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Major Relief for GUVNL in PPA termination case from Supreme Court

Adani Power had terminated the 1,000 - Mw power purchase agreement with GUVNL from its plant in Mundra on account of non-coal supply by Gujarat Mineral Development Corporation. Adani Power asserted that the power supply was conditional to coal supply.

Photo Credit : (AP)

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In a rare Supreme Court Moment, the Supreme Court on Friday issued a notice to Adani Power, allowing a rare curative petition filed by Gujarat Urja Vikas Ltd (GUVNL) against an order passed in July, 2019 allowing the company to terminate a power purchase agreement.

The move comes as a major relief for GUVNL as the estimated compensation, according to industry experts that was payable to Adani Power, stood at nearly Rs 11,000 crore. On the other hand law experts said that curative judgements, particularly in power sector, are very rare.

Adani Power had terminated the 1,000 - Mw power purchase agreement with GUVNL from its plant in Mundra on account of non-coal supply by Gujarat Mineral Development Corporation. Adani Power asserted that the power supply was conditional to coal supply.

GUVNL then challenged the termination notice before the Gujarat Electricity Regulatory Commission which held that the termination was illegal. The decision was upheld by the Appellate Tribunal for Electricity but was then reversed by the Supreme Court in July, 2019.

A three-judge bench headed by the then justice Arun Mishra in July, 2019 had held that the notice of termination of a power purchase agreement by the Adani Power Mundra Ltd to the Gujarat Urja Vikas Nigam Ltd (GUVNL) in 2009 was legal and valid. 

A five-judge bench headed by Chief Justice NV Ramana in its order said, "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."

The matter has been listed for next hearing on September 30.


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adani power GUVNL