The Andhra Pradesh High Court has dismissed a batch of writ appeals filed by renewable energy generators, including Ecoren Energy India Pvt. Ltd. (“Appellant”), who sought protection from lenders’ recovery actions after delays in payments by state power distribution companies (“DISCOMs”).
The appellants, wind and solar power producers, had signed Power Purchase Agreements (“PPAs”) with DISCOMs at tariffs approved by the Andhra Pradesh Electricity Regulatory Commission (“APERC”). After a change of government in 2019, DISCOMs resisted paying the agreed rates, triggering litigation.
In earlier cases, the High Court directed DISCOMs to honour PPAs and ruled that APERC could not retrospectively revise tariffs fixed for 25 years. But payment delays left the companies unable to repay loans taken from India Infrastructure Finance Co. Ltd., Tata Cleantech Capital Ltd., and PTC India Financial Services Ltd. (“Lenders”)
In January 2020, a single judge restrained lenders from declaring the companies’ accounts as Non-Performing Assets (NPAs), noting their heavy investments and reliance on tariff-based financing. A further order in November 2022 extended protection, directing that no coercive steps be taken against the Appellants
The lenders later sought to vacate these interim protections. In July, 2025, the single judge allowed their plea, holding that the interim restraint could not continue indefinitely, especially when lenders had statutory rights under RBI circulars to classify NPAs and recover dues. Challenging this, the companies filed the present writ appeals arguing that recovery before receipt of DISCOM dues would cripple their projects and affect power supply.
A Division Bench comprising Chief Justice Dhiraj Singh Thakur and Justice Ravi Cheemalapati rejected this contention, holding that lenders’ rights under loan agreements cannot be made contingent on payments from DISCOMs, who are not party to those contracts.
Finding “no merit” in the appeals, the Bench dismissed them without costs, thereby paving the way for lenders to proceed with recovery measures.
Appearances
Appellants- Mr. P. Sri Raghu Ram, Sr. Counsel & Mr. Shoeb Alam, Sr. Counsel appearing vice Ms. Shagufta Jahan Noor
Respondents- Mr. O. Manohar Reddy, Sr. Counsel
