In 2007, Adani Power had signed a PPA with GUVNL for the supply of 1,000 MW power at a certain rate from its power project situated in Korba in Chhattisgarh. However, Adani later informed GUVNL that the power supply would be from its plant located in Mundra instead of Korba. Therefore, another PPA was signed between the two entities and there was an assurance given to Adani by the Gujarat Mineral Development Corporation (GMDC) that it would supply coal to Adani.
The GMDC, however, did not supply coal to Adani as assured and the situation remained the same despite several reminders sent by Adani to the Gujarat government, the GMDC and the GUVNL in this regard.
Subsequently, Adani terminated the PPA and fulfilled the condition of payment of liquidated damages as was stipulated in the PPA.
The termination notice was challenged before the Gujarat Electricity Regulatory Commission (GERC), which held that Adani Power illegally terminated the PPA. This decision was upheld by the Appellate Tribunal for Electricity, leading to the appeal before the Supreme Court.