Adani claim for refund of 280 Cr upfront premium: LPA dismissed by Himachal Pradesh High Court
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Shimla, July 18,
In a recent judgment, the Himachal Pradesh High Court has ruled against Adani Power Limited in its claim for compensation against the State under Sections 65 and 70 of the Indian Contract Act. The Court, in a detailed 51-page judgment pronounced today, delivered its verdict on two critical appeals concerning the Jangi Thopan Hydropower project, which had significant financial implications for both the State of Himachal Pradesh and Adani Power Limited.
The court found that there was no legal relationship between Adani and the State, which is essential for such claims under Section 70. The court emphasized that Adani’s transaction involving payment to Brakel did not establish grounds for entitlement to compensation from the State.
A division bench of Justice Vivek Singh Thakur and Justice Bipin Chander Negi, stated, “For the reasons stated hereinabove, the claim sought to be enforced by Adani against the State on the basis of Section 65 of the Contract Act is rejected.”
Additionally, the court addressed the issue of Brakel Corporation, noting that their award was obtained through misrepresentation. The court held that Brakel’s misconduct rendered them “in pari delicto,” meaning equally at fault, which invalidated any claims for restitution under Section 65. The judgment highlighted, “In the present case, Brakel was in pari delicto… Brakel nor anyone on its behalf could have claimed a refund.”
Furthermore, the court clarified that government notations do not constitute formal legal decisions unless properly issued. Consequently, Adani Power Limited’s appeal was dismissed. ” Accordingly, LPA No. 166 of 2022 filed by the State of Himachal Pradesh is allowed and LPA No. 167 of 2022 filed by the M/s Adani Power Limited is dismissed,” concluded the Judgement.
Background of the Case:
In 2019, Adani Power filed a Writ petition seeking a refund of Rs 280.269 crores, along with interest, citing payments made on behalf of Brakel Corporation in relation to two hydro projects in Kinnaur District.
The matter pertained to when in 2006 two hydro projects Jangi Thopan – Powari in Kinnaur Distt, were allocated to Brakel Corp after bidding. At that time Brakel NV could not deposit the upfront money within the set time limit. So, the 2nd highest bidder Reliance infrastructure knocked the door of the State High court and prayed that this project should be allocated to them.
Also read: https://himachalscape.com/hp-hc-reserves-verdict-on-adani-power-plea-to-release-rs-280-cr-upfront-deposit/
During the hearing Brakel corporation NV somehow managed to deposit the upfront money. On behalf of Brakel this money was deposited by Adani Power. But Adani Power had never been in the consortium of Brakel.
In the year of 2009 the double bench of the High Court annulled this allocation to Brakel and the State govt had forfeited this upfront money according to the relevant clauses of the bid documents.
The court’s decision marks a significant legal outcome in the complex dispute involving contractual obligations and governmental decisions regarding project allocations and refunds in Himachal Pradesh.
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