HC Affirms SECI’s Decision to Reallocate Solar Capacity to Adani Group

Key Takeaways

The Delhi High Court upheld the Solar Energy Corporation of India’s decision to transfer 2.33 GW of power capacity from Azure Power to Adani Green Energy.
Advocate Ravi Sharma’s public interest litigation alleged irregularities in the bidding process but was dismissed by the court.
The court stated that any grievances must be raised by actual bidders, and the reallocation did not harm the public exchequer as costs per unit decreased.

Court Upholds Reallocation of Power Capacity

The Delhi High Court has upheld the Solar Energy Corporation of India’s (SECI) decision to reallocate 2.33 gigawatts (GW) of power generation capacity from Azure Power India to Adani Green Energy, a ruling stemming from a case brought by advocate Ravi Sharma. Sharma’s public interest litigation (PIL) claimed irregularities in the competitive bidding process for solar power projects, leading to a potential loss to the public exchequer.

Sharma sought to annul the December 2023 power purchase agreement (PPA) between SECI and Adani, urging an investigation into alleged misconduct. However, a division bench consisting of Justice Dinesh Mehta and Justice Vinod Kumar dismissed the PIL. The judges remarked that the court would not engage in “fishing and roving inquiry” based on allegations of irregularities. While they acknowledged the increase in capacity and the transfer of Azure Power’s capacity to Adani Green might create an appearance of irregularity, they emphasized that Sharma, as a non-bidder, could not raise such grievances.

The court noted that any claims should ideally originate from actual participants in the bidding process. Consequently, it rejected Sharma’s petition on the grounds that he failed to demonstrate any specific loss to the public or the public exchequer. The judges clarified that the existing contract, finalized two years prior, could not be unsettled solely on the basis of perceived irregularities.

Furthermore, the court pointed out that the power purchase price set by SECI had decreased after the capacity reallocation, contradicting Sharma’s assertions of public loss. The judges remarked, “The jury trial demanded by the US Securities and Exchange Commission, which the petitioner has placed before us, does not even indicate any loss to public or public exchequer.”

In his defense, Sharma had alleged that the transfer of power generating capacity to Adani Green violated established norms, suggesting that favoritism existed due to the influence of both Adani and Azure Power. However, the court’s ruling reinforces that substantive proof of harm to the public interest is essential for legal intervention in such matters, especially when agreements have already been executed and operationalized.

The High Court’s decision underscores the need for valid claims within public interest litigations, especially regarding competitive bidding processes, highlighting that not all perceived irregularities warrant judicial scrutiny when they are presented by parties without vested interests in the outcome.

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