Hyderabad: The Hyderabad High Court on Wednesday refused to direct the Centre not to invoke the bank guarantees furnished by Konaseema Gas Power Ltd for failing to fulfil contractual obligations pertaining to a bid that the company had won for availing some quantum of Re-Gasified Liquid Natural Gas.
Justice P. Naveen Rao was disposing of a petition by the company seeking to direct the Centre not to invoke bank guarantee and also to direct the Centre to permit it to enter into an agreement and submit bank guarantee for phase III besides drawing the allocated quantity of RLNG gas as per letter of award dated March 2, 2016.
The petitioner pointed out that it did not draw any gas due to short supply in AP and did not avail any subsidy from Centre.
The judge noted that there were more failures on the part of the petitioner though the Centre introduced the RLNG supply scheme to help stalled gas projects like Konaseema.
The judge pointed out that the company could not fulfil the conditions laid down in the agreements that were entered into between it and the Centre.
The judge pointed out that several of the loans taken by the company were declared non-performing assets by banks but the Centre tried to help such companies through its RLNG supply scheme.
The company, despite bidding and getting RLNG in the second phase supply, could not fulfil its contractual obligations despite being given several extensions to do so, the judge added.
While rejecting the contention of the company that the Centre too had failed in fulfilling its promise to supply gas, the judge directed the company to request the authorities to consider it for future schemes of the Centre in accordance with law.
