HC stays order on refund of upfront money to power firm

The HP High Court yesterday stayed the judgment passed by the Single Bench on January 13, 2023, whereby it had directed the state government to return Rs 64 crore along with seven per cent interest to the Seli Hydro Electric Power Company Ltd.

A division bench comprising Justice Vivek Singh Thakur and Justice Sushil Kukreja passed this order on an application filed by the state for staying the judgment. It was claimed in the application that the department has deposited sum of Rs 93,96,07,671 in the Registry of the court and in terms of the judgment the entire awarded amount along with up-to-date interest stands deposited in the Registry except interest for two days.

However, the counsel representing the Power Company disputed the correctness and calculations of the amount deposited by the state. It was also contended that the application to stay the operation of judgment is not filed under the specific provision and prayed for rejection of the application at the threshold.

However, the court rejected the prayer made on behalf of the power company by observing that “mention of wrong provision cannot be a sole basis for rejection of this application as almost entire due amount has been deposited by the applicant/state.”

It is pertinent to mention here that the High Court has ordered attachment of Himachal Bhawan at Sikandra road in New Delhi for failure of the state government to return Rs 64 crore paid as upfront premium to Seli Hydro Company.

The order of attachment was passed by Justice Ajay Mohan Goel on failure of the Himachal government to return Rs 64 crore paid as upfront premium by the company for being allotted a 320 MW hydel project in the tribal district of Lahaul Spiti in 2009. The government has been asked to return the Rs 64 crore along with seven per cent interest from the date of filling of the petition by the power company.

It was on February 28, 2009 that the state government had allotted 320 MW hydel project to be set in Lahaul Spiti to the company. The work for construction of the road to the project site had been allotted to the Border Road Organization. As per the terms and conditions, it was the responsibility of the state government to provide the required infrastructure for setting up of the project.

It was in 2018 that the company filed a petition in the High Court, seeking return of the Rs 64 upfront money as the government had failed to provide the basic infrastructure.

The state government has challenged the judgment of the single bench before the Division Bench (DB) by filing an appeal and now the division bench has stayed the operation of the judgment during the pendency of the appeal.