Power companies hail Supreme Court stay on RBI circular

Power companies have welcomed the Supreme Court’s stay on RBI circularand said the verdict will prevent 13Gw of stressed power plants from insolvency.

“SC order has provided a great relief to Power sector stressed assets, this would provide time for Bankers to finalise resolution plan for about 13 GW of projects which are presently in their final stages and HLEC under the Chairman ship of Cabinet Secretary, to submit its report on corrective actions that the Government intends to initiate to mitigate stress factors, ” Association of Power Producers director general Ashok Khurana said.

In a big relief to private power, textiles companies and shipowners, the Supreme Court has stayed the Reserve Bank of India’s circular, preventing initiation of Insolvency proceedings against their stressed power assets.

“The Supreme Court has asked RBI and parties to maintain status quo with regard to insolvency proceedings,” senior advocate Mahesh Agarwal told ET adding the RBI’s plea will be heard on November 11.

Members of the Association of Power Producers, Independent Power Producers Association of India, Shipowners association and textile associations from Chennai have got the relief, he said.

The Supreme Court heard the plea filed by RBI seeking transfer of all cases filed against its February circular to the apex court. Private power companies, bank employees, textile associations had filed about a dozen cases against the controversial circular in various high courts.

The relief to the companies came on Tuesday, the last day for bankers to refer unresolved cases to insolvency court.

“Where ever cases have been referred to NCLT post RBI circular their will be status quo and where they have not been filed, they will not be referred to NCLT,” Agarwal said.