MADC seeks Rs 910crore damages from Abhijeet Group

Nagpur: Maharashtra Airport Development Company (MADC) has filed a case in Maharashtra Electricity Regulatory Commission (MERC) seeking Rs 910 crore damages from Abhijeet Group. MERC will hear the petition on January 5 in Mumbai. Earlier, Abhijeet Group had sought Rs2,100 crore from MADC for not fulfilling the terms of the concession agreement signed in November 2007.
MADC has contended in the petition that Abhijeet failed to supply electricity at the rate of Rs2.97 per unit as per the concession agreement.It has also charged that Abhijeet violated several norms of MERC and did not fulfil other contractual obligations. The petition claims that there was unjust enrichment of Abhijeet due to the concession agreement and it needed to be reversed. One of the demands is that Abhijeet should not claim any compensation from MADC.
Abhijeet Group had formed a joint venture with MADC — Abhijeet MADC Nagpur Energy Private Limited (AMNEPL) — to set up a 246MW power plant in Mihan. This plant was to supply 200MW to Mihan at the rate of Rs2.97 per unit. However, the problem arose when Abhijeet could not get a coal linkage and had to buy coal through e-auction. This increased the cost of its power beyond the stipulated Rs2.97 per unit. On the other hand MADC could not generate enough load to even run one 61.5MW unit economically and Abhijeet ran a diesel generator to supply 2MW to Mihan.
Abhijeet finally stopped supplying power to Mihan in April 2014 citing unbearable losses. In July 2014, Abhijeet sent a termination notice to MADC seeking Rs1,837 crore damages, which later increased to Rs2,100 crore. When MADC opposed the notice in court, Abhijeet offered to go for arbitration. However, this was rejected by MADC.
In April 2015 the Mihan task force headed by union transport minister Nitin Gadkari asked Abhijeet to supply power at the Rs3.60 per unit. However, Abhijeet flatly turned down the offer saying that its cost of generation was Rs4.35 per unit. Then Abhijeet requested MADC to go for the fresh agreement. MADC agreed but asked the company to submit certain documents. Abhijeet, however, failed to furnish the same. Finally, the MADC board resolved in July 2016 to file a suit against Abhijeet in MERC and action was taken accordingly.