MERC8217;s concern over MSEB8217;s financial state

MSEB representative strongly made a plea to the MERC to find a way out as it was at the receiving end. The non-payment of standby charges by Tata Power to it had further deteriorated the financial condition of MSEB.

The State government, admitting that there was a dispute between Tata Power and BSES, had kept in abeyance its order issued on March 22, 2000 just before one and half hours of the beginning of an hearing on BSES petition at MERC on Tuesday. BSES pleaded that its petition be admitted and an ad interim stay be granted prohibiting the Tata Power to disconnect its standby power.

However, during hearing which began this morning, Tata Power took a strong objection to the state government stay order keeping its March 22 order in abeyance as the BSES has taken up the issue at MERC. Tata Power claimed that the March 22, 2000 order still remains in place and on the basis of which the BSES would have to pay standby charges to it. The company also questioned the MERC8217;s powers on an issue which has already been resolved through a government order.

Tata Power said that the state government8217;s order issued on March 22, 2000 was final and cannot be reopened. It was ironical that BSES simply sat on the order while MSEB and Tata Power have honoured it. Furthermore, even if the BSES which had termed the March 22 order as illegal, it should have approached the high court or any other body against that order, Tata Power counsel said.

Tata Power counsel said that it did not want to give up on the issue of maintainability of March 22 order as the company had made adjustments in its balance sheet and informed its shareholders.

Tata Power contended that though the state government delegated powers to MERC under section 22 2 n of the Central Electricity Regulatory Commission Act ,1998, it cannot adjudicate upon the dispute or difference which has been resolved in the past and it cannot be done retrospectively but can decide upon prospective issues. Section 22 2 n states quot; to adjudicate upon the disputes and differences between the licensees and utilities and to refer the matter for arbitration.quot;

In addition to this, Tata Power counsel said that the state government while keeping its March 22 order in abeyance, had not mentioned clearly whether it had delegated powers under section 22 2 p. This sections states quot;to aid and advise the state government on any other matter referred to the state commission by such government.quot;

Tata Power counsel demanded that the MERC may admit BSES petition subject to a condition that the latter would contribute its share towards standby charges until the judgment is delivered. However, BSES rejected the Tata Power proposal and reiterated that it had already paid nearly Rs 30 crore to the former in good faith despite having a dispute on this issue.

Following Wednesday8217;s MERC directives, Tata ower admitted that there was no threat to BSES for the disconnection of its standby power. Similarly, Tata Power expected similar gesture from MSEB which had also threatened to disconnect Tata Power8217;s standby power in the wake of nonpayment of arrears of Rs 274 crore towards standby charges.