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Vivek Pharmachem India Ltd. v. Rajasthan Electricity REGULATORYandORS

Rajasthan HC9 Feb 2018CW/2400/2018

Case brief

AI extract

What is this about?

Single bench order in four writ petitions by an electricity supplier challenging the denial of Late Payment Surcharge. Court dismissed the respondent's financial stress defence, directing payment of 50% LPS within one month and the remainder within 12 months.

What did the court decide?

Directed respondent RUVNL to pay 50% of LPS due within one month and the remainder of 50% LPS within 12 months.

Vivek Pharmachem India Ltd. Vs Rajasthan… — Contract and Commercial Disputes | Rajasthan HC (2018)

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HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR

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1.S.B. Civil Writ Petition No.2393/2018 Vivek Pharmachem (India) Ltd., Having Its Registered Office Located At A 1, Sethi Colony, Jaipur 302004 Rajasthan Through Its Director, Mr. Kuldeep Gupta. ----Petitioner

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Versus

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Rajasthan Electricity Regulatory Commission Through Its Chairman, Sahkar Marg, Jaipur. 2. The State of Rajasthan Through Its Energy Secretary, Government of Rajasthan, Secretariat, Jaipur. 3. Rajasthan Urja Vikas Nigam Limited Through Its Managing Director, Vidyut Bhawan, Janpath, Jyoti Nagar, Jaipur 302005 4. Ajmer Discom Through Its Managing Director, Having Its Registered Office Located At Old Power House, Hathibhata Road, Jaipur Road, Ajmer 305001 ----Respondents

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2.S.B. Civil Writ Petition No.2398/2018 Vivek Pharmachem (India) Ltd., Having Its Registered Office Located At A-1, Sethi Colony, Jaipur-302004 Rajasthan Through Its Director, Mr. Kuldeep Gupta. ----Petitioner

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Versus 1. Rajasthan Electricity Regulatory Commission Through Its Chairman, Sahakar Marg, Jaipur. 2. The State of Rajasthan Through Its Energy Secretary, Government of Rajasthan, Secretariat, Jaipur. 3. Rajasthan Urja Vikas Nigam Limited Through Its Managing Director, Vidyut Bhawan, Janpath, Jyoti Nagar, Jaipur-302005 4. Jaipur Discom Through Its Managing Director, Having Its Registered Office Located At Vidyut Bhawan, Janpath, Jyoti Nagar, Jaipur-302005. ----Respondents

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3.S.B. Civil Writ Petition No.2399/2018 Vivek Pharmachem (India) Ltd., Having Its Registered Office Located At A-1, Sethi Colony, Jaipur-302004 Rajasthan Through Its Director, Mr. Kuldeep Gupta. ----Petitioner

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Versus 1. Rajasthan Electricity Regulatory Commission Through Its Chairman, Sahakar Marg, Jaipur. 2. The State of Rajasthan Through Its Energy Secretary, Government of Rajasthan, Secretariat, Jaipur. 3. Rajasthan Urja Vikas Nigam Limited Through Its Managing Director, Vidyut Bhawan, Janpath, Jyoti Nagar, Jaipur- 302005. 4. Ajmer Discom Through Its Managing Director, Having Its Registered Office Located At Old Power House, Hathibhata Road, Jaipur Road, Ajmer-305001. ----Respondents

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4.S.B. Civil Writ Petition No.2400/2018

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Vivek Pharmachem (India) Ltd., Having Its Registered Office Located At A-1, Sethi Colony, Jaipur-302004 Rajasthan Through Its Director, Mr. Kuldeep Gupta. ----Petitioner

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Versus

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Rajasthan Electricity Regulatory Commission Through Its Chairman, Sahakar Marg, Jaipur. 2. The State of Rajasthan Through Its Energy Secretary, Government of Rajasthan, Secretariat, Jaipur.

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(2 of 3)

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[CW-2393/2018]

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Rajasthan Urja Vikas Nigam Limited Through Its Managing Director, Vidyut Bhawan, Janpath, Jyoti Nagar, Jaipur- 302005. 4. Jodhpur Discom Through Its Managing Director, Having Its Registered Office Located At Jodhpur ----Respondents

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_____________________________________________________ For Petitioner(s) : Mr.Ravi Chirania. For Respondent(s) : Mr.Virendra Lodha, Senior Counsel with Mr.Jai Lodha, Ms.Susan Mathew.

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HON'BLE MR. JUSTICE ALOK SHARMA Order

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09/02/2018

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Although, Mr.Virendra Lodha, Senior Counsel appearing with Mr.Jai Lodha for respondent—Rajasthan Urja Vikas Nigam Limited (RUVNL) submitted that respondent—RUVNL is facing grave financial stress, the fact of the matter remains that the issue in this petition is not about RVVNL’s financial stress but is instead about the right of the petitioner to be paid LPS in terms of its Power Purchase Agreement (PPA) with RUVNL and its right to the rule of law on contracts being enforced not scuttled by the State instrumentality.

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The petitioner’s case is that the LPS admittedly due and payable to it and in fact admitted by RUVNL is being held back for reasons of it not acceding to the arm-twisting of RUVNL to waive 50% of the LPS and file an affidavit in regard thereto. He submitted that 50% of the LPS due to other similar suppliers under their PPA’s has been made over on their furnishing requisite affidavits/undertakings to RUVNL. It has been submitted that financial difficulty being bandied about as a defence is not even remotely a sustainable defence. Liabilities under contracts cannot be circumvented for reasons of financial difficulty and if that

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(3 of 3)

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[CW-2393/2018]

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proposition were to be upheld it would result in complete chaos in business and trade and break down of the rule of law. It has been

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submitted that the issue in this petition has also been addressed by this court in SBCWP No.1733/2018 titled Tarini Minerals (P) Ltd. Vs. Rajasthan Electricity Regulatory Commission & Others and other connected matters in its order dated 05.02.2018 where appropriate directions have been issued to RUVNL. It has been prayed that similar directions be issued in this petition.

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Mr.Virendra Lodha cannot and does not deny that Tarini Minerals (P) Ltd. Vs. Rajasthan Electricity Regulatory Commission & Others (supra) was disposed of directing payment of 50% of LPS due and outstanding within one month and the remainder as duly computed 12 months thereafter.

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Rsultantly, these petitions are accordingly disposed of and as in Tarini Minerals (P) Ltd. Vs. Rajasthan Electricity Regulatory Commission & Others (supra), it is directed that respondentRUVNL pay 50% of the LPS due to the petitioner-companies within one month from today and the remainder 50% LPS duly computed in accordance with law within a period of 12 months thereafter.

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A copy of this order be placed in each connected petition.

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(ALOK SHARMA)J.

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Karan/126-129

Vivek Pharmachem India Ltd. v. Rajasthan Electricity REGULATORYandORS

Case brief

What is this about?

What did the court decide?

Vivek Pharmachem India Ltd. v. Rajasthan Electricity REGULATORYandORS

Case brief

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