The case of State of Himachal Pradesh vs. JSW Hydro Energy Ltd. is a legal dispute concerning the interpretation of contracts and the distribution of hydropower projects in Himachal Pradesh.
The main issue arises here is whether contractual obligations to supply free power overrides electricity tariff regulations or not.
The facts of the case reveals that an agreement was signed between the parties stating that JSW will supply 18% of the power generated to the appellant state free of cost. The dispute arises when JSW approaches the High court to limit its free power obligations to 13% citing the Central Electricity Regulatory Commission’s (CERC) 2019 tariff regulations. JSW receives the high court’s judgement in their favor which leads the appellant to initiate the case in the appellate court.
The Hon’ble Supreme Court of India in its judgement ruled in favor of the state overriding the High Court’s judgement stating that CERC regulations can not override the contractual agreement between the parties and as agreed JSW have to provide 18% power to the appellant free of cost as per original agreement even though it exceeds the cap specified in CERC Regulations.
This judgement carries consequences for the upcoming conflicts related to the contract agreements and regulatory structures within the power industry especially in terms of CERC regulations and contractual obligations.
Judgement: https://indiankanoon.org/doc/175543240/