HC orders arbitration over dispute between TNEB, pvt firm

The Madras High Court today ordered arbitration proceedings on a payment dispute case between a private firm and TNEB over implementation of central government sponsored Rs 323 crore project for digitalising the entire system of electricity distribution in Tamil Nadu.

Justice M M Sundresh issued the order while disposing of a petition by city-based Navayuga Infotech Private Limited accusing the Tamil Nadu Electricity Board (TNEB) of delaying payments though 90 per cent work on it had already been completed.

The petitioner had sought to quash a March 28 showcause notice issued by TNEB threatening to terminate the contract awarded to a consortium in which the petitioner company was a member.
 

Observing that the arbitration was being ordered as mediation efforts held earlier had failed, Justice Sundresh nominated retired high court judges K Chandru and K Venkataraman to represent TNEB and the petitioner respectively.

The arbitration proceedings will be presided over by retired chief justice of Jammu and Kashmir High Court N Paul Vasanthakumar, the judge said ordering status quo on the showcause notice.

The petitioner submitted that the TNEB awarded the contract for the Restructured Accelerated Power Development and Reforms Programme (RAPDRP) project in October 2010 vide an agreement.

The objective of the project was to digitalise the entire system of electricity distribution coverage, billing and recovery in the country, thereby ensuring high degree of transparency in levying power usage charges.

The petitioner alleged from the commencement of the project the TNEB was not co-operating with it for reasons best known to it.

Despite completion of 90 per cent work as on today, TNEB had to clear about Rs 140 crore, it claimed adding the board was raising "unnecessary objections solely with a view to delay the payment."

The petitioner further alleged TNEB had already received Rs 250 crore from the central government for the project by presenting 'false and fabricated note' misrepresenting that it had already paid the amount to the company.