Damodar Valley Corporation (DVC) is now eyeing the Jharkhand government’s decision to comply with the Supreme Court’s May 31 order, directing it to pay Reliance Infra Rs 535 crore in cash and Rs 303 crore through bank guarantee by July 31.
Ram Naresh Singh, chairman of the Kolkata-based DVC, has given an undertaking in writing to the Supreme Court on June 6, stating that DVC will comply with the court’s directive in terms of the arbitration award. DVC has to receive arrears of Rs 3,711.27 crore from Jharkhand Urja Vitaran Nigam (JUVN), but the Jharkhand cabinet will take the decision of paying out only a part of it — to the tune of Rs 800 crore. This payment to DVC would be beneficial to both DVC and Reliance Infra.
Rishi Nandan, general manager, commercial, told FE the matter of paying to DVC was lying with the government. “The payment would be made once the (Jharkhand) cabinet clears the decision,” Nandan said.
A Reliance Infra official said the SC directed DVC vide an order on May 31 to give an undertaking to safeguard the company’s interest but, at the same time, DVC was granted a payment extension.
In an arbitration dispute, the award was passed in favour of Reliance Infra and DVC was asked to pay an aggregate sum of Rs 1,250 crore, comprising cash component of around Rs 898 crore and of six bank guarantees of around 353 crore. There is also an interest obligation of 12% per annum on the total sum, amounting to Rs 898 crore.