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Reliance Infra gets SC relief on dues to Tata Power
June, 03rd 2008

Reliance Infrastructure Ltd, the Anil Dhirubhai Ambani Group (ADAG) firm, on Monday received some relief when the Supreme Court directed Tata Power, which is yet to receive Rs 56 crore from Reliance towards energy charges, not to take any coercive step to recover the amount.

A vacation bench comprising justices C K Thakker and Lokeshwar Singh Panta issued notices to Tata Power and asked it to file its reply in ADAGs petition within a month.
Reliance has challenged the Appellate Tribunal for Electricitys order on May 12 holding that Tata Power was entitled to recover charges for energy supplied to Reliance at Rs 2.09 per unit. The balance outstanding dues on account of the difference between Rs 2.09 per kwh and Rs 1.77 per kwh and shortfall in minimum off-take of energy should be released to Tatas within four weeks along with delayed payment charges at the prevailing prime lending rate fixed by SBI for short borrowing and not at the rate of 24% per annum as directed by the MERC, the tribunal said.

The appellate tribunal had said that the issue relating to take or pay should be examined after the apex courts decision in another pending appeal relating to the similar issue, as to whether or not Tata was a distribution licensee and whether or not Reliances offer of rebate to its consumers to prevent them from moving away from it was tenable in law.

In a similar petition last year, the apex court  had directed Tatas to refund 50% of the Rs 451.35 crore to Reliance that it had paid as standby charges for electricity supply in Maharashtra and pay the rest as bank guarantee.

Earlier, Reliances counsel Abhishek Manu Singhvi argued that for entire Maharashtra, except Borivali, Reliance has been paying Rs 1.77 per unit, while in the case of Borivali, the rate fixed by Tatas is Rs 2.09 per unit.

Reliance said that it was supposed to pay at the rate of Rs 3.5 crore per month to Tata as standby energy charges and the remaining Rs 8 crore was to be paid in the form of difference of 32 paise per unit, which is paid for Borivali.

During the proceedings, Tatas counsel assured the court that it wouldnt take any coercive step against Reliance for the recovery of Rs 56 crore till the next date of hearing.

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