Upholding an order of Maharashtra Electricity Regulatory Authority, the Bombay high court on Thursday asked Tata Power Company to pay Rs 289 crore (Rs 2.89 billion) to the state electricity board towards standby charges within seven months in three instalments.
The order was delivered by Justice F I Rebeiro and Justice S R Sathe on TPC's petition challenging MERC order.
The court also asked TPC to furnish a bank guarantee for Rs 315 crore (Rs 3.15 billion) to Reliance Energy Ltd towards the excess amount of standby charges paid by REL during 1994 to 2004.
The judges directed Tata Power company to pay Rs 100 crore (Rs 1 billion) to MSEB within four weeks towards standby charges and thereafter pay the remaining amount in two equal instalments.
As regards monthly standby charges of Rs 33 crore (Rs 330 million), the high court ruled that TPC and REL should contribute this amount in future in the ratio of 77 per cent to 23 per cent respectively.
TPC's counsel suggested the company is ready to pay Rs 100 crore (Rs 1 billion) to MSEB as standby charges but asked the court to stay MERC's impugned order until it delivers final verdict.
TPC counsel also suggested that TPC and REL should pay standby charges in the ratio of 50:50 to MSEB.
However, counsel for MSEB and Reliance Energy did not agree to the suggestion put forth by TPC and said the impugned order should not be stayed.
MSEB contended that Reliance Energy and TPC owed more than Rs 280 crore (Rs 2.8 billion) to them as standby charges but it is up to them to decide on the sharing formula.