Staff Reporter

BANGALORE: The Karnataka High Court has upheld the contention of the Government that the power purchase agreement (PPA) entered into between the erstwhile Karnataka Electricity Board (KEB) and Godavari Sugars of Mumbai in 1999 for purchase of power is null and void.

The court also agreed with the State’s stand that the PPA had become “null and void” under the provisions of the Karnataka Electricity Regulatory Commission (KERC) Act. It, however, made it clear to the Government that the PPA would continue to hold good till a new agreement is in place.

The court was dealing with a petition by Godavari Sugars seeking a direction to Karnataka Power Transmission Corporation Limited (KPTCL) to honour the PPA it had signed with it on October 8, 1999.

After nearly two years of executing the PPA, KPTCL (which came into existence on April 1, 2000) contended that the October 1999 PPA is null and void and called upon the company to enter into a fresh PPA under the provisions of the KERC Act.

The company then filed a writ in the High Court seeking a direction to the authorities to declare the October 1999 PPA as valid and operative. It also urged the court to direct the authorities to withdraw the March 26, 2004 order asking it to enter into a fresh PPA.

Justice D. V. Shylendra Kumar upheld the contention of the State and agreed with the State’s contention that the old PPA is null and void.