1. Essar plea against Rs 2,311 cr demand: Supreme Court seeks Gujarat response

Essar plea against Rs 2,311 cr demand: Supreme Court seeks Gujarat response

The Supreme Court on Thursday sought response from the Gujarat government and others on Essar Steel's appeal against the R2,311-crore demand raised by public sector power distribution company Dakshin Gujarat Vij Company Ltd (DGVCL) allegedly for unauthorised use of electricity supplied to its Hazira plant in the state.

By: | Published: October 2, 2015 12:50 AM

The Supreme Court on Thursday sought response from the Gujarat government and others on Essar Steel’s appeal against the R2,311-crore demand raised by public sector power distribution company Dakshin Gujarat Vij Company Ltd (DGVCL) allegedly for unauthorised use of electricity supplied to its Hazira plant in the state.

A bench headed by Chief Justice HL Dattu sought response from the state government and the state distribution company after Essar termed the demand as exorbitant and unjustified.

Essar has challenged the Gujarat High Court’s order that set aside the Appellate Authority’s order on the ground that the Essar’s petition questioning the validity and correctness of the DGVCL’s revised supplementary bills of January 2012, aggregating to Rs 192.58 crore for recovery of electricity charges for unauthorised use of electricity of 168.42 MU, was not maintainable in law. While the Authority had held contrary to the HC, it had also directed the state distribution company to revise and reduce the unauthorised use of electricty to 25.23 MU.

Senior counsel Harish Salve, appearing for Essar, argued that for recovery of electricity charges in respect of any unauthorised use, it is necessary to first establish that there was unauthorised use. “The contention of respondent (DGVCL) that the revised supplementary bills are not final orders/bills and, therefore, the appeal under Section 127 of the Electricity Act is not competenet, is without substance,” the petition stated.

Salve told the court that the company has already paid Rs 192 crore and the demannd is at least 23 times more than what it should be.

It said that the amalgamation of Essar Steel (Hazira) Limited (ESHL) into Essar Steel India Ltd became effective from August 5, 2010, prior to the period for which the demand was assessed for supply of electricity to ESHL.

DGVCL had orginally assessed ESIL energy charges at Rs 2311.02 crore for 168.42 MV of electricty consumed between June 15 to July 30, 2011. The power supply arrangement Dakshin Gujarat Vij had was only with Essar Steel. Pursuant to representations made by Essar to several authorities, the state government had constituted a committee to examine the entire issue. The Committee in its report of December 13, 2011 had held that that there was no theft of energy and full energy was accounted and paid for.

Accordingly, DGVCL had issued two revised supplementary bills for a total amount of Rs 192.58 crore till the total claim was finally satisfied.

According to DGVCL, the amalgamation of other units of the Essar group which were not consumers with ESIL (the consumer), does not mean that \the merged units would automatically become its consumers. The legal entity, even after becoming a single one after merger, does not mean that the merged units becomes a single consumer as a consumer is to be seen in relation to the premises and not to the legal entity, it said, adding that they would continue to remain separate premises with a different connection and meter.

Tags: EssarGujarat
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