The Supreme Court on Wednesday said it will hear on Tuesday the joint application filed by Adani Power Mundra and Gujarat Urja Vikas Nigam (GUVNL), seeking modification of the apex court’s decision of July 2, 2019 as they had arrived at an out-of-court settlement in a dispute over termination of a February 2007 power purchase agreement (PPA) for supplying 1,000 MW of electricity.

As per the settlement deed, Adani has agreeed to relinquish compensation worth thousands of crores from the state-owned discom, which in turn has undertaken not to terminate the PPA of February 2, 2007, which was upheld by the SC in 2019.

Adani’s counsel Mahesh Agarwal, while seeking urgent hearing for disposal of the GUVNL’s curative petition, sought permission from a bench led by Chief Justice NV Ramana to place on record the settlement deed of January 3.

While seeking modification of the apex court’s decision of July 2, 2019, the joint application asked the SC to note that the parties shall be governed and bound by the terms of the settlement deed and also declare that GUVNL “has relinquished its claim for termination of the PPA of February 2, 2007 and the compensation for the period till July 9, 2019 in perpetuity for all intent and purposes in view of the Settlement Deed reached”.

The state discom has agreed with Adani on the methodology reworked for the payment of energy charges to the latter, for generation and supply of electricity under its 2007 PPAs “read with the two Supplementary PPAs of December 5, 2018. The parties have also agreed on the withdrawal of the proceedings pending before the Central Electricity Regulatory Commission,” the application stated.

A five-judge SC Bench of Chief Justice NV Ramana, Justices UU Lalit, AM Khanwilkar, BR Gavai and Surya Kant, while hearing the GUVL’s curative plea in an open court, had on September 30 asked Adani Power to respond.

In July 2019, a bench led by Justice Arun Mishra (now retired) had held that the notice of termination of a PPA by Adani Power to GUVNL in 2009 was legal and valid. It had validated Adani Power’s claim for compensatory tariff from GUVNL for additional costs incurred in supplying power from its imported coal-based Mundra plant, after the Gujarat Mineral Development Corporation (GMDC) reneged on its promise to supply local coal from Mogra-II coal block in Chhattisgarh.

Adani in 2006 had emerged as a successful bidder for supply of 1,000 MW power at the rate of Rs 2.35 per Kwh from its power project at Korba, Chhattisgarh, to GUVNL. Another agreement was entered in April 2007 for supply of 1,000 MW against bid from Mundra Power Project in Gujarat. The bid was submitted on the basis of the assurance given by GMDC to supply 4 million tonne of coal. Since the Fuel Supply Agreement could not be executed, Adani had written to GUVNL in Januray 2009 reiterating its inability to supply the power to the procurer in the absence supply of coal by from GMDC. It also informed that it had no other option except to terminate the PPA.

Finally, Adani on December 28, 2009, terminated the PPA. GUVNL challenged the termination before the Commission, which directed Adani to supply the power at the rate determined in the PPA. On Appeal, Aptel upheld the CERC’s order. GUVNL had argued that the procurer was not concerned with the issue as to from where Adani would arrange for its supply of coal. It submitted that it was the responsibility of Adani to make arrangement for an alternative sources.