A) ABSTRACT / HEADNOTE

The case pertains to the interpretation and application of a press release issued on 1st October 2009, announcing modifications to the existing Mega Power Policy. The Supreme Court was required to decide whether this press release constituted “law” under Clause 1.1 of the Request for Proposal (RFP) or Power Purchase Agreement (PPA). The dispute arose from the contention that the appellant had factored the modified policy benefits into its bid, while the respondent argued that the legal modifications materialized later, through formal notifications issued in December 2009. The Court ruled that the press release was not “law” under Clause 1.1, emphasizing that it was merely a proposal pending further statutory action.

Keywords:

Mega Power Policy, Press Release, Customs Notification, Change in Law, Power Purchase Agreement.

B) CASE DETAILS

i. Judgment Cause Title: Nabha Power Limited & Anr. v. Punjab State Power Corporation Limited & Anr.

ii. Case Number: Civil Appeal No. 8478 of 2014

iii. Judgment Date: 5th November 2024

iv. Court: Supreme Court of India

v. Quorum: B.R. Gavai, Prashant Kumar Mishra, and K.V. Viswanathan, JJ.

vi. Author: Justice K.V. Viswanathan

vii. Citation: [2024] 11 S.C.R. 445

viii. Legal Provisions Involved:

• Electricity Act, 2003
• Customs Act, 1962, Section 25
• Mega Power Policy (2006)
• Press Release dated 1st October 2009

ix. Judgments Overruled: None explicitly mentioned.

x. Related Legal Subjects: Electricity Law, Contract Law, Administrative Law, Fiscal Policy Law.

C) INTRODUCTION AND BACKGROUND OF JUDGMENT

The appeal arises from a judgment of the Appellate Tribunal for Electricity, which upheld the Punjab State Electricity Regulatory Commission’s decision rejecting the appellants’ claim that a Cabinet decision of 1st October 2009, summarized in a press release, amounted to “law” under the PPA’s terms. The appellants argued that this press release marked a new legal regime, impacting fiscal benefits they had considered in their bid for a Mega Power Project. The respondents contended that any change in law occurred only through formal notifications issued later in December 2009, binding under the Customs Act.

D) FACTS OF THE CASE

1. Customs Notification of 2002: Goods imported for Mega Power Projects were granted exemptions under Notification No. 21/2002.
2. Mega Power Policy (2006): Defined fiscal benefits and conditions for Mega Power Projects.
3. RFP Issuance (June 2009): Nabha Power Limited issued an RFP for developers through tariff-based bidding under Section 63 of the Electricity Act, 2003.
4. Press Release (1st October 2009): Announced modifications to the Mega Power Policy, including removal of certain conditions like interstate sale requirements.
5. Bidding Deadline: The appellant submitted its bid on 9th October 2009, factoring in the fiscal benefits under the modified policy.
6. Customs Notification (11th December 2009): Formalized the modifications to the Mega Power Policy.
7. Dispute: The respondent claimed the benefits accrued only after the December 2009 notifications, requiring a tariff adjustment under the PPA.

E) LEGAL ISSUES RAISED

1. Whether the press release dated 1st October 2009 constitutes “law” under Clause 1.1 of the RFP/PPA.
2. Whether the legal regime governing fiscal benefits changed with the press release or the subsequent notifications in December 2009.

F) PETITIONER/APPELLANT’S ARGUMENTS

1. The press release, reflecting a Cabinet decision, is binding as “law” under Clause 1.1 of the PPA.
2. The press release created a legitimate expectation, influencing the appellant’s bid.
3. Clause 2.7.2.1 of the RFP required bidders to consider all applicable legal factors, which included the Cabinet-approved policy.
4. The Cabinet decision effectively modified the Mega Power Policy, making fiscal benefits effective from 1st October 2009.

G) RESPONDENT’S ARGUMENTS

1. The press release was a proposal, not enforceable as law.
2. Section 25 of the Customs Act mandates formal notifications for customs exemptions, which occurred only on 11th December 2009.
3. The PPA’s definition of law excludes press releases unless formalized through statutory instruments.
4. The benefits claimed were contingent on subsequent reforms and certifications, which were finalized only in 2010.

H) JUDGMENT

a. Ratio Decidendi:

1. The press release did not constitute “law” under the PPA’s definition.
2. Legal certainty is fundamental; a press release cannot alter or repeal statutory provisions.
3. Notifications issued in December 2009 constituted the “change in law.”

b. Obiter Dicta:

The judgment underscored the need for clarity in government communications, especially where fiscal policies and contractual obligations are concerned.

c. Guidelines (If Any):

1. For fiscal benefits to apply, formal notifications or amendments must be issued.
2. Bidders must rely only on statutory instruments or codified policies for contractual obligations.

I) CONCLUSION & COMMENTS

The Court clarified the boundaries between executive intent and legally binding instruments. It reiterated that a Cabinet decision must be followed by statutory notifications to create enforceable rights or obligations. This case highlights the importance of clear legal frameworks in high-stakes contractual arrangements.

J) REFERENCES

a. Important Cases Referred:

1. Energy Watchdog v. CERC (2017) 14 SCC 80
2. Nazir Ahmad v. King Emperor AIR 1936 PC 253
3. Babu Verghese v. Bar Council of Kerala (1999) 3 SCC 422

b. Important Statutes Referred:

1. Electricity Act, 2003
2. Customs Act, 1962
3. General Clauses Act, 1897