BHEL Files ₹542.14 Crore Lawsuit Against KPCL Over Pending Dues

29 Mar 2025 , 04:30 PM

Bharat Heavy Electricals Limited (BHEL) has filed a commercial suit against the Karnataka Power Corporation Ltd. (KPCL) to recover outstanding dues of ₹542.14 crore. The suit, filed before the Bengaluru City Civil and Sessions Court, seeks recovery of dues relating to a contract.

The dispute arose from an Engineering, Procurement and Construction (EPC) contract relating to construction of a unit at the Bellary Thermal Power Station, which BHEL had executed for the Karnataka Power Corporation Ltd.

Under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, BHEL has formally announced this legal move, highlighting that the case carries material importance. The plea also brings to attention BHEL’s measures to recover the dues and have financial discipline with its own operations.

Considering its potential implications for BHEL’s financial performance, the case is likely to garner considerable interest from investors, stakeholders and market analysts alike. In any scenario, the legal decision may put an impact on cash flow, revenue recognition and financial health of the company that bears an impact on market sentiment.

The legal proceedings against BHEL highlight the company’s adherence to corporate governance and compliance measures, ensuring transparency in its financial disclosures in accordance with regulatory guidelines.

Speculation is high as to how this will play out, and investors will have their eyes on both BHEL and KPCL to see the repercussions of the case and any updates from the steeping tower.

The case highlights broader challenges for infrastructure and power sector companies involving contract execution, payment disputes and financial recoveries. The delay in the settlement may also impact BHEL’s working capital management and accordingly may affect its capacity to undertake new projects or investment. The court’s ruling may have implications for similar disputes in the industry and the future contracts entered into by public sector enterprises and contractors.