SC says Sasan’s contract on running power plant alterable

New Delhi, July 11 (IANS) The Supreme Court on Monday said the contractual obligation that Sasan power project must have produced 95 per cent of the contracted capacity of 620 MW on a sustained basis for 72 hours to receive payments was not something sacrosanct and unalterable.

Pointing out that such a agreement under the power purchase agreement on sustained basis was not a statutory regulation but a contractual one, the bench of Justice Kurian Joseph and Justice Rohinton Fali Nariman said it could be reduced by both the parties.

In response to the observation from the bench that "95 per cent is not a statutory regulation", senior counsel C.A. Sundram, appearing for some of the utilities, said: "it is a contractual regulation."

To that, Justice Nariman said: "So it can be reduced by both the parties."

Äs Sundram also said they have not given up this contractual condition, Justice Nariman said: "We will give you a formality of hearing."

The bench directed the hearing of the matter on July 28.

The top court has been hearing pleas by seven state power utility companies belonging to Madhya Pradesh, Uttar Pradesh, Rajasthan, Punjab, and Haryana, which have challenged the Appellate Tribunal for Electricity (APTEL) order directing them to pay Sasan project dues of Rs 1,050 crore.

Besides them, Tata Power Distribution Ltd. too had moved the court. Earlier, the apex court had declined to put on hold the tribunal’s order, directing seven state-run power utilities and Tata Power Distribution Company to pay Sasan Ultra Mega Power Project dues of Rs 1,050 crore.

Senior counsel Kapil Sibal and Abhishek Manu Singhvi, appearing for Sasan Ultra Mega Power Project, told the court that in the meantime they would not unplug the power supply to the seven state utilities.

Sibal told the bench that except for Uttar Pradesh, five states have paid their first instalment of refund to Sasan and Haryana has paid two. He told the court that the due date for the payment of second instalment was July 29, 2016.

The tribunal had upheld Sasan Power’s commercial operational date claim to be March 31, 2013, thereby clearing way for the power generator to claim dues of Rs 1,050 crore from seven state power utilities and Tata Power Distribution Company.

The Sasan project had declared the commercial operational date to be March 31, 2013, on the basis of a certificate from Lahmeyer International — an independent engineer. But it was contested by the Western Regional Load Despatch Centre — the apex body tasked to ensure integrated operation of the power system in the western region.

The Central Electricity Regulatory Commission had not accepted Sasan’s claim of March 31, 2013, and had set August 16, 2013 as the date.

But after the regulator in June asked the Madhya Pradesh utility to pay its dues in three instalments, it also asked the utilities of Rajasthan, Punjab and Haryana to pay their dues in four instalments.