Supreme Court upholds pro rata apportionment of linkage coal among beneficiaries and dismisses appeals

A bench of Chief Justice B.R. Gavai and Justice K. Vinod Chandran heard challenges to concurrent orders of the Central Electricity Regulatory Commission (CERC) and the Appellate Tribunal for Electricity (APTEL) concerning allocation of firm and tapering coal linkage for a thermal power project and recovery of Change‑in‑Law compensation. The appeals arose from claims by the generator for additional tariff adjustment and supplementary bills against procurers after shortfall in linkage coal necessitated procurement from alternate sources.

The Court held that the CERC and APTEL correctly interpreted the contractual and allocation documents and that the coal allocated to the project was to be treated for the plant as a whole and apportioned pro rata among all beneficiaries. The Court stressed judicial restraint in second‑guessing specialised regulators and observed that "unless the Court finds that the expert bodies have failed to take into consideration the mandatory statutory provisions or if their decisions are based on extraneous considerations or they are ex facie arbitrary and illegal, it will not be appropriate for this Court to substitute its views with that of the expert bodies." The Court, in its reasoning, observed: The appeals were dismissed.

Background The dispute arose out of a Kamalanga thermal power project for which GMR Kamalanga Energy Limited (GKEL) secured firm and tapering coal linkage and executed long‑term PPAs with three procurers: Grid Corporation of Odisha (GRIDCO), the Haryana distribution utilities (through PTC), and Bihar Utilities. After units achieved commercial operation, GKEL sought tariff adjustments and supplementary bills for Change‑in‑Law and additional cost incurred due to shortage of linkage coal and procurement of imported/open‑market coal. In Petition No. 79/MP/2013 the CERC allowed several claims and devised a formula requiring pro rata apportionment of additional cost; GKEL later filed Petition No. 105 seeking clarification and recovery of outstanding supplementary bills from Haryana procurers. CERC directed Haryana Utilities to pay supplementary bills and to apportion firm and tapering linkage coal on a pro rata basis among beneficiaries; APTEL dismissed appeals against that order.

Haryana Utilities contended that firm linkage and specific FSAs were unit or procurer‑specific and that GRIDCO and Bihar should bear the cost of tapering linkage; GRIDCO argued it had prior rights since its PPA was earlier and was not impleaded before CERC. GKEL and other respondents submitted allocation and FSA language showed coal was for the plant as a whole and ACQ would be operationalised in proportion to generation covered under PPAs. The Supreme Court examined CERC and APTEL reasoning, prior orders in related matters (including Energy Watchdog, MSEDCL and Uttar Haryana Bijli Vitran), and correspondence from Mahanadi Coalfields Ltd. confirming pro rata release against total PPA capacity. The Court found no substantial question of law under Section 125 of the Electricity Act, 2003 warranting interference, affirmed that the allocation was project‑wide and not procurer‑specific, and dismissed Civil Appeal Nos. 1929 of 2020 and 3429 of 2020, upholding the impugned APTEL order dated 20 December 2019. No interim directions were required beyond the CERC direction to pay supplementary bills with late payment surcharge.

Case No.: 2025 INSC 1079 (Civil Appeal No. 1929 of 2020 & Civil Appeal No. 3429 of 2020) Case Title: Haryana Power Purchase Centre (HPPC) and Others v. GMR Kamalanga Energy Limited and Others Appearances: For the Petitioner(s): Shri M.G. Ramachandran, Senior Counsel (for Haryana Utilities) For the Respondent(s): Dr. Abhishek Manu Singhvi, Senior Counsel and Shri Vishrov Mukherjee (for GMR Kamalanga Energy Ltd.); Ms. Prerna Singh (for PTC India Ltd.); Shri Raj Kumar Mehta (for GRIDCO); Shri S.B. Upadhyay, Senior Counsel (for Bihar Utilities).