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No coercive steps against Telangana over power dues: HC to Centre

The Central government issued an instruction to Telangana on August 29 seeking to pay principal power due amount of ₹3,441.78 crore and another sum of ₹3,315.14 crore as surcharge to A.P. within 30 days

September 28, 2022 08:47 pm | Updated September 29, 2022 08:22 am IST - HYDERABAD

The Telangana High Court

The Telangana High Court | Photo Credit: Subrahmanyam G.S.

The Telangana High Court on Wednesday passed an interim direction to the Central government not to take any coercive steps against Telangana State power utility companies, after hearing the State’s writ petition seeking to suspend the Centre’s order to pay ₹3,441.78 crore towards power dues to Andhra Pradesh.

A Bench of Justices P. Naveen Rao and Sambasivarao Naidu, passing the direction, issued notices to the Union of India and other respondents. The Bench instructed the Centre, Andhra Pradesh government, National Load Despatch Centre, Power System Corporation Limited, AP Power Generation Corporation Limited and Telangana State Electricity Regulatory Commission to file counter affidavits by October 18.

The Central government issued an instruction to Telangana government on August 29 seeking to pay principal power due amount of ₹3,441.78 crore and another sum of ₹3,315.14 crore as surcharge to A.P. within 30 days. The notice was issued under Section 92 of of AP Reorganisation Act. While the State government filed one writ petition challenging this notice, the Telangana State Northern Power Distribution Company Limited, the Telangana State Southern Power Distribution Company Limited and the Telangana State Power Coordination Committee filed another plea seeking similar relief.

Supreme Court senior counsel Dushyant Dave, appearing for the State power utilities, told the Bench that the Centre issued the notice unilaterally without giving an opportunity to the power utilities to present their contentions. Since the notice was issued under Section 92 of the AP Reorganisation Act, it should have been discussed and deliberated before the Southern Regional Council, he said. The Council was the apex body to take a call on such matters and it was not involved in the decision making process, he said.

Senior counsel from the apex court contended that the Central government had created an environment of tilting towards Andhra Pradesh government as the latter’s political heads helped the Centre in securing election of their candidates as President and Vice-President. Mr. Dushyant Dave said what was the need for the Centre to serve notice in haste while several issues arising out of AP Reorganisation Act were pending for years for solutions.

The residuary A.P. State and newly created Telangana State were two new babies created under AP Reorganisation Act and the Centre had shown biased attitude towards Telangana government by issuing notice to pay power dues. Senior advocate C.V. Mohan Reddy appearing for AP Power Distribution Companies, contended that non-payment of nearly ₹7,000 crore by Telangana government had pushed AP Power Utilities into non-performing assets. These companies secured huge loans from financial institutions to generate and distribute power to others. The dues were related to the power supplied after bifurcation of the State. Naturally, the AP Reorganisation Act would not apply here.

Additional Solicitor General of India Suryakaran Reddy said that due to intervention of the Centre Andhra Pradesh had supplied power to Telangana. Naturally, the Centre had issued the notice directing Telangana to pay the power dues as it received power supply from A.P. he said.

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