and final payments in compliance with its earlier August 31, 2020 and February 25, 2022 orders.
Rejecting Adani’s plea for further payment of Rs 1,300 crore, which it claimed to be the shortfall towards late payment surcharge, a bench led by Justice Vineet Saran said that the issue is left open and can be claimed before an appropriate forum. On February 25, the Supreme Court had asked the three Rajasthan state-run distribution companies to pay the balance Rs 3,048 crore with 9% interest to compensate for higher fuel costs.
Adani senior counsel AM Singhvi argued that the discoms have paid a total of Rs 59,996 crore till November last year, but the company had not received any further payment towards compensatory tariff for recovery of the higher cost of imported coal.
Meanwhile, the power distribution companies argued that no penalty should accrue from November last year as domestic coal had been offered since then, but Adani was not keen to use it.
Even Rajasthan Urja Vikas Nigam chairman Subodh Agarwal in its affidavit had said that it was entitled to certain claims, which were not part of the present case, and sought permission to file for recovery of its payments against Adani. However, the apex court said this issue was outside the purview of the current case, but gave liberty to the discoms to raise the issue in accordance with law. In August 2020, the apex court had had upheld the order of the Appellate Tribunal for Electricity that allowed compensatory tariff to Adani Power’s 1,320-MW Kawai plant since 2013, to recover the additional cost incurred by it on importing coal, as the Rajasthan government could not keep its promise of making arrangements for domestic fuel supplies for the plant. The Adani group firm had cited lack of domestic coal linkage and import of Indonesian Coal to bat for higher compensatory tariff.
However, Adani Power later 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.
Holding the three Rajasthan discoms guilty of contempt of its August 31, 2020 order that directed payment of compensatory tariff to Adani Power within four weeks, the judges in February had asked the top brass of the discoms — 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 — to be personally present before it for framing of charges if they failed to pay Adani in time.
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 subsidiaries for receiving domestic fuel under the 2017 Shakti policy.