This is a discussion on Ratnagiri Gas and Power Private Limited within the Investment forums, part of the Financial Services category; The Supreme Court Wednesday approved an out of court settlement between Maharashtra's power utility and Dabhol Power Corporation (DPC), thus ...
The Supreme Court Wednesday approved an out of court settlement between Maharashtra's power utility and Dabhol Power Corporation (DPC), thus disposing of all litigation related to the project and clearing the decks for its revival.
A bench of judges H.K. Sema and B.N. Srikrishna approved the terms of the settlement and disposed off an appeal filed by DPC against a judgement of Bombay High Court related to a power purchase agreement.
The National Thermal Power Corporation (NTPC) and Gas Authority of India Ltd (GAIL) have formed a joint venture - Ratnagiri Gas and Power Private Limited - to take over the project. The apex court had approved other issues related to the project in July.
Senior counsel Fali S. Nariman and T.R. Andhyarujina explained to the bench the terms of the settlement between Dabhol and the Maharashtra State Electricity Board, and said they wanted to give a quietus to the litigation.
The bench then ordered disposal of all pending litigation in terms of the settlement.
According to the settlement, the original power purchase agreement dated Dec 8, 1993 and the consolidated and amended power purchase pact dated Dec 9, 1998, has been rescinded with effect from Mary 23, 2001 and the parties have no rights or obligations whatsoever under them.
The two preliminary termination notices dated May 19, 2001 and two other termination notices dated Sep 10, 2001 have been withdrawn, while arbitration notices dated April 12, 2001 and May 21, 2001, and all proceedings, claims and counter-claims of the parties also stand withdrawn.
The amended and restated escrow agreement dated March 27, 1999 among Dabhol, the state electricity board and Canara Bank were declared to be of no legal effect and consequently the power utility was discharged from its obligations. Dabhol will also not make a call on Canara Bank for payment of Rs.1.360 billion or any other amount on behalf of the electricity board and Canara Bank will not be required to pay the same.