Shillong: The District Commercial Court in Shillong has the stayed the move of the National Thermal Power Corporation (NTPC) to regulate the supply of power in Meghalaya from May 11.
On Friday, despite the enforcement of strict lockdown in East Khasi Hills district, the court conducted a physical hearing for two hours and granted stay of the NTPC notice.
The court was presided by NA Khan and attended physically by Advocate General Amit Kumar, senior advocate Sibasis Sen and advocate for state government Arkin Kharwanlang. The NTPC was represented by its counsel before the court.
The NTPC had earlier notified Meghalaya Energy Corporation Limited (MeECL) of the impending regulation of power over its ‘disputes’ with the state government.
“The Meghalaya government, in pursuance of its objective of resolution of legacy issues in relation to the supply and transmission of power, has been taking decisive steps. The state government identified huge expenditure being incurred from the government exchequer towards capacity charges being demanded by the NTPC under the Power Purchase Agreement (PPA) of 2007,” said state power minister James K Sangma.
“Upon detailed examination of the same, it was observed that several crores were being demanded by the NTPC under the said PPA, even though the state Government had surrendered its entire allocation under the said PPA in 2015 itself. The State was also not drawing on its allocation of power from NTPC as the cost of power per unit was higher than prevailing market price and therefore, the continuation of the PPA had become unviable, unnecessary, and burdensome on the state Exchequer and did not serve any gainful purpose,” Sangma added.
On April 15, the NTPC raised a demand to clear an amount of Rs 416.72 crore of which Rs 294 crore was demanded to be paid in April itself. The NTPC further intimated the MeECL that in case the said amount was not paid, then the Letter of Credit 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 demanded by NTPC are due and payable to it and the continuation of the PPA is not warranted, Sangma noted.
The state government then terminated the PPA by a notice dated April 16, 2021. The state government also took immediate steps to approach the District Commercial Court in Shillong on April 22 seeking urgent stay against the action of NTPC.
The court took up the matter and ordered status quo in favour of the state government on April 22 and the invocation of the Letter of Credit was averted.
The NTPC preferred an application for vacation of the stay order, however, the stay was not vacated and continues till date.
The NTPC again, by its letter dated May 4, notified MeECL that since dues are not paid, regulation of power would be done from May 11 onwards in the state.
“In the present circumstances of growing COVID-19 cases, a decision to regulate power and subject the state to long power cuts would be disastrous and would seriously impact the fight against COVID-19,” said Sangma.
The Meghalaya government immediately approached the commercial court again on May 7 seeking stay of the decision of NTPC to regulate power supply in Meghalaya.
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