SC refuses relief to GMR

The Supreme Court today refused to direct the Karnataka government to pay Bangalore-based GMR Energy Ltd at a rate of Rs 8.85 per unit for supply of power from its plant at Tannir Bhavi of Mangalore district.

A Bench headed by Justice S B Sinha disposed of the matter directing the company to approach the Karnataka High Court as another similar petition was pending before it.

Alleging gross abuse of process by the government authorities, senior counsel Mukul Rohtagi, appearing for GMR, said that the state government had even failed to pay for the electricity at the reduced rate of Rs 5.50 per unit.

“The plant is now under breakdown and steps are being taken to put the plant back in operation shortly to comply with the direction issued under Section 11 the Electricity Act,” said the petition filed by GMR seeking interim relief.

Pointing out that it was entitled to a higher rate for supply of electricity, GMR said that steep increase in naphtha prices (from Rs 23,656 per MT on December 16, 2008 to Rs 35,801 per MT on April 16, 2009) had resulted in a loss of Rs 1.25 crore per day.

However, opposing the plea, Solicitor General G E Vahanvati said that the petition be referred to the high court as a similar petition was earlier referred by the apex court.

Earlier, the apex court had asked the Karnataka High Court to decide expeditiously the company’s another petition challenging a state government notification that asked it to supply power to the state at Rs 5.50 a unit.