Search the Internet          Tips  Sites: Finance, Investment

SC bars DPC from encashing MSEB L/C

The Supreme Court on Friday stayed the encashment of the Rs 1.36 bn letter of credit given by the Maharashtra State Electricity Board to US power major Enron-promoted Dabhol Power Company.

On September 11, DPC had invoked the L/C from Canara Bank accusing the MSEB for non-payment of April dues but it was restrained from encashing the same as partner MSEB stopped the payment by obtaining an injunction from the Bombay high court.

When the petition filed by MSEB came up for hearing in the apex court, a three-judge Bench comprising Justice S P Bharucha, Justice N Santosh Hegde and Justice Y K Sabharwal said the order of the high court restraining Canara Bank from making payments under the L/C "shall operate pending further orders".

Meanwhile, the court did not pass any order on the interim application filed by DPC seeking clarification of the August six order of the apex court restraining both parties from altering the status quo pending the decision of the high court on the jurisdiction of the Maharashtra Electricity Regulatory Commission.

DPC had justified its decision to invoke the LC saying care and preservation of the entire project during the ensuing months would be jeopardised, as DPC was unable to access and utilise funds available under the L/C.

ALSO READ:
The Enron Saga