Supreme Court seeks Himachal’s response in Adani Power’s Rs 280 Crore refund case

In a significant move, the Supreme Court of India has issued a notice to the Himachal Pradesh government, requiring it to respond to a petition filed by Adani Power Ltd. The company is seeking a refund of Rs 280 crore, along with 18% interest, for an amount it had deposited for the 960 MW Jangi Thopan Power Projects in Kinnaur district.

This legal battle has its roots in a complex history involving the project’s original allotment to Brakel Corporation, a Dutch firm, which failed to meet the required financial commitments within the stipulated time. This failure led to a series of legal complications.

A Supreme Court bench, comprising Justices M M Sundresh and Arvind Kumar, has refused to stay the Himachal Pradesh High Court’s decision that overturned a previous order directing the state government to refund the money to Adani Power. The High Court’s division bench had earlier ruled that the financial arrangements between Adani Power and Brakel Corporation violated the tender conditions and the state’s Hydro Power Policy, thus invalidating any claims for compensation.

The dispute dates back to 2005 when the Himachal Pradesh government invited global bids for two hydropower projects—Jangi Thopan and Thopan Powari—each with a capacity of 480 MW. Brakel Corporation, the highest bidder in 2006, failed to deposit the required upfront premium on time. This opened the door for Reliance Infrastructure Ltd, the second-highest bidder, to offer to match Brakel’s bid. During this period, Adani Power, which was a consortium partner with Brakel, deposited Rs 280 crore as the upfront premium.

Reliance Infrastructure then approached the Himachal Pradesh High Court, challenging the allotment of the projects to Brakel. In 2009, the High Court annulled the allotment and directed the state government to invite fresh bids. Consequently, the state government demanded Rs 2,700 crore in damages from Brakel for delays in the project’s implementation.

Adani Power’s appeal to the Supreme Court argues that the division bench of the High Court made an error in its judgment by not acknowledging the financial commitments and losses the company has incurred. With the Supreme Court now calling for a detailed response from the Himachal Pradesh government, this long-standing legal tussle is set to enter its next chapter. Further reports are awaited on this story.