Karnataka - Mysore   

Power tariff: Grahakara Parishat to approach Supreme Court

By Our Staff Correspondent

MYSORE, JAN. 25. The decision of the High Court of Karnataka to strike down the Karnataka Electricity Regulatory Commission's (KERC) order on reduction of tariff to be paid by Karnataka Power Transmission Corporation Limited (KPTCL) to a power producer will be questioned by the Mysore Grahakara Parishat (MGP) in the Supreme Court.

The parishat Convenor, G.S. Nayak, said the High Court's order had been challenged in two Special Leave Petitions filed by KPTCL and KERC before the Supreme Court. "As the order of the High Court imposes an additional burden of Rs. 30 crores a year on the electricity consumers of the State, the parishat will appear before the Supreme Court," Mr. Nayak said in a statement.

The KERC, which is entrusted with the responsibility of fixing reasonable power tariff to safeguard the interests of consumers, revised the Rs. 2.60 a unit rate being paid by KPTCL to Jindal Tractabel Power Company Limited (JTPCL) to Rs. 2.35 a unit. "This meant a saving of more than Rs. 30 crores a year for KPTCL. This also means saving for the consumers," he said.

But JTPCL, which has now been renamed as Jindal Thermal Power Company Limited, challenged the KERC order in the High Court saying it had entered into a contract with KPTCL before the KERC came into existence.

JTPCL argued that such a contract was deemed to have the approval of the KERC and so the KERC had no jurisdiction to examine or revise the contract.

A Division Bench, consisting of Justice S.R. Nayak and Justice K. Ramanna, agreed with JTPCL's contention and quashed the order of KERC. Though KERC had sought to be a party to the case and defend its order, the High Court said KERC being a statutory adjudicatory authority could not be allowed to contest an appeal against its order.

The parishat, which has decided to challenge the High Court order, would appear before the Supreme Court through its counsel.

The issues to be raised before the Supreme Court by the parishat include whether a Government letter on May 12, 1999 permitting KPTCL to finalise power purchase agreement with JTPCL is tantamount to a concluded contract. This issue is crucial as the KERC came into existence on June 1, 1999.

The parishat pointed out that Jindal had argued that this letter, which mentioned the rate as Rs. 2.60 per unit, amounted to a concluded contract between KPTCL and JTPCL. As the letter was issued before KERC came into existence, Jindal had claimed that KERC could not modify the contract.

KPTCL and the KERC have said that the letter is not to be construed as a concluded contract and as there is no concluded contract on the date KERC came into existence, KERC is free to examine and change the conditions of the sale of power.

"The parishat is of the opinion that as KPTCL and JTPCL have admitted that there were no records of negotiations, which fixed the rate at Rs. 2.60 a unit, and there seems to be no rational basis for settling this rate, the letter, that too from the Government, which is not a party to the contract, cannot be considered as a concluded agreement between KPTCL and JTPCL," Mr. Nayak said.

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