Power dues: Telangana HC sets aside Centre’s order

The order was passed by the Division Bench comprising Chief Justice Alok Aradhe and Justice NV Sharavan Kumar dealing with the challenge filed by the Telangana State.

Hyderabad: The Telangana High Court has set aside the Central government order which directed Telangana State Southern Power Distribution Company Limited, Telangana State Northern Power Distribution Company Ltd and Telangana State Power Coordination Committee to pay over Rs 6,700 crore to APGENCO (Andhra Pradesh Power Generation Corporation Limited).

The order was passed by the Division Bench comprising Chief Justice Alok Aradhe and Justice NV Sharavan Kumar dealing with the challenge filed by the Telangana State. For the power supply made by APGENCO during the period June 2014 to June 2017, the Ministry of Power, Central government passed the order on August 29, under the AP State Reorganisation Act with directions to pay an amount of Rs 3,441.78 crore towards the principal amount and Rs 3,315.14 crore towards the late payment surcharge to the Government of Andhra Pradesh within a time frame of 30 days. Multiple disputes are pending in different forums regarding the payments of post-bifurcation dues by the State of Telangana.

---

The State of Andhra Pradesh approached the Central government for intervention, wherein the meeting was conducted on 8 February 2022, to resolve the issues arising under the Reorganisation Act. CS Vaidhyanathan, Senior Counsel appearing for the TS DISCOMS argued that 31 Power Purchase Agreements (PPAs) were entered between Andhra Pradesh & TS DISCOMS with a provision that disputes between the parties are to be settled between the chief executives by negotiations. The same was not adopted or any opportunity was given as agreed, TS Power Utilities said. union government lacks jurisdiction or power to act as the adjudicatory body under the Reorganisation Act, it was argued.

Representing the union Government, the Additional Solicitor General argued that the Impugned Order was passed in the presence of secretaries of both States. Moreover, the liability of payment of the Principal amount of Rs 3,441.78 crore was admitted by communication sent by the State of Telangana, the union said.

CV Mohan Reddy, Senior Counsel representing the State of Andhra Pradesh reiterated that the order passed by the Centre is based on the admission of liability of dues by Telangana and hence, the contention of violation of Principles of Natural Justice is misconceived. He also said that the Supreme Court alone can decide this dispute and said the High Court is not the appropriate authority.

After considering the rival submissions of both sides, the court observed that Power Purchase Agreements envisage the resolutions of disputes through negotiations at first instance and thereafter, through arbitration. In addition, the parties are free to approach APERC for settlement of disputes.

The State of Andhra Pradesh without resorting any of the above remedies, directly approached the Central Government under Section 92 of the Reorganisation Act. The court observed that as the dispute is between the entities owned and controlled by the State of Telangana and the State of Andhra Pradesh, it is eminently desirable that the dispute be resolved amicably, preferably through mediation. The court expressed its hope that both parties make earnest endeavour to sort out the disputes.