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More trouble for Reliance Infra

Reliance Infrastructure took a hit on Thursday after the Bombay High Court refused interim relief from orders passed against it by the Maharashtra Electricity Regulatory Commission (MERC), reports Urvi Mahajani.

mumbai Updated: Oct 23, 2009 01:19 IST
Urvi Mahajani

Reliance Infrastructure took a hit on Thursday after the Bombay High Court refused interim relief from orders passed against it by the Maharashtra Electricity Regulatory Commission (MERC).

A vacation bench of Justice J.H. Bhatia and Justice Mridula Bhatkar refused relief to R-Infra and scheduled the first week of November for the next hearing.

R-Infra had sought to quash three of MERC’s order — a stay on R-Infra’s suburban power tariff hike, recovery of fuel adjustment charges, and a third-party inquiry into R-Infra’s accounts.

On October 16, R-Infra moved the high court seeking quashing of the MERC orders passed in July.

On Thursday, it applied for urgent relief, asking for a stay on the orders till the high court decides the issue.

R-Infra’s accounts, now into their sixth year, are being probed to find out how much the company spent on its electricity distribution business.

The company had applied to MERC to implement a rate hike, saying it had spent significant sums on creating power distribution infrastructure in Mumbai’s suburbs.

J.J. Bhatt, representing R-Infra, sought that the court at least stay the third party investigation into its accounts till the HC had decided on the petition. However, the vacation bench did not entertain the petition.

Following a public outcry and political protests in June this year, the state government had intervened and stalled R-Infra’s seven per cent power tariff hike for its 26 lakh consumers.

The new rate, if implemented, would have inflated monthly bills — especially those of homes — by 30 to 35 per cent.

Apart from seeking approval for its new tariff rate, Reliance Infrastructure has appealed to the high court to allow it to recover fuel adjustment charges from its consumers, saying, “The MERC order (to this effect) is without any basis and arbitrary.”