SC to examine Essar's plea against Rs 2,300-cr fine by DGVCL

Dakshin Gujarat Vij Co Ltd had imposed penalty for alleged diversion of electricity supplied to company's Hazira plant

Supreme Court will examine Essar Steel's plea challenging the fine of Rs 2,311 crore imposed on the firm for alleged diversion of electricity supplied to its Hazira plant.

A bench comprising Chief Justice HL Dattu and Justice Amitava Roy issued notice to the Gujarat government and state- owned power distribution company, Dakshin Gujarat Vij Co Ltd (DGVCL), on an appeal filed by Essar, which termed the penalty "unjustified".

"Issue notice to the respondents. We will examine the matter," the bench said.

The apex court was hearing a plea by Essar Steel India Ltd (ESIL) which has challenged the July 17 order of Gujarat High Court that set aside the Appellate Authority's order on the grounds that Essar's plea questioning the validity and correctness of DGVCL's revised supplementary bills was not maintainable in law.

Essar had contended that for recovery of electricity charges with respect to any unauthorised use, it was necessary to first establish that there was unauthorised use.

"The contention of respondent (DGVCL) that the revised supplementary bills are not final orders/bills and, therefore, the appeal under Section 127 of the Electricity Act is not competent, is without substance," the petition said.

Essar Steel India Ltd had signed an agreement with DGVCL in February 2010, where the power from the state distribution company could only be used by ESIL and not by any other related firm and any violation would attract a penalty equivalent to 10 times the price of the electricity consumed.

DGVCL found that ESIL had supplied electricity to its affiliates between June 15 to July 30 in 2011. On September 22, 2011, DGVCL issued a bill of Rs 2,311 crore to ESIL for use of power by its affiliates.