PIL in HC on over-invoicing by power firms, seeking SIT probe

A petition has been moved in the Delhi High Court seeking an SIT probe into alleged over- invoicing of equipment and fuel imported for power plants by the electricity generating companies of Adani and Essar groups.
The PIL filed jointly by two NGOs -- Centre for Public Interest Litigation and Common Cause -- was today listed for hearing before a bench comprising Acting Chief Justice Gita Mittal and Justice C Hari Shankar.
However, Justice Hari Shankar recused himself from hearing the matter, saying he was a counsel for one of the companies mentioned in the petition.
Thereafter, the acting chief justice listed the PIL for hearing before another bench on September 20.

However, the NGOs' counsel and advocates present for the Centre, DRI and CBI utilised the brief opportunity to spell out their respective stands.
The counsel, appearing for the Centre, opposed the petition, saying it would "jeopardise the entire power sector in the country."

While the DRI contended that it was investigating various firms in this regard, CBI counsel submitted that it will seek instruction on the matter.
DRI's contention was opposed by NGOs counsel Prashant Bhushan, who said that one and half year have passed but the agency has not taken any concrete step.
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.

The NGOs have 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 NGOs claimed that the DRI had earlier unearthed that public and private sector energy companies were siphoning away several thousands crores of rupees abroad.
"Most of these over-invoicing instances have been reported from the power sector, the impact of which is felt by the millions of the electricity consumers in the form of higher tariff," the NGOs claimed in their PIL.
"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 alleged.

The NGOs elaborated the modus operandi in their plea giving an example that suppose the Original Equipment Manufacturer (OEM) of power equipment is located in China, but it raises the invoice in the name of a company located in say UAE, and the UAE-based company then raises its own invoice by inflating the value on the Indian company.
"But, Chinese OEM ships the equipment directly to India," it claimed.
"Thus, it is clear that such companies have much to hide in the way they have indulged in huge over-invoicing of coal imported from Indonesia in order to siphon off money from India to cheat the consumers and the shareholders. ... The said case is a clear criminal offence and needs a thorough investigation by an SIT," the PIL alleged.

The two NGOs 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 even registering an FIR during the tenure of then CBI Director Ranjit Sinha, the PIL alleged.