R-Power gets HC stay on Krishnapatnam penalty

The Anil Ambani-owned Reliance Power (R-Power) has got a stay from the Delhi High Court against a notice for penalty of Rs 400 crore by the procurers of power from its Krishnapatnam ultra mega power project (UMPP) in Andhra Pradesh.

In a statement, R-Power said, “On a petition by Reliance Power, the Delhi High Court has passed an order on March 20, directing that no coercive steps shall be taken for the time being against RPL, by or on behalf of any of the states procuring power from the proposed Krishnapatnam UMPP.”

Ajai Jain, chairman and managing director of APTransco, said they were taking legal advice with respect to the Delhi High Court's order. “Now the matter is in court. We served the notice as per the clauses of power purchase agreement (PPA) and the company had approached the court claiming force majeure. Now, it is for the court to decide whether the delay amounts to force majeure or otherwise,” he told Business Standard.

The utility had also threatened to encash the bank guarantee of the company following the work coming to a standstill. On the question of whether the power utility is planning to challenge the stay order either in the Delhi HC or the Supreme Court, he said they are consulting the legal experts on this matter.

"We had decided to initiate action against the company for the delay in project implementation as we have strong grounds as per the clauses of the PPA,” he said while responding to a question on the likelihood of a favourable judicial outcome.

R-Power said the change in regulations in Indonesia has impacted all imported coal-based projects in India, with nearly 15,000 Mw capacity, involving an investment of about Rs 75,000 crore. The issue has also been raised by the Association of Power Producers with the Prime Minister and the government.

It has also sent a dispute resolution notice on March 13, to all procurers, for an amicable resolution of the matters in line with the terms of the PPA between the parties.