MUSHTAQ GHUMMAN
ISLAMABAD: The Power Division and K-Electric (KE) remain at loggerheads over the tariff issue, with KE demanding payment of Tariff Differential Subsidy (TDS) on the basis of original tariff determinations, citing a stay order of the Sindh High Court (SHC), while the Power Division insists that TDS payments will be made in accordance with NEPRA’s revised determinations, well-informed sources told Business Recorder.
Both sides are engaged in intense correspondence, citing different court references and regulatory interpretations to justify their respective positions.
In his latest letter, KE Chief Executive Officer Moonis Alvi stated that the utility had forwarded a letter written by Deputy Secretary Power Division Abdul Mateen—regarding the TDS payment mechanism following NEPRA’s revised determinations on the federal government’s review motion—to KE’s legal counsel, Dr Farogh Naseem, who is representing the company before the SHC.
According to Alvi, KE’s counsel is of the considered opinion that the contents of the said letter could expose the respondents, including the Power Division, to contempt proceedings in the pending constitutional petitions. Consequently, KE has written directly to the Secretary Power to apprise him of what it termed the “correct state of affairs.”
KE reiterated the contents of its earlier letters dated November 11, 2025, and December 1, 2025, drawing the Secretary’s attention to the three constitutional petitions (CPs) and the interim orders of the SHC. KE maintained that it is a settled proposition of law that interim orders must be construed in the context of the injunction application, citing Fakhurl Arfin v. FOP (2015 CLC 318).
According to KE, the context of the injunction applications, read together with the ad-interim orders dated November 4, 2025, clearly establishes that no action—directly or indirectly—can be taken by the respondents or even by any entity not party to the proceedings to enforce the review tariff determinations.
“By not processing KE’s provisional claims, which are premised upon the original tariff determinations, the Ministry of Energy is, in essence, enforcing the review tariff determinations, which it is not legally permitted to do,” Alvi stated in his letter. He added that even the agent bank, Habib Bank Limited (HBL), acting under the Master Collection Agreement (MCA), is bound by the ad-interim orders and cannot process payments based on the review tariff determinations.
“What cannot be done directly, cannot be done indirectly,” he said.
KE further cited a judgment of a learned Division Bench of the Sindh High Court in Saifur Rehman v. Muhammad Ayub (1998 CLC 1872), which held that a party to proceedings cannot, while an application for interim relief is bona fide pending, act in a manner that pre-empts its lawful disposal, as such conduct may amount to contempt of court.
The utility also argued that the Ministry’s stance violates Clause 2.1 of the Tariff Differential Subsidy Agreement (TDS Agreement), which provides that in the event of a restraining order issued by a court of law, the preceding tariff shall be used for filing provisional TDS claims.
KE reproduced Clause 2.1 of the TDS Agreement, which states that if a tariff determination or quarterly tariff adjustment is challenged in court and restraining orders are issued, KE shall file provisional claims on the basis of the tariff determination or adjustment preceding the one under challenge.
KE maintained that the SHC’s orders dated November 4, 2025, constitute “restraining orders,” thereby fully attracting the provisions of Clause 2.1 of the TDS Agreement.
The power utility further contended that under Clause 2.6 of the TDS Agreement, the TDS balance report can only be prepared by KE and that the Ministry of Energy cannot unilaterally prepare, revise, or amend the report. According to KE, any revisions made by the Ministry are based on a tariff currently under judicial restraint, rendering such revised balance reports void and legally unenforceable.
“In view of the foregoing, the TDS balance reports prepared and signed by KE stand deemed signed and acknowledged by the Ministry of Energy,” Alvi said.
He concluded that the stance reflected in the Deputy Secretary’s letter dated December 8, 2025, amounts to a clear violation of the SHC’s orders of November 4, 2025, the principles laid down in the Saifur Rehman case, and Clauses 2.1 and 2.6 of the TDS Agreement.
Alvi once again requested the Secretary Power to process and release KE’s provisional TDS claims on the basis of the original tariff determinations, reserving KE’s legal rights in case of non-compliance.
