LI Network
Published on: October 12, 2023 at 13:31 IST
The Supreme Court recently imposed costs of Rs. 40 lakhs and Rs. 25 lakhs on Punjab State Power Corporation Limited (Respondent) based on the actual expenses incurred by Nabha Power Limited and Talwandi Sabo Power Ltd (Appellants).
The Supreme Court had previously settled a contractual dispute between the parties and directed the Respondent to make payments to the Appellants. However, the Respondent continued to initiate numerous legal actions to evade its payment obligations, which prompted the Court to impose costs.
Background:
Disputes had arisen between Nabha Power Limited (Appellant) and Punjab State Power Corporation Limited (Respondent) regarding the recovery of deductions from the monthly tariff by the Respondent.
The matter went through various proceedings, from the Regulatory Commission to the Supreme Court. In 2017, the Supreme Court issued a judgment directing the Respondent to make certain payments to the Appellant.
However, these payments were not made, and the Respondent filed miscellaneous applications and a review petition, all of which were dismissed. The Appellant then initiated contempt proceedings, which were decided in its favor.
Subsequently, the Respondent filed proceedings before the Regulatory Commission, seeking accounts and details related to coal washing, a refund of the principal amount, and late payment surcharges. The Regulatory Commission deemed this petition maintainable as it raised a fresh dispute between the parties.
Supreme Court Verdict:
The Supreme Court found that the petition filed by the Respondent before the Regulatory Commission was merely another attempt to avoid its obligations. Consequently, the Court imposed costs on the Respondent for reasserting an issue that had been conclusively determined by the Court in its judgment of 2017.
The Court explained, “We have no hesitation in concluding that the impugned order, though seemingly innocuous, is not sustainable. It represents yet another attempt by the Respondent to evade its obligations under the judgment dated 05.10.2017. Such attempts cannot be condoned, and there must be consequences. The dispute between the parties concerns a contractual matter, and costs typically favor the prevailing party in such cases, especially when one party persistently attempts to circumvent court orders.”
The Court allowed the appeal and ordered the Respondent to pay costs actually incurred by the Appellants. In an effort to set an example, the Court directed both parties to provide their actual bills of costs. As a result, the Court awarded a cost of Rs. 40 lakhs to Nabha Power Limited, which had engaged multiple counsels and incurred a total expense of Rs. 1,95,80,081.
The order issued by the Regulatory Commission was set aside, and the case was decided in favor of the Appellants.
Case Title: Nabha Power Limited v. Punjab State Power Corporation Limited
