Synopsis

This Supreme Court judgment arises from a dispute between a power generator (APNRL) and a distribution company (WBSEDCL) concerning compensation for increased coal costs under a Power Purchase Agreement (PPA). The core issue was whether APNRL was entitled to compensation for (i) procuring coal from alternative sources due to delay in operationalizing its captive coal block, and (ii) the cancellation of its coal block by the Supreme Court in Manohar Lal Sharma, which it claimed was a "Change in Law" event. The Court partly allowed the appeal, upholding the entitlement to compensation for the Change in Law event (coal block cancellation) but denying compensation for the period before the cancellation, as the PPA's specific indemnity clause (Article 2.5) barred such claims for non-captive coal sourcing.

1. Basic Information of the Judgment

Case Title: Civil Appeal Nos. 2584-2585 of 2026 – West Bengal State Electricity Distribution Co. Ltd. vs. Adhunik Power & Natural Resource Ltd. & Ors.

Citation: 2026 INSC 202

Court: Supreme Court of India

Jurisdiction: Civil Appellate Jurisdiction (Article 136)

Coram: Chief Justice Surya Kant, Justice B.V. Nagarathna, and Justice Joymalya Bagchi

Nature of Bench: Three-Judge Bench

Date of Judgment: February 27, 2026

2. Legal Framework & Key Precedents

The judgment interprets contractual provisions in the context of the electricity sector and the coal block allocation scandal.

• Primary Legislation & Agreements:
  Power Sale Agreement (PSA) dated 05.01.2011: Between WBSEDCL (Appellant) and PTC India Ltd. for supply of 100 MW power.
  Power Purchase Agreement (PPA) dated 25.03.2011: A back-to-back agreement between APNRL (Respondent No. 1) and PTC for onward sale of power to WBSEDCL.
  Article 10 of the PPA/PSA: Defines "Change in Law" events, which entitle the affected party to compe

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