Supreme Court accepts settlement between Adani Power, Gujarat Urja Vikas Nigam in Rs 11K crore PPA dispute

The Supreme Court on Tuesday accepted the compromise reached between Adani Power (Mundra) Ltd. and Gujarat Urja Vikas Nigam Ltd. (GUVNL), over the supply of electricity.

A five-judge bench headed by Chief Justice N.V. Ramana said: "In view of settlement deed, we dispose of the curative petition, by saying that both parties will be governed by the compromise".

In a settlement, the private firm waived off its nearly Rs 11,000 crore dues with the state PSU in a dispute over termination of a February 2007, power purchase agreement for supplying 1000 MW electricity. The private firm has agreed to keep supplying power to the state PSU.

On September 30, last year, the top court asked Adani Power (Mundra) Ltd. to respond to a curative plea by GUVNL challenging it's 2019 judgment which had upheld the private firm's termination of a pact with the state PSU.

At the outset, Attorney General K.K. Venugopal submitted before the bench that parties have settled the problem and there was a claim of over Rs 10,000 crore compensation and it now stands withdrawn. The AG urged the top court to record the settlement in the matter. The bench, also comprising Justices U.U. Lalit, D.Y. Chandrachud, B.R. Gavai, and Surya Kant queried the law officer, how to interfere in the judgment?

The counsel for Adani submitted that curative petition can be disposed of on the terms of settlement reached between the parties, and the firm will continue to supply power.

The Chief Justice queried that once the court has taken up the curative and doesn't interfere in the judgment then how can it modify the judgment. He added, "You want it to be disposed of based on settlement?"

The AG urged the bench to take on record affidavits by both parties in the matter. Justice Lalit suggested that the court can record that the relationship between the parties will be governed by the compromise. Justice Kant agreed with Justice Lalit's suggestion in the matter.

The AG submitted that the court can invoke Article 142 and put an end to the dispute.

Justice Lalit said that parties have entered into compromise and the court can dispose of settlement in terms of the settlement which was filed by signatures of competent persons. "We proceed that both parties have now entered into settlement", he added.