Have Justice Arun Mishra’s Judgements Helped Adani Group?

Over the last week, a document of unknown origin has been circulating in the capital. The two-page document listing eight court cases is reportedly doing the rounds of offices of the judges of the Supreme Court of India and senior lawyers.

The document, a copy of which is with NewsClick, lists eight cases that have been taken up by the country’s apex court, each of which involves the Adani group and each of which has been heard by a bench of judges headed by Justice Arun Kumar Mishra. The Supreme Court has ruled in favour of the Adani group in six of these cases, enabling the corporate conglomerate, headed by India’s second richest man, to gain large amounts running into over thousands of crores of rupees.

One case is currently being heard by the apex court and a judgement is expected soon, according to two individuals with close knowledge of the matter who spoke to NewsClick on the condition that they not be named.

The eighth case, involving a company in the Adani group, has also been listed before a bench headed by Justice Mishra in July. In this case, one of the two individuals who spoke to NewsClick said that hearings are going on and it is unclear if a judgement would be pronounced by the bench before Justice Mishra’s retirement.

In August 2019, senior advocate Dushyant Dave wrote to the then Chief Justice of India, Ranjan Gogoi, alleging irregularities of procedure in certain cases involving companies in the Adani group. In his letter, which was sent to all judges of the court and which entered the public domain, Dave had drawn attention to two cases in particular, which he alleged were listed “out of turn” by the Supreme Court registry during the summer vacation that year.

The listings, which he alleged “appear(ed) to be extremely unjustified as per the established practice and procedure followed by (the Supreme Court),” resulted in “thousands of crores” worth of benefit to companies in the Adani group. Both the cases were listed, heard and decided in a “hurry and in an improper” manner, Dave alleged, adding that the cases were decided by a vacation bench of the court headed by Justice Mishra in violation of the Supreme Court’s own established procedures.

In his letter, Dave also pointed toward two other cases that involved the Adani group where “favourable” judgements were given by benches headed by the judge.

A bench headed by Justice Mishra, who is due to retire on September 2, is expected to soon pronounce its judgement in a case relating to Adani Power Rajasthan Limited––which owns a 1,320 megawatt capacity thermal power plant in Rajasthan. In this case, arguments were concluded and the judgement reserved on July 29.

The case in which a judgement is anticipated relates to a legal dispute on “compensatory tariffs” for electricity worth over Rs 5,000 crore that the Adani group company claimed was owed to it by a clutch of state government-owned power distribution utilities in Rajasthan, including those located in the cities of Jaipur and Jodhpur. This particular legal battle, which has a long and convoluted history that runs to seven years, is expected to come to a final conclusion in the near future.

NO STRANGER TO CONTROVERSY

The senior-most (in terms of age) judge in the Supreme Court at present, Justice Mishra is hardly a stranger to controversy. He started his career as a judge of the Madhya Pradesh High Court in October 1999 and was elevated to the Supreme Court in July 2014, soon after the BJP-led National Democratic Alliance government, led by Prime Minister Narendra Modi, came to power.

Perceived by some as holding views similar to those espoused by the Rashtriya Swayamsevak Sangh, the ideological parent organisation of the ruling Bharatiya Janata Party (BJP), Justice Mishra was reportedly denied promotions to the Supreme Court on three occasions before May 2014, during the regime of the Congress-led United Progressive Alliance government, led by Prime Minister Manmohan Singh.

Justice Mishra’s alleged proximity to members of the ruling party was on public display at least twice, which led to this perception. In December 2016, he organised his nephew’s wedding with functions in Gwalior and New Delhi, with senior BJP leaders in attendance. These included the Chief Minister of Madhya Pradesh, Shivraj Singh Chouhan, who attended the wedding in Gwalior. Union ministers Rajnath Singh and (late) Arun Jaitley, besides former Rajasthan Chief Minister Vasundhara Raje, attended the wedding reception in New Delhi.

In February 2020, Justice Mishra publicly expressed his admiration for Prime Minister Narendra Modi in remarks made at an international judicial conference, praising his “versatile genius” and describing him as an “internationally acclaimed visionary.”

Over the course of his long career, Justice Mishra has decided over 100,000 cases, including numerous sensitive and high-profile ones considered to be “politically sensitive.”

In 2015, he was on a bench, along with the then Chief Justice of India HL Dattu, that dismissed a petition by Sanjiv Bhatt, a former Indian Police Service officer who sought the court’s direction to re-open investigations into the 2002 riots against Muslims in Gujarat, when Modi was Chief Minister of the state.

Bhatt had claimed that he was present at a meeting of top police officials where Modi allegedly instructed those present to look the other way while riots and arson took place for three days. While dismissing Bhatt’s petition, the bench opined that the petitioner had not approached the court with “clean hands” and the petition was motivated to benefit rival political parties.

In 2017, Justice Mishra headed a two-member bench that dismissed a petition seeking an investigation into the “Sahara-Birla papers.” In that case, documents recovered from the offices of the Aditya Birla Group in the course of a raid by officers of the Central Bureau of Investigation (CBI) had surfaced. These documents showed that large amounts had been allegedly paid at different times to various public servants and politicians. These included Prime Minister Modi, who, in one entry in a document seized from the computer of a senior executive in Sahara group, allegedly received a payment of Rs 25 crore when he was Gujarat Chief Minister.

The Supreme Court dismissed the evidentiary value of these documents, describing them as “loose pages,” and refused to order an investigation into the case.

MEDICAL COLLEGE ‘SCAM’

Justice Mishra was also on the bench that decided the case pertaining to the so-called “medical college bribery scam.” The case had originated in an allegation that an entity named Prasad Education Trust that runs a medical college had paid a bribe to “senior relevant public functionaries” to get a “favourable verdict” in an ongoing case at the Supreme Court regarding its licence to offer courses in medicine.

The CBI recovered Rs 2 crore in cash from the home of a retired judge of the Odisha High Court, who was arrested along with officials of the medical college and other middlemen. The agency’s investigation also sought to implicate a sitting judge of the Allahabad High Court, and conducted raids at his residences.

The CBI alleged in a First Information Report (FIR) on the case that these persons had “conspired” to hand over large sums of cash to a Bhubaneswar-based individual who had claimed “close contact” with the “senior relevant public functionaries” and who had allegedly assured them of his ability to influence the outcome of the court’s decision in favour of the trust that ran the medical college.

The case drew significant public attention because of the alleged links between certain players and the then Chief Justice of India (CJI), Justice Dipak Misra, who had headed the bench that was hearing the case relating to the medical college licence.

In the wake of the CBI’s FIR, two petitions were filed before the Supreme Court, requesting a court-monitored investigation into the allegations by a Special Investigation Team (SIT). Crucially, the petitioners demanded that their request be heard by a Constitution bench of five senior-most judges of the court, excluding the then CJI, and that Justice Dipak Misra recuse himself from the hearings.

The petitions, that were originally put up on urgent basis to be heard on admittance by a two-judge bench, however, took an unprecedented turn when CJI Misra annulled the earlier bench and posted it before another bench presided by himself. The hearings before that bench produced high drama, as the petitioners argued for the CJI to recuse himself as the FIR contained allegations against a bench headed by him.

CJI Dipak Misra threatened the petitioners with contempt of court and entertained all submissions related to the case, leading to a parade of supportive advocates unrelated to the proceedings being allowed to address the court. In the end, however, the petitions were listed before a three-judge bench, including Justice Arun Mishra. In November and December of 2017, this bench dismissed both petitions, accusing one of “forum shopping” and the other of “scandalising the highest judicial system of the country.”

JUDGE LOYA CASE

Justice Mishra was also a part of the two-judge bench that was initially constituted to hear the so-called “Judge Loya” cases. Sensational revelations in the media in 2017 on the unusual circumstances surrounding the death of Judge Brijgopal Harkishan Loya, had caused a quite a furore in the country at that time. At the time of his death, Judge Loya was hearing a case that related to alleged extra-judicial murders by the Gujarat police of an alleged extortionist named Sohrabuddin Sheikh, and a known associate of his, as well as the rape and murder of his wife, Kausar Bi.

The case against the Gujarat police may have implicated Amit Shah, the present Union Home Minister, who was Home Minister of Gujarat at the time of the alleged killings. Judge Loya had allegedly died of a heart attack while lodged at a hotel in Nagpur, days after he issued summons to Shah to appear before him in the proceedings of the case.

Two separate petitions that called for an investigation into the death of Judge Loya reached the Supreme Court. These were clubbed together and listed before a bench comprising Justice Mishra and Justice Mohan Shantanagoudar in January 2018.

This listing was one among others that apparently provoked an unprecedented response: the four senior-most judges after the then CJI Justice Misra, held an unprecedented media conference and released a letter they had written to the media. The judges raised a number of concerns about the manner in which the CJI had allotted cases and constituted benches as the “master of the roster,” drawing attention to a number of cases Justice Arun Mishra had been assigned to hear allegedly in violation of the Supreme Court’s norms and procedures.

One of the four judges, who went on to become CJI, Justice Ranjan Gogoi, admitted to journalists that the listing of the Judge Loya case was one of the factors that had prompted their extraordinary action. A few days later, the Judge Loya cases were re-assigned to a different bench.

CASE ON ADANI POWER RAJASTHAN

The case that is currently going on before a three-judge bench headed by Justice Arun Mishra, which also includes Justices Vineet Saran and Mukesh Shah, is based on a clutch of three petitions appealing a regulatory decision of the Appellate Tribunal for Electricity (APTEL) that granted Adani Power Rajasthan Limited (APRL)––a subsidiary of Adani Power Limited––“compensatory tariffs” worth around Rs 5,000 crore.

(In a following article, we will explain in detail the circumstances and background of the case and what follows is a simplified summary.)

APRL has, since 2013, demanded a hike in electricity tariff paid to it by distribution utilities in Rajasthan. Its argument is that when the tariffs had initially been fixed, based on a competitive auction in which APRL had committed to selling electricity at the lowest price, it had based its bid on a promised assurance of coal supply from the Indian government at a certain price.

The government failed to supply coal, as a result of which APRL had to run the plant using coal imported from Indonesia. In 2010, because of a law passed by that country’s government, Indonesian coal became considerably more expensive. APRL argues that it deserves to be awarded a hike in tariff over the earlier agreed level to “pass-through” the extra cost of the Indonesian coal to power consumers.

This demand of APRL, which it first took to the Rajasthan Electricity Regulatory Commission (RERC) in 2013, has since gone back and forth in the legal system. In a long drawn-out process of hearings over five years, the RERC’s initial decision that arrived in 2018, admitted Adani’s reasoning. It argued that a letter sent to the company, indicating that the government intended to allocate a coal block to supply its power plant, constituted a firm commitment, reneging on which constitutes a “change in law”, for which APRL deserves to be compensated.

This RERC order was challenged before APTEL, which, in September 2019, delivered its verdict upholding the RERC’s conclusion and ordered the power distribution utilities concerned to pay up over Rs 5,000 crore in “compensatory tariffs” to the company in the Adani group.

It is this decision by APTEL that is the subject of the challenge before the Supreme Court bench headed by Justice Mishra. Of the three petitions before it, one is by the distribution utilities for the cities of Jodhpur and Jaipur, along with the larger Rajasthan state power distribution utility, while the other two petitions have been filed by the All India Power Engineers Federation (AIPEF).

The AIPEF, a representative organisation for employees of government owned-power sector companies, has sought to intervene in the proceedings of this case since 2019, while it was being heard by the APTEL. The federation had sought to intervene as a representative of the interests of power consumers and power distribution utilities, after it had been recognised as a representative of consumers in a separate case by the Supreme Court.

AIPEF’s intervention was dismissed by APTEL before it issued its final verdict, and thus, the federation’s appeal before the Supreme Court against the dismissal has been clubbed along with AIPEF’s original intervention petition by the three-judge bench.

SIX PRO-ADANI VERDICTS

If indeed the three-judge bench ends up ruling in favour of Adani Power Rajasthan, this would become the seventh occasion a judgement favouring the Adani group has been made by a bench presided over by Justice Arun Mishra.

On January 29, 2019, the Supreme Court decided in favour of Adani Gas Limited in a case against the government of Rajasthan. The case related to natural gas distribution network projects that the company was implementing in Udaipur and Jaipur. A no-objection certificate had been withdrawn by the Rajasthan government and an application by Adani Gas had been rejected by the state government.

Both these decisions were overturned by the Supreme Court, taking into account the costs that had already been incurred by Adani Gas in proceeding with the works without having the requisite permissions in place.

In his letter, senior advocate Dushyant Dave had noted that in this case, the petition was listed before a bench of Justice Arun Mishra and Justice Navin Sinha, who delivered the order, in spite of the fact that other judges of the Supreme Court––who had served as members of earlier benches that had heard the case––were available to hear the case. Further, Dave pointed out that the case was of a category that had been assigned to a different bench of the Supreme Court.

The next such occasion took place on May 2, 2019, when a bench of Justices Arun Mishra and Abdul Nazeer decided in favour of Adani Electricity Mumbai Limited in a case against Tata Power Company Limited.

Adani Electricity Mumbai, which was at the time of the order, in the process of acquiring the electricity distribution business in Mumbai from the Reliance ADAG (Anil Dhirubhai Ambani Group), was the beneficiary of the order which dismissed Tata Power’s arguments in a long-standing dispute between itself and Reliance ADAG over demand charges.

This case, too, found mention in Dave’s letter as an instance where Justice Mishra’s bench took over the case when it should not have, under extant Supreme Court procedures.

The same bench, on July 16, 2019, dismissed a review petition filed by Tata Power against its earlier decision.

On May 7, 2019, a bench of Justice Mishra and Justice Shah ruled in favour of Parsa Kanta Collieries Limited, an Adani group company engaged in mining coal from the Parsa East Kente Basan coal block in northern Chhattisgarh, in a case against a Rajasthan government- owned power generation firm to which it supplies coal.

In this case, Dave pointed out, the case was being heard by a bench comprising Justices Rohinton Nariman and Indu Malhotra, and was listed before a summer vacation bench headed by Justice Mishra without any order that it be so listed.

The case involved an arbitration award that was in Parsa Kanta’s favour, which had been struck down by the Rajasthan High Court. In this judgement, the Supreme Court overturned the High Court’s order and partially upheld the arbitration award.

Then, on May 23, 2019, an early hearing application was made before the same vacation bench of Justices Mishra and Shah, seeking hearing in a case between Adani Power Mundra Limited and the Gujarat Electricity Regulatory Commission. The case was heard the following day by a bench of Justices Mishra,Bhushan Gavai and Surya Kant, and the judgement was reserved after a single hearing.

In its order that was pronounced on July 2, 2019, the bench allowed Adani to cancel contracts it had secured through competitive bidding to sell power to the Gujarat government’s distribution utility, on the grounds that a government-owned coal mining company had failed to provide coal supply to Adani Power Mundra.

On these two cases, Dave wrote in his letter: “…both these matters were listed, taken up and heard without any justification and in hurry and in an improper manner. As a result, besides causing grave injury to public interest and public revenue, it has caused immense damage to the image of the Supreme Court…It is disturbing that the Supreme Court of India should take up regular matters of a large corporate house during the summer vacation in such a cavalier fashion.”

Dave also clarified that he had in the past appeared in cases for the Adani group.

The response of an unnamed spokesperson of the Adani group to Dave’s explosive letter is reproduced here verbatim:

“The letter of Mr Dave has come to our notice. It is unfortunate that misconceived and malicious statements against the Hon’ble Apex court and our company are made without proper verification. The arbitration matter was in the list of vacation matters and came for hearing in normal course. It was as per the procedure prescribed for listing in vacation. It was prescribed that arbitration matters which require to be adjudicated expeditiously can be listed with consent of parties to the case- which was done. Mr Dave had in this matter himself appeared for us before Hon’ble Rajasthan high court. The power matter was listed pursuant to application for urgent hearing after due notice to the opposite side advocates. The insinuations made regarding the four matters of Adani group are wholly unwarranted.”

Finally, on July 22, 2020, a Supreme Court bench presided over by Justice Arun Mishra, that included Justices Bhushan Gavai and Krishna Murari, ruled in favour of Korba West Power Company Limited in a case against the public sector Power Grid Corporation of India Limited.

The Korba West power plant is located in Chhattisgarh and was acquired by the Adani group in April 2019. The claim by the Power Grid Corporation in this case, which was an appeal against an order of the National Company Law Tribunal over an insolvency claim against the power plant’s previous owner Avantha Power, was dismissed by the bench in a single hearing, stating that it found “no ground to interfere” in the (tribunal’s) ruling. The tribunal had dismissed the claim made by the Power Grid Corporation of payments that it claimed were due to it.

SIGNIFICANCE OF UPCOMING ORDER

As we will explain in detail in the next article, the Supreme Court’s decision assumes further significance in light of an earlier decision by it on the issue of coal imports from Indonesia by Adani Power for another one of its power plants–– in this case, the 4,620 MW capacity power project in Mundra, Gujarat.

In this case, a Supreme Court bench led by Justice Rohinton Nariman had, in a landmark ruling, dismissed Adani’s claim to compensatory tariffs, by elucidating a fundamental principle behind tariffs fixed through competitive auctions.

Delving into the legislative intent of the Electricity Act, 2003, under which such auctions take place, the April 2017 ruling had determined that a company that bids a certain tariff level, is assuming the risk of fluctuations in the cost of inputs, including fuel, and therefore cannot later seek compensation for increases in input costs. The APTEL ruling in the Adani Rajasthan case, appears to contradict this principle.

The decision by the bench led by Justice Arun Mishra can serve to reinforce the principle of the 2017 order if it upholds the appeal and strikes down the compensatory tariffs. If it dismisses the appeal and grants compensatory tariffs favouring the Adani group, it may end up contradicting the 2017 order of Justice Nariman, creating jurisprudential ambiguity.

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