Order of the Supreme Court of India regarding the shutting down of Chambal Mini Hydel Project, 12/01/2023

  • 12/01/2023

Order of the Supreme Court of India in the matter of Madhav Infra Projects Limited & Others Vs Madhya Pradesh Madhya Kshetra Vidyut Vitran Co. Limited & Others dated 12/01/2023.

The Madhya Pradesh Electricity Board conceived the setting up of Chambal Mini Hydel Project, for which grant was received from the Ministry of Non Conventional Energy Sources. The project was initially awarded to a private entity but it was eventually abandoned in the year 1999. Thereafter, pursuant to a tender floated by the Board, the Chambal Mini Hydel Project was leased in favour of the petitioner (Madhav Infra Projects Limited) on August 23, 2013 for 30 years.

The lease agreement in respect of the project was terminated by Madhya Pradesh Madhya Kshetra Vidyut Vitran Co. Limited on May 30, 2022 and   the   petitioner   had   filed   the    Writ Petition challenging the same.

Since the project and consequential production of electricity power came to a halt, the SC as an interim measure, directed the   Madhya Pradesh Madhya Kshetra Vidyut Vitran  on  October 19, 2022   to   supply electricity to the petitioner to enable them to pump out the water. Similarly, status quo regarding transfer or handing over the assets was also directed to be maintained.

The plant is lying defunct.

The Supreme Court said that closure of the hydro plant is detrimental to the public interest "as not only will it deteriorate the functional  condition of the plant,  the nonproduction of energy will also be a national loss".

The court added that even though the bone of contention is the rate being charged by Madhav Infra Projects Limited for supply of energy - these are issues which can be effectively resolved in appropriate proceedings. The dispute regarding charges for the produced energy is not a sufficient or valid ground to keep the plant defunct.

The SC, January 12, 2022 directed that as an interim measure the termination of contract between the parties shall remain in abeyance and Madhav Infra Projects Limited shall be allowed to operate the plant and produce hydro energy. Madhya Pradesh Madhya Kshetra Vidyut Vitran Co. Limited shall continue to purchase the generated power. The SC asked the High Court of Madhya Pradesh to look into the question of validity of the termination of contact at the earliest and preferably within a period of six months.