Clamping down on defaulters, Bharat Heavy Electrical Limited (BHEL) has started sending out legal notices for non payment of dues. Notices have been served to Abhijeet Group, Adhunik Group, Visa Power ltd and Monnet Ispat and Energy ltd, to recover Rs 17,000 crore in dues.

Reacting to the decision, a BHEL spokesperson said that the legal notices were issued after the repeated dialogues with the companies failed to yield any result. He added that BHEL was forced to stop further dispatches and site activities and issued a hold notice as the outstandings kept increasing.

According to a news report in The Mint, BHEL has demobilized the Abhijeet Group 1,080 megawatts (MW) Jharkhand power project site and closed the Visa Power project site. Abhijeet Group, Adhunik Group, Visa Power ltd have also been named in the comptroller and auditor general of India report on the allocation of coal fields.

BHEL, India’s largest power equipment maker has total dues outstanding of around Rs 39,000 crore at the end of the quarter ended June. Around half of the amount will be paid to the firm only after it meets specific milestones related to a project.

Meanwhile, Visa Power argued that BHEL has not supplied erectable equipment from its various units in the required sequence. As a result, material at site is not usable till such time equipment required for immediate use is made available.

Refuting claims of dispute, Monnet Ispat said that they will clear all dues after completion of their job.

Deputy governor of Reserve Bank of India K C Chakarabarty had stated that power projects are stalled not because of lack of credit but because of lack of supply of fuel and uncertainties with regard to coal pricing and power tariffs, towards which the government has recently taken some measures.

The total gross outstanding loans of the Indian scheduled banks to the power sector was Rs 4,038.22 billion as of March, according to central bank data. The power sector’s gross bad loans rose from Rs 8.02 billion in March 2009 to Rs 23.06 billion in March 2013.