Bombay High Court

Bombay High Court: While deliberating upon the instant writ petition seeking temporary, time-limited relief so that the Letter of Credit is not further acted upon until MSEDCL has been able to move the Central Electricity Regulatory Commission, the Division Bench of G.S. Patel and Gauri Godse, JJ., issued an ad interim order directing the respondents to not take any steps to invoke the Letter of Credit in furtherance of the letter dated 29-08-2022 issued by the CGPL (Coastal Gujarat Power Ltd.)

The dispute was regarding the Short-Term Open Access arrangement between the Maharashtra State Electricity Distribution Company Ltd. (MSEDCL) and Coastal Gujarat Power Ltd. This is a Special Purpose Vehicle (SPV) established to implement and develop a 4000 M W ultra-mega project at Mundra, Kutch District, Gujarat. The Tata Power Company Ltd. (the 2nd respondent) is the holding company of CGPL.

It was stated by the petitioner’s counsels that there was a Letter of Credit for Rs 19.88 crores in favour of CGPL issued by MSEDCL. Due to the disputes between the parties, CGPL invoked the Letter of Credit on 29-08-2022. MSEDCL actually paid Rs 19.66 crores, though under protest to CGPL/Tata Power on 30-08- 2022, one day after CGPL invoked the Letter of Credit.

It was further stated by the petitioner that despite the afore-stated payment having admittedly and demonstrably being made, CGPL has not yet communicated to Canara Bank (which issued the Letter of Credit and also the 4th respondent) not to act further on the invocation.

Upon perusal of the afore-stated facts, the Court pointed out that as of now it is not concerned with the disputes regarding the price of the power supply that have arisen vis-a-vis the power purchase agreement between MSEDCL and CGPL. The Court, however, noted that there is undoubtedly a payment made by MSEDCL to CGPL, although under protest, and that there is sufficient prima facie case to issue an ad interim order until 07-09-2022.

The Court also directed that the concerned are to act on an authenticated copy of the order and the Canara Bank will not insist on a certified copy of this order.

[Maharashtra State Electricity Distribution Company Ltd. v. Coastal Gujarat Power Ltd., 2022 SCC OnLine Bom 2048, decided on 05-09-2022]

Advocates who appeared in this case :

Rafique Dada, Senior Advocate, with Deepa Chawan, Ravindra Chille & Rahul Sinha i/b DSK Legal, Advocates, for the Petitioner.

*Sucheta Sarkar, Editorial Assistant has prepared this brief.

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