Allahabad HC asks government to submit report on stressed assets in power sector by July 18

Allahabad High Court on Tuesday asked the government to submit its report on stressed assets in power sector by July 18 and said that it will take a call after receiving it.

However, the high court did not stay the February 12 circular of the RBI which classified even one-day delay in debt servicing as a defaulter.

Earlier, the power firms approached the high court and said that the circular should not be applicable to the power sector for the time being.

"We cannot say what will happen in future but in yesterday’s hearing, one thing was very clear that court did not stay the circular but it said if any action is taken by any bank, the members can approach the court," said Ashok Khurana, director-general of Association of Power Producers.

The court also asked the government councilor and the RBI about the finance secretary’s meeting.

On May 31, the court had stayed the RBI's circular for a month and asked the finance ministry to call all related parties to resolve the situation of stress in power companies due to high debt, no power purchase agreements and lack of coal.