Power utilities buck norms

No problem with violation, says Karnataka Electricity Regulatory Commission


But the Karnataka Electricity Regulatory Commission (KERC) says it has no problem with the 'violation.' Controversy and the tariff revision seem to go hand-in-hand. The ERCs of all the power companies have been filed by persons who are not even authorised to do so, violating the Company Act as well as the articles of association of KPTCL and Escoms.

Revision sought

The ERC filed before the KERC has sought a revision of 51 paise (Escoms) and 11 paise (KPTCL). The KPTCL proposal has been filed by Chandrashekar, financial advisor, regulatory affairs, while for Bescom it is Govindaraju, Chief General Manager (Commercial). In the other Escoms, the ERCs have been filed by lower rung officers like Executive Engineers or Superintendents. Ravish Kumar Executive Engineer, Gescom has filed ERC on behalf of Gulbarga, Superintendent Engineer Vijayendra has been assigned the task by CESC at Mysore and for Hubli it is Executive Engineer Sridhar Dipal.

Interestingly the Demand Draft (DD) for ERC by Hescom is issued by KPTCL (DD no 389678 drawn on Vijaya Bank Rs 41,56,875, Dt 30, June, 2009), questioning the claim of independent and individual ERC by the companies.    

According to legal experts, this action by the power utilities is a violation of Section 291 of Company Act, which says that the company should act only through its board of directors.

According to Article 40 of Article of Association of KPTCL and Escoms, the board may delegate any of its power to Managing Director, Chairman or committee of board. As per Article 44 (17), any director of KPTCL and Escoms should execute a power of attorney (PoA) under the seal of the company to appoint any person. However, neither of the ERCs has come with a PoA.

Supreme Court

It is also a violation of Supreme Court order between Messrs Dale and Carrington Investment Private Limited versus P K Pratapan, which says "any individual director has no power to act on behalf of a company of which he is a director of the company unless by some resolution by board of director of company grants him specific powers."

Several discrepancies can be seen in the figures depicted in the text and the forms attached. Pointing out to some of the errors, a legal expert on power sector said in one of the forms submitted by KPTCL, the security deposit collected from consumers for the year 2009 has been put at Rs 43.8 crore. In another form, the figure is shown as Rs 13.57 crore. There is problem with the inventory expenditure. At one place it is shown as Rs 111.55 crore while in another it is Rs 4.4 crore. The papers filed by Escoms also have problems. "We can find at least a dozen of them in each application and they could lead to legal problems as they are sworn affidavits," he said.

Power experts suspect that this might be an attempt to cover up these discrepancies. " It is nothing but a perjury, because you are swearing to an affidavit on wrong facts, probably the top brass is making scapegoat of the lower rung officials to avoid risk of being prosecuted," said a legal expert. Pointing out that most of the figures provided by the Escoms did not tally in the accounts.

Interestingly, the Karnataka Electricity Regulatory Commission (KERC), when contacted, said that this is not an issue as the company can appoint any person for the matter to deal with the Commission. "It should not be a problem at all, any body can be authorised to do so," said K P Pandey, Chairman, KERC. On the mistakes, he said, he will look into it during the hearing.

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