SHILLONG, May 7: The District Commercial Court, Shillong has stayed the move of the National Thermal Power Corporation (NTPC) to regulate the supply of power in the state from May 11.
Given its disputes with the state government pertaining to “dues”, the NTPC had earlier intimated the Meghalaya Energy Corporation Limited (MeECL) of the impending regulation of power.
Sources said the state government, in pursuance of its objective of resolution of legacy issues pertaining to supply and transmission of power, is taking some decisive steps. The government observed a huge expenditure being incurred due to capacity charges demanded by the NTPC under the Power Purchase Agreement of 2007.
It came to light during an examination that the NTPC was demanding several crores of rupees under the 2007 PPA although the government had surrendered its entire allocation under the agreement in 2015 itself.
The state was not drawing its allocation of power from the NTPC as the cost per unit was higher than the market price. The government felt the continuation of the PPA was unviable, unnecessary, and burdensome on the state exchequer.
On April 15 last, the NTPC had demanded the clearance of Rs 416.72 crore, of which Rs 294 crore was demanded by April itself. It intimated the MeECL that in case the payment is not made, the Letter of Credit (LoC) of Rs 18 crore (approximately), submitted by the MeECL, would be invoked and forfeited immediately.
In the opinion of the state government, none of the amounts is due and payable to the NTPC. The government felt the PPA’s continuation is not warranted and terminated it through the MeECL by sending a notice on April 16.
Subsequently on April 22, the government moved the District Commercial Court seeking an urgent stay on the action of the NTPC vis-à-vis the move over invocation of LoC. The court, presided over by Commercial Judge NA Khan, took up the matter and conducted physical hearing considering extreme urgency as public interest is involved in it.
It passed an order of status quo in favour of the government on that day itself and the invocation of LoC was averted. The government was represented by Advocate General Amit Kumar and assisted by advocates Sibasis Sen, Chetan Joshi and Arkin Kharwanlang.
Later, the NTPC preferred an application for vacation of the stay order. It has not been vacated yet.
The NTPC again, by its letter dated May 4, notified the MeECL that since dues were not paid, the supply of power would be regulated from May 11 onwards.
Given the pandemic, the state government approached the court on Friday, seeking the stay of the NTPC’s decision. The court conducted a physical hearing and granted stay of the NTPC notice, thereby averting possible load-shedding.
The Advocate General and advocates Sen and Kharwanlang attended the hearing on behalf of the government.
