MSEB seeks refund of Rs 1,200 cr from DPC

Sanjay Jog

Mumbai, Nov 19: The Maharashtra State Electricity Board (MSEB) on Monday appealed to the Bombay High Court that Dabhol Power Company (DPC) be ordered to pay it an amount of Rs 1,200 crore towards the excess payment of capacity charges during May 1999 and April 2001. According to MSEB, of the total payment of Rs 3,499 crore towards the power purchases, the capacity charge amounted to Rs 2,087 crore. The average purchasing rate per unit of Dabhol Phase-I (740 mw) power in 2000-01 has been about Rs 7.30 while its payment for the Phase-II (if and when commissioned) would have been in the range of Rs 500 crore per month.

MSEB has denied that it has failed or neglected to make payments to DPC under the power purchase agreement (PPA) from time to time and whenever the payments were made after the due dates, interest was paid to DPC. “It is DPC that has defaulted in paying the rebate due to MSEB for the default and material misrepresentation on the availability of power without any basis whatsoever. The DPC’s refusal to pay/adjust the rebate in terms of the express provision of the PPA of undisputed facts is obdurate and wrongful,” it said.

MSEB in its counter affidavit has prayed that DPC’s writ petition challenging the jurisdiction of Maharashtra Electricity Regulatory Commission (MERC) to adjudicate upon dispute and difference between MSEB and DPC be dismissed at cost. The Bombay High Court division bench comprising justices Ajit Shah and Sharad Bobde would begin hearing on the DPC’s writ petition from December 11 following the Supreme Court’s order of August 6 to settle the MERC jurisdiction issue.

The filing of counter affidavit by MSEB today coincides with the completion of six months period after the issuance of two preliminary termination notices by DPC on May 19. DPC, which has already issued another two preliminary termination notices to MSEB on September 10 however, has been restrained from serving a final termination notice to MSEB by the Bombay High Court on November 9 over a civil suit filed by Indian financial institutions.

MSEB further said that the DPC cannot be permitted to go ahead with the arbitration when the statute requires that its dispute with DPC be adjudicated upon only by the Merc. “DPC is an Indian company doing business in India and subject to Indian laws and an utility within the meaning of the Electricity Regulatory Commission Act (ERCA),” MSEB added. MSEB has strongly denied DPC’s apprehension that it would not get a proper or fair hearing before the MERC. It further said that “MERC has both the competence3, expertise and regulatory responsibility to adjudicate upon the disputes raised in the MSEB’s petition filed on May 25 before the MERC,” it said.

According to MSEB, the disputes it has raised before the MERC involve technical, commercial and legal issues and it would clearly have consequences/ramifications, which directly bear on matters which have exclusively been entrusted to the MERC under section 22 (1) and 29 of The ERCA. “The MERC, which is fully competent in every respect to adjudicate upon, is an expert body with special knowledge and experience in matters relating to electricity in Maharashtra state,” MSEB said.

MSEB said that adjudicating functions/powers/jurisdiction have been conferred on the MERC in respect of disputes and differences between utilities.