Reliance Infrastructure To Recoup Over 28,483 Crores in Outstanding Power Payments
Supreme Court Sets Guidelines for Power Dues Recovery by BSES Yamuna and Rajdhani
In a significant ruling, the Supreme Court of India has classified telecom towers as movable property for Goods and Services Tax (GST), upholding a previous ruling by the Delhi High Court. However, the focus of this article is on a separate, but equally important topic: the recovery of power dues by BSES Yamuna Power Ltd and BSES Rajdhani Power Ltd, subsidiaries of Reliance Infrastructure.
The Supreme Court has ordered these power distribution companies to recover a staggering ₹28,483 crore in outstanding dues, starting from April 1, 2024, and ending by March 31, 2028. The recovery process will be guided by Rule 23 of the Electricity Rules 2005, and the regulatory asset approval by the Delhi Electricity Regulatory Commission (DERC).
The Supreme Court has outlined specific guidelines for the recovery process. Regulatory assets, essentially deferred revenue gaps to be recovered in future tariffs, must be fully liquidated within four years. Any surplus revenues earned by the discoms must be first adjusted against existing regulatory assets. The Delhi Electricity Regulatory Commission has been instructed to ensure no further creation of regulatory assets except in extraordinary and clearly defined circumstances.
To bridge the gap between the amount paid by consumers and the amounts owed to discoms, mechanisms such as deficit recovery surcharge, fuel adjustment charges, tariff rationalization, and government subsidies will be utilised. The state governments have been directed to fund subsidies upfront through budgetary allocations, rather than forcing distribution companies to bear the subsidy burdens.
The Supreme Court's judgement holds regulatory commissions accountable for their decisions, warning that ineffective regulation and delay in dues recovery lead to “regulatory failure” with the ultimate burden falling on consumers. The judgement aims to restore financial discipline and sustainability in power distribution tariffs and ensure cost-reflective consumer tariffs to avoid distortion of supply costs and unsustainable debt for discoms.
The two power distribution companies supply electricity to 5.3 million households in Delhi. The recovery of ₹28,483 crore of regulatory assets will begin retrospectively from April 1, 2024, over a period of four years. As of July 31, 2025, the total dues of BSES Yamuna Power Ltd and BSES Rajdhani Power amount to ₹28,483 crore. Reliance Infrastructure holds a 51% stake in these two power distribution companies, while the Delhi government holds the remaining 49%.
The Supreme Court order also mandates Electricity Regulatory Commissions (ERCs) to undertake a strict and intensive audit of the circumstances in which Discoms have continued without recovery of Regulatory Assets. The Apex Court has directed that the regulatory assets, including carrying costs to the tune of ₹27,200.37 crore, be paid within three years to Delhi's three private discoms. The order was published on August 8, 2025.
In a separate development, the Ministry of Defence (MoD) has finally issued a Request for Information (RFI) for phasing out Second World War vintage Chetak and Cheetah copters.
[1] https://www.livemint.com/news/india/supreme-court-rules-telecom-towers-movable-property-for-gst-11648893743467.html [2] https://www.barandbench.com/news/litigation/supreme-court-rules-telecom-towers-movable-property-for-gst [3] https://www.livemint.com/news/india/supreme-court-orders-reliance-infra-s-subsidiaries-to-recover-power-dues-worth-rs-28483-cr-11651398489804.html [4] https://www.business-standard.com/article/companies/sc-orders-reliance-infra-s-subsidiaries-to-recover-power-dues-worth-rs-28483-cr-12108140118708.html [5] https://www.thehindubusinessline.com/news/sc-orders-reliance-infra-s-subsidiaries-to-recover-power-dues-worth-rs-28483-cr/article32611666.ece
- In the realm of Indian infrastructure and business, the Supreme Court's ruling on telecom towers as movable property for Goods and Services Tax (GST) has significant implications.
- Simultaneously, the recovery of power dues by BSES Yamuna Power Ltd and BSES Rajdhani Power Ltd, subsidiaries of Reliance Infrastructure, is another crucial concern, with the Supreme Court ordering a recovery of ₹28,483 crore in outstanding dues.
- The finance sector, specifically the power industry, will be impacted by the Supreme Court's guidelines for the recovery process, which includes the full liquidation of regulatory assets within four years.
- The energy sector may also see changes due to the Supreme Court's judgement, as it aims to restore financial discipline and sustainability in power distribution tariffs, ensuring cost-reflective consumer tariffs to prevent distortion of supply costs and unsustainable debt for discoms.
- The recovery of regulatory assets by BSES Yamuna Power Ltd and BSES Rajdhani Power Ltd, comprising ₹28,483 crore, will have wide-ranging effects on the economy, particularly on the finance, energy, and industry sectors.
