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<!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd"> <html xmlns="http://www.w3.org/1999/xhtml"> <head> </head> <body> <div style="font-family:Verdana, Geneva, sans-serif; font-size:12px; text-align:justify"> <table width="800" border="0" style="border:1px solid #ccc;padding:5px;" align="center" cellpadding="6" cellspacing="0"> <tr> <td align="left" valign="top"> Central Electricity Regulatory Commission A person deprived of using legitimately entitled money has a right to be compensated for the deprivation by way of interest, compensation or damages MANU/CR/0331/2019 - (26 Dec 2019) </td> </tr> <tr> <td align="left" valign="top">Power Grid Corporation of India Limited Vs. Aryan MP Power Generation Private Limited</td> </tr> <tr> <td align="left" valign="top" style="background-color:#FDEDCE">The Review Petitioner, Power Grid Corporation of India Ltd., has filed the present Review Petition under Section 94 of the Electricity Act, 2003 read with Regulations 103, 111 and 114 of the Central Electricity Regulatory Commission (Conduct of Business) Regulations, 1999 read with Order 47 Rule 1 of the Code of Civil Procedure, 1908 for review of order dated 3rd December, 2018. As per the impugned order, the Review Petitioner was directed to refund the Bank Guarantee after adjustment of the relinquishment charges to the Respondent, with 9% interest from the date of encashment till the date of payment. 
The Respondent has vested right in receiving the interest on the encashed bank guarantee amount in terms of settled principles of law laid down by the Hon'ble Supreme Court in the case of Executive Engineer, Dhenkanal Minor Irrigation Division, Orissa and others Vs. N.C. Budharaj (Deceased) by lrs. and others in which the Hon'ble Supreme Court held that, a person deprived of the use of money to which he was legitimately entitled, has a right to be compensated for the deprivation by whatever name it may be called, viz, interest, compensation or damages. 
The Commission, in the order dated 3rd December, 2018 had came to the conclusion that, the Respondent (Aryan) had relinquished the LTA granted and the liability of the Respondent for payment of relinquishment charges would be decided in the light of the decision in Petition and observed that, there was no requirement to direct the Review Petitioner to refund the encashed BG. The Commission further observed that, any amount that becomes due and payable after adjustment of the relinquishment charges, is required to be refunded by the Review Petitioner with 9% interest from the date of encashment till the date of payment. However, the Commission in Para 22 of the impugned order had not issued any specific direction to CTU to keep the encashed BG in a separate/fixed account till the disposal of the Petition. 
According to the Review Petitioner, when a Bank Guarantee is encashed by CTU as per the provisions of the BPTA, the encashed Bank Guarantee amount is disbursed to the POC pool and there is no question of earning of interest thereon. The Review Petitioner has further submitted that in the present case, the Bank Guarantee has been retained by it as per the Commission's order and therefore, it cannot be termed as wrongful detention of monies and interest thereon. 
In terms of the Orders of the Commission, the encashed Bank Guarantee amount was not to be disbursed to the PoC pool and had to be retained by the Review Petitioner. Rather, the Review Petitioner was required to adjust the encashed BG amount once order in Petition was issued. Hence, the contention of the Review Petitioner that, the amount enchased under the Bank Guarantee is disbursed to the POC Pool by CTU and there is no question of earning of interest thereon, is not justified in present case. Therefore, PGCIL is liable to pay the interest earned on encashed BG (after adjustment of relinquishment charges) amount from the date of encashment till the date of payment as per order in Petition No. 92/MP/2015. Review Petition is disposed of.</td> </tr> <tr> <td align="left" valign="top" >Relevant : Executive Engineer, Dhenkanal Minor Irrigation Division, Orissa and others Vs. N.C. Budharaj (Deceased) by lrs. and others [<manuid> MANU/SC/0016/2001</manuid>]</td> </tr> <tr> <td align="left" valign="top" >Tags : Refund, Bank Guarantee, Direction</td> </tr> <tr> <td align="left" valign="top">&nbsp;</td> </tr> <tr>  <td align="left" valign="top">Source : newsroom.manupatra.com</td> </tr> <tr> <td align="left" valign="top">&nbsp;</td> </tr> <tr> <td align="left" valign="top">Regards</td> </tr> <tr> <td align="left" valign="top">Team Manupatra</td> </tr> <tr> <td align="left" valign="top">&nbsp;</td> </tr> </table> </div> </body> </html>