Delhi High Court stays SECI order barring Reliance Power from auctions

The debarment notice has raised concerns for Reliance Power, which leverages its subsidiaries to secure contracts in India's competitive renewable energy market

Reliance Power (RPower) secured a stay order from the Delhi High Court (HC) against a debarment notice issued by Solar Energy Corporation of India (SECI). The notice had barred the company and its subsidiaries from participating in SECI’s tenders for three years, according to a stock exchange filing.

 

The court order, issued on November 26, grants temporary relief to all RPower’s subsidiaries except Reliance NU BESS (formerly Maharashtra Energy Generation).

 

The debarment arose from allegations that Reliance NU BESS submitted a fraudulent bank guarantee. SECI alleged that the company used a counterfeit foreign bank guarantee during its bid submission for a 1,000 megawatt/2,000 megawatt-hour standalone battery energy storage system project.

 

 

“The repeated submission of a fake bank guarantee along with its counterfeit endorsement has been deemed a deliberate act by the bidder, intended to vitiate the tendering process and secure the project capacity through fraudulent means. This conduct demonstrates a malafide intent to manipulate the outcome,” read the SECI notice dated November 13.

 

The notice added, “Furthermore, it is concluded that the actions of the bidder implicate the parent company, which had provided its financial strength to the bidder, enabling it to meet the qualification requirements for the tender, making the parent company equally accountable in this matter.”

 

The bank guarantee, purportedly issued by FirstRand Bank via a branch in Manila, Philippines, was found to be fake after SECI’s investigation revealed that the bank has no branch in Manila.

 

RPower has consistently denied the allegations, maintaining that it was a victim of fraud perpetrated by third parties. The company filed a criminal complaint with the Economic Offences Wing of the Delhi Police on October 16 against the third party involved, which led to the registration of a first information report (FIR) on November 11.

 

The FIR states that a third party was allegedly paid Rs 5.4 crore to arrange the bank guarantee, later revealed to be counterfeit. RPower claims it “acted bona fide” and considers the issue a “cheating conspiracy”.

 

The HC’s decision follows RPower’s legal challenge to SECI’s actions, which the company described as “unwarranted” and detrimental to its shareholders. The stay order temporarily halts SECI’s debarment notice, pending further legal proceedings.

 

The debarment has triggered concerns for RPower, which relies on its subsidiaries to compete in India’s renewable energy market.   

STORY SO FAR  

Fraud allegations 

SECI accuses Reliance NU BESS of submitting a fake foreign bank guarantee in a bid for a battery storage project 

SECI's notice 

SECI claims the fraud involved “deliberate acts” to manipulate the tendering process, implicating the parent company as well

 

RPower’s defence 

Denies involvement, alleging it was defrauded by a third party 

Business impact 

SECI’s debarment jeopardises RPower's ability to compete in India's renewable energy sector