Another plea in SC for probe into over-pricing by power firms

A fresh petition was today moved in the Delhi High Court seeking a court-monitored probe into alleged over-invoicing of imports of raw material and equipment relating to power projects in India by electricity generating companies of Adani and Essar groups.
The petition by former bureaucrat and social activist Harsh Mander was filed in a pending identical matter involving NGOs, Centre for Public Interest Litigation and Common Cause.
When the NGOs' plea came up for hearing, a bench of Justices S Ravindra Bhat and Sunil Gaur asked them to give details of the DRI enquiry against alleged over-invoicing of equipment and fuel imported for power plants and tagged the fresh petition along with it.

The court asked for the information from the NGOs which have sought an SIT probe into the issue, and listed the matter for hearing on October 25.
However, Additional Solicitor General Sanjay Jain said the pleas would obstruct the ongoing probe.
The DRI said it would be appealing against its adjudicating authority's decision giving a clean chit to the Adani group in connection with one of the show cause notices issued to the company for alleged over-pricing of equipment.

No one appeared for the two group companies as they have not been made parties in the petition, which has incorporated the Centre, the DRI and the CBI as the respondents.

Senior advocate Vivek Tankha, who appeared for Mander, sought a direction to the Department of Revenue and Directorate of Revenue Intelligence (DRI) to implement a recommendation that every bill of export or shipping, should include an entry regarding the international market price of the goods or machineries which are sought to be imported.
"This simple step would go a long way in curbing this menace. It is pertinent to mention here that the DRI itself has issued a general alert finding 40 companies to be indulging in rampant over-invoicing," the plea filed through advocate Vaibhav Srivastava said.
During the hearing, advocate Prashant Bhushan, appearing for the two NGOs, alleged that over-pricing was also a cause for the rising number of non performing assets (NPAs) of the banks.

He alleged that Adani and Essar groups have set up shell companies overseas which buy equipment from the suppliers and then sell them to the power companies at inflated prices.
He claimed that on the basis of the over-invoicing, the companies were "lifting huge loans from public sector banks" and, through this modus operandi, "siphoning off money".
Apart from this, these power companies charged a higher tariff from consumers on the ground of the over-priced equipment and fuel, he contended, adding that "they are defrauding consumers by saddling them with higher power tariffs."
The bench, however, said it first wanted to understand the issue and asked the NGOs to give a note indicating the content of the various show cause notices issued to the two groups by DRI as well as the status of investigation and adjudication by the agency in each case.

The NGOs have alleged in their plea that one and half years have passed since DRI issued an alert regarding over- pricing of equipment and coal, but the agency had not taken any concrete step.
They have also alleged that the power firms belonging to the two groups were allegedly inflating the value of imports for their power plants to siphon money abroad and avail higher power rate compensation.
"The modus operandi is identical in all these cases. The coal or power equipment, even though (these are) shipped directly to India, but its invoicing is routed through a different company incorporated abroad which is directly owned and controlled by the promoters of the project in India," the PIL has alleged.

The two NGOs have also claimed in their plea that they have learnt that the CBI had registered a Preliminary Enquiry (PE) based on the DRI show-cause notice to Adani in May 2014.
However, the CBI apparently closed the PE without registering an FIR during the tenure of then CBI Director Ranjit Sinha, the PIL has alleged.