NCLT reserves order on petitions against Tangedco, say sources

Arguments dwelt on whether a PSU falls within the ambit of a "corporate person" under IBC Code

The National Company Law Tribunal (NCLT), Chennai, has reserved orders in a batch of petitions filed by power producers Ind Bharath Power Gencom Ltd, Ind Bharath Thermal Limited and Aarkay Energy (Rameshwaram) Limited against Tamil Nadu Generation and Distribution Company Ltd (Tangedco), the State government-owned power distribution company, according to legal sources. The petitions were seeking initiation of corporate insolvency resolution process to recover the recievables to the tune of over Rs 600 crore in all the three entities put together, from the discom.

The petitions were heard on consecutive days during the past week and the various aspects of moving a corporate insolvency resolution against a Public Sector Undertaking were argued, said sources.

Arguments were made on the scope of the terms "corporate debtor" and "corporate person" under the Insolvency and Bankruptcy Code (IBC) and whether a Public Sector Undertaking would fall within the ambit of a "corporate person" under the Code, they said. The issue on whether a dispute relating to an electricity discom would have to go before the Tamil Nadu Electricity Regulatory Commission as per the provisions of the Electricity Act, 2003, among others.

There were petitions filed with the High Court earlier related to non payment of dues. According to industry sources, various power producers are suffering from lack of timely payment of dues from the discom service provider.

It may be noted that P Thangamani, minister for electricity , Prohibition and Excise, earlier in June, this year, has said that various steps including joining the UDAY Scheme and efficient coal management and import substitution has helped the government to reduce the losses of Tangedco from Rs 13, 985 crore in 2013-15 to Rs 3,783 crore in 2016-17. The gap between aggregate rate of realisation (ARR) and Aggregate Cost of Supply (ACS) which was Rs 2.16 in 2010-11 was reduced to Rs 0.44 in 2016-17. The year 2017-18 is expected to see Rs 2150 crore profit as against a loss reported in the previous years for Tangedco, said the minister in the Tamil Nadu Legislative Assembly earlier.

"After a long gap of 15 years, it is expected that Tangedco will break even during the year 2017-18, which is on a fiscal year basis without considering the debt of around Rs 81,000 crore" he said .