Govt Press Releases Not “Change in Law” In PPA : Supreme Court Rejects Power Generators' Plea

The Supreme Court on Tuesday (Aug. 19) observed that the government decisions and clarifications, including the 'press releases' could not be considered as “change in law” in Power Purchase Agreements (“PPAs”). Holding thus, the bench comprising Chief Justice Of India BR Gavai and Justice Augustine George Masih dismissed the plea filed by Nabha Power Limited (NPL) and Talwandi Sabo Power Limited (TSPL) who sought compensation from Punjab State Power Corporation Limited (“PSPCL”) on the grounds of change in law, upholding the findings of the Appellate Tribunal for Electricity (APTEL) which ruled that public notices or press release lacking a legislative or statutory backing cannot be considered as a change in law as they merely qualifies as an administrative policy instruments put in place for clarifications by the government. The case stems from a dispute that arose after the appellants, being special purpose vehicles set up to develop thermal power projects in Punjab, had executed Power Purchase Agreements with PSPCL after tariff-based competitive bidding. They later claimed that government decisions and clarifications, including a press release on mega power project benefits and subsequent DGFT notifications, altered the fiscal framework and thus qualified as a “Change in Law,” entitling them to compensation. APTEL had ruled against the Appellants, holding that neither the FTP benefits nor the press release could support their claims, leading them to appeal before the Supreme Court. The judgment authored by Justice Masih held that a press release is merely an administrative announcement without legal force, and therefore it cannot constitute a “Change in Law”. Only statutes, rules, or notifications published in the official gazette qualify as change in law, the Court said. The Court referred to Nabha Power Limited (NPL) v. Punjab State Power Corporation Limited (PSPCL) and Another (2018), which held that only duly promulgated notifications such as custom notification, and not Press Releases or Communications, would constitute as “Change in Law” “Accordingly, no “Change in Law” had occurred until the Notifications dated 11.12.2009 and 14.12.2009, thereby implying that the benefits would have been deemed to be accrued only from the said dates.”, the court said. The Court noted that the actual "Change in Law" occurred only when the formal Customs Notifications were issued on December 11 and 14, 2009, which was after the Appellant's bid submission date. Therefore, no legitimate expectation or claim could be based on the pre-bid Press Release of October 1, 2009 entitling them the benefit of change in law to claim compensation. “the Press Release dated 01.10.2009 would neither amount to “law” within the meaning conceptualized in the PPA, as it would only be the Notifications dated 11.12.2009 and 14.12.2009 that would have amounted to “law”, nor it would thereby amount to “Change in Law” as argued by Appellants in the instant Civil Appeals.”, the court added. Accordingly, the Court answered the issue of change in law against the Appellants, and their appeals were dismissed. Cause Title: NABHA POWER LIMITED VERSUS PUNJAB STATE POWER CORPORATION LIMITED AND OTHERS (and connected case)Citation : 2025 LiveLaw (SC) 820Click here to read/download the judgment

Govt Press Releases Not “Change in Law” In PPA : Supreme Court Rejects Power Generators' Plea

Yash Mittal

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