The Madras High Court has dismissed a writ petition by Hindustan Petroleum (HPCL) seeking direction to Tamil Nadu Generation and Distribution Corporation (Tangedco) to make payment of R182 crore together with interest against the outstanding due from GMR Power Corporation — with whom Tangedco has a power purchase agreement (PPA).
HPCL had executed a fuel supply agreement with GMR Power in 1996 to operate a power plant in Chennai for which the PPA was signed. The terms of the PPA also provide that the bills raised by the HPCL will be forwarded to Tangedco by GMR Power along with other operational costs and Tangedco shall pay the fuel bills and other payments to GMR and in turn the company shall pay the fuel bills to HPCL.
Over a period of time, Tangedco had to pay in excess of R225 crore to GMR Power and out of which R71.28 crore was released in the second week of April 2015. However, no amount has been paid by GMR Power to HPCL despite receipt of such sums and aggrieved by this, HPCL moved the high court.