M A I N   N E W S

SC refuses to intervene in power boards’ assets case
S.S. Negi
Legal Correspondent

New Delhi, September 16
The Supreme Court has justified the division of assets and liabilities of the undivided MP State Electricity Board (MPSEB) between Madhya Pardesh and Chhattisgarh by the Union Government after the creation of the new state in 2000 and refused to intervene in the matter, saying it would like to have judicial restraint in such disputes between states.

Rejecting the appeal of the restructured MPSEB for resettlement of assets and liabilities afresh, the Bench of Mr Justice S.B. Sinha and Mr Justice Dalveer Bhandari said, “Ordinarily, in a matter of this nature, this court, in exercise of its discretionary jurisdiction under Article 32 of the Constitution, shall not interfere. It would exercise judicial restraint.”

The court said, “It may be erroneous, but not illegal. It may not be just and proper for one of the state boards, but it is so for the other.”

The court accepted the contention of the Union Government that it had adopted the “most rational” method of apportionment of current assets and liabilities as the power consumption ratio had a rational link with the subject matter.

However, it rejected the stand of the two states that population ratio should be relevant for deciding assets and 

“Whenever population ratio is to be taken into account for the purpose of apportionment of assets and liabilities, Parliament has stated so categorically,” the court said. In this case, the Central Government had maintained two other criteria — geographical constitution and fixed assets — as essential parameters, it added.

Under the settlement, long-term assets and liabilities were divided between Madhya Pradesh and Chhattisgarh in the ratio of 90:10 and in overall, the restructured MPSEB was given 85 per cent of the assets and 84 per cent of the liabilities.

“The action on the part of the Central Government cannot hence be said to be irrational,” the court said. The revenue generation capabilities of the restructured MPSEB and the new Chhattisgarh State Electricity Board were duly taken into consideration by the Union Government, it added.

As per revenue generation capabilities, power consumption ratio between Madhya Pradesh and Chhattisgarh was fixed at 77 and 23 per cent, respectively, while connected load was put at 79 and 21 per cent.

While Madhya Pradesh got 67 per cent share of the installed capacity of power plants, 33 per cent went to Chhattisgarh. The revenue generation by the two states was put at 64 per cent and 36 per cent, respectively, by the Centre at the time of bifurcation.

“Fixing current liabilities on the basis of revenue generation capacity is not and cannot be held to be arbitrary or irrational,” the court ruled.



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