The Rajasthan High Court, on Thursday, prohibited the state government from imposing a special fuel surcharge on consumers. It instructed the recovery of only the principal amount of Rs 3,048.64 crore paid to Adani Rajasthan Power Limited (ARPL) for power purchase, excluding the interest.

The Jodhpur bench of the high court annulled and invalidated all orders related to the recovery process. It directed that if the recovery conducted by the DISCOMs from the consumers exceeded the principal amount, it should be appropriately adjust

According to Ramit Mehta, the legal representative for one of the petitioners, the imposition of the special fuel surcharge was a response to the financial strain experienced by the DISCOMs, attributed to the payment of Rs 7,438.58 crore to Adani Rajasthan Power Limited (ARPL).

Ramit Mehta explained that the total amount of Rs 7,438.58 crore comprised Rs 3,048.64 crore as the principal amount, Rs 2,947.81 crore as interest or carrying cost on the principal amount, and an extra interest amount arising from loans obtained from financial institutions. He further emphasized that the DISCOMs had placed the entire responsibility of recovering this amount on the consumers.

It's important to note that the initial principal amount payable was Rs 3,048.64 crore, but it escalated due to a delay in the discharge of liability by the DISCOMs. The delay in fulfilling their obligations resulted in an increase in the overall amount.

In light of this observation, the bench led by Justice Pushpendra Singh Bhati concluded that transferring the financial burden borne by the DISCOMs, stemming from their inability to fulfill their obligations within the specified timeframe, onto the consumers was not deemed justifiable in the eyes of the law.

The judge emphasized that consumers cannot be compelled to bear the consequences for the DISCOMs' failure to discharge their liability within the stipulated time.

The judge highlighted that the respondent-DISCOMs are entities of the state government and, as such, fall under the definition of 'State' as outlined in Article 12 of the Constitution of India. Consequently, it is the responsibility of the State to safeguard the interests of the consumers. However, despite this obligation, the respondents imposed the additional cost under the guise of a special fuel surcharge.

The court asserted that the special fuel surcharge could have been considered justified if it had been applied solely to the original principal amount of Rs 3,048.64 crore. However, the imposition of the special fuel surcharge in the present case was deemed unjustified in the eyes of the law.