Change in Law Runs From Notification Date: Supreme Court

Change in Law Compensation Runs From Notification Date, Not Order Date: Supreme Court Dismisses Rajasthan Discoms' Appeal

Published: 3 November 2026 · NyayVidhan · 3 min read

The Supreme Court dismissed an appeal by the Rajasthan power distribution companies against Adani Power Rajasthan, leaving undisturbed APTEL's ruling that Coal India's Evacuation Facility Charges notification of 19 December 2017 was a change in law compensable from its date. A mere difference in one party's understanding of a change in law does not move the start date to an order's date under Article 10.5.1(ii) of the PPA, and a supplementary bill follows adjudication (paras 24-26, 28-29).

Key holdings

Appeals under Section 125 of the Electricity Act, 2003 need a substantial question of law, as under Section 100 CPC (paras 15-16).

A mere difference in understanding of a change in law does not attract Article 10.5.1(ii) of the PPA (para 24).

Where the notification and its application are undisputed, there is no change in interpretation of law (para 25).

A change-in-law supplementary bill is raised only after due adjudication by the competent forum (para 26).

The plea that the generator should have billed earlier had no factual or legal basis (para 28).

Case explainer by NyayVidhan: an account of this judgment and the law it laid down, not the court's text. The judgment itself is the authoritative version.

Brief Facts

Under a Power Purchase Agreement of 28 January 2010, Adani Power Rajasthan contracted to supply the three Rajasthan Discoms 1200 MW at a levelized tariff of Rs.3.238 per unit (para 3). On 19 December 2017 Coal India imposed Evacuation Facility Charges of Rs. 50 per tonne; the generator flagged it as a change in law the next day (para 4). After partial relief from the Regulatory Commission, APTEL condoned delays of 332 and 236 days and, on 18 April 2024, held the notification a change in law, with compensation from its date and carrying cost at LPS rates, save for the 332-day delay (paras 5-7). This Court confined the appeal to Articles 10.2.1 and 10.5 of the PPA (para 8).

Court's Findings

An appeal under Section 125 of the Electricity Act, 2003 is controlled by Section 100 CPC: APTEL is the final court of fact and law, a substantial question of law must exist, and this Court proceeds on APTEL's findings of fact unless they are perverse (paras 14-16). The other issues raised were not substantial questions of law (para 17). Whether a public authority's notification is a change in law, and from which date, had attained finality through GMR Warora, UHBVNL 2019 and UHBVNL 2023 (para 18). Article 10.2.1 of the PPA, based on restitution, is substantive (para 21). Under Article 10.5.1(i) the adjustment runs from the date of the change in law; Article 10.5.1(ii), using an order's date, applies only where a changed interpretation of law in that order makes the change (paras 22-23). A mere difference in one party's understanding does not bar the other from Article 10.5.1(i) (para 24). Here the notification and its application were undisputed, so clause (ii) did not apply (para 25). A supplementary bill is raised only after due adjudication by the competent forum (para 26), and carrying cost was already covered by the earlier decisions (para 27).

Legal Principle

Under the PPA's change-in-law clause, the tariff adjustment runs from the date of the change in law itself. The date of an order or judgment governs only where the change in law arises from a changed interpretation of law; one party's different understanding of whether a notification is a change in law does not shift the date (paras 22-25).

NyayVidhan's view · Practice note

Why It Matters

For distribution companies and generators bound by change-in-law clauses like this one, the ruling narrows the room to dispute when compensation starts. Where a governmental instrumentality's notification is itself the change, the adjustment runs from its date; a disagreement over whether it qualifies does not turn the case into one of changed interpretation (paras 22-25). The Court also treated an appeal under Section 125 of the Electricity Act, 2003 as confined to substantial questions of law (paras 15-17). Prompt notice still matters: the Court pointed out that the generator notified the change in law the very next day (para 28).

Editorial comment by the NyayVidhan Editorial Desk. It is not part of the Court's judgment and is not legal advice.

Precedents Relied Upon

GMR Warora Energy Ltd. v. CERC (2023) 10 SCC 401
Relied Upon Discussed at ¶ 18, 27
Held that notifications of instrumentalities of the State issued after the cut-off date, including Coal India's circular of 19 December 2017 levying Evacuation Facility Charges, are change in law events compensable on the restitutionary principle, and upheld carrying cost at LPS rates; the Court extracted it and held that these issues had attained finality.
Uttar Haryana Bijli Vitran Nigam Ltd. v. Adani Power Ltd. (2019) 5 SCC 325
Relied Upon Discussed at ¶ 18, 27
Held that a change in law by adoption, promulgation or amendment of law takes effect in the monthly tariff from the date of the change, subject to the in-built restitutionary principle, and that carrying cost relatable to the PPA's change-in-law article was payable; extracted as one of the decisions settling the issue.
Uttar Haryana Bijli Vitran Nigam Ltd. v. Adani Power (Mundra) Ltd. (2023) 2 SCC 624
Relied Upon Discussed at ¶ 18, 27
Held that once carrying cost is granted, it is payable on compound interest from the date of the change in law event, to restore the affected party to its original economic position; extracted as one of the decisions settling the issue, including carrying cost.

View all precedents (4)

Prem Cottex v. Uttar Haryana Bijli Vitran Nigam Ltd. (2021) 20 SCC 200
Distinguished Discussed at ¶ 9, 27
Relied on by the appellants for the distinction between a liability to pay and an obligation to pay without a demand; the Court held that the decision relied upon on behalf of the appellants had no application to the facts.