Bilaspur, Jun 3 The Chhattisgarh High Court has stayed a demand notice of Rs 153.55 crore issued by the Chhattisgarh State Power Distribution Company Limited (CSPDCL) against Jindal Steel Limited, and directed the state electricity regulator to hear the company afresh before deciding the dispute.
A division bench of Chief Justice Ramesh Sinha and Justice Bibhu Datta Guru set aside a March 30, 2026 order of a single judge that had dismissed Jindal Steel's writ petition challenging the demand notice.
The bench held that the decision-making process was vitiated due to the absence of an effective hearing at the initial stage.
The court directed the Chhattisgarh State Electricity Regulatory Commission (CSERC) to provide Jindal Steel a reasonable opportunity to present its case and decide the matter afresh in accordance with law.
Till a fresh decision is taken, the demand notice and related recovery proceedings will remain in abeyance.
The case was heard on May 8 and the judgment was delivered on Tuesday.
The dispute relates to a Power Purchase Agreement (PPA) signed on November 2, 2011 between Jindal Steel Limited, formerly known as Jindal Steel and Power Limited, and CSPDCL for the supply of electricity from the company's captive power plant in Raigarh district.
The agreement laid down provisions regarding load factor calculations, scheduling of power supply and tariff determination. It also allowed power injection beyond specified limits during peak and off-peak hours, with excess supply billed at concessional rates. Supplementary PPAs were subsequently executed for 2012 and 2013.
As per the HC order, Jindal supplied electricity during the financial years 2011-12 and 2012-13 and raised invoices in accordance with the agreements.
CSPDCL made payments without protest at average rates of Rs 2.42 and Rs 2.66 per unit, respectively.
In 2014, CSPDCL filed a tariff petition before the State Electricity Regulatory Commission seeking tariff determination and true-up (financial correction). The commission approved a minimum base tariff of Rs 1.50 per unit and classified the procurement as "non-firm power".
Jindal contended that such classification was not contemplated under the PPAs and challenged the subsequent proceedings.
CSPDCL issued a demand notice on July 7, 2016, seeking recovery of Rs 153.55 crore along with interest, alleging excess payments had been made to the company for power supplied during 2011-12 and 2012-13.
Jindal argued that the demand was arbitrary and contrary to the contractual provisions of the PPAs, maintaining that all invoices were raised strictly in accordance with the agreements.
The company further claimed that the disputed demand resulted in denial of a No Objection Certificate (NoC) required for short-term open access to power exchanges, effectively preventing it from undertaking power trading transactions.
After its challenge was dismissed by a single bench of the High Court in March this year, the company filed an appeal before the division bench.
Allowing the appeal, the HC observed that the company was not afforded an adequate opportunity of hearing, and set aside the March 30, 2026 order passed by the single judge.
"It is directed that the appellant Company shall be afforded an opportunity of hearing and put forth its submissions before the Regulatory Commission in the proceedings relating to tariff order of CSPDCL and final true-up. After hearing the appellant-Company, CSPDCL/Commission may proceed to hear and decide the matter afresh, in accordance with law," the court said.
