The notice was served on Tuesday evening on the grounds that the DPC has defaulted on February 13 on making available power as instructed to it during the stipulated period.

MSEB sources told The Financial Express that the notice has been served as per the section 8.4 of the power purchase agreement (PPA) and DPC has been asked to clarify its stand. The sources said that DPC has not only misdeclared the power availability but has also failed to provide the power of 666 mw during 0700 hours to 1300 hours on February 13.

MSEB sources said that DPC, as per the provisions of the PPA, did not inform the actual power availability in advance and thereby has defaulted. Sources clarified that MSEB cannot ask DPC to pay the rebate as it would be due in May as per the PPA provisions. Sources revealed that DPC has been asked to communicate the quantum of misdeclaration.

Replying to the controversy DPC spokesperson Jimmy Mogal said: "As per the PPA, DPC is obligated to state the availability level for a particular month in that respective bill. MSEB has differed with the stated availability figure for February and has asked us to review the February bill. DPC has communicated to MSEB on this issue and has confirmed the availability figure of February. Accordingly, the February bill remains due and payable."

In a latest development to the whole payment controversy, MSEB has issued a cheque of Rs 114 crore towards the payment February bill in protest of DPC's denial to adjust the dues against the rebate bill.

Section 8.4 of the PPA reads: "Anytime during the term of this agreement, declared base load capacity has been less than the rated base load capacity throughout the period of 183 days immediately preceding that time and there is no reasonable likelihood that the capacity would be equal to or exceed the rated base load capacity throughout the period of 183 days immediately following that time then the DPC may serve a downrating notice.

A downrating notice shall specify the number of mega watt which will, following the date of such downrating notice, become the rated base load capacity provided that the downrated base load capacity shall not be less than the highest level of average active power produced by the power plants availability period during 183 days immediately preceding the date of such downrating notice."

It must be mentioned here that this is the second such notice served by MSEB on DPC. MSEB had issued a first rebate notice of Rs 400 crore for its default on January 28 sighting the misdeclaration of availability of power and actual supply of power.MSEB, which has yet to pay the December (Rs 102 crore), January (Rs 125 crore) and February (Rs 114 crore) bills to DPC, has asked DPC to adjust these bills against the rebate amount of Rs 400 crore for the January 28 default.