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The Hindu on : SC upholds MPEB move

Online edition of India's National Newspaper on
Monday, February 21, 2000

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SC upholds MPEB move

By T. Padmanabha Rao

NEW DELHI, FEB. 20. The Supreme Court has ruled that the decision of the Madhya Pradesh Electricity Board (MPEB) to invite offers for better terms in its favour from independent power producers (IPPs) on different parameters ``to enable it to prioritise the projects for providing escrow protection based on least tariff criteria and to decide about optimum mix of liquid fuel, hydel and coal-based projects cannot be said to be unreasonable or arbitrary''.

Mr. Justice G.T. Nanavati, delivering the judgment of the Bench, dismissed a group of special leave petitions from the IPPs (appellants) against a judgment of the Madhya Pradesh High Court, which had dismissed their writ petitions against the July 24, 1998 decision of the MPEB. The Court also partly allowed related appeals from certain concerned IPPs.

The Bench, which included Mr. Justice S. N. Phukan, quashed the MPEB decision to give priority to a specified thermal power project and directed the Board to take a fresh decision for giving priority for ``escrow coverage'' (in respect of the remaining coal-based projects).

``Having gone through the minutes of the meeting of the Cabinet sub-committee and the relevant facts and circumstances and on taking an overall view, we find that the decision to recommend Maheshwar, Daewoo and Bine in respect of Maheshwar Hydel Project (82 mw), Korba (East) Thermal Power Project (1,070 mw) and Bina Thermal Power Project (578 mw) cannot be faulted,'' the Bench observed.

The decision in favour of these projects ``appears to have been taken bona fide and in overall public interest'', the Bench said, and added that ``the decision, therefore, did not call for any interference by the Court and the High Court was right in upholding that decision''.

``Having considered all relevant facts and circumstances, it is not possible for us (the apex court) to agree with the contention that the least tariff criteria was not a good criteria as it was unrealistic and arbitrary,'' the Bench observed. ``It is difficult to appreciate how the least tariff criteria can be said to be a hoax when it is based upon and consistent with the notification issued under Section 43 A (2) of the Electricity Supply Act.''

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