2014 PLP 1253 (MLD)

SHOAIB SAEED, J.

Petitioner is a holder of Generation Licence issued by National Electric and Power Regulatory Authority (hereinafter referred as "NEPRA") for its own power generation. In this regard on 6-10-2001 petitioner company entered into an agreement for supply of electricity of MEPCO (respondent) where-under the company offered to sell/supply 5-MW of power to MEPCO (respondent) which was accepted resulting into a Power Purchase Agreement (hereinafter referred as PPA) dated 4-6-2007. The PPA executed between the parties was for a period of one year till June 2008. On its expiry a Revised Power Generation Agreement (hereinafter referred as RPPA) dated 28-2-2009 was executed between the parties for a period of five years and under fresh terms supply of 9-MW of Power was to be supplied till its expiry in February, 2014. Electricity was supplied by petitioner company to MEPCO (respondent) and payments were accordingly made till the month of May, 2012. MEPCO (respondent) thereafter withheld an amount of Rs.36.210 Million against 4 invoices issued in the months of June, July and August, 2012 without any lawful justification. Correspondence in this regard between the parties did not bear any results. Petitioner was verbally intimated about some audit objections for delay in the aforesaid payments.

2. Respondent was bound to make payments for the relevant invoices as provided under clause "g" of the RPPA which is as under:-- "The Power Purchaser will make payment against each invoice submitted by company on or before 7th day from the date of receipt of invoices by the Power Purchaser. It is also provided that if the Power Purchaser fails to make the payment of two billing Cycles, the company reserves the right to discontinue the power supply."

3. On account of said clause due to huge outstanding balance, as aforesaid, Power Supply to the respondent company was discontinued.

4. Parawise comments were filed by the respondents raising various objections but primarily it was an audit objection on account of which the aforesaid payment was being withheld.

5. It was argued by the learned counsel for the petitioner that audit objections were an internal matter of the MEPCO (respondent) with which the petitioner company have no concern, whatsoever, and any audit objection could not be made the basis for stoppage of payments which otherwise was not denied by the respondent. Reliance in this regard was placed on, "WAPDA through Chairman and 3 others v. Fazal Karim and 5 others (2008 YLR 308) (Lahore) and Water and Power Development Authority and others v. Umaid Khan 1988 CLC 501.

6. Learned Legal Advisor for MEPCO (respondent) has opposed the pleas raised by the learned counsel for the petitioner.

7. In view of clause-'g" of the Revised Power Generation Agreement, MEPCO Company was bound to make payments against invoices, submitted for the relevant months though admitted in the parawise comments by the respondents to have been withheld primarily for audit objections. The said affair is a matter between MEPCO (respondent) and its audit department. The petitioner (electricity supplier) whose payments are long overdue should have been disbursed Rs.36.210 Million along with prescribed mark-up, wrongly withheld by the MEPCO (respondent). This writ petition is accepted, Chief Executive Officer MEPCO is directed to release the payments to the petitioner company. JJK/M-28/L Petition accepte