Delhi HC grants relief to R Power against coercive action by procuring states

The Delhi High Court today passed orders restraining states procuring power from Reliance Power's Krishnapatnam UMPP from taking any coercive steps against the power utility for the time being, Reliance Power Ltd said in a filing with the Bombay Stock Exchange.

The Southern Power Distribution Company of Andhra Pradesh (APSPDCL) has issued termination notice to Coastal Andhra Power Limited (CAPL), which is implementing the project, for 'abandoning' the construction of the 4,000 MW ultra mega power project at Krishnapatnam in Nellore district.

"In view of the defaults and anticipatory breach, having no alternative, the procurers together decided to terminate the agreement which shall come into effect from 7th day of receipt of this notice. However, without prejudice to the rights of the procurers to claim appropriate amount of damages and restoration of land etc, fastens the seller's liability of payment of Rs400 crore to the procurers within one week as per Article 3.3.2 of the PPA," the notice served by APSPDCL on CAPL said.

Subsequently, other power procuring states -Tamil Nadu, Karnataka and Maharashtra - have also slapped fines of Rs400-crore on Reliance Power for delay in the Krishnapatnam project.

The project is being developed by Reliance Power's wholly-owned subsidiary, Coastal Andhra Power Ltd.

Reliance Power said power generation and several other power projects in the states have been affected because of shortage of imported coal.