PSUs shouldn't behave like Shylock to become money-minded: SC

NEW DELHI: Supreme Court has said that public sector units should not be guided only by commercial interests for making money like a private company but their conduct must be like a model citizen and came down on Gujarat Urja Vikas Nigam Limited (GUVNL) for behaving like "Shylock" and getting into unnecessary litigation on tariff against wind power producers in Gujarat from which it purchases power.

A bench of Justices Sanjay Kumar and Satish Chandra Sharma rejected the plea of GUVNL which contended that tariff rate of Rs 3.56 per kWh as mentioned in power purchase agreements (PPAs) was binding on the four power generating companies. The court said govt has been promoting renewable energy to reduce carbon footprint and to make the country energy self-sufficient and less dependent on fossil fuels and GUVNL should be mindful of the policy.

The PSU took the stand that these wind energy projects had willingly entered into PPAs with it, binding themselves to the tariff rate of Rs 3.56 per kWh, and were, therefore, not at liberty to seek determination of tariff on a case-to-case basis thereafter, a plea which was rejected by the SC.

"GUVNL cannot be guided only by its own commercial interests, like a private business entity and it's conduct, as a state-instrumentality, must be of the standard of a model citizen. However, patently unfair treatment was sought to be meted out by GUVNL to the respondent companies by binding them to a rate that was wholly inapplicable to them. Such conduct, akin to a Shylock, does not reflect positively upon GUVNL," the bench said.