Search the Internet          Tips  Sites: Finance, Investment

HC dismisses MSEB's plea to restrain DPC from invoking LC

The Bombay high court on Friday dismissed a notice of motion moved by Maharashtra State Electricity Board seeking to restrain US major Enron's Dabhol Power Company from invoking the Rs 1.36-billion letter of credit with Canara Bank to settle its pending April dues.

The notice of motion was dismissed by Justices Ajit Shah and Sharad Bobde, who directed the parties to maintain status quo till September 21.

The judges, however, gave liberty to MSEB to approach an appropriate forum for seeking relief about restraining DPC from invoking the L/C with Canara bank.

Consequently, MSEB may now move Maharashtra Electricity Regulatory Commission or Supreme Court praying for restraining DPC from invoking the L/C to settle its April dues.

The judges opined that the Supreme Court had asked the high court only to decide whether MERC had the jurisdiction to decide the ongoing dispute between MSEB and DPC. All other issues were, therefore, to be decided by an appropriate forum.

On September 11, DPC had invoked the L/C from Canara Bank but was restrained to encash the same as partner MSEB stopped the payment by obtaining an injunction from the Bombay high court till Friday.

Justifying the decision to invoke letter of credit, US energy major said care and preservation of the entire project during ensuing months would be jeopardised as DPC was unable to access and utilise funds available under the L/C.

YOU MAY ALSO WANT TO READ:
The Enron Saga

Tell us what you think of this report