SC sets aside order allowing Sasan UMPP to recover Rs 1,050 cr

12 December 2016

The Supreme Court today set aside an order of the Appellate Tribunal for Electricity (APTEL) which had allowed Reliance Power-promoted Sasan Ultra Mega Power Project (UMPP) to recover Rs 1,050 crore alleged dues from procurer electricity distribution firms.

“We thus find that the Appellate Tribunal is wholly incorrect in accepting the case of waiver put forward by learned counsel for Sasan, and is equally incorrect in absolving the independent engineer for the test certificate given by him on March 30, 2013.

“We, therefore, set aside the Appellate Tribunal’s judgement, and reinstate the judgement dated August 8, 2014 of the Central Electricity Regulatory Commission,” a bench of justices Kurian Joseph and R F Nariman said.

UMPP, located in Singrauli district of Madhya Pradesh, is an integrated power plant-cum-coal mining project at a single location, involving an investment of over Rs 27,000 crore.

The company was allowed by the APTEL to recover Rs 1,050 crore dues from procurer states’ distribution companies.

The Appellate Tribunal for Electricity (APTEL) in its March 31 order had upheld the Sasan Power Ltd’s commercial operational date (COD) claim that the first unit of 660 MW started its commercial operation on March 31, 2013 and directed procurers to pay Rs 1050 crore to the UMPP.

Besides All India Power Engineers Federation, power distribution companies such as Ajmer Vidyut Vitran Nigam, MP Management Company, Haryana Power Generation Corporation (now Haryana Power Purchase Centre), U.P Power Corporation and Punjab State Power Corporation had challenged the APTEL order which was in favour of Sasan UMPP.

The Tata Power Distribution Ltd, and Tata Power Delhi Distribution Ltd had also challenged the order of the tribunal.

The dispute pertained to the date from which Sasan project started commercial supply of power to the distribution firms.

While Sasan UMPP said the start date is March 31, 2013, the distribution firms claimed that it was August 16, 2013.

The Sasan UMPP had been claiming that the power distribution firms owed it Rs 1,050 crore as payment for the power supplies between March 31, 2013 and August 16, 2013.

The Central Electricity Regulatory Commission (CERC), on August 8, 2014, had held that the commercial operation date was August 16, 2013.

It had allowed the plea of power distribution companies that the electricity supplied between March 31, 2013 and August 16, 2013 was ‘infirm power’ or electricity injected into the grid prior to the start of commercial operations.

Sasan UMPP appealed against the CERC order before the APTEL which reversed the order and allowed the Reliance firm to recover Rs 1,050 crore alleged dues from procurer electricity distribution firms.

The power distribution companies then moved the Supreme Court against the APTEL order.

The apex court, in its 63-page verdict, said the public interest has to be kept in mind when the question of waiver, in favour of the generator of electricity, is considered.

“We have also pointed out that the Appellate Tribunal’s finding that the Independent Engineer’s test certificate can pass muster and that there is a waiver on facts is not a possible conclusion, and such finding is, therefore, perverse and hence set aside,” it said.

In 2006, Power Finance Corporation Limited, a government of India undertaking which acted as the nodal agency, had completed a competitive bid process for development of an ultra mega power project based on linked coal mines using super critical technology of units of 660 mega watts (MW) each in Sasan District, Singrauli in Madhya Pradesh.

Sasan UMPP was incorporated as a special purpose vehicle by the Power Finance Corporation to implement the project.

Source – BS