HC notice on plea seeking CBI probe into over-invoicing by power firms

The Delhi High Court on Wednesday issued a notice to the CBI on a petition seeking a probe into the alleged over-invoicing of equipment and fuel imported for power plants by electricity generating companies.

The petition by NGO Centre for Public Interest Litigation (CPIL) has accused several firms, including those belonging to the Adani Group and Essar Group, of over-invoicing of power equipment. It also alleged that several other private companies over-invoiced coal imports.

A Bench of Justice S. Ravindra Bhat and Justice A. K. Chawla also asked the CBI to file the status of the FIR registered by it against State-run entities: National Thermal Power Corporation (NTPC) and Metals and Minerals Trading Corporation (MMTC) in connection with alleged over-invoicing of coal imports.

Alert by the DRI

The Bench also asked the agency about the steps it has taken on the alert issued by the Directorate of Revenue Intelligence (DRI) naming 40 companies, which allegedly was indulging in over-valuation of coal imports.

In its alert issued to various authorities, the DRI had stated: “While Indonesian Coal was directly shipped from Indonesian ports to importers in India, the import invoices were routed through one of more intermediaries based in Singapore, Dubai, Hong Kong, British Virgin Islands (U.K.) etc for the purpose of artificially inflating its value.”

The DRI told the court that pursuant to investigation against the companies mentioned in the petition, show cause notices were issued and thereafter, the adjudication of the cases are at different stages.

Advocate Prashant Bhushan, appearing for the NGO, claimed that the scam unearthed by the DRI discloses several private companies have siphoned off several thousand crores of rupees abroad.

“The DRI had found that various power companies such as Adani and Essar had set-up their own related companies to indulge in huge over-invoicing in the purchase of power-equipment in order to siphon out money from the companies to their own entities registered in tax havens,” the petition alleged.

Higher tariff

“Most of these instances of over-invoicing have been reported from the power sector, the impact of which is felt by millions of electricity consumers in the form of higher tariff,” the petition said.

The petition also claimed that the CBI had registered a Preliminary Enquiry (PE) based on the DRI show cause notice to Adani in May 2014. However, the CBI closed the PE without registering an FIR during the tenure of then CBI Director Ranjit Sinha, the PIL alleged.