West Bengal State Electricity Distribution Co. Ltd. v. Adhunik Power & Natural Resource Ltd. 2026 INSC 202 - Contract Law
Indian Evidence Act 1872 - Section 92,94 -Ordinarily, when a contract is reduced to writing, its terms must be determined from the document itself. However, this rule does not put an embargo on looking into such facts which (i) establish a link between terms of the contract and existing facts i.e. attending circumstances, or (ii) impart meaning to a term which may otherwise be meaningless or unworkable. (Para 22) [Context: The Supreme Court held that cancellation of the Ganeshpur captive coal block pursuant to Manohar Lal Sharma and the subsequent Coal Mines (Special Provisions) Act, 2015 constitute “Change in Law” events under Articles 10.1.1(b) and 10.1.1(f) of the PPA/PSA, entitling Adhunik Power & Natural Resources Ltd. to compensation from 25.08.2014 with carrying costs.]
Case Info
Case name and neutral citationWest Bengal State Electricity Distribution Co. Ltd. v. Adhunik Power & Natural Resource Ltd. & Ors., 2026 INSC 202
CoramChief Justice Surya Kant, Justice B.V. Nagarathna, Justice Joymalya Bagchi (author)
Date of judgment27 February 2026 (New Delhi)
Case laws and citations referred
- Manohar Lal Sharma v. Principal Secy. & Ors., (2014) 9 SCC 516
- Anglo American Metallurgical Coal Pty. Limited v. MMTC Limited, (2021) 3 SCC 308
- GMR Kamalanga Energy Ltd. and Anr v. CERC and Ors., 2018 SCC OnLine APTEL 151
Statutes / laws referred
- Indian Evidence Act, 1872 (Sections 91, 92, 94, 95 and related illustrations)
- Bharatiya Sakshya Adhiniyam, 2023 (corresponding provisions: Sections 94, 95, 98)
- Coal Mines (Special Provisions) Ordinance, 2014
- Coal Mines (Special Provisions) Act, 2015
- Coal Mines (Nationalisation) Act, 1957
- Mines and Minerals (Development and Regulation) Act, 1957
- PPA/PSA contractual clauses: in particular Articles 2.2, 2.5 and 10 (including Articles 10.1.1(b), 10.1.1(f), 10.2)
Three‑sentence brief summaryThe Supreme Court held that cancellation of the Ganeshpur captive coal block pursuant to Manohar Lal Sharma and the subsequent Coal Mines (Special Provisions) Act, 2015 constitute “Change in Law” events under Articles 10.1.1(b) and 10.1.1(f) of the PPA/PSA, entitling Adhunik Power & Natural Resources Ltd. to compensation from 25.08.2014 with carrying costs. At the same time, it set aside the Appellate Tribunal’s direction granting compensation for coal procured via e‑auction/import to meet shortfall in tapering linkage prior to cancellation of the coal block, holding that Article 2.5 is an indemnity protecting the buyer (WBSEDCL) from such pre‑cancellation coal‑cost escalations. The Court directed CERC to modify its consequential order dated 11.02.2026 in line with these findings within four weeks.
