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Energy Law ReportsA Monthly JournalIndia’s first exclusive journal on EnergyCovering Orders and Judgments of the Supreme Court,High Courts and Appellate Tribunal for Electricity (APTEL)SEPTEMBER, 2012Mode of CitationYear ELR (Court) Page®Authorised Agency for publishing Orders of APTEL

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Subject IndexiContentsArrangement of Cases[Alphabetical]APTEL• Balmukund Sponge and Iron Pvt. Ltd. and Ors. v.Damodar Valley Corporation and Anr. 03.05.2012 ......... 1002• Himachal Pradesh State Electricity Board, Shimla v.Himachal Pradesh Electricity Regulatory Commission,• Shimla and Jai Prakash Hydro Power Ltd (JHPL), Shimla 19.04.2012 ......... 0933• M/s. Indian Wind Power Association, Chennai v.Tamil Nadu Electricity Regulatory Commission,Tamil Nadu Electricity Board Rep by its Chairman andThe Chief Financial Controller, Chennai 03.05.2012 ......... 1009• NTPC Limited, New Delhi v. Central Electricity RegulatoryCommission, New Delhi and GRIDCO Limited, Orissa 19.04.2012 ......... 0955• Power Grid Corporation of India Ltd., Haryana v.Central Electricity Regulatory Commission, New Delhi and Ors. 10.05.2012 ......... 0972• The Chairman, The Member (Distribution), Chennai andThe Superintending Engineer (PEDC), Perambalur v.Madras Cements Ltd. and Tamil Nadu Electricity RegulatoryCommission, Chennai 19.04.2012 ......... 0963• The Chairman, TNEB Tamil Nadu Electricity Board, and Ors. v.M/s Ind Barath Thermal Power Ltd. and RegulatoryCommission (Represented by its Secretary), Chennai 23.05.2012 ......... 0980• The Electricity Department, Nani Daman v.Joint Electricity Regulatory Commission, Gurgaon 25.06.2012 ......... 0993High Court• Indraprastha Gas Ltd. v. Petroleum andNatural Gas Regulatory Board and Anr. 01.06.2012 ......... 1013• M/s Waryam Steel Castings (P) Ltd., Punjab v.Punjab State Power Corporation Limited and Ors. 27.07.2012 ......... 1028ENERGY LAW REPORTS SEPTEMBER, 20125

ii Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]Arrangement of Cases[Chronological]APTEL• The Electricity Department, Nani Daman v.Joint Electricity Regulatory Commission, Gurgaon 25.06.2012 ......... 0993• The Chairman, TNEB Tamil Nadu Electricity Board, and Ors. v.M/s Ind Barath Thermal Power Ltd. and RegulatoryCommission (Represented by its Secretary), Chennai 23.05.2012 ......... 0980• Power Grid Corporation of India Ltd., Haryana v.Central Electricity Regulatory Commission, New Delhi and Ors. 10.05.2012 ......... 0972• Balmukund Sponge and Iron Pvt. Ltd. and Ors. v.Damodar Valley Corporation and Anr. 03.05.2012 ......... 1002• M/s. Indian Wind Power Association, Chennai v.Tamil Nadu Electricity Regulatory Commission,Tamil Nadu Electricity Board Rep by its Chairmanand The Chief Financial Controller, Chennai 03.05.2012 ......... 1009• Himachal Pradesh State Electricity Board, Shimla v.Himachal Pradesh Electricity Regulatory Commission,Shimla and Jai Prakash Hydro Power Ltd (JHPL), Shimla 19.04.2012 ......... 0933• NTPC Limited, New Delhi v. Central Electricity RegulatoryCommission, New Delhi and GRIDCO Limited, Orissa 19.04.2012 ......... 0955• The Chairman, The Member (Distribution), Chennai andThe Superintending Engineer (PEDC), Perambalur v.Madras Cements Ltd. and Tamil Nadu ElectricityRegulatory Commission, Chennai 19.04.2012 ......... 0963High Court• M/s Waryam Steel Castings (P) Ltd., Punjab v.Punjab State Power Corporation Limited and Ors. 27.07.2012 ......... 1028• Indraprastha Gas Ltd. v. Petroleum and NaturalGas Regulatory Board and Anr. 01.06.2012 ......... 10136ENERGY LAW REPORTS SEPTEMBER, 2012

Subject IndexiiiSubject IndexAdoption of transformation losses at 0.5 per cent — Whether State Commission haderred in adopting transformation losses at 0.5 per cent as furnished by PowerCorporation? — Held, contention of Appellant before this Tribunal in Appeal No. 192of 2009 was that the actual incremental transmission losses were 2 per cent andtransformation losses were 0.5 per cent. Appellants could not be permitted to take anentirely different stand and claim that voltage surcharge should have been determinedtaking into account transformation losses at 0.2 per cent only.M/s Waryam Steel Castings (P) Ltd., Punjab v.Punjab State Power Corporation Limited and Ors.Appeal No. 198 of 2011 at page 1028Decided On: 27.07.2012MANU/DE/3711/2012Allowance of depreciation — Whether Depreciation upto 90 per cent can be allowed?— Held, this issue also has been considered by this Tribunal holding that, depreciationcannot be denied forever and directed Central Commission to allow unpaid portion ofdepreciation (upto 90 per cent) after the plant has lived its designated useful life. Issuerelating to computation of Interest on loan has been decided by Tribunal rejectingAppellant’s contention by giving valid reasons. Issue relating to interest on loan inTariff due to de-capitalisation of certain assets has been held by this Tribunal holdingthat, cumulative repayment of loan proportionate to the assets de-capitalised isrequired to be reduced and directed the Central Commission to act accordingly.NTPC Limited, New Delhi v. Central Electricity RegulatoryCommission, New Delhi and GRIDCO Limited, OrissaAppeal No. 88 of 2007, at page 0955Decided On: 19.04.2012MANU/ET/0076/2012Applicability of Provision — Whether provisions of Section 10 dealing with duties ofgenerating company are subjected to Sections 39 and 40 related to duties and functionsof State Transmission Utility and Transmission Licensee respectively? — Held, rule ofconstruction is well settled that in an enactment, when there are two provisions whichcannot be reconciled with each other, they should be so interpreted in such a way thatthe effect is given to both. Concept that the effect should given to both, is the veryessence of rule. Thus, a construction that reduces one of provisions to a “use-lesslumber” or “dead letter” is not harmonious construction. In present case, interpretationof phrase “subject to provision of Act” would include provision of Section 39 and 40of Act, would render provision of Section 10 relating to ‘dedicated transmission line’a dead letter. Such a construction would not be acceptableThe Chairman, TNEB Tamil Nadu Electricity Board, and Ors. v.M/s Ind Barath Thermal Power Ltd. and Regulatory Commission(Represented by its Secretary), ChennaiAppeal No. 145 of 2011 at page 0980Decided On: 23.05.2012MANU/ET/0105/2012Condonation of Delay — Whether delay of 246 days in filing the Appeal had beenproperly explained? Whether in facts and circumstances of case, Section 14 of limitationAct, could be invoked for excluding period of pendency of Writ Petition before HighCourt? — Held, Application to condone delay did not disclose the sufficient cause orENERGY LAW REPORTS SEPTEMBER, 20127

iv Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]justification for permitting Applicants to file the Appeal with the delay of 246 days.Application to condone the delay of 246 days could not be allowed in light of facts ofcase which would clearly indicate that, Section 14 of limitation Act would not applysince there was no bona fide on part of Applicants to file the Appeal with long delayafter exhausting remedy before High Court. Application dismissedBalmukund Sponge and Iron Pvt. Ltd. and Ors. v.Damodar Valley Corporation and Anr.I.A. NO. 135 OF 2012 IN DFR NO. 706 OF 2012 at page 1002Decided on: 03.05.2012MANU/ET/0100/2012Construction of transmission lines — Whether responsibility to construct the dedicatedtransmission line was of generating company (Respondent), which establishedgenerating station or the Transmission Licensee (Appellant), which is responsible toestablish the intra-state transmission system? — Held, It is the duty of generatingcompany to establish a dedicated transmission line. Dedicated transmission line isnot a transmission line in terms of definition under Section 2(72) of Act. Similarly,dedicated transmission line is not a distribution system in terms of the definition ofSection 2(19) of Act. Term “Transmission licensee” has been defined in Section 2(73)of Act as “transmission Licensee” means a licensee authorized to establish or operatetransmission lines. Since, dedicated transmissions lines is neither a transmission lineor distribution system, it cannot be the duty of Appellant, transmission licensee, toestablish and operate a dedicated transmission line. Section 10 of Act read with theElectricity (Removal of difficulty) fifth Order, 2005 makes it clear that it is the duty ofthe generating company to establish the dedicated transmission lines.The Chairman, TNEB Tamil Nadu Electricity Board, and Ors. v.M/s Ind Barath Thermal Power Ltd. and Regulatory Commission(Represented by its Secretary), ChennaiAppeal No. 145 of 2011 at page 0980Decided On: 23.05.2012MANU/ET/0105/2012Depreciation — Whether Depreciation can be considered for deemed repayment ofloan? Whether cost of maintenance spares limited to 1 per cent of the historical costwould cover the cost of spares for maintenance of additional equipment? — Held,Tribunal in Appeal No. 139 and 140 of 2006 decided this issue holding that depreciationis an expense and therefore it cannot be considered for deemed repayment of loan.Since, depreciation is an expense it represents a decline in value of assets because ofuse, wear or obsolescence. Tribunal in Appeal No. 139 and 140 of 2006 decided infavour of Appellant holding that under Clause 18 of the CERC Regulations, additionalcapitalisation after date of commercial operation is recognised as part of capitalexpenditure and cost of additional equipment is not included in historical cost. Costof maintenance spares limited to 1 per cent of the historical cost would not cover thecost of spares for the maintenance of the additional equipment. Issue relating to Non-Consideration of Normative Transit Loss for coal received through Railway Systemhas also been covered by Tribunal’s Judgment in favour of Appellant.NTPC Limited, New Delhi v. Central Electricity RegulatoryCommission, New Delhi and GRIDCO Limited, OrissaAppeal No. 88 of 2007, at page 0955Decided On: 19.04.2012MANU/ET/0076/20128ENERGY LAW REPORTS SEPTEMBER, 2012

Subject IndexvDetermination of Cost — Whether cost of equipment adopted by State Commission indetermining the charges for use of the system was liable to be set aside? — Held,charges for use of additional 66/11 kV system can only be determined using the costof equipment prevalent at the time of laying of such system. Commission had used‘cost of replacement method’, which, was a correct approach to determine the chargesfor the additional 66/11 kV system.M/s Waryam Steel Castings (P) Ltd., Punjab v.Punjab State Power Corporation Limited and Ors.Appeal No. 198 of 2011 at page 1028Decided on: 27.07.2012MANU/DE/3711/2012Direction of State Commission — Whether the Joint Commission was correct in directingthe Appellant to supply all the consumers with the contracted load exceeding 1500 kVAat a voltage of 66 kV without considering the practical problems with respect to supplyto the existing consumers and the substantial expenditure required for such change? —Held, order regarding the supply voltage had been passed by Joint Commission onbasis of the petition filed by Appellant. Thus, Appellant could not blame Joint Commissionfor specifying voltage levels for consumers with load exceeding 1500 kVA. However,Joint State Commission has made only slight modification with conditions of supply inimpugned order. Joint Commission was directed to consider the issue of shifting ofexisting consumers to higher voltage as a consequence of impugned order and decidethe matter after hearing all concerned and considering cost benefit analysis of suchtransfer. Accordingly, this matter was remanded back to Joint CommissionThe Electricity Department, Nani Daman v.Joint Electricity Regulatory Commission, GurgaonAppeal No. 35 of 2012 at page 0993Decided On: 25.06.2012MANU/ET/0103/2012Enhancement in rate of interest — Whether the State Commission was justified inenhancing the rate of interest on arrears from 8 per cent to 11.5 per cent as providedunder Article 10.11 of the PPA in the second Review? — Held, since Article 10.11 ofPPA was (apparently) under suspension by virtue of the Commission’s order, Boardcould not be held at fault for delay in making payment and it cannot be directed to paythe interest at penal rate of plus 3 per cent. Simultaneously, Respondent Hydro Powerwould also be required to be compensated for the loss it had suffered due to delay inmaking full payment. Therefore, Respondent Hydro Power was entitled for carryingcost at SBI short term PLR only. Penal rate of article 10.11 at SBI PLR plus 3 per cent perannum would not be justified. This would apply to accumulated arrears up to 2006-07 only. After issuance of first Tariff Order in February 2007, Article 10.11 of PPAwould become fully operational and interest rate as per this article i.e SBI short termPLR plus 3 per cent per annum would be payable to the Respondent Hydro Power.Matter remanded to the State Commission for re-determining the interest rate as perthis Article. Appeal allowed.Himachal Pradesh State Electricity Board, Shimla v.Himachal Pradesh Electricity Regulatory Commission,Shimla and Jai Prakash Hydro Power Ltd (JHPL), ShimlaAppeal No. 9 of 2011 and appeal No. 178 OF 2010 at page 0933Decided On: 19.04.2012MANU/ET/0075/2012ENERGY LAW REPORTS SEPTEMBER, 20129

vi Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]Enhancement of retail supply tariff — Whether Joint Commission had erred inincreasing the retail supply Tariff for domestic, BPL and agriculture consumersresulting in Tariff shock for these categories of consumers? — Held, Commission,disregarded the proposals of second Respondent which had been published anddetermined Tariff giving Tariff shock to subsidized categories of consumers. Finalapproved Tariff should have some semblance with proposals which were publishedby licensee or Commission.” Regarding Tariff shock to domestic and agricultureconsumers, findings of Tribunal in its Judgment dated 28 th February, 2012 in AppealNo. 159 of 2011 would squarely apply to the present case. Accordingly, impugnedorder was set aside and matter remanded to Joint Commission for re-determination ofTariff.The Electricity Department, Nani Daman v.Joint Electricity Regulatory Commission, GurgaonAppeal No. 35 of 2012 at page 0993Decided On: 25.06.2012MANU/ET/0103/2012Entitlement to additional return on equity — Entitlement to additional return onequity — Whether a Transmission Licensee was entitled to additional return on equityof 0.5 per cent in case instead of commissioning of entire project as a whole a unit orunits or a line or a group of lines were commissioned? — Held, element of thetransmission project appertains to the scope and ambit of the word transmissionsystem. It means that element of the transmission work, which is applicable in a givensituation. It is the scheme as a whole, not a part thereof, that would qualify atransmission licensee to entitlement to additional return on equity. Interpretation ofdifferent provisions of Act does hardly have too much of relevance in conspectus ofthe fact situation in which interpretation of Regulation 15(2) of the Regulations, 2009is called for. Element of the transmission project does not mean only one element to theexclusion of others, if there are more than one, and Commission does appear to haverightly held that the project as a whole had not been commissioned within timeschedule. Appeal dismissed.Power Grid Corporation of India Ltd., Haryana v.Central Electricity Regulatory Commission, New Delhi and Ors.Appeal No. 155 of 2011 at page 0972Decided On: 10.05.2012MANU/ET/0086/2012Fixation of Retail Price — Whether impugned order fixing the maximum retail priceor requiring Petitioner to disclose Network Tariff and Compression Charges to itsconsumers was liable to be quashed? — Held, prices are generally governed / regulatedby market forces. Price fixation/regulation/control is essentially a clog on the freedomof trade and commerce conferred the status of a fundamental right. However, whereverthe circumstances so justify, same has been treated as a reasonable restriction. Howeversuch restriction on fundamental right has to be by legislative mandate only. PNGRBAct does not confer any power on the Board to fix/regulate price of gas as has beendone vide the impugned order. Any provision therein having the effect of empoweringthe Board to fix price or Network Tariff or Compression Charges for CNG, as long asnot transportation Rate, was beyond the competence of Board and ultra vires the PNGRBAct and of no avail. Petroleum and Natural Gas Regulatory Board was not empoweredto fix or regulate the maximum retail price at which gas was to be sold by entities asPetitioner, to consumers. Board was also not empowered to fix any component of10ENERGY LAW REPORTS SEPTEMBER, 2012

Subject IndexviiNetwork Tariff or Compression Charge for an entity such as Petitioner having its owndistribution network. Provisions of Regulations in so far as construed by Board to beso empowering it were held to be bad/illegal. Accordingly, impugned order to theextent so fixing the maximum retail price or requiring Petitioner to disclose NetworkTariff and the Compression Charges to its consumers was struck down/quashed.Petition allowed.Indraprastha Gas Ltd. v. Petroleum andNatural Gas Regulatory Board and Anr.W.P.(C) NO. 2034/2012 and CM Nos.4370/2012 & 5617/2012 at page 1013Decided On: 01.06.2012MANU/DE/2313/2012Grand of interim relief — Whether Applicants were entitled for interim orders forstay of impugned order passed by Tamil Nadu Electricity Regulatory Commissionvalidating levy of excess demand and energy charges? — Held, there was a primafacie case to stay the operation of impugned order passed on basis of clarification asgiven by Electricity Board with effect from 25 th June, 2010 for calculation of penalty forexcess demand and excess energy. Balance of convenience was also in favour ofAppellants. Interim relief sought for in these interlocutory applications was againstcollection of penalty and not the normal electricity charges due to Electricity Board.Electricity Board was restrained from collection of excess energy charges and excessdemand charges in terms of clarification dated 25 th June, 2010 issued by ElectricityBoard for period till the passing of impugned order. In case of dismissal of appealsand confirmation of impugned order by this Tribunal, Appellants would be liable topay penalty for excess energy and excess demand charges as per impugned orderalong with interest for delay in payment. Applications allowed.M/s. Indian Wind Power Association Rep. by its Secretary General, Chennai v.Tamil Nadu Electricity Regulatory Commission, Tamil Nadu Electricity BoardRep by its Chairman and The Chief Financial Controller, ChennaiIA NO. 105 OF 2012 in appeal no. 51 OF 2012 at page 1009Decided On: 03.05.2012MANU/ET/0097/2012Inclusion of O&M Expenses — Whether State Commission had erred in includingO&M expenses twice in the charges for additional 66/11 kV system? — Held, Tribunalhad categorically directed to determine charges for use of additional 66/11 kVtransmission system. Determination of transmission charges or wheeling chargeshad to be carried out in accordance with regulations specified by State Commissionand would include Return on Equity, Depreciation, O&M expenses, interest on loanand working capital etc. State Commission had considered O&M expenses only onceand not twice as alleged by the Appellant. No reason to interfere with impugned orderof State Commission. Appeal dismissed.M/s Waryam Steel Castings (P) Ltd., Punjab v.Punjab State Power Corporation Limited and Ors.Appeal No. 198 of 2011 at page 1028Decided on: 27.07.2012MANU/DE/3711/2012Inclusion under O&M expenditure of loss on account of de-capitalisation of asset— Whether Central Commission was justified in not allowing alleged loss on accountof de-capitalisation of assets as part of O&M expenditure? — Held, NTPC had madeENERGY LAW REPORTS SEPTEMBER, 201211

viii Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]huge profits on account of Talcher Station as pointed out by Central Commission.Therefore, plea of Appellant for further relaxation on the ground that plant was oldone and outlived its useful life was not tenable. Benefits of Renovation andModernisation such as earning from relaxed operational norms, additional UI chargesand incentive etc. had been achieved but, even then same had not been passed on tothe beneficiary consumers. As per the policy of Central Commission, any loss or profitarising out of de-capitalised assets is to be borne/retained by Appellant. CentralCommission was justified in not allowing alleged loss on account of de-capitalisationof assets as part of O&M expenditure.NTPC Limited, New Delhi v. CERC, New Delhi and GRIDCO Limited, OrissaAppeal No. 88 OF 2007, at page 0955Decided On: 19.04.2012MANU/ET/0076/2012Interpretation of Regulation — Whether State Commission’s Intra-state OpenAccess Regulations 2005 can over-ride the specific provisions of parent Act? —Held, Intra-state Open Access Regulations, 2005 are made under Section 181 of 2003Act. These Regulations framed by State Commission are required to be consistent withthe provisions of the parent Act and Rules to carry out the provisions of the Act. Byway or interpretation of Regulation, State Commission could not give a directionwhich was contrary to provisions of Section 10 of the Electricity Act. Impugned orderwas set aside. Generating company is governed by Section 10 of Electricity 2003 Act.Generating Company alone was liable to construct transmission line at its own cost.Therefore, Respondent Generating Company was directed to get dedicatedtransmission lines constructed at its own cost as per Section 10 of 2003 Act.The Chairman, TNEB Tamil Nadu Electricity Board, and Ors. v.M/s Ind Barath Thermal Power Ltd. and Regulatory Commission(Represented by its Secretary), ChennaiAppeal No. 145 of 2011 at page 0980Decided On: 23.05.2012MANU/ET/0105/2012Jurisdiction — Whether the State Commission has the jurisdiction to declare anAgreement entered into between the Appellant and M/s. Madras Cements Limitedas terminated contrary to the terms of the said Agreement? — Held, there areRegulations framed by State Commission, which empowers the Commission toinvoke the inherent powers of Commission to make such orders as may be necessaryto meet the ends of justice. They also provide that the Regulations already availableshall not bar the State Commission from adopting any other procedure which is atvariance with any of the provisions of these Regulations. State Commission hadcorrectly utilised its inherent powers to decide the matter regarding termination ofwheeling arrangement to Ariyalur unit of Respondent No. 1. There was no infirmityin findings of State Commission that, no compensation was payable by RespondentNo. 1 to Appellant consequent of termination of wheeling arrangement requested byRespondent No. 1.The Chairman, The Member (Distribution), Chennai and The SuperintendingEngineer (PEDC), Perambalur v. Madras Cements Ltd. and Tamil NaduElectricity Regulatory Commission, ChennaiAppeal No. 8 of 2012, at page 0963Decided On: 19.04.2012MANU/ET/0077/201212ENERGY LAW REPORTS SEPTEMBER, 2012

Subject IndexixPower of State Commission — Whether the State Commission could declare thewheeling agreement as terminated in a petition under Section 12(h) of the Open AccessRegulations 2005 which deals with the Long Term Open Access customer after treatingthe Madras Cements Limited as a Short Term Open Access customer relying on theperiod of the Agreement mentioned in the Energy Wheeling Agreement? — Held,reading of Clause 6 of Tamil Nadu Electricity Commission Intra State Open accessRegulations, 2005, in its entirety makes it clear that any customer who would beavailing intra state Open Access for a period of more than one year or less than fiveyears shall be a Short Term Open Access customer. Respondent No. 1 has to be treatedas Short Term Open Access customer in terms of Intra-State Open Access Regulations,2005 in spite of Energy Wheeling Agreement entered into between Appellant and theRespondent No. 1 being for a period of three years and in spite of its having depositedthe registration fee and agreement fee applicable for Long Term Open Access customerat the time of seeking the Open Access. Request of the Respondent No. 1 for terminationof wheeling arrangement from its generating plant to its unit at Ariyalur will begoverned by Clause 13(h) of the Intra-State Open Access Regulations applicable toShort Term Open Access customers.The Chairman, The Member (Distribution), Chennai andThe Superintending Engineer (PEDC), Perambalur v. Madras Cements Ltd.And Tamil Nadu Electricity Regulatory Commission, ChennaiAppeal No. 8 of 2012, at page 0963Decided On: 19.04.2012MANU/ET/0077/2012Restriction on debts to 1 per cent of outstanding arrears — Whether JointCommission had erred in restricting Bad and Doubtful debts to 1 per cent ofoutstanding arrears in contravention to Tariff Regulation? — Held, “the receivables”indicated in Regulation 28 are the total receivables at current Tariff rate and not thearrears outstanding. Information sought as per format 18 of Regulations relating toaudited amount of receivables bad and doubtful debts would not infer that allowanceof bad debts had to be limited to 1 per cent of arrears outstanding. However, StateCommission has discretion to allow bad debts upto 1 per cent of receivables after thelicensee gets the receivables audited. It is not binding on Joint Commission to allow1 per cent of receivables a bad debts. Licensee had also not indicated if auditedaccounts for previous year were submitted to Joint Commission. Joint Commissionmight reconsider the provision of bad debts after audited accounts were submittedby Appellant in Truing up.The Electricity Department, Nani Daman v. Joint ElectricityRegulatory Commission, GurgaonAppeal No. 35 of 2012 at page 0993Decided On: 25.06.2012MANU/ET/0103/2012Service of document’s Copy — Whether Appellant was not served with the copy ofdocuments in respect of the issue relating to the Truing up of Interest cost andAmortization of cost of Debt Restructuring? Whether Judgment rendered in AppealNo. 120 of 2008 had attained finality? — Held, the Respondent Hydro Power throughthe Affidavit had specifically stated that during the proceedings in MYT applicationfor control period from 2008 – 2011, copies of all miscellaneous documents weresupplied to Appellant when same were filed before State Commission. In fact, alongwith original application, nine additional copies were duly filed before StateENERGY LAW REPORTS SEPTEMBER, 201213

x Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]Commission. On the basis of averments made in said application, interest for Financialyear 2003-2004 to 2007-2008 and debt restructuring were approved by StateCommission. State Commission had referred to the complete details provided inapplication. On the basis of information furnished by Respondent Hydro Power, interestand debt restructuring expenses had been approved. Materials available on recordclearly showed that those documents were supplied to Electricity Board. In respect ofthe issues namely Incentive for Higher Plant Availability and Cost of Infirm Energy,this Tribunal in Appeal No. 120 of 2008 had already decided as against the ElectricityBoard. Admittedly, the findings in that Appeal had not been challenged in Appealfiled by Board. Judgment rendered in Appeal No. 120 of 2008 had attained finality.Claim on these issues had no merit. Appeal dismissedHimachal Pradesh State Electricity Board, Shimla v.Himachal Pradesh Electricity Regulatory Commission,Shimla and Jai Prakash Hydro Power Ltd (JHPL), ShimlaAppeal No. 9 of 2011 and appeal No. 178 OF 2010 at page 0933Decided On: 19.04.2012MANU/ET/0075/2012Variation in Tariff — Whether the Joint Commission has erred in providing forvariation in Tariff of domestic consumers with Fuel and Power Purchase CostAdjustment determined in accordance with the formula decided in the Tariff Order?— Held, Power Purchase Cost Adjustment formula had already been set aside by thisTribunal in its Judgment in case of Daman Industries Association v. ElectricityDepartment of Daman & Diu and Another with direction to the Joint Commission tore-determine formula afresh. Accordingly, this issue did not survive.The Electricity Department, Nani Daman v.Joint Electricity Regulatory Commission, GurgaonAppeal No. 35 of 2012 at page 0993Decided On: 25.06.2012MANU/ET/0103/201214ENERGY LAW REPORTS SEPTEMBER, 2012

0933ab2012 ELR (APTEL) 0933*BEFORE THE APPELLATE TRIBUNAL FOR ELECTRICITY, NEW DELHI(APPELLATE JURISDICTION)Himachal Pradesh State Electricity Board, Shimlav.Himachal Pradesh Electricity Regulatory Commission,Shimla and Jai Prakash Hydro Power Ltd (JHPL), ShimlaANDcJaiprakash Power Ventures Ltd., Solanv.Himachal Pradesh Electricity Regulatory Commission andHimachal Pradesh State Electricity Board, ShimlaAPPEAL NO. 9 OF 2011 AND APPEAL NO. 178 OF 2010DECIDED ON: 19.04.2012defghCoramM. Karpaga Vinayagam, J. (Chairperson) and V.J. Talwar, Member (Technical)CounselFor Appellant/Petitioner/Plaintiff: R.K. Mehta, A. David, Antaryami Upadhyay,S. Lakhi Singh, Anish Singh, Advs. in Appeal No. 9 of 2011 and S.B. Upadhyay,Sr. Adv., Pawan Upadhyay, Anisha Upadhyay, Pawan Kishore Singh, JayeshGaurav and Param Kumar Mishra, Advs. in Appeal No. 178 of 2010For Respondents/Defendant: Surbhi Sharma and Shikha Ohri, Advs. for R-1 inAppeal Nos. 9 of 2011 and 178 of 2010 and S.B. Upadhyay, Sr. Adv. for R-2,Pawan Upadhyay, Pawan Kishore Sing, Jayesh Gaurav and Param Kumar Mishra,Advs. for R-2 in Appeal No. 9 of 2011 and R.K. Mehta, A. David, AntaryamiUpadhyay and Anish Singh, Advs. for R-2 in Appeal No. 178 of 2010Cases referredCentral Bank of India v. Ravindra and Ors. MANU/SC/0663/2001: (2002) 1 SCC 367: AIR2001 SC 3095: 2002 (50) BLJR 207: 2002 Civil CC 364: (2001) 107 CompCas 416 (SC):JT 2001 (9) SC 101: 2002 (1) KLT 743 (SC): 2002 1 LW 683: (2002) 1 MLJ 109 (SC):RLW 2002 (2) SC 241: 2001 (7) SCALE 351 (Relied On) [p. 0952, para 60 c]CIT v. Shyam Lal Narula AIR 1963 PB 411 (Relied On) [p. 0952, para 60 a]Dwarka Das v. State of M.P. MANU/SC/0088/1999: (1999) 3 SCC 500: AIR 1999 SC1031: 1999 (1) CTC 635: 1999 (2) JLJ 83 (SC): JT 1999 (1) SC 375: 1999 3 LW 367:1999 (1) OLR 388: 1999 (I) OLR (SC) 388: (1999) 121 PLR 820: 1999 (1) SCALE376: (1999) 1 SCR 524: 1999 (2) UJ 895 (Mentioned) [p. 0946, para 36 e]K Rajamouli v. A.V.K.N. Swamy MANU/SC/0341/2001: (2001) 5 SCC 37: AIR 2001SC 2316: 2001 (3) ALLMR (SC) 788: 2001 (2) ArbLR 702 (SC): (2001) 3 CompLJ 144(SC): JT 2001 (Supp l1) SC 168: 2001 3 LW 13: 2001 (3) PLJR 32: 2001 (4) SCALE212: (2001) 3 SCR 473: 2001 (2) UC 117 (Mentioned) [p. 0946, para 36 f]i* MANU/ET/0075/2012ENERGY LAW REPORTS SEPTEMBER, 2012 15

0934Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]Maharashtra State Elecy. Distt. Co. Ltd. Bandra (East) Mumbai v. Maharashtra ElectricityRegulatory Commission, Mumbai MANU/ET/0009/2008: 2008 ELR (APTEL) 110(Affirmed) [p. 0952, para 60 d]State of Punjab v. Darshan Singh MANU/SC/0843/2003: (2004) 1 SCC 328: AIR 2003SC 4179: (SC Suppl) 2004 (2) CHN 102: 2003 (4) CTC 442: 2004 (1) JCR 38 (SC): JT2005 (11) SC 285: 2004 1 LW 618: 2004 (2) MhLJ 565: 2004 (2) MhLJ 565 (SC):(2004) 1 MLJ 61 (SC): 2004 MPLJ 302 (SC): 2003 (9) SCALE 35: (2003) Supp 4 SCR1042: 2004 (86) SLJ 78 (SC): 2004 (1) UJ 377 (Mentioned) [p. 0946, para 36 e]UPSRTC v. Imtiaz Hussain MANU/SC/2406/2005: (2006) 1 SCC 380: AIR 2006 SC649: 2006 1 AWC (Supp) 414 SC: (2006) 2 CALLT 72 (SC): 2006 (108) FLR 950:JT 2005 (10) SC 496: (2006) ILLJ 714 SC: (2006) SCC (L and S) 246: (2006) 1UPLBEC 851 (Mentioned) [p. 0946, para 36 e]Acts/Rules/RegulationsElectricity Act, 2003Section 94(i) [p. 0946, para 36 d]Section 94(1) [p. 0951, para 60 e]Electricity Regulatory Commissions Act, 1998 [p. 0949, para 51 a]Code of Civil Procedure (CPC)Section 152 [p. 0937, para 7 e]HPERC (Conduct of Business) Regulation, 2005Regulation 63 [p. 0946, para 35 a]ISSUES AND FINDINGSAppeal No. 9 of 2011Whether Appellant was not served with the copy of documents in respect of the issuerelating to the Truing up of Interest cost and Amortization of cost of Debt Restructuring?Whether Judgment rendered in Appeal No. 120 of 2008 had attained finality?Held, the Respondent Hydro Power through the Affidavit had specifically statedthat during the proceedings in MYT application for control period from 2008 – 11,copies of all miscellaneous documents were supplied to Appellant when same werefiled before State Commission. In fact, along with original application, nine additionalcopies were duly filed before State Commission. On the basis of averments made insaid application, interest for Financial year 2003-04 to 2007- 08 and debt restructuringwere approved by State Commission. State Commission had referred to the completedetails provided in application. On the basis of information furnished by RespondentHydro Power, interest and debt restructuring expenses had been approved. Materialsavailable on record clearly showed that those documents were supplied to ElectricityBoard. In respect of the issues namely Incentive for Higher Plant Availability andCost of Infirm Energy, this Tribunal in Appeal No. 120 of 2008 had already decidedas against the Electricity Board. Admittedly, the findings in that Appeal had notbeen challenged in Appeal filed by Board. Judgment rendered in Appeal No. 120 of2008 had attained finality. Claim on these issues had no merit. Appeal dismissedAppeal No. 178 of 2010Whether the State Commission was justified in enhancing the rate of interest onarrears from 8 per cent to 11.5 per cent as provided under Article 10.11 of the PPA inthe second Review?”abcdefghi16ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghiHP State Electricity Board, Shimla v. HP Electricity Regulatory Commission and Anr.(M. Karpaga Vinayagam, J. (Chairperson))Held, since Article 10.11 of PPA was (apparently) under suspension by virtue ofthe Commission’s order, Board could not be held at fault for delay in makingpayment and it cannot be directed to pay the interest at penal rate of plus 3 percent. Simultaneously, Respondent Hydro Power would also be required to becompensated for the loss it had suffered due to delay in making full payment.Therefore, Respondent Hydro Power was entitled for carrying cost at SBI shortterm PLR only. Penal rate of article 10.11 at SBI PLR plus 3 per cent per annumwould not be justified. This would apply to accumulated arrears up to 2006-07only. After issuance of first Tariff Order in February 2007, Article 10.11 of PPAwould become fully operational and interest rate as per this article i.e SBI shortterm PLR plus 3 per cent per annum would be payable to the Respondent HydroPower. Matter remanded to the State Commission for re-determining the interestrate as per this Article. Appeal allowed.ORDERM. Karpaga Vinayagam, J. (Chairperson)1. Himachal Pradesh State Electricity Board (Electricity Board) is the Appellant inAppeal No. 9 of 2011. Jai Prakash Power Ventures Ltd, a successor company ofM/s Jai Prakash Hydro Power Limited is the Appellant in Appeal No. 178 of 2010.2. The Himachal Pradesh Electricity Regulatory Commission and M/s Jai PrakashHydro Power Limited (Hydro Power) are the 1 st and 2 nd Respondents respectively inAppeal No. 9 of 2011. The Himachal Pradesh Electricity Regulatory Commissionand the Himachal Pradesh State Electricity Board are the 1 st and 2 nd Respondentsrespectively in Appeal No. 178 of 2010.3. The Appellant, Himachal Pradesh State Electricity Board has filed the Appeal inAppeal No. 9 of 2011 as against the correctness of the MYT order dated30 th March, 2009 determining the Tariff for sale of electricity generated by Baspa IIHEP of second Respondent Hydro power to the Appellant for the MYT controlperiod of 2008- 2011 as well as against the Clarificatory order dated 23 rd June, 2010passed by the State Commission.4. M/s Jai Prakash Hydro Power Limited has filed the composite Appeal in AppealNo. 178 of 2010 as against MYT order dated 30 th March, 2009, the order dated10 th September, 2009 passed in the Review Petition and the order dated 23 rd June, 2010passed in clarificatory petition.5. Since the impugned MYT order dated 30 th March, 2009 and impugned clarificatoryorder dated 23 rd June, 2010 are the subject matter of both these Appeals, the commonJudgment is being rendered.6. For the sake of convenience, Himachal Pradesh State Electricity Board the Appellantin Appeal No. 9 of 2011 and (second Respondent in Appeal No. 178 of 2010) wouldbe referred to as the Appellant Electricity Board and M/s Jai Prakash Hydro PowerLimited the Appellant in Appeal No. 178 of 2010 (second Respondent in AppealNo. 9 of 2011) is being referred to as the Respondent Hydro Power. Himachal PradeshElectricity Regulatory Commission the Respondent No. 1 in both the Appeals isreferred to as the State Commission herein after.7. The brief facts of the case are as follows:0935ENERGY LAW REPORTS SEPTEMBER, 201217

0936Energy Law Reports (ELR) [Vol. 2, Part 4, 2012](a) Jai Prakash Hydro Power Limited is a Generating Company.(b) On 23 rd November, 1991, a Memorandum of Understanding was signedbetween the Government of Himachal Pradesh and Hydro Power fordevelopment of 300 MW Hydro-electric Power Plant BASPA-II on river Baspain Kinnaur District.(c) On 4 th June, 1997, a Power Purchase Agreement was signed between theAppellant Electricity Board and the Respondent Hydro Power for sale of powerfrom Baspa II HEP of the Respondent Hydro Power. On completion of theproject, Hydro Power commenced its generation of electricity on 8 th June, 2003and sale thereof to the Appellant Electricity Board.(d) Himachal Pradesh Electricity Board is the sole purchaser of the electricitygenerated by the Baspa II HEP of Jai Prakash Hydro Power Limited.(e) A supplementary Agreement between the Hydro Power and Electricity Boardwas executed on 26 th February, 2003 agreeing to the capital cost of the projectat Rs. 1550 Crores for the purpose of Tariff and Payment mechanism of sale ofpower to the Board.(f) On 7 th July, 2003 the Respondent Hydro Power submitted first bill for sale ofpower to the Electricity Board after Commercial Operation Date as per provisionsof PPA based on the agreed cost of project of Rs. 1550 Crores.(g) The State Commission in its interim order dated 19 th July, 2003 issueddirections to the Appellant Electricity Board for payment of revenue realizedfrom sale of power received from the project to the Respondent Hydro Powertill the Tariff is approved by the State Commission.(h) On 6 th September, 2003 the State Commission set aside the SupplementaryAgreement dated 26 th February, 2003 and directed the Electricity Board to continuepayment of revenue realized from sale of power of the project to the RespondentHydro Power till the approval of the Tariff by the Commission.(i) On 21 st November, 2005, the Respondent Hydro Power filed its first TariffPetition before the State Commission for approval of Capital Cost of the projectand for fixation of Tariff with effect from the date of commercial operation ofthe project.(j) On 24 th February, 2007, the First Tariff order determining the Capital cost ofthe Baspa II HEP and Tariff for the financial years 2003-04 to 2007-08 waspassed by the State Commission. In this order, the State Commission quantifiedthe amount of arrears to be paid by the Electricity Board to Jai Prakash HydroPower Limited and also awarded the carrying cost for such arrears at the rateof 8 per cent.(k) Both the Appellant Electricity Board and the Respondent Hydro Powerfiled petitions for review of the order dated 24 th February, 2007 on Determinationof the Capital Cost and Tariffs for 300 MW Baspa II HEP. In its review petitionthe Respondent Hydro Power requested for early payments of the arrears andfor review of interest rate of 8 per cent awarded by the Commission on theground that it was not in consonance with the Article 10.11 of the PowerPurchase Agreement.(l) In the Review order dated 7 th February, 2008, the State Commission directed theElectricity Board to pay the whole amount of arrears during the year 2008-09 intwo instalments. In regard to application of the provisions of Article 10.11 ofabcdefghi18ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghiHP State Electricity Board, Shimla v. HP Electricity Regulatory Commission and Anr.(M. Karpaga Vinayagam, J. (Chairperson))the PPA, the State Commission observed that the necessary adjustments shallbe made during processing of the subsequent petition along with necessaryadjustments in the arrears payable.(m) Subsequently, the Respondent Hydro Power filed a Tariff Petition for MultiYear Tariff (MYT) for the control period 2009 to 2011.(n) The State Commission passed the MYT order on this petition on30 th March, 2009. However, the State Commission did not make any adjustmentstowards interest on arrears as observed in its Review order dated7 th February, 2008 and merely allowed the interest only at the rate of 8 per cent.(o) Aggrieved over this MYT order dated 30 th March, 2009, the RespondentHydro Power filed for a Review in Petition No. 83 of 2009. The AppellantElectricity Board also moved a review Petition No. 91 of 2009 seeking reviewof MYT order dated 30 th March, 2009.(p) On 10 th September, 2009, the Review Petition filed by the Respondent HydroPower was disposed of. In this order, the State Commission recomputed thearrears payable by the Board and the carrying costs, based on the Annual FixedCharges (AFC) approved by the Commission in its review order dated10 th September, 2009 and the payments made by the Board for the period FY04to FY08. The Commission also directed the Board to pay the entire arrears ofprior period as per the order dated 7 th February, 2008 but, again restricted therate of interest at the rate of 8 per cent.(q) The State Commission permitted the Appellant Electricity Board to amendor file revised petition as some of the issues raised in the review petition werealso the subject matter of Appeal No. 120 of 2008 filed before this Tribunaland this Tribunal’s Judgment had been pronounced.(r) Again both the parties filed separate clarificatory petitions against thisreview order dated 10 th September, 2009 under Section 152 of the Civil ProcedureCode. In these petitions, the State Commission passed order on 26 th March, 2010holding that though there was no scope for review of the review order, underSection 152 of Civil Procedure Code, the State Commission has got limitedpowers to make corrections of the mistakes committed in the earlier Judgments.It further directed that the Board is liable to pay the interest from the date ofthe CoD as per Clause 10.11 of the PPA. However, State Commission kept theinterest rate @ 8 per cent for the period from CoD of the project to30 th October, 2010 and revised it to SBI long term PLR only for the period from1 st November, 2009 till the payment of arrears by the Board.(s) Having aggrieved over this order, both the parties have filed these Appealsbefore this Tribunal on different grounds.(t) As mentioned earlier, Himachal Pradesh Electricity Board has filed Appealin Appeal No. 9 of 2011 and Jai Prakash Hydro Power Limited has filed theAppeal in Appeal No. 178 of 2010 as against the impugned orders dated30 th March, 2009, 10 th September, 2009 and 23 rd June, 2010.8. Let us first deal with the Appeal No. 9 of 2011 filed by the Himachal PradeshState Electricity Board as against the order dated 30 th March, 2009 determining theTariff for the control period 2008- 11 and the Review order dated 23 rd June, 2010.9. The following issues have been raised by the Appellant Electricity Board in thepresent Appeal.0937ENERGY LAW REPORTS SEPTEMBER, 201219

0938Energy Law Reports (ELR) [Vol. 2, Part 4, 2012](a) Truing Up of Interest Cost for the Financial year 2003-04 and FinancialYear 2007-08.(b) Amortization of Cost of Debt Restructuring(c) Incentive for Higher Plant Availability(d) Infirm Energy(e) Payment of Interest on Arrears10. The contentions raised by the Appellant in first and second issues raised in thisAppeal are same which and related to non-supply of information by the Respondent.Therefore, we would deal with these issues together. These issues relate to Truingup of interest cost and Amortization of Cost of Debt Restructuring.11. The learned Counsel for the Appellant Electricity Board has made the followingsubmissions:(a) The State Commission had categorically observed in the order dated30 th March, 2009 that there were certain errors in the information submittedby the Respondent Hydro Power and therefore, the State Commission calledupon the Respondent Hydro Power to submit further information andaccordingly the Respondent Hydro Power submitted the information to theCommission without submitting the copies of the said information to theAppellant Electricity Board.(b) Because of the fact of non-supply of information, which was brought to thenotice of the Commission by the Appellant Electricity Board in its ReviewPetition before the State Commission, the Appellant was unable to respond tothe information submitted by the Respondent Hydro Power.(c) The State Commission decided the issue on the information supplied byRespondent Hydro Power and without giving an opportunity to the Board torespond to the same.(d) The State Commission had held that the Board was not able to point outany error in the figures supplied by the Respondent Hydro Power and proceededto approve the claims of the Respondent Hydro power on the basis of theanalysis of the documents submitted by the Respondent, which were not suppliedto the Appellant. Thus, the order of the State Commission with regard to truingup of the interest cost had been passed in violation of the principle of naturaljustice.(e) The purported claim of Respondent Hydro Power that the information wassupplied to the Appellant Electricity Board is wrong. The documentary proofsubmission of copies of the information to the Appellant show that the copieswere submitted to the office of Chief Engineer (PSP) between August 2008 toFebruary 2009. The office of Chief Engineer (PSP) was disbanded on30 th September, 2008 and all the works handled by this office were transferredto other wings of the Board. Thus, the Appellant was not aware of the detailsof the information supplied by the Respondent Hydro Power.12. The learned Senior Counsel for the Respondent Hydro Power vehemently opposedthe contentions of the Appellant Electricity Board and made the following replysubmissions on these issues:(a) The ground on which the Appellant has raised this point relating to thealleged non supply of the relevant documents filed by the Respondent Hydroabcdefghi20ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghiHP State Electricity Board, Shimla v. HP Electricity Regulatory Commission and Anr.(M. Karpaga Vinayagam, J. (Chairperson))Power before the State Commission is wrong. In fact, all sort of documentswere duly furnished to the Appellant Electricity Board and the same were inpossession of the Appellant. The Respondent Hydro Power has also filed anAffidavit to this effect before this Tribunal on 25 th July, 2011 in support of itscontention that the said documents were duly furnished to the Electricity Boardat the time when they were filed before the State Commission. In the Affidavit,it has been clearly stated that all the documents in MA No. 45 were furnishedto the Appellant on 17 th March, 2009 and other documents referred to by theAppellant were also furnished to the Appellant on various dates i.e. 20 th August,2008, 10 th October, 2008, 19 th December, 2008, 21 st February, 2009 and 6 th February,2009 simultaneously when they were filed before the State Commission. As amatter of fact, the State Commission also was conscious of this fact that thenecessary documents had supplied to the Appellant and only on that basis,the State Commission observed in impugned order dated, 23 rd June, 2010 thatthe Electricity Board was not able to point out any error in the approvedfigures in respect of truing-up of interest cost for the period Financial Year2003-04 to 2007-08 and Amortization of cost of debt restructuring. Hence, thecontention of the Appellant on this issue has no basis.(b) As regards the closure of office of Chief Engineer (PSP) on 30 th September,2008 as claimed by the Appellant, the learned Counsel for the RespondentHydro Power in its affidavit dated 14 th December, 2011 submitted a copy of theReview petition filed by the Appellant on 12 th June, 2009. This review petitionwas filed before the State Commission by the Chief Engineer (PSP) on behalf ofthe Appellant Electricity Board. The Appellant has mentioned in Para 1 of thisreview petition that “ a copy of the Tariff order dated 30 th March, 2009 wasdelivered in the office of Chief Engineer (PSP) on 13 th April, 2009 though receivedon in the Board office on or before 6 th April, 2009. After receiving the Tarifforder, the same was examined in the office of Chief Engineer (PSP), a wing ofthe Petitioner”. These facts would clearly reveal that the claim of the AppellantElectricity Board about non-receipt of information and closure of office of ChiefEngineer (PSP) is factually incorrect.13. We have considered the submissions of both the parties on these issues. It isnoticed that the Respondent Hydro Power through the Affidavit specifically statedthat during the Proceedings in the MYT application for the control period from2008 – 11, the copies of all the miscellaneous documents were supplied to theAppellant when the same were filed before the State Commission. In fact, alongwith the original application, 09 additional copies were duly filed before the StateCommission. On the basis of the averments made in the said application, the interestfor Financial year 2003-04 to 2007- 08 and debt restructuring were approved by theState Commission. On perusal of the impugned order dated 30 th March, 2009, it isclear that the State Commission has referred to the complete details provided in theapplication. On the basis of the information furnished by the Respondent HydroPower, the interest and debt restructuring expenses have been approved.14. If actually the Appellant was aggrieved over the alleged non supply of documentsto the Appellant, the Appellant could have filed necessary application before theCommission for giving a direction to the Respondent Hydro Company to furnishthe copies. As a matter of fact, this issue was never raised before the Commission.Therefore, this contention relating to the alleged non supply of documents cannotbe accepted especially in the light of the affidavit filed by the Respondent Hydro Power0939ENERGY LAW REPORTS SEPTEMBER, 201221

0940Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]before this Tribunal to the effect that all the documents have been furnished to theAppellant in time. As a matter of fact, as pointed out by the learned Senior Counselfor the Hydro Power, the State Commission has categorically observed in its orderdated 23 rd June, 2010 that no error was pointed out by the Appellant on the documentssubmitted by the Respondent Hydro Power before the State Commission. The relevantobservations are as follows:The Commission has trued up interest cost for Financial Year 2003-04 toFinancial Year 2007-08 and cost of debt restructuring based on the analysis ofthe documents submitted by JHPL. As the Board is not able to point out anyerror in the Commission’s approved figures, the Commission retains the same15. Only in the Second Review Petition filed by the Electricity Board on 4 th November,2009, the Appellant Electricity Board raised the issue for the first time about the nonsupply of the necessary documents. The Respondent Hydro Power filed a reply on18 th November, 2009 to the said new ground taken by the Appellant in the Secondreview petition. In reply, the Respondent Hydro Power categorically denied andstated that all the documents were submitted to the Appellant simultaneously at thefiling of the same with the State Commission. The said reply filed by the RespondentHydro Power is as follows:5 (xi) & (xii) The Respondent respectfully submits that copies of all theMiscellaneous Application (MA’s) had been supplied to HPSEB simultaneousto filing with Hon’ble Commission. Moreover the Hon’ble Commission in theMYT order dated 30 th March, 2009 has covered complete details from MA’sfiled by Respondent, based on which interest and debt restructuring expenseshave been approved. As such, the Respondent respectfully submits that thereis no merit in these grounds for consideration by the Hon’ble Commission.16. Therefore, there is no merit in the ground urged by the Appellant relating toTruing up of cost as well as Amortization of cost of debt restructuring. Accordingly,the same is rejected.17. Let us deal with the issues third and fourth together. The third issue is Incentivefor Higher Plant Availability. In respect of this issue, the Appellant Electricity Boardhas made the following submissions:(a) The State Commission has computed the incentive on higher plant availabilityto the tune of Rs. 9.10 Crore and Rs. 9.20 Crores on 95.65 per cent and 98.83per cent plant availability considering the deemed availability as 90 per centfor the period 19 th January, 2006 to 2 nd May, 2006. During the period from 19 thJanuary, 2006 to 2 nd May, 2006, the Plant was not in operation. Therefore, noincentive on account of higher plant availability could be granted to RespondentHydro Power on the basis of the deemed plant availability. Hence the plantavailability shall have to be considered as zero for the purpose of determinationof incentive on account of higher plant availability in terms of Article 17.5 (f)of the PPA.(b) In view of the above, the plant availability during the Financial Year 2005-06has to be taken as 77.89 per cent and during the Financial Year 2006-07, thesame has to be taken as 91.01 per cent considering 0 per cent availabilityduring force majeure period for the purpose of payment of incentive on accountof higher plant availability.(c) Without prejudice to the above, it is to be stated that as per Clause 8.10 ofthe PPA, the amount of incentive payable for any Tariff year shall not exceedabcdefghi22ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghiHP State Electricity Board, Shimla v. HP Electricity Regulatory Commission and Anr.(M. Karpaga Vinayagam, J. (Chairperson))2 per cent of the Return on Equity. Therefore, the State Commission shouldhave restricted the amount of incentive on account of Higher Plant Availabilityto Rs. 1.63 Crores instead of allowing a sum of Rs. 9.20 Crores for the FinancialYear 2006-07.18. The fourth issue is related to Infirm Energy. In respect of this issue followingsubmissions have been made by the Appellant.(a) The Respondent Hydro Power supplied 8.08160 MUs of the saleable infirmenergy prior to commercial operation date of the Project. As per Clause 8.2 ofthe PPA, the saleable infirm Energy charges paid to the Respondent HydroPower are to be reduced from the Capital cost of the project.(b) The capital cost of the project has a cumulative prospective effect on theTariff of the project till the life of the project.(c) In terms of the clause 8.2 of the PPA, it was incumbent upon the RespondentHydro Power to raise the bill for infirm saleable energy on the Electricity Boardin the same manner as they are raising the bills for energy sold to the ElectricityBoard after commercial operation date.(d) Knowing fully well that in terms of Clause 8.2 of the PPA, the energycharges of infirm saleable energy before commercial operation date was to bereduced from the capital cost, the Respondent Hydro Power deliberately hadnot raised the bills which had resulted in financial losses to the ElectricityBoard. The contention of the Respondent Hydro Power that this issue hasalready been decided in Appeal No. 120 of 2008 by this Tribunal cannot beaccepted since the said decision requires reconsideration in view of the factthat there was no discussion arrived in this Judgment with regard to infirmenergy.19. In respect of these issues third and fourth, the reply made by the learned SeniorCounsel for Respondent Hydro Power is as follows:(a) In respect of the issue namely Determination of incentive for higher plantavailability in violation of Clause 8.10 of the PPA as well as the issue relatingto the cost of the infirm energy, this Tribunal has already adjudicated in AppealNo. 120 of 2008 on 21 st July, 2009 and decided as against the Appellant.Admittedly, the Appellant did not file any Appeal against the said Judgmentof Appeal No. 120 of 2008 and hence, the issues decided by this Tribunal hadattained finality and therefore, the said issues cannot be raised again.20. We have considered these submissions. As pointed out by the learnedSenior Counsel for the Respondent in respect of these issues i.e. Higher PlantAvailability and Infirm Energy, the Tribunal in the earlier Proceedings in AppealNo. 120 of 2008 decided in the Judgment dated 21 st July, 2009 as against the ElectricityBoard. It is not disputed that, no further Appeal was filed against the said decision.21. Let us now refer to the relevant portion of the findings in the said Judgment ofthis Tribunal in respect of these issues:(b) Incentive on Higher Plant Availability:Incentive in Paragraph 5.10 of the impugned order the Commission hasdealt with incentive for higher plant availability. The Commission hererecalls Clause 8.10 of the PPA. In case the plant availability exceeds anormative level of 90 per cent the Respondent No. 2 is entitled to incentive@ 0.35 per cent of equity component of the capital cost as per approved0941ENERGY LAW REPORTS SEPTEMBER, 201223

0942Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]financial package for each percentage increases in the plant availabilityabove 90 per cent normative level during the year when the plantavailability is more than 90 per cent. The Clause also says that the amountof this incentive payable for any Tariff year shall not exceed 2 per centROE for a Tariff year. The contention of the Appellant is that theCommission has interpreted 2 per cent Return on Equity in the samemanner it has interpreted 10 per cent Return on Equity in determiningsecondary energy rates. The Interpretation of the Appellant is incorrectas found above. The Appellant’s challenge to the Commission’s impugnedorders, relating to incentive on higher plant availability, therefore, hasalso to fail.(c) Incentive on higher plant availability during the FY 2005-06 and 2006-07when admittedly the plant was out of operation during the period 19 th January,2006 to 2 nd May, 200612. In its review order, the Commission considered the plea of the Appellantthat during the period of 19 th January, 2006 to 2 nd May, 2006, the plantwas not in operation and therefore, no incentive on account of higherplant availability could be granted to the Appellant. Paragraph 4.8 of theReview order deals with the issue. In Paragraph 4.8.1 the Commissionhas set out the plea of the Board regarding the Plant remaining out ofoperation during 19 th January, 2006 to 2 nd May, 2006. The Commissionsays that a committee was constituted for determining whether in operationof the plant was due to force majeure event. Commission expressed thefollowing view:The Commission would take a view on the Board’s contention once thesaid committee decides on the non-functioning of Baspa-II power Plantw.e.f. 19 th January, 2006 to 2 nd May, 2006. The Board will submit thereport of the committee for consideration of the Commission by30 th June, 2008.13. The Respondent No. 2 submits that the said committee has held theinoperation as a force majeure event. The Respondent No. 2 also contendsthat the deemed plant availability on account of force majeure has to beconsidered at 90 per cent and that higher plant availability for the FY 2005-06and 2006-07 has been allowed by the Commission as per the provisionsof the PPA. Therefore, the plea of the Appellant that higher plantavailability has been wrongly calculated is incorrect.14. The Other Issues(d)….(e)…(f) Cost of Infirm EnergyThe Respondent No. 2 has admittedly not raised any bill for infirm energy.Accordingly, dealing with this issue need not arise.22. As indicated above, no further Appeal was filed by the Electricity Board. Hencethis finding has attained finality. The learned Counsel for the Appellant ElectricityBoard submits that this Judgment requires reconsideration as there has been nodiscussions whatsoever with regard to infirm energy and as such the observationsof the Tribunal are ‘per-incurium’. The learned Counsel for the Appellant has submittedabcdefghi24ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghithat ‘per-incurium’ decisions are the decisions given in ignorance or in forgetfulnessof some statutory provisions or Authority binding on the Court concerned, or astatement of law caused by inadvertence or conclusion that has been arrived atwithout application of mind or proceeded without any reason so that in such a casesome step in the reasoning on which it is based, is found on that account to bedemonstrably wrong.23. In view of the submission made by the Appellant that the findings of this Tribunalin regard to infirm energy was without discussion and so it was ‘per-incurium’, weare duty bound to relook in to the merits of the claim of the Appellant ElectricityBoard on this aspect.24. The case of the Appellant Electricity Board rests on the interpretation of Article8.2 of the PPA. According to the Appellant Electricity Board it was incumbent onthe part of the Respondent Hydro Power to raise the bills for infirm saleable energysold to the Appellant Electricity Board in accordance with Article 8.2 of PPA. It isfurther contended that though the Respondent had full knowledge that the energycharges for infirm saleable energy before Commercial Operation Date was to bereduced from the Capital Cost which in turn would have impact on the Tariff, ithad preferred not to raise the bills for such infirm energy.25. Let us examine the relevant provisions of the PPA. Article 10 of the PPA dealswith Billing and Payment and Article 8 of the PPA deals with Sale and purchase ofthe Energy. Clause 10.1 deals with monthly bills & Clause 8.2 of the PPA deals withinfirm energy. These clauses are quoted below:ARTICLE 10BILLING AND PAYMENT 10.1 MONTHLY BILLSThe Company shall prepare bills in triplicate in accordance with the jointlysigned statement referred to in Section 9.20 and furnish one copy of the samealong with jointly signed meter readings as per Section 9.4 and jointly signedstatement to each of the following, on or after each billing date commencingwith the first billing date following the COD of unit No. 1. …Article 8SALE AND PURCHASE OF THE ENERGY…..HP State Electricity Board, Shimla v. HP Electricity Regulatory Commission and Anr.(M. Karpaga Vinayagam, J. (Chairperson))8.2 Infirm energyThe saleable portion of the energy generated by each unit of the project fromdate of synchronization of the unit with the grid to the commercial operationdate of that unit shall be paid for by the Board to the Company at overall perunit rate applicable for the initial period. This overall per unit rate shall bearrived at after taking into consideration the capacity charges, the primarycharges and saleable design energy for initial Tariff period. Pendingdetermination of this per unit rate, the payment shall be made on provisionalbasis at the Bulk supply Tariff of the Board. The Adjustment shall be doneafter CoD of the project. The capital cost shall however be reduced by anamount equal to the value of the saleable infirm energy on the above basis.26. Bare reading of the above clauses would reveal that while it was incumbent onthe part of the Respondent Hydro Power to prepare bills for sale of energy after CoDas per Clause 10.1, the Board was duty bound to make payment of infirm energy at0943ENERGY LAW REPORTS SEPTEMBER, 201225

0944Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]Bulk supply rate of the Board pending determination of Tariff for initial period inaccordance with Clause 8.2 of the PPA. The Respondent Hydro Power would notknow the Bulk supply rate of the Appellant Board to raise the bills for the infirmpower. Thus, it was the Appellant Board who failed to make the payment for infirmenergy at its Bulk supply rate and get the reduction in capital cost of the project.Since no payment was made by the Appellant Electricity Board towards the infirmenergy, there was no reduction in the capital cost.27. The Appellant Electricity Board has stated in its Rejoinder Affidavit dated26 th April, 2011 that in the earlier Judgment given by this Tribunal (in Appeal No.120 of 2008) this aspect was not considered since the Appellant had not submittedthe cost benefit analysis. Thus, the Appellant has admitted through affidavit dated26 th April, 2011 that it did not submit the requisite details to the Tribunal for properanalysis in earlier appeal. Clearly, the Appellant himself was at fault on two counts,(1) firstly, by not making payment for infirm energy at Bulk supply rate as perClause 8.2 of the PPA and (2) secondly, by not supplying cost benefit analysisbefore this Tribunal in its earlier Appeal No. 120 of 2008. Despite this, the Appellanthas chosen to claim that the Judgment of this Tribunal in Appeal No. 120 of 2008was ‘per-incurium’. This approach on the part of the Appellant is to be deprecated.28. As such, there is no merit in the contention urged by the Electricity Board onboth these issues. Accordingly, the same is rejected.29. The 5 th issue is payment of Interest on Arrears as per the provision of theArticle 10.11 of the PPA.30. This issue is common in both the Appeals in No. 178 of 2010 and Appeal No. 9of 2011.31. M/s Jai Prakash Hydro Power Limited has filed the Comprehensive Appeal No.178 of 2010 assailing the correctness of the MYT Tariff order dated 30 th March, 2009,the order dated 10 th September, 2009 passed in the Review Petition and the orderdated 23 rd June, 2010 passed in the Clarificatory Petition.32. The issue which Respondent Hydro Power has raised in this Appeal is aboutthe applicability of the rate of interest which Respondent Hydro Power is entitledon its outstanding amount as per the Article 10.11 of the PPA which is quoted asunder:10.11 In case the Board does not make the payment of any bill within the duedate of payment, the outstanding amount of such bill shall bear interest accruedfor the number of days between the due date of payment and actual date ofpayment at a rate equal to the rate being charged from time to time by StateBank of India for 90 days unsecured loans to commercial borrowers plus three(3) per cent per annum plus interest tax subject to the provisions contained inSection 10.18.33. On this issue, the Appellant Electricity Board has made the following submissions:(a) The Payment of Interest on Arrears as per Article 10.11 of the PPA hasbeen claimed by Respondent Hydro Power only in the second Review Petitionwhich was disposed of on 23 rd June, 2010. In this order, the State Commissionhas specifically held that review of the review is not maintainable. Eventhen, the State Commission has invoked the provision of Section 152 of theCPC to give direction for payment of interest on arrears. This order is wrongabcdefghi26ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghiHP State Electricity Board, Shimla v. HP Electricity Regulatory Commission and Anr.(M. Karpaga Vinayagam, J. (Chairperson))because what can not be done directly cannot be permitted to be doneindirectly. The correction of the order on merits by allowing the claim whichhad been earlier impliedly rejected, is not permissible in exercise of the powersunder Section 152 of the CPC.(b) Interest is payable only on the outstanding amount. Article 10.1 requiredthe Respondent Hydro Power to raise the bills at Tariff calculated as per Article 8of PPA. The Respondent Hydro Power had been raising the bills calculatedtaking in to account the project cost of Rs. 1550 Cr agreed to by the parties inthe Supplementary Agreement dated 26 th February, 2003. This agreement hadbeen set aside by the State Commission as void by its order dated 6 th September,2003. Consequently, the bills raised by the Respondent Hydro Power alsobecame null and void. Since there were no bills raised by the RespondentHydro Power, question of arrears would not arise.(c) The State Commission in its order dated 23 rd June, 2010 has specificallydirected the Electricity Board to pay the entire arrears by 30 th September, 2010holding that the interest payable on arrears by the Board till 30 th September, 2010will be allowed as a pass through in the ARR of the Board. In view of theabove time bound directions, the Appellant had no other option but, to makeinterest of payment amount in order to avoid any further liability. The paymentof the said amount will not take away the right of the Appellant to questionthe validity of the said directions.34. In respect of this issue, the reply made by the learned Senior Counsel for RespondentHydro Power is as follows:(a) With regard to the issue regarding direction for payment of arrears, in fact,the Appellant has already paid the entire arrears of Rs. 87.25 Crores toRespondent Hydro Power by 30 th September, 2010 in compliance of theCommission’s order dated 26 th March, 2010 and as such, raising the issue atthis stage has no relevance as financial obligations of the Appellant has alreadybeen discharged.(b) It is not correct to state that the issue regarding rate of interest as perArticle 10.11 of PPA was raised for the first time in the second review petition.This issue had been raised by the Respondent Hydro Power in its petitionfiled earlier for review of State Commission’s first Tariff order dated24 th February, 2007. The State Commission had recognized the same in its revieworder dated 7 th February, 2008 wherein the State Commission had observedthat in regard to the provisions of Article 10.11 of the PPA, necessary adjustmentsshall be made during processing of the subsequent petition along with necessaryadjustments in the arrears payable.35. We have given our anxious consideration to these rival submissions. Admittedly,the State Commission passed MYT order dated 30 th March, 2009 without makingadjustments towards rate of interest on arrears as indicated by the State Commissionin the review order dated, passed earlier by the State Commission on 7 th February, 2008by allowing the carrying cost @ 8 per cent per annum. Therefore, the Jai PrakashHydro Power Limited was constrained to file the Review Petition on this point. TheState Commission disposed of the said Review through the order dated10 th September, 2009. Though the State Commission recomputed the arrears payableby the Board, it did not revise the rate of interest and kept it @ 8 per cent per annum.Therefore, the Appellant again filed the application for u/s 152 of the Code of Civil0945ENERGY LAW REPORTS SEPTEMBER, 201227

0946Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]Procedure read with Regulation 63 of HPERC (Conduct of Business) Regulation2005, which was disposed of by the impugned order dated 23 rd June, 2010. In thisorder the State Commission directed for the payment of interest at SBI long termPLR from 1 st November, 2009 onwards till the payment of the arrears is made. TheState Commission did not change the interest rate for the earlier period i.e. from thedate of Commissioning till 31 st October, 2009 in which period, the payment hadbeen made only @ 8 per cent per annum. Hence, Respondent Hydro Power feelingaggrieved over this order dated 23 rd June, 2010 wherein the State Commissiondisregarded the terms of the PPA i.e Article 10.11 of the PPA which provides forpayment of interest on arrears at the rate equal to SBI PLR of 90 days unsecuredloan to commercial borrowers plus 3 per cent per annum and allowed interest@ 8 per cent per annum only from the date of Commissioning of the project till31 st October, 2009 and @ 11.5 per cent per annum thereafter, till the payment of arrears,has filed this present Appeal No. 178 of 2010.36. As mentioned earlier, the very same impugned order has been challenged inAppeal No. 9 of 2011 by the Appellant Electricity Board on the ground that orderpassed by the State Commission dated 23 rd June, 2010 providing relief to RespondentHydro Power in the Second Review is wrong. According to the Appellant ElectricityBoard, the said order was passed modifying the earlier order in second reviewpetition even though the review of review is not maintainable under Section 94(i) ofthe Electricity Act. It is further pointed out that Section 152 of the CPC can beinvoked only for correction of clerical and administrative mistakes and the samecannot be invoked to modify the order earlier passed. With regard to this Legalposition, the learned Counsel for the Appellant Electricity Board has cited the followingauthorities:(a) UPSRTC v. Imtiaz Hussain 1 (2006) 1 SCC 380(b) State of Punjab v. Darshan Singh 2 (2004) 1 SCC 328(c) Dwarka Das v. State of M.P. 3 (1999) 3 SCC 500(d) K Rajamouli v. A.V.K.N. Swamy 4 (2001) 5 SCC 3737. In the light of the above rival contentions, we have to consider the followingquestion “whether the State Commission is justified in enhancing the rate of intereston arrears from 8 per cent to 11.5 per cent as provided under Article 10.11 of thePPA in the second Review?”abcdefg1 Ed.: MANU/SC/2406/2005: AIR 2006 SC 649: 2006 1 AWC (Supp) 414 SC: (2006) 2CALLT 72 (SC): 2006 (108) FLR 950: JT 2005 (10) SC 496: (2006) ILLJ 714 SC: (2006) SCC (Land S) 246: (2006) 1 UPLBEC 8512 Ed.: MANU/SC/0843/2003: AIR 2003 SC 4179: (SC Suppl) 2004 (2) CHN 102: 2003 (4)CTC 442: 2004 (1) JCR 38 (SC): JT 2005 (11) SC 285: 2004 1 LW 618: 2004 (2) MhLJ 565: 2004(2) MhLJ 565 (SC): (2004) 1 MLJ 61 (SC): 2004 MPLJ 302 (SC): 2003 (9) SCALE 35: (2003)Supp 4 SCR 1042: 2004 (86) SLJ 78 (SC): 2004 (1) UJ 3773 Ed.: MANU/SC/0088/1999: AIR 1999 SC 1031: 1999 (1) CTC 635: 1999 (2) JLJ 83 (SC): JT1999 (1) SC 375: 1999 3 LW 367: 1999 (1) OLR 388: 1999 (I) OLR (SC) 388: (1999) 121 PLR820: 1999 (1) SCALE 376: (1999) 1 SCR 524: 1999 (2) UJ 8954 Ed.: MANU/SC/0341/2001: AIR 2001 SC 2316: 2001 (3) ALLMR (SC) 788: 2001 (2) ArbLR702 (SC): (2001) 3 CompLJ 144 (SC): JT 2001 (Supp l1) SC 168: 2001 3 LW 13: 2001 (3) PLJR32: 2001 (4) SCALE 212: (2001) 3 SCR 473: 2001 (2) UC 117hi28ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghiHP State Electricity Board, Shimla v. HP Electricity Regulatory Commission and Anr.(M. Karpaga Vinayagam, J. (Chairperson))38. According to Respondent Hydro Power it is entitled for interest at SBI 90 daysunsecured loan (short term PLR) plus 3 per cent for outstanding amount. However,the State Commission while admitting that the arrears were accumulated and werepayable by the Board, had only allowed interest at the rate of 8 per cent per annumonly from Commercial Operation Date till 31 st October, 2009 and at rate of 11.5 per centfor the period 1 st November, 2009 to date of payment of arrears. This decision of theState Commission is not in consonance with Article 10.11 of the PPA which providefor rate of interest at SBI 90 days unsecured loan (short term PLR) plus 3 per centper annum.39. On the other hand, the Appellant Electricity Board has opposed this claimcontending that the interest is payable only at the outstanding amount;Article 10.1 requires the Respondent Hydro Power to raise the bills at Tariff calculatedas per Article 8 of the PPA, the Respondent Hydro Power had been raising the billscalculated taking into account the project cost of Rs. 1550 Crores agreed to by theparties in the Supplementary Agreement dated, 26 th February, 2003 but, this Agreementhad been set aside by the State Commission as void by its order dated 6 th September,2003 and consequently the bills raised by the Respondent Hydro Power becomenull and void and therefore, the question of arrears would not arise.40. In the light of the above submissions, let us see the background to understandthe issue in the proper prospective.41. M/s Jai Prakash Hydro Power Limited (Hydro Power) a Generating Companyentered into an Implementation Agreement on 1 st October, 1992 with the Governmentof Himachal Pradesh for setting up Baspa-II Hydro Electric Project on river Baspa,a tributary of river Sutlej in Himachal Pradesh.42. Pursuant to the said Implementation Agreement dated 1 st October, 1992 a PowerPurchase Agreement (PPA) was executed between the Respondent Hydro Powerand the Appellant Electricity Board on 4 th June, 1997.43. A supplementary Agreement between Respondent Hydro Power and the AppellantElectricity Board was executed on 26 th February, 2003 agreeing to the cost of theproject at Rs. 1550 Crores for the purpose of Tariff and Payment mechanism of saleof power to the Appellant Electricity Board.44. The first unit of Baspa-II Hydro Electric Project was Commissioned on24 th May, 2003. The second unit was Commissioned on 29 th May, 2003. The thirdunit was Commissioned on 8 th June, 2003.45. On 7 th July, 2003 the Respondent Hydro Power submitted first bill for sale ofpower to the Board after CoD as per provisions of PPA based on the agreed cost ofproject of Rs. 1550 Crores.46. On 19 th July, 2003 the State Commission issued directions to the Appellant ElectricityBoard for payment of revenue realized from sale of power received from the projectto the Respondent Hydro Power till the Tariff is approved by the Commission.47. On 6 th September, 2003 the State Commission set aside the SupplementaryAgreement dated, 26 th February, 2003 and directed the Appellant Electricity Boardto continue to make payment of revenue realized from sale of power of the project tothe Respondent Hydro Power till the approval of the Tariff by the Commission. Therelevant portions of the State Commission’s order dated 6 th September, 2003 is quotedas under:0947ENERGY LAW REPORTS SEPTEMBER, 201229

0948Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]14.1 On the basis of discussion in the foregoing, cumulative consideration ofaforesaid provisions of the law and for the reasons assigned, all the issuesframed in Para 5 are decided against the Respondents. It is abundantly clearthat the Respondents Board and the Company acted beyond their jurisdictionin utter disregard to the provisions of 1998 Act by signing and the Boardapproving the impugned Supplementary Agreement. Such approval by theBoard is unsustainable in law. The Supplementary Agreement dated28 th February, 2003 is herewith held void ab initio, non est and inoperativeand/ordered as such.……Directions of the Commission……4. Until the approval of the Commission as at (3) above, the Respondent Boardshall continue to pay to the Company the revenue realised from sale of energyfrom Baspa Stage II Project as per the Interim order of 19 th July, 2003.48. Thus, the State Commission had directed the Appellant Electricity Board to payrevenue realized from sale of power from the project to the Respondent Hydro Power.To implement these directions following steps would be required to be taken:• Power received from project would be sold by the Board to its consumersor in case HP is surplus in power to other licensees outside the state:• Revenue to be collected from the consumers or other licensees for suchsale of power by the Board:• Revenue thus, collected to be paid to the Respondent Hydro Power49. In order to finalise the arrangement for implementation this direction of theState Commission, the parties held a meeting on 3 rd April, 2004 and decided asunder:(i) The present arrangement of payment for the summer months viz., April toOctober, when energy delivered by M/S JHPL is by and large sold outside theState, shall continue and the revenue realized by the Board on account of suchsale of power after accounting for wheeling charges and transmission lossesshall be passed on to the Company(ii) During the winter month viz., November to March, when energy deliveredby JHPL is used with in the State, the average sale rate of power within theState as arrived at on the basis approved date (sic rate) for the previous year,shall be adopted for releasing the payment to the Company during such wintermonths.50. From the above it is clear that the Respondent Hydro Power would not know inadvance the rate at which its power is likely to be sold outside the State. As such itwould not be able to raise bills in accordance with the Article 8 of the PPA. Inactual terms, the above direction of the Commission’s has suspended the operationof Article 10.11 of the PPA till the Commission decides the Tariff.51. Admittedly the Respondent Hydro Power was entitled for payment for sale ofpower from its project as per the provisions of the PPA. It was entitled for paymentat Tariff calculated as per Article 8 of PPA. Article 8 of PPA detailed the methodologyand parameters for determination of Tariff. Close examination of the PPA and inparticular Article 8 would reveal that approval of the State Commission for fixingabcdefghi30ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghiHP State Electricity Board, Shimla v. HP Electricity Regulatory Commission and Anr.(M. Karpaga Vinayagam, J. (Chairperson))the Tariff was not required and understandably so. PPA was executed in June 1997i.e. before the enactment of Electricity Regulatory Commissions Act 1998 and ElectricityAct 2003. As such PPA did not contain the requirement of the approval of the StateCommission. Himachal Pradesh Electricity Regulatory Commission was establishedin the Year 2001 under Electricity Regulatory Commission Act, 1998 as a singlemember Commission. After enactment of Electricity Regulatory Commission Act, 1998,the capital cost and the Tariff was required to be approved by the State Commission.The State Commission in its order dated 6 th September, 2003 did not set aside thePPA. It had only set aside the Supplementary Agreement fixing the cost of project atRs. 1550 Crores. It did not question the validity of Article 8 or Article 10.11 of thePPA. In fact, whole of PPA was kept intact. The sole impact of the Commission’sdirective was, as mentioned above, that the Article 10.11 of PPA would not beoperative till the Commission approves the capital cost and the Tariff for the project.52. The Respondent Hydro Power filed a petition before the Commission on21 st November, 2005 for approval of the Cost of the project fixing Tariff for sale ofpower from the project to the Board for the period from CoD to FY 2007-08.53. The State Commission passed an order dated 24 th February, 2007 approving thecost of the project at Rs. 1534 Cr for the purpose of Tariff as against agreed cost ofRs. 1550 Cr in supplementary Agreement. In this order the State Commission hastaken the cognizance of the arrears to be paid by the Board to the RespondentHydro Power and also allowed interest on such arrears at 8 per cent per annum ascarrying cost. The portion of the order related to arrears and interest thereon isreproduced below for ready reference:(5.15) Arrears payable by HPSEB for the period FY 2003- 04 to FY 2005-06(5.15.1) Based on the various components of the Annual Fixed Charges (AFC)approved in this chapter in the above heads for the period FY 2003-04 to FY2005-06, the Commission has taken note of the considerable variation betweenthe payments made by the Board to the applicant for each of these years andpayments due for payment by the Board.5.15.2 Variation between the AFC approved for the year by the Commission inthis order as summarized in succeeding para 5.16 and the payment made byHPSEB for each of these years is indicated in the table below:Rs. CroresDescription 2003-04 2004-05 2005-06Annual Fixed Charges 271.66 306.61 329.74Payments made by HPSEB, excluding rebate 200.22 252.23 269.58Difference 71.44 54.38 60.165.15.3 This amounts to a total of Rs. 186 crores. Similar reconciliation wouldbe required for the period FY 2006-07 as well once the actual data on generationis available for the period.5.15.4 Similar to the approach followed by the Commission in para 5.12 above,the Commission has provided recovery of the principal amount of the expenditureincurred along with the carrying cost at 8 per cent upto FY 2006-07 for recoveryover a period of seven years starting from FY 2007-08. The computations areindicated in the table below:0949ENERGY LAW REPORTS SEPTEMBER, 201231

0950Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]Description Unit 2003-04 2004-05 2005-06 2006-07Opening balance Rs. Cr. 0 74.30 136.81 210.32Additions Rs. Cr. 71.4 54.4 60.2 0.0Payments Rs. Cr. 0.00 0.00 0.00 0.00Closingbalance base amount Rs. Cr. 71.44 128.69 196.97 210.32Interest rate % 8% 8% 8% 8%Interest Rs. Cr. 2.86 8.12 13.35 16.83Closing balance of payment Rs. Cr. 74.30 136.81 210.32 227.15(5.15.5) The closing balance of payment for FY 2006-07 of Rs. 227.15 would needto be paid to JHPL by HPSEB through a recovery mechanism over seven yearsstarting FY 2007-08. This translates to an amount of Rs. 32.45 crores per year.This amount would be further adjusted based on the actual generation data availablefor the period FY 2006-07. Considering that the arrear amount is significant andcould considerably distort future Tariffs of the project if this amount is allowedfor recovery from future Tariffs, the Commission has decided to compensate theapplicant for this amount outside the Tariff mechanism of the project.(5.15.6) HPSEB would pay this amount to the applicant in equal monthlyinstallments to the applicant from FY 2007-08 onwards, along with the billsdue for payment as per Tariffs under this order. Subsequently, HPSEB wouldinclude this amount for approval of the Commission along with payment details,as a separate item of expenditure in its yearly Aggregate Revenue Requirementfor the corresponding year for determination of retail Tariffs.54. By this order, the State Commission had not only recognised the admissibility ofthe arrears, but, also permitted interest on such arrears at 8 per cent as carryingcost. Thus, the State Commission had realized that the Respondent Hydro Powerwas entitled for certain Annual Fixed Charges (AFC) as per the PPA and it had notbeen getting the same. Accordingly the Respondent Hydro Power was entitled forthe carrying cost of the differential amount (arrears).55. It is important to note that the Appellant Electricity Board did not challenge theadmissibility of arrears in its review Petition No. 94 of 2007 before the State Commission.56. The first Tariff order of the State Commission dated 24 th February, 2007 was challengedby the Appellant before this Tribunal in Appeal No. 120 of 2008 and the issue relatedto admissibility of arrears was not raised by the Appellant in this Appeal No. 120 of2008. In this Appeal the Appellant Electricity Board had, in fact, accepted an amountof Rs. 227.15 Crores as arrears including interest as determined by the State Commissionfor the period up to FY 2006-07. For verification, we have gone through the originalpleadings contained in the Appeal Paper Book in Appeal No. 120/2008, the Appellanthad challenged only the directions of the Commission given in review order dated7 th February, 2008 reducing the number of instalments from seven to two only. Thesubmissions made by the Appellant in Appeal No. 120 of 2008 is reproduced below:R. Because the learned Commission failed to appreciate that in the impugnedorder dated 24 th February, 2007, the Learned Commission had permitted theAppellant to repay the outstaying balance for Financial Year 2006-07 ofRs. 227.15 crores in instalments of Rs. 32.45 crores per year for next years.However, without even considering the burden the amount would out on theAppellant, the Learned Commission Vide order dated 7 th February, 2008 inReview Petition directed the Appellant to pay the whole amount of arrears inthe Financial year 2008-09 in two instalments. It is respectfully submitted thatabcdefghi32ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghiHP State Electricity Board, Shimla v. HP Electricity Regulatory Commission and Anr.(M. Karpaga Vinayagam, J. (Chairperson))this payment of arrears in financial year 2008-09 puts unnecessary burden onthe State Exchequre and the payments would be made by the Appellant inequal instalments for next seven years.57. The above pleadings would indicate that the liability was not questioned. Havingaccepted its liability to pay the arrears including interest as worked out by theCommission in its order dated 24 th February, 2007, the Appellant Electricity Boardcannot now question the admissibility of arrears and interest thereon.58. Again the Appellant Electricity Board did not challenge the admissibility ofarrears in its objections on MYT petition of the Respondent Hydro Power for controlperiod 2009-11 filed before the State Commission. In fact the Appellant had objectedto the quantum of arrears claimed by the Respondent in MYT petition for 2009-11.Further it did not make any objection on the interest payable determined by theState Commission in its Tariff order dated 7 th February, 2008.59. Thus, the issue of admissibility of arrears and interest for delayed payment hasattained finality and as such, the same cannot be permitted to be raised again.60. The question of interest on arrears raised by the Respondent Hydro Power in itssecond review petition before the State Commission has been dealt with at length bythe State Commission. Relevant portion of the State Commission’s findings in theimpugned order dated 23 rd June, 2010 is quoted below:Interest on Arrears(2.41) In the second review petition filed by the JHPL, JHPL has claimed intereston arrears in accordance with the Clause 10.11 of the PPA.(2.42) Though in terms of Section 94(1) of the Act, review of review is notmaintainable, yet the Commission has the power under Section 152 of theCPC to clarify the position for meeting the ends of justice.(2.43) Clause 10.11 of the PPA, reads as under:In case the Board does not make the payment of any bill within the duedate of payment, the outstanding amount of such bill shall bear interestaccrued for the number of days between the due date of payment andactual date of payment at a rate equal to the rate being charged from timeto time by State Bank of India for 90 days unsecured loans to commercialborrowers plus three(3) per cent per annum plus interest tax subject tothe provisions contained in Section 10.16.(2.44) Clause 2.2.43 of the PPA defines due date of payment, which reads asunder-Due Date of Payment means with respect to any bill, the date by whichthe amount of such bill is required to be paid. This date shall:-(a) in case of any monthly bill for any billing month, be 30 daysfrom the billing date or from the date of presentation of the bill tothe Bankers/designated officer of the Board, whichever is later.(b) in case of any supplementary or any other bill, be 35 days fromthe date of presentation of bill to the designated officer of the Boardor of the Company, as the case may be.(2.45) Interest is a natural corollary of any delayed payment. Sometimes differentinterest rates are prescribed so as to differentiate between normal orcompensatory rate of interest and a panel rate of the interest. Para 8 of Punjab0951ENERGY LAW REPORTS SEPTEMBER, 201233

0952Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]High Court decision rendered in case of CIT v. Shyam Lal Narula AIR 1963 Pb411 reads as under:8. The words “interest” and “compensation” are sometimes usedinterchangeably and on other occasions they have distinct connotation.“Interest” in general terms is the return or compensation for the use orretention by one person of a sum of money belonging to or owned toanother. In its narrow sense “interest” is understood to mean the amount,which one has contracted to pay for use of borrowed money. In whatevercategory “interest” in a particular case may be put, it is a considerationpaid either for the use of money or for forbearance in demanding it, afterit has fallen due, and thus, it is a charge for use or forbearance of money.In this sense, it is compensation allowed by law or fixed by parties, orpermitted by custom or usage, for use of money, belonging to another, orfor the delay in paying money after it, has become payable.(2.46) This decision of the Punjab & Haryana. High Court, has been approvedby the Supreme Court in Central Bank of India v. Ravindre & Ors 5 (2002) SCC367 and the decision of the Supreme Court has been followed by the AppellateTribunal for Electricity in Appeal No. 15 of 2007, decided on 5 th February,2008 - Maharashtra State Elecy. Distt. Co. Ltd. Bandra (East) Mumbai v. MaharashtraElectricity Regulatory Commission, Mumbai 6 2008 ELR (APTEL) 110.(2.47) In view of the above quoted decisions, the interest is basically intendedto compensate the party who was entitled for payment of amount due. Thereis no reason why the Board should not pay interest from the date paymentbecomes due. In this regard there appears no ambiguity in the provisions ofClause 10.11, read with Clause 2.2.43, of the PPA.(2.48) From the above, it is clear that interest as per Clause 10.11 is applicableonly for arrears on account of bills raised by the JHPL. JHPL can raise billsonly as per the Tariff/recovery schedule approved by the Commission. The8 per cent rate of interest, mentioned in the tables showing the computation ofarrears, is de facto the carrying cost allowed by the Commission.61. Thus, the State Commission in the impugned order dated 23 rd June, 2010 hasclarified that it had allowed carrying cost for delay in payment of accumulatedarrears. Question is now limited to carrying cost i.e. at what rate the State Commissionshould have allowed the carrying cost? The State Commission has adopted a carryingcost at 8 per cent in accordance with approach adopted by the Commission inPara 5.12. of the Tariff order dated 24 th February, 2007. Para 5.12 of this order dealtwith the payment of certain principle amount to be paid. We feel that this approachof the State Commission is not correct.62. We are of the opinion that the interest rate prescribed in Article 10.11 has twocomponents viz. compensatory component as SBI short term PLR and Penal componentas plus 3 per cent. Having accepted that the Respondent Hydro Power is required tobe compensated for loss of revenue it had suffered due to delay in payment, the StateCommission should have allowed carrying cost at compensatory component of Article10.11 of PPA i.e. at SBI short term PLR (as per Article 10.11 of PPA minus 3 per cent5 Ed.: MANU/SC/0663/2001: AIR 2001 SC 3095: 2002 (50) BLJR 207: 2002 Civil CC 364:(2001) 107 CompCas 416 (SC): JT 2001 (9) SC 101: 2002 (1) KLT 743 (SC): 2002 1 LW 683:(2002) 1 MLJ 109 (SC): RLW 2002 (2) SC 241: 2001 (7) SCALE 3516 Ed.: MANU/ET/0009/2008abcdefghi34ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghiHP State Electricity Board, Shimla v. HP Electricity Regulatory Commission and Anr.(M. Karpaga Vinayagam, J. (Chairperson))penalty rate). Since Article 10.11 of PPA was (apparently) under suspension by virtueof the Commission’s order dated 6 th September, 2003, Board could not be held at faultfor delay in making payment and directed to pay interest at penal rate of plus 3 per cent.Simultaneously, the Respondent Hydro Power would also be required to be compensatedfor the loss it had suffered due to delay in full payment. Therefore, the RespondentHydro Power was entitled for carrying cost at SBI short term PLR only. Penal rate ofArticle 10.11 at SBI PLR plus 3 per cent per annum would not be justified. This wouldapply to the accumulated arrears up to 2006-07 only.63. The State Commission issued first Tariff order in February 2007 for FY 2007-08.After issuance of this Tariff order, Article 10.11 of PPA would become fully operationaland interest rate as per this article i.e. interest at SBI short term PLR plus 3 per centwould be payable to the Respondent Hydro Power.64. It is true that the order passed by the State Commission in the Review of theReview order allowing the interest as per Article 10.11 of the PPA for the portion ofthe period is not Legally valid since Section 152 of the CPC which has been invokedby passing this order cannot be used to modify the effect of the earlier order. This issettled law laid down by this Tribunal as well as the Hon’ble Supreme Court. However,Respondent Hydro Power, the Appellant in Appeal No. 178 of 2010 has claimed thathe filed the Appeal comprehensively, challenging all the three orders i.e. (1) the impugnedorder dated 30 th March, 2009 (2) the review order dated 10 th September, 2009 and (3)the second review order dated 23 rd June, 2010 and has deposited three Court feesaccordingly. Therefore, all the orders namely 30 th March, 2009, 10 th September, 2009and 23 rd June, 2010 are subject matters of these Appeals.65. Hence we are empowered to go into the Legality of the other impugned orderspassed by the Commission in the order 30 th March, 2009 and 10 th September, 2009even assuming that the last order passed in Clarificatory Petition Review on23 rd June, 2010 is nonest in view of the fact that review of the order of the revieworder is not permissible under law.66. We have already concluded that the first Tariff order passed by the StateCommission in February, 2007 for the FY 2007-08 and after issuance of this Tarifforder, Article 10.11 of the PPA would become fully operational. Once Article 10.11comes into play, we have to hold that the interest rate as per this Article would bepayable to the Respondent Hydro Power. Therefore, the impugned order relating tothis issue is set-aside. The matter is remanded to the State Commission forredetermining the interest rate as per this Article in the light of our observationmade above and pass the consequential orders accordingly.67. Before parting with this case, we are constrained to refer to one more aspectrelating to the conduct of the Appellant Electricity Board, firstly, on account ofmisrepresentation regarding the non-supply of relevant documents by the RespondentHydro Power and secondly on account of the unfair plea raised by the ElectricityBoard that the Judgment of this Tribunal in Appeal No. 120 of 2008 was per-incurium.68. In this context, we would like to refer to some of the observations made byHon’ble Supreme Court in a number of authorities to the effect that the statutoryauthorities are expected to show remorse or regret when their officers act negligently.The Hon’ble Supreme Court has laid down the following principles:a. It is high time that Government and public authorities adopt the practice ofnot relying upon technical pleas for the purpose of defeating legitimate claimsof citizens and do what is fair and just to the citizens.0953ENERGY LAW REPORTS SEPTEMBER, 201235

0954Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]b. Statutory authorities exist to discharge statutory functions in public interest.They should be responsible litigants. They cannot raise frivolous and unjustobjections, nor act in a callous and high handed manner. They cannot behavelike some private litigants with profiteering motives. Nor can they resort tounjust enrichment.c. It must be remembered that the State is not an ordinary party trying to wina case against some of its own citizens by hook or by crook. The interest of theState is to meet honest claims and never to score a technical point or overreacha weaker party to avoid a just liability and secure an unfair advantage.69. We are constrained to remind the Appellant that above guidelines have not beenfollowed by the Appellant in this case for the best reasons known to it. Therefore,we are compelled to record our “displeasure” over the conduct of the Appellant.Though we thought of imposing heavy costs on the Appellant due to their improperconduct, we refrain from doing so, since we hope that the Appellant at least infuture would not commit such mistakes.70. Summary of Our Findings:(i) In respect of the issue relating to the Truing up of Interest cost and Amortization ofcost of Debt Restructuring, we hold the contention of the Electricity Board that thecopies of the requisite documents/information furnished to the State Commission werenot supplied by the Jai Prakash Hydro Power Limited is factually incorrect. Thematerials available on record would clearly show that those documents were suppliedto the Electricity Board.(ii) In respect of the issues namely Incentive for Higher Plant Availability and Cost ofInfirm Energy, this Tribunal in Appeal No. 120 of 2008 had already decided asagainst the Electricity Board. Admittedly, the findings in that Appeal have not beenchallenged in the Appeal filed by the Board. In view of the above, the judgmentrendered in Appeal No. 120 of 2008 has attained finality. Even otherwise the claimon these issues has no merit.(iii) Since the Article 10.11 of PPA was (apparently) under suspension by virtue of theCommission’s order dated 6 th September, 2003, Board could not be held at fault fordelay in making payment and it can not be directed to pay the interest at penal rate ofplus 3 per cent. Simultaneously, the Respondent Hydro Power would also be required tobe compensated for the loss it had suffered due to delay in making full payment. Therefore,the Respondent Hydro Power was entitled for carrying cost at SBI short term PLR only.Penal rate of article 10.11 at SBI PLR plus 3 per cent per annum would not be justified.This would apply to the accumulated arrears up to 2006-07 only. After issuance of firstTariff order in February 2007, Article 10.11 of PPA would become fully operationaland interest rate as per this article i.e SBI short term PLR plus 3 per cent per annumwould be payable to the Respondent Hydro Power.71. In view of the above findings, we do not find any merit in Appeal No. 9 of 2011filed by the Himachal Pradesh Electricity Board. Therefore, the same is dismissed.We find merit in the grounds raised in the Appeal No. 178 of 2010 filed by JaiPrakash Hydro Power Limited. Therefore, the said Appeal No. 178 of 2010 is allowed.72. Accordingly, we direct the State Commission to pass consequential orders interms of the findings rendered by this Tribunal as referred to above.73. However, there is no order as to costs.abcdefghi36ENERGY LAW REPORTS SEPTEMBER, 2012

0955ab2012 ELR (APTEL) 0955*BEFORE THE APPELLATE TRIBUNAL FOR ELECTRICITY, NEW DELHI(APPELLATE JURISDICTION)NTPC Limited, New Delhiv.Central Electricity Regulatory Commission, New Delhiand GRIDCO Limited, OrissaAPPEAL NO. 88 OF 2007DECIDED ON: 19.04.2012cdefghiCoramM. Karpaga Vinayagam, J. (Chairperson) and Rakesh Nath, Member (Technical)CounselFor Appellant/Petitioner/Plaintiff: M.G. Ramachandran, Swapna Seshadri andAnand K. Ganesan, Advs.For Respondents/Defendant: R.K. Mehta, Antaryama Upadhyay, Mragank Sharma,Shobhit Jain, Suman Kukrety, David A., Advs. and B. Sree Kumar, AC(L), CERCCases referredDelhi Electricity Regulatory Commission v. BSES Yamuna Power Limited and Ors. MANU/SC/7117/2007: (2007) 3 SCC 33: 2007 (5) ALT 6 (SC): JT 2007 (8) SC 409: 2007 (3)SCALE 289: (2007) 2 SCR 747 (Relied On) [p. 0957, para 7 e]NTPC v. CERC and Ors. MANU/ET/0077/2009: 2009 ELR (APTEL) 705 (Affirmed)[p. 0960, para 12 d]NTPC Limited v. CERC and Ors. MANU/ET/0089/2011: 2011 ELR (APTEL) 931(Affirmed) [p. 0960, para 23 f]NTPC Limited v. CERC and Ors. MANU/ET/0014/2011: 2011 ELR (APTEL) 224(Affirmed) [p. 0959, para 23 c]NTPC Limited v. CERC and Ors. MANU/ET/0088/2011: 2011 ELR (APTEL) 924(Affirmed) [p. 0956, para 23 g]NTPC Limited v. CERC and Ors. MANU/ET/0089/2011: 2011 ELR (APTEL) 930(Affirmed) [p. 0960, para 23 f]NTPC Limited v. CERC and Ors. MANU/ET/0091/2011: 2011 ELR (APTEL) 937(Affirmed) [p. 0960, para 23 f]NTPC Limited v. CERC and Ors. MANU/ET/0092/2011: 2011 ELR (APTEL) 941(Affirmed) [p. 0960, para 23 f]NTPC Limited v. CERC and Ors. MANU/ET/0110/2011: 2011 ELR (APTEL) 1241(Affirmed) [p. 0960, para 23 f]Sri Chamundi Mopeds Ltd. v. Church of South India Trust Association Madras MANU/SC/0501/1992: (1992) 3 SCC 1: AIR 1992 SC 1439: (1992) 75 CompCas 440 (SC):(1992) 2 CompLJ 121 (SC): JT 1992 (3) SC 98: 1992 2 LW 10: 1992 2 LW 10: 1992(1) SCALE 947: (1992) 2 SCR 999: 1992 (2) UJ 257 (Discussed)[p. 0961, para 25 a]Acts/Rules/RegulationsCERC Regulations, Clause 18 [p. 0956, para 9 g]* MANU/ET/0076/2012ENERGY LAW REPORTS SEPTEMBER, 201237

0956Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]ISSUES AND FINDINGSWhether Central Commission was justified in not allowing alleged loss on accountof de-capitalisation of assets as part of O&M expenditure?Held, NTPC had made huge profits on account of Talcher Station as pointed out byCentral Commission. Therefore, plea of Appellant for further relaxation on the groundthat plant was old one and outlived its useful life was not tenable. Benefits ofRenovation and Modernisation such as earning from relaxed operational norms,additional UI charges and incentive etc. had been achieved but, even then same hadnot been passed on to the beneficiary consumers. As per the policy of CentralCommission, any loss or profit arising out of de-capitalised assets is to be borne/retained by Appellant. Central Commission was justified in not allowing allegedloss on account of de-capitalisation of assets as part of O&M expenditure.Whether Depreciation can be considered for deemed repayment of loan?Whether costof maintenance spares limited to 1 per cent of the historical cost would cover thecost of spares for maintenance of additional equipment?Held, Tribunal in Appeal No. 139 and 140 of 2006 decided this issue holding thatdepreciation is an expense and therefore it cannot be considered for deemed repaymentof loan. Since, depreciation is an expense it represents a decline in value of assetsbecause of use, wear or obsolescence. Tribunal in Appeal No. 139 and 140 of 2006decided in favour of Appellant holding that under Clause 18 of the CERC Regulations,additional capitalisation after date of commercial operation is recognised as part ofcapital expenditure and cost of additional equipment is not included in historicalcost. Cost of maintenance spares limited to 1 per cent of the historical cost wouldnot cover the cost of spares for the maintenance of the additional equipment. Issuerelating to Non-Consideration of Normative Transit Loss for coal received throughRailway System has also been covered by Tribunal’s Judgment in favour of Appellant.Whether Depreciation upto 90 per cent can be allowed?Held, this issue also has been considered by this Tribunal holding that, depreciationcannot be denied forever and directed Central Commission to allow unpaid portionof depreciation (upto 90 per cent) after the plant has lived its designated useful life.Issue relating to computation of Interest on loan has been decided by Tribunal rejectingAppellant’s contention by giving valid reasons. Issue relating to interest on loan inTariff due to de-capitalisation of certain assets has been held by this Tribunal holdingthat, cumulative repayment of loan proportionate to the assets de-capitalised is requiredto be reduced and directed the Central Commission to act accordingly.abcdefgJUDGMENTM. Karpaga Vinayagam, J. (Chairperson)1. NTPC Limited is the Appellant. The Central Commission is the First Respondent.GRIDCO Limited is the Second Respondent.2. The Appellant has filed this Appeal as against the impugned order dated23 rd March, 2007 passed by the Central Commission which relates to the Tariff of TalcherThermal Power Station which is a dedicated station from which the entire power issupplied to the State of Odisha. Since some of the claims have been disallowed by theCentral Commission, the Appellant has filed this Appeal raising the following issues:hi38ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghi(a) Treating Depreciation available as Deemed Loan Repayment(b) Cost of Maintenance Spares(c) Non-consideration of Normative Transit Loss for coal received throughRailway System(d) Admissibility of Depreciation upto 90 per cent(e) Computation of Interest on loan(f) Loss on account of de-capitalisation of assets- its impact on allowable O&MExpenditure for the period 2004-2009(g) Depreciation(h) Non recovery of full depreciation and interest on loan in Tariff due tode-capitalisation of certain assets.3. According to the Appellant some of the issues referred to above, have been dealt bythis Tribunal and allowed those issues in favour of the Appellant and the said decisionhas been followed by this Tribunal in several other subsequent decisions and therefore,a similar order may be passed in respect of those issues in this Appeal as well.4. We have heard the learned Counsel for the Appellant as well as the learnedCounsel for the Respondent on these issues.5. The first issue is Treating Depreciation available as Deemed Loan Repayment.6. This issue has been decided by this Tribunal in Appeal No. 139 and 140 of 2006dated 13 th June, 2007. In this decision this Tribunal held that the Depreciation is anexpense and therefore it cannot be considered for deemed repayment of loan andtherefore, the Central Commission shall make a fresh computation of outstandingloan. Since the depreciation is an expense it represents a decline in the value ofassets because of use, wear or obsolescence.7. On this point, the Hon’ble Supreme Court has also given a finding to this effect in(2007) 3 SCC 33 DERC v. BSES Yamuna Power Limited & Others. 1 As such, this issuehas been covered in the earlier Judgment and decided in favour of the Appellant.This is not disputed.8. The Second Issue is Cost of Maintenance Spares.9. This issue has also been dealt by this Tribunal in Appeal No. 139 and 140 of2006 decided on 13 th June, 2007 in favour of the Appellant. In this decision, it hasbeen held by this Tribunal that under Clause 18 of the CERC Regulations, theadditional capitalisation after the date of commercial operation is recognised aspart of the capital expenditure and the cost of the additional equipment is notincluded in the historical cost. The cost of maintenance spares limited to 1 per centof the historical cost would not cover the cost of spares for the maintenance of theadditional equipment. Therefore, the Central Commission shall examine afresh andpass necessary Orders. Thus, this point also has been covered by the Judgmentdated 13 th June, 2007 in favour of the Appellant.10. The third Issue is Non-Consideration of Normative Transit Loss for coal receivedthrough Railway System.09571Ed.: MANU/SC/7117/2007: 2007 (5) ALT 6 (SC): JT 2007 (8) SC 409: 2007 (3) SCALE 289:(2007) 2 SCR 747NTPC Limited, New Delhi v. CERC, New Delhi and Anr.(M. Karpaga Vinayagam, J. (Chairperson))ENERGY LAW REPORTS SEPTEMBER, 201239

0958Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]11. It is pointed out by the Appellant that this issue has also been covered in thevery same Judgment dated 13 th June, 2007 in favour of the Appellant. In this Judgment,the Tribunal directed the Central Commission to pass necessary consequential Orderswhile deciding this issue in favour of the Appellant. Thus, this point also has beencovered by the above Judgment.12. The fourth Issue is Admissibility of Depreciation upto 90 per cent.13. As pointed out by the Appellant, this issue also has been considered by thisTribunal in the very same Judgment dated 13 th June, 2007. In this decision, theTribunal held that the depreciation cannot be denied forever and directed the CentralCommission to allow the unpaid portion of the depreciation (upto 90 per cent) afterthe plant has lived its designated useful life. Thus, this issue also has been decidedby this Tribunal in favour of the Appellant in the above Judgment.14. The fifth issue is Computation of Interest on loan.15. In respect of this issue, as fairly admitted by the learned Counsel for the Appellantthat this Tribunal in the Judgment in Appeal No. 14 of 2009 dated 8 th December, 2011has rejected the contention on this issue urged by the Appellant by giving validreasons. Thus, this issue has been decided by this Tribunal as against the Appellant.Therefore, the same has to be followed in this Appeal also.16. The sixth issue is Loss on account of de-capitalisation of assets- its impact onallowable O&M Expenditure for the period 2004-2009.17. This issue is a new issue which has to be considered afresh. We will considerthis issue after giving our finding on other issues.18. The seventh issue is Depreciation.19. In respect of this issue, the Appellant submitted that in view of the order passedby the Central Commission in the Review Petition dated 5 th September, 2008 and3 rd February, 2009, the Appellant is not pressing this issue. Therefore, nor orderneed be passed on this issue.20. The last issue, namely 8 th Issue is Non Recovery of full depreciation and intereston loan in Tariff due to de-capitalisation of certain assets.21. In respect of the issue of non recovery of full depreciation, the first party, theAppellant is not pressing the point. However, he presses the second part of theissue i.e. interest on loan in Tariff due to de-capitalisation of certain assets. It issubmitted that this issue stands covered by the Judgment dated 13 th June, 2007 bythis Tribunal in Appeal No. 139 of 2007. In this Judgment it has been held by thisTribunal that the cumulative repayment of loan proportionate to the assets decapitalisedis required to be reduced and directed the Central Commission to actaccordingly. Therefore, the second part of the issue No. 8 is also being decided infavour of the Appellant.22. Though these issues have been dealt with by this Tribunal and decided infavour of the Appellant as indicated above, the learned Counsel for the Respondentssubmit that as against the said Judgment rendered by the Tribunal; the CentralCommission filed civil Appeal No. 5434 to 5452 of 2007 before the Hon’ble SupremeCourt and while passing interim orders the learned Senior Counsel appearing forthe Appellant NTPC before the Hon’ble Supreme Court gave an undertaking thatthey would not press the issues (a), (b), (d) and (h) (ii) and on this basis, the Hon’bleabcdefghi40ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghNTPC Limited, New Delhi v. CERC, New Delhi and Anr.(M. Karpaga Vinayagam, J. (Chairperson))Supreme Court while passing interim Order, recorded this undertaking and observedthat the said undertaking shall apply to other cases as well. In the light of the saidundertaking, it is submitted by the learned Counsel for the Respondents that theAppellant cannot raise these issues namely (a), (b), (d) and (h) (ii) in this Appeal tillthe disposal of the civil appeal pending before the Hon’ble Supreme Court.23. While dealing with similar Appeals, this Tribunal while passing final orders inthose Appeals, held that the pendency of the Appeal before the Hon’ble SupremeCourt or mere undertaking given by the Appellant that they would not press theseissues would not render the earlier decision of this Tribunal non-est and non effectiveand therefore, the Tribunal is empowered to hear the Appellant on these issues. Wehave made those observations in the Judgments rendered in various Appeals. Inthose decisions, we relied upon Sri Chamundui Mopeds Ltd. v. Church of South IndiaTrust Association Madras in 1992 (3) SSC 1. The details of our Judgments containingthe relevant observations are given below:(a) NTPC Limited v. CERC & Ors. 2 2011 ELR (APTEL) 224 at 228(Judgment and order dated 4 th February, 2011 passed in Appeal No. 92 of2010)It is submitted by the learned Senior Counsel for the Central Commission thatthe Judgment rendered by this Tribunal, referred to above, had been appealedbefore the Hon’ble Supreme Court and the same is pending. In our view, thependency of the Appeal before the Supreme Court is not a ground to ignorethe orders of this Tribunal. As a matter of fact, the Hon’ble Supreme Court alsoin 2007 (3) SCC 33 3 has decided the issue of depreciation as mentioned above.Hence, this point is also answered in favour of the Appellant.(b) NTPC Limited v. CERC & Ors.(Judgment and order dated 19 th April, 2011 passed in Appeal No. 62 of 2010)It is submitted by the learned Counsel for the Respondent that in respect ofsome of the issues, namely, (a) consequences of refinancing of loan (b) treatingdepreciation available as deemed repayment of loan (c) cost of maintenance ofspares related to additional capitalisation (d) depreciation availability upto90 per cent in the event of disincentive and (e) impact of de-capitalisation ofassets on cumulative loan repayment, already an undertaking has been givenby the Appellant before the Hon’ble Supreme Court in civil Appeal No. 5634of 2007 to the effect that the issues would not be pressed for fresh determinationand therefore, now the learned Counsel cannot press these issues in this Appeal.(c) NTPC Limited v. CERC & Ors. 4 2011 ELR (APTEL) 924(Judgment and order dated 31 st May, 2011 passed in Appeal No. 168 of 2010)10. It is pointed out by the learned Counsel for the Respondent thatbecause Judgment of this Tribunal has been challenged in the Hon’bleSupreme Court and in that Proceedings, NTPC has given undertakingthat it will not press for some of the issues, including this issue beforethe Central Commission and, therefore, the issue cannot be pressed in0959i2 Ed.: MANU/ET/0014/20113 Ed.: Delhi Electricity Regulatory Commission v. BSES Yamuna Power Limited and Ors.MANU/SC/7117/2007: JT 2007 (8) SC 409: 2007 (3) SCALE 289: (2007) 2 SCR 7474 Ed.: MANU/ET/0088/2011ENERGY LAW REPORTS SEPTEMBER, 201241

0960Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]this Tribunal. But as pointed out by the learned Counsel for the Appellantthat mere pendency of the Appeal against the Judgment of this Tribunalin the Hon’ble Supreme Court and mere undertaking given by the NTPCas to not to implement the order of the Tribunal pending decision in thesecond appeal does not dilute the ratio of the decision of this Tribunalwhich is binding on the Central Commission.11. Therefore, the issue is also decided in terms of the decision renderedby this Tribunal as referred to above. Accordingly, this issue is decidedin favour of the Appellant.12. The third issue is the cost of maintenance spares. According to theAppellant, the Central Commission disallowed the cost of maintenancespares without considering the impact of additional capitalisation onthe maintenance spares to be considered for determination of workingcapital. This issue has also been decided in favour of the Appellant inthe following Judgments:(a) Judgment dated 13 th June, 2007 in Appeal No. 139 and 140;(b) Judgment dated 21 st August, 2009 in Appeal No. 54 and 74 of2009 NPTC v. CERC and Ors. 5 2009 ELR (APTEL) 70513. Despite the ratio decided by this Tribunal, the Central Commissionhas not followed the principle decided on 13 th June, 2007 and the similararguments were advanced by the Respondent for the Counsel regardingthe pendency of the Appeal before the Supreme Court.14. As indicated above, the mere pendency of the appeal against theJudgment of this Tribunal will not dilute the ratio of this Tribunal solong it is not set aside. Therefore, the issue is also allowed in terms of thesaid decision.Note: The above has been followed in the following four Judgments:(1) NTPC Limited v. CERC & Ors. 6 2011 ELR (APTEL) 930(2) NTPC Limited v. CERC & Ors 7 . 2011 ELR (APTEL) 931(3) NTPC Limited v. CERC & Ors. 8 2011 ELR (APTEL) 937(4) NTPC Limited v. CERC & Ors. 9 2011 ELR (APTEL) 941(d) NTPC Limited v. CERC & Ors. 10 2011 ELR (APTEL) 1241(Judgment and order dated 18 th July, 2011 passed in Appeal No. 64 of 2010)9. In regard to all the issues, we have heard the learned Counsel for theparties. The learned Counsel for the Appellant would submit that inrespect of the issues No. 1 to 6 this Tribunal already decided in favour ofthe Appellant and, therefore, a similar order may be passed. On the otherhand, it is submitted by the learned Counsel for the Respondent in respectof these issues already the Appeal has been filed before the Hon’bleSupreme Court which is pending and those issues cannot be pressed5 Ed.: MANU/ET/0077/20096 Ed.: MANU/ET/0089/20117 Ed.: MANU/ET/0089/20118 Ed.: MANU/ET/0091/20119 Ed.: MANU/ET/0092/201110 Ed.: MANU/ET/0110/2011abcdefghi42ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghNTPC Limited, New Delhi v. CERC, New Delhi and Anr.(M. Karpaga Vinayagam, J. (Chairperson))before the Tribunal in view of the undertaking given by the Appellantbefore the Hon’ble Supreme Court to the effect that above issues wouldnot be pressed for fresh determination.10. On the other hand, the learned Counsel for the Appellant wouldbring to our notice the Judgment of Hon’ble Supreme Court in SreeChamundi Mopeds Ltd. v. Church of South India Trust Association Madras 11(1992) 3 SCC 1 in which it has been held that mere undertaking given bythe parties and even on the stay of the order of this Tribunal in theearlier case do not render the decision of this Tribunal non-est or noneffectiveand the decision would continue to operate as a binding precedenttill the decision is set aside in the second appeal by the Supreme Court.11. The learned Counsel for the Appellant cited the Judgment of thisTribunal in Appeal No. 92 of 2010 dated 4 th February, 2011 reported in2011 ELR (APTEL) 224 12 and contended that these issues have beenconsidered and the findings has been rendered in favour of the Appellanton the basis of the earlier Judgment of this Tribunal.12. We have gone through the Judgment of the Hon’ble Supreme Courtas well as the Judgment of this Tribunal reported in 2011 ELR (APTEL)224 and in the light of the view taken by us earlier, we are unable toaccept the contention urged by this Respondent. Therefore, this appeal isallowed in respect of above issues No. 1 to 6 in terms of the Judgmentreferred above.24. The above decisions would show that we have already taken a view on thestrength of the Sri Chamundi Mopeds Ltd. case.25. However, the learned Counsel for the Respondents distinguished the Judgmentof Hon’ble Supreme Court in Sri Chamundi Mopeds Ltd. v. Church of South India TrustAssociation Madras 13 reported in 1992 (3) SCC 1 contending that the said Judgmentwould not apply to the present facts of the case and as such the Appellant cannotbe allowed to violate its own undertaking before the Hon’ble Supreme Court inview of the fact some effect has to be given to the interim order dated 10 th December,2007 passed by the Hon’ble Supreme Court.26. We are unable to accept this contention as we have considered the very sameobjection in other Appeals and rejected the said contention by giving our own reasonsas mentioned above. Hence we are not inclined to take a different view from theearlier view taken by us in the other Judgments.27. Therefore, all the issues which have already been decided namely (a), (b), (c), (d)and (h) (ii) in favour of the Appellant are decided accordingly in this Appeal alsoas the same would apply to the present Appeal also. Therefore, the Central Commissionmay pass the consequential orders in terms of our finding on those issues.0961i11 Ed.: MANU/SC/0501/1992: AIR 1992 SC 1439: (1992) 75 CompCas 440 (SC): (1992) 2CompLJ 121 (SC): JT 1992 (3) SC 98: 1992 2 LW 10: 1992 2 LW 10: 1992 (1) SCALE 947:(1992) 2 SCR 999: 1992 (2) UJ 25712 Ed.: NTPC Limited v. CERC and Ors. MANU/ET/0014/201113 Ed.: MANU/SC/0501/1992: AIR 1992 SC 1439: (1992) 75 CompCas 440 (SC): (1992) 2CompLJ 121 (SC): JT 1992 (3) SC 98: 1992 2 LW 10: 1992 2 LW 10: 1992 (1) SCALE 947:(1992) 2 SCR 999: 1992 (2) UJ 257ENERGY LAW REPORTS SEPTEMBER, 201243

0962Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]28. As indicated above, in respect of issue No. (e), i.e. computation of Interest onloan we hold against this point rejecting the contention of the Appellant as we havealready decided in Appeal No. 14 of 2009 as against the Appellant.29. In respect of the Issue of Non Recovery of Full Depreciation, as mentioned earlier,the Appellant himself stated that he is not pressing this issue.30. So, only the fresh issue which has to be considered is issue No. (f) i.e. Loss onaccount of de-capitalisation of assets- its impact on allowable O&M Expenditure forthe period 2004-2009.31. According to the Appellant, the findings which have been given by the CentralCommission that any loss or profit arising out of the assets de-capitalised after theyhave been taken out of service is to be retained by the generating company is patentlywrong. The relevant finding is as follows:As regards the head others”, the Petitioner in its affidavit dated,22 nd December, 2006 has explained that the cost of certain fixed assets decapitalisationhas been included therein. However, as per the policy of theCommission, any loss or profit arising out of assets de-capitalised after theyhave been taken out of service is to be retained by the generating company.Accordingly, an amount of Rs. 245.89 lac, Rs. 263.27 lac and Rs. 490.08 lachave been disallowed in the year 2000-01, 2001-02 and 2002-03.32. It is pointed out by the Appellant that when the Appellant took over the TalcherStation from the erstwhile Orissa Electricity Board it had almost outlived its usefullife and consequently, the Appellant had to incur substantial expenditure onRenovation and Modernisation of the Talcher Station and the process the Appellanthad incurred substantial loss on the de-capitalisation of the assets of the TalcherStation and therefore, the loss incurred by the Appellant on the de-capitalisation ofassets during the process of Renovation and Modernisation of the Talcher Stationshould be allowed to be recovered through the Tariff as part of the operation andmodernisation expenditure.33. On the other hand, the learned Counsel for the Respondent submits that theCentral Commission has rightly disallowed the said amount for the year 2001-02and 2002-03 respectively considering its policy that any loss or profit arising out ofthe assets de-capitalised after they have been take of service would be retained bythe generating company.34. We have carefully considered these submissions made by the Counsel for theparties.35. According to Learned Counsel for the Respondent, as per the pre-conditions ofR&M, the benefits under Renovation and Modernisation have to be shared betweenthe beneficiary and the Generator. As a matter of fact, the NTPC has made hugeprofits on account of the Talcher Station as pointed out by the Central Commission.Therefore, the plea of the Appellant for further relaxation on the ground that theplant is old one and outlived its useful life is not tenable. Though, Ministry ofPower guidelines envisaged that Renovation and Modernisation period shall notexceed 30 months, it has become a long term process in the Talchar Power Stationsince 1995. As a matter of fact, the benefits of Renovation and Modernisation suchas earning from relaxed operational norms, additional UI charges and incentive etc.have been achieved but, even then the same had not been passed on to the beneficiaryconsumers.abcdefghi44ENERGY LAW REPORTS SEPTEMBER, 2012

abcdThe Chairman and Ors. v. Madras Cements Ltd. and Anr.(M. Karpaga Vinayagam, J. (Chairperson))36. The Central Commission while rejecting the Review Petition filed by the Appellantby its order dated 28 th September, 2007 has observed that once the assets are takenout of service, they do not form part of the capital base for any purpose and the costof the new assets placed in lieu of the assets de-capitalised form the capital basewhich entitles the Petitioner for a return.37. Further, as per the policy of the Central Commission, any loss or profit arisingout of the de-capitalised assets is to be borne/retained by the Appellant. That beingthe practice consistently followed by the Central Commission, we do not want tointerfere with the same. There is also no Regulation on this aspect favouring thecontention raised by the Appellant.38. Therefore, we are of the view that the Central Commission is fully justified innot allowing the alleged loss on account of de-capitalisation of assets as part of theO&M expenditure.39. In the light of our above findings we allow the Appeal only in respect of some ofthe issues indicated above and reject the other issues.40. Thus, the Appeal is partly allowed. The Central Commission is directed to passconsequential orders in terms of the above finding after hearing the parties.41. However, there is no order as to costs.0963ef2012 ELR (APTEL) 0963*BEFORE THE APPELLATE TRIBUNAL FOR ELECTRICITY, NEW DELHI(APPELLATE JURISDICTION)The Chairman, The Member (Distribution), Chennaiand The Superintending Engineer (PEDC), Perambalurv.Madras Cements Ltd. and Tamil Nadu ElectricityRegulatory Commission, ChennaiAPPEAL NO. 8 OF 2012DECIDED ON: 19.04.2012ghiCoramM. Karpaga Vinayagam, J. (Chairperson) and Rakesh Nath, Member (Technical)CounselFor Appellant/Petitioner/Plaintiff: S. Vallinayagam, Adv.For Respondents/Defendant: T.S. Murthy, Mukti Chaudhary, Advs. for R-1, RahulBalaji, Senthil Jagadeesan and Krishna Dev, Advs.Case referredBihar State Electricity Board and Anr v. UMI Special Steel Limited MANU/SC/0677/2000: JT 2000 (Suppl 3) SC 68: 2001 (1) PLJR 61: 2000 (7) SCALE 371: (2000) 8 SCC561: (2000) 8 SCC 561: 2001 (1) UC 122: 2001 (1) UJ 313: (2000) 8 SCC 560 (Discussed)[p. 0971, para 23 c]* MANU/ET/0077/2012ENERGY LAW REPORTS SEPTEMBER, 201245

0964Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]Acts/Rules/RegulationsTamil Nadu Electricity Commission Intra State Open access Regulations, 2005Regulation 6 [p. 0967, para 10 e]Regulation 12 [p. 0968, para 11 a]Regulation 12(h) [p. 0968, para 4 c]Regulation 13 [p. 0967, para 10 d]ISSUES AND FINDINGSWhether the State Commission has the jurisdiction to declare an Agreement enteredinto between the Appellant and M/s. Madras Cements Limited as terminated contraryto the terms of the said Agreement ?Held, there are Regulations framed by State Commission, which empowers theCommission to invoke the inherent powers of Commission to make such orders asmay be necessary to meet the ends of justice. They also provide that the Regulationsalready available shall not bar the State Commission from adopting any otherprocedure which is at variance with any of the provisions of these Regulations.State Commission had correctly utilised its inherent powers to decide the matterregarding termination of wheeling arrangement to Ariyalur unit of Respondent No. 1.There was no infirmity in findings of State Commission that, no compensation waspayable by Respondent No. 1 to Appellant consequent of termination of wheelingarrangement requested by Respondent No. 1.Whether the State Commission could declare the wheeling agreement as terminatedin a petition under Section 12(h) of the Open Access Regulations 2005 which dealswith the Long Term Open Access customer after treating the Madras Cements Limitedas a Short Term Open Access customer relying on the period of the Agreement mentionedin the Energy Wheeling Agreement?Held, reading of Clause 6 of Tamil Nadu Electricity Commission Intra State Openaccess Regulations, 2005, in its entirety makes it clear that any customer who wouldbe availing intra state Open Access for a period of more than one year or less thanfive years shall be a Short Term Open Access customer. Respondent No. 1 has to betreated as Short Term Open Access customer in terms of Intra-State Open AccessRegulations, 2005 in spite of Energy Wheeling Agreement entered into betweenAppellant and the Respondent No. 1 being for a period of three years and in spite ofits having deposited the registration fee and agreement fee applicable for Long TermOpen Access customer at the time of seeking the Open Access. Request of theRespondent No. 1 for termination of wheeling arrangement from its generating plantto its unit at Ariyalur will be governed by Clause 13(h) of the Intra-State OpenAccess Regulations applicable to Short Term Open Access customers.JUDGMENTM. Karpaga Vinayagam, J. (Chairperson)1. The Appellants are Chairman and the Officials of the Tamil Nadu ElectricityBoard. M/s. Madras Cements Limited Chennai is the First Respondent. Tamil NaduState Commission is the Second Respondent.2. The Appeal has been filed by the Appellant challenging the order dated2 nd March, 2011 passed by the State Commission directing the Appellant to terminateabcdefghi46ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghithe Energy Wheeling Agreement entered into between the Appellant Electricity Boardand Madras Cement Limited, the First Respondent in respect of wheeling of electricityfrom its generating plant to its unit at Ariyalur.3. The short facts are as follows:The Chairman and Ors. v. Madras Cements Ltd. and Anr.(M. Karpaga Vinayagam, J. (Chairperson))(a) M/s. Madras Cement Limited, the First Respondent has its cement factoryat Alathiyur Works in Ariyalur District.(b) The First Respondent established a coal based thermal power plant with acapacity of 36 MW (2 x 18 MW) for its own consumption.(c) M/s. Madras Cements Limited applied for Appellant’s approval for paralleloperation of their generators.(d) The Appellant after examining the request made by M/s. Madras CementsLimited granted the approval for parallel operation of 2 x 18 MW generatorswith the Appellant’s Grid through letter dated 15 th March, 2005.(e) In addition to that, M/s. Madras Cements Limited, the First Respondentapplied for a Long Term Open Access under the provisions of the Intra StateOpen Access Regulations, 2005. Accordingly the Appellant issued approvalfor Long Term Open Access for Wheeling of 6 MW of power from the 2 x 18MW Coal based power Plant at Alathiyur works of Perambalur ElectricityDistribution Circle.(f) Under the above wheeling approval, 01 MW of power was wheeled toM/s. Madras Cements Limited plant at RR Nagar of Virdhunagar ElectricityDistribution Circle and 5 MW of power was wheeled to its plant at Ariyalur.(g) Thereupon, the Madras Cements Limited entered into an Energy WheelingAgreement with the Appellant on 7 th March, 2009 for wheeling energy to it’splants. The said Agreement provided for wheeling of 1 MW of power toRR Nagar of Virudhunagar and 5 mw of power to Ariyalur factory. It furtherprovided for payment of certain charges pertaining to the cost of the interfacingCPP with Appellant’s grid and other charges.(h) Accordingly, M/s. Madras Cements Limited (R-1) made payment of chargesto the Appellant.(i) In view of the relaxation in power grid and commissioning of a generatingset at their Ariyalur plant, the wheeling of 5 MW power to their Ariyalur Plantwas not required from 4 th June, 2009. Therefore, M/s. Madras Cements Limited(R-1) decided to withdraw wheeling of 5 MW power to its unit at Ariyalur.Accordingly, M/s. Madras Cements Factory(R-1) sent a letter on 27 th June, 2009to the Appellant seeking for termination of the Agreement in so far as it relatesto the wheeling of energy to the Ariyalur unit.(j) In reply to above request, the Appellant sent a letter dated 9 th July, 2009stating that their request to terminate the Energy Wheeling Agreement to AriyalurPlant is not feasible for compliance since the Agreement was for a period ofthree years from 7 th March, 2009 upto 6 th March, 2012. It further stated that theAgreement could be terminated only in the event of any breach on the part ofthe Appellant and hence M/s. Madras Cements Factory (R-1) will have to paythe transmission charges and scheduling system operation charges continuouslyevery month till the expiry of the Agreement whether the power is wheeled ornot to its Ariyalur unit.0965ENERGY LAW REPORTS SEPTEMBER, 201247

0966Energy Law Reports (ELR) [Vol. 2, Part 4, 2012](k) Aggrieved by the said letter dated 9 th July, 2009, M/s. Madras CementsLimited (R-1) filed a Petition before the State Commission seeking to set asidethe letter dated 9 th July, 2009 sent by the Appellant and praying for a directionto the Appellant to terminate the Wheeling Agreement of the First Respondent’s2 x 18 MW captive generating plant at Alathiyur to its unit at Ariyalur anddirecting the Appellant not to levy any further charges as per the EnergyWheeling Agreement in so far as it relates to Ariyalur Plant.(l) The State Commission, after entertaining the said Petition issued notice tothe Appellant and heard the parties.(m) Ultimately, the State Commission by the impugned order dated 2 nd March, 2011,directed the Appellant to terminate the Energy Wheeling Agreement in respectof the captive generating plant at Alathiyur to its unit at Ariyalur and set asidethe letter dated 9 th July, 2009 sent by the Appellant. Aggrieved by this order, theElectricity Board, the Appellant has filed this Appeal.4. The Appellant’s submissions are as follows:(a) The State Commission does not have the powers to declare EnergyWheeling Agreement entered into between the Appellant Electricity Boardand M/s. Madras Cements Limited as terminated.(b) The present case is covered by the Regulation 12(h) of the Tamil NaduElectricity Commission Intra State Open access Regulations 2005 which relatesto the Long Term Open Access Customers and it does not relate to the ShortTerm Open Access Customers. In the instant case, the first Respondent obtainedapproval for Long Term Open Access from the Appellant. Hence the StateCommission cannot invoke 13 (h) which relates to the Short Term Open Accesscustomers.5. In the elaboration of these points, the learned Counsel for the Appellant submitsthat M/s. Madras Cements Limited (R-1)entered into an Energy Wheeling Agreementdated 7 th March, 2009 with the Appellant for wheeling 6 MW Electricity through theAppellant’s network for three years from the date of the signing of the Agreementand this Agreement could not be terminated by the State Commission for the reasonnot contemplated under the Agreement and as per the order No. 2 dated 15 th May, 2006of the Regulatory Commission relating to the determination of the transmissioncharges and wheeling charges, M/s. Madras Cements Limited (R-1) is liable to paytransmission charges under the Open Access Regulations in addition to the wheelingcharges and so, the Regulatory Commission cannot declare the Agreement to beterminated. It is further stated by the Appellant that the State Commission could notcategorise M/s. Madras Cements Limited as Short Term Open Access customer whenM/s. Madras Cements Limited (R-1) applied and got the Long Term Open Accessapproval from the Appellant and that therefore, the impugned order is liable to beset aside.6. In reply to the above submissions, the learned Counsel appearing for the1 s Respondent stated that this issue has already been decided by this Tribunal asagainst the Appellant in the Judgment dated 1 st March, 2011 in Appeal No. 113 and115 of 2010 wherein identical facts and issues as in the present case were involvedand hence, this Appeal is liable to be dimissed.7. In the light of the above submissions, two questions would arise for theconsideration:abcdefghi48ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghiThe Chairman and Ors. v. Madras Cements Ltd. and Anr.(M. Karpaga Vinayagam, J. (Chairperson))8. The Appellant’s submissions are as follows:(a) Whether the State Commission has the jurisdiction to declare an Agreemententered into between the Appellant and M/s. Madras Cements Limited asterminated contrary to the terms of the said Agreement ?(b) Whether the State Commission could declare the wheeling agreement asterminated in a petition u/s 12(h) of the Open Access Regulations 2005 whichdeals with the Long Term Open Access customer after treating the MadrasCements Limited as a Short Term Open Access customer relying on the periodof the Agreement mentioned in the Energy Wheeling Agreement?9. We have carefully considered the submissions made by both the parties in thelight of the questions framed above.10. At the out set, it shall be stated that the present case is fully covered by theJudgment dated 1 st March, 2011 passed by this Tribunal in Appeal No. 113 and 115of 2010. In this Judgment, this Tribunal has confirmed the view taken by the StateCommission that a customer under three years’ agreement would be a Short TermOpen Access Customer and consequently Regulation 12(h) would not govern but, onthe contrary Regulation 13 would govern the said customer of the Agreement enteredinto with the parties. The relevant observations given by this Tribunal is as follows:“20. Anatomized, this provision creates two types of open access customers, namely,short term and long term. The short term open access customer is he who avails himselfor itself of intra state open access for a period of one year or less. When this period comesto the extent of five years or more, then that customer is called a long term intra stateopen access customer. In between the two customers, there is no other sub Clause for onewho enters into an intra state wheeling agreement for a period of more than one year andless than five years. There is Note 1 below the Regulation 6 which provides that theopen access applicants intending to be such for a period of less than five years and morethan a year shall be considered under short term open access only (emphasis ours) andshall be allowed at a time for a period not exceeding one year. It is not in dispute that inboth the cases agreement was for a period of three years and the provision in Note 1, ifapplied, both the agreements would come under a short term intra state open accesswheeling agreement. The argument of the learned Counsel for the Appellant that if itwas the intention of the Respondent No. 1 to enter into a short term agreement for aperiod of one year or less, then obviously the first Respondent would not have madedeposit of Rs. 50,000 towards wheeling charges; and more importantly the RespondentNo. 1 itself did not seek for any relief under Clause 13 (h); on the contrary it adhered toClauses (f) & (h) of Clause 12 of the agreement. We are unable to accept the submission.When the Regulation itself makes it clear that the agreements in question come under thecategory of intra state short term open access agreement, then it is immaterial what theparties had intended for. The law settled is that where the agreement contradicts the lawor is at variance with the latter, it is the latter that has to prevail and all disputes haveto be adjudicated upon in terms of the law so declared.There can be no quarrel to the Legal proposition that statutory rules and regulationshave the force of law; consequently, the agreements which are at variance with thedelegated legislation are unenforceable. Therefore, non-invoking of Cause 6 of the agreementor Clause 13 (h) of the agreement by the Respondent No. 1 or deposit of Rs. 50,000 ineach of the two is of no consequence. It was the submission of the Appellant that for ashort term customer it was not necessary for the first Respondent to go to the Commissionas SLDC was competent enough for the purpose. This is not a material consideration for0967ENERGY LAW REPORTS SEPTEMBER, 201249

0968Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]us. With reference to sub Clauses (c) and (e) of Clause 12 of the Regulations, 2005 it issubmitted that because it was a long term agreement the modalities in details wereworked out, namely, capacity needed, point of injection, point of drawal, duration ofavailing open access etc. etc. and the duty was cast on the nodal agencies to issuenecessary guidelines and to intimate the applicant whether the application should beallowed or not. Further, strengthening of the system was essential before approval of theintra state open access wheeling agreement and all these modalities are not required incase an applicant wants to be a short term open access customer. Since these procedureswere adopted in terms of Clause 12 which culminates in Clause (h), it is obvious that itwas a long term open access agreement. To our mind, this is begging the question. If thelaw does not require of the nodal agency to examine the strength of the system and gothrough the details of the procedure because of the applicant coming under the law as ashort term open access customer, then it cannot be said that merely because the proceduresdealt with in Clause 12 were gone through, the applicant would be as styled as longterm open access customer as it will be contrary to the position of law. Learned Counselfor the Appellant too much harps on sub Clause (h) of Clause 12 and compares it withsub Clause (h) of Clause 13 which we reproduce hereunder:Clause 12(h) of the Intra State open access regulation reads as follows:A long term open customer shall not relinquish or transfer his rights andobligations specified in the open access agreement without prior approval of theCommission. The relinquishment or transfer of rights and obligations shall besubject to payment of compensation as may be determined by the Commission.The Clause 13 (h) of the Intra State Open access regulation reads as follows:A short term open access customer who has surrendered the reserved capacity orwhose reserved capacity has been reduced or cancelled shall bear the fulltransmission or distribution charges as the case may be and the scheduling andsystem operating charges based on the original reserved capacity till such timeit is not utilized by the utility or allotted to any other open access customer andlimited to the period for which a capacity was reserved.21. If a customer is a short term open access customer as the first Respondent is, then,willy nilly, sub-Clause (h) of Clause 13 of the agreement has to be invoked. The partyor the Tribunal cannot alter the situation of the law. It is not for the Tribunal tocomment that the law is vague or unjust. It must not comment what the law should be.It is unable to say that the intention of the parties is so clear that the law has to takea back seat. In both the cases, the Commission found that the transfer point on transactionin each of the cases is the plant switch yard of the Respondent No. 1 at 33 KV and thetransaction between the first Respondent and the PTC takes place at the switch yard ofthe Appellant and re-sale by the PTC to the Appellant also takes place at the sameswitch yard. This is not in dispute.22. Accordingly, we do not find any material infirmity in the orders complained of.The Respondent No. 2 upon examination of the agreements vis-a-vis the Regulationscorrectly held that Clause 13 of the Regulations would apply to the Respondent No.1 in terms of the provision contained in Clause 6 thereof.23. Accordingly, we dismiss the Appeals without costs.”11. On going through the above Judgment, it is clear that it squarely applies to thepresent facts of the case. The Agreement in the present case is also one for the termof three years. Therefore, Madras Cements Limited (R-1) cannot be characterised asa Long Term Open Access customer. Merely because the Madras Cements Limitedabcdefghi50ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghiThe Chairman and Ors. v. Madras Cements Ltd. and Anr.(M. Karpaga Vinayagam, J. (Chairperson))(R-1) applied and got the approval for the Long Term Open access from the Appellant,it cannot be said Regulation 12 alone will govern since the term of the Agreemententered into between the Appellant and Madras Cements Limited is only for threeyears which is governed by Regulation 13 relating to Short Term Open Accesscustomer. Therefore, the Madras Cements Limited cannot be characterised as a LongTerm Open Access customer.12. The Short Term Open Access customer is one, who avails himself of intra stateOpen Access for a period of one year or less. The Long Term Open Access customeris one, who avails himself of intra state Open Access for a period of five years ormore. In between the two customers, there is no other sub Clause for one who entersinto an intra state wheeling agreement for a period of more than one year and lessthan five years. This is provided in the Regulation. If this Regulation is taken intoaccount, then the Madras Cement Limited, the first Respondent can be consideredto be a Short Term Open Access Customer and in that event only 13(h) of the Agreementhas to be invoked.13. According to the Appellant, the provision of Clause 6(ii) of the Regulation shouldbe read to mean that only when the Agreement entered into between the parties at atime for a period not exceeding one year, it should be treated as Short Term OpenAccess and that when it is executed at a time for a period exceeding one year shallbe treated as Long Term Open Access and as such, the Madras Cement Limited, thefirst Respondent should have been considered only as a Long Term Open Accesscustomer. This interpretation is wrong. As quoted above, clause 6(i) provides thatthe Short Term Open Access customer is availing intra state Open Access for aperiod of one year or less. Similarly, Clause 6(ii) which squarely defines that thecustomer availing intra state Open Access for a period of five years or more istreated as a Long Term Open Access customer.14. Thus, the reading of Clause 6 in its entirety makes it abundantly clear that anycustomer who would be availing intra state Open Access for a period of more thanone year or less than five years shall be a Short Term Open Access customer.15. This point has been dealt with and decided by the State Commission in theimpugned order. The relevant observation is as follows:It is to be noted that in the instant case, an Energy Wheeling Agreement (EWA) hasbeen executed between the Petitioner and the Respondent on 7 th March, 2009 for wheeling6 MW of power through Board’s grid for capitive use. As per Clause 9(a) of EWA, theagreement shall remain in force for a period of three years. As the EWA was eaxecutedin March, 2009, i.e. subsequent to the date of coming into force of the intra state OpenAccess Regulations, 2005 made by the Commission, the said regulations would beapplicable to this case.Any customer who avails Open Access for less than five years has to be treated as a shortterm Open Access customer. The Petitioner will, therefore, have to be treated as a shortterm Open Access customer and compensation has to be determined with reference toClause 13(h), which fastens liability on a customer, only if reserved capacity remains idle.Clause 13(f) of the Intra-State Open Access Regulations, 2005 reads as follows:-In case a short-term customer is unable to utilize the full or substantial part ofthe capacity reserved, he shall inform the State Load Dispatch Centre alongwith reasons for his inability to utilize the reserved capacity and may surrenderthe reserved capacity.0969ENERGY LAW REPORTS SEPTEMBER, 201251

0970Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]Clause 13(h) of the said Regulations, 2005 reads as follows:The short-term customer, who has surrendered the reserved capacity or whosereserved capacity has been reduced or cancelled, shall bear full transmission ordistribution charges as the case may be and the scheduling and system operationcharges based on original reserved capacity till such time it is not utilized by theutility or allotted to any other open access customer, and limited to the period forwhich the capacity was reserved.In view of the findings in the preceding paragraphs, the letter of the third RespondentNo. SE/PEDC/PBLR/AO/CRS/JA1/F.E.HT.SC.No. 43-EWA/D No. 308.o dated7 th July, 2009 is set aside.In this finding, in our view there is no infirmity.16. The learned Counsel for the Appellant stated that the State Commission has nojurisdiction to decide the application under Clause-13(h) of the Regulations, 2005.The contention is not tenable. There are Regulations framed by the State Commission,which empowers the Commission to invoke the inherent powers of the Commissionto make such orders as may be necessary to meet the ends of justice. They also providethat the Regulations already available shall not bar the State Commission from adoptingany other procedure which is at variance with any of the provisions of these Regulations.If the State Commission deems it necessary to pass appropriate orders by adoptingdifferent procedure, it can pass suitable orders with reasons to be recorded.17. Therefore, the State Commission in this case has correctly concluded that theRespondent Company was a Short Term Open Access customer by suitablyinterpreting the Clause 6(i) and 6(ii) of the Regulations and granted the relief to itby giving valid reasons.18. There is no dispute in the fact that there was no loss whatsoever had occasionedto the Appellant on account of the prayer for the termination. It is an undisputedfact that the expenditure for infrastructure in interfacing the captive generatingplant of the Madras Cements Limited (R-1) with the Grid of the Appellant wasentirely borne by Madras Cements Limited. In fact, Madras Cements Limited (R-1)has been assessed to demand charges for the entire sanctioned demand. The capacityreserved for the Madras Cements Limited through Open access is being utilised bythe Appellant for providing power supply to the First Respondent consequent tothe reduction of power cut to 20 per cent with effect from 16 th June, 2009.19. That apart, 3 to 12.9 MW of power is being generated and sold to the 3 rd partythrough the Appellant’s transmission system and the Madras Cements Limited hasbeen paying the necessary charges for the same.20. As pointed out by the State Commission, the Madras Cements Limited is a ShortTerm Open Access customer on account of the specific Terms of the Open AccessRegulations as interpreted by the State Commission in the impugned order as well bythe Judgment dated 1 st March, 2011 in the Appeal No. 113 and 115 of 2010 renderedby this Tribunal. The Appellant is duty bound to act swiftly in accordance with theOpen Access Regulations and the orders passed by the State Commission.21. The very same point has again been dealt with by this Tribunal in anotherAppeal in Appeal No. 108 of 2011 in the judgment rendered in this Appeal on19 th March, 2012. This Tribunal has given the following findings:(i) The Respondent No. 1 having entered into an Energy Wheeling Agreementwith the Appellant for a period of three years has to be treated as the Short Termabcdefghi52ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghOpen Access customer in terms of Intra-State Open Access Regulations, 2005 inspite of it having deposited the registration fee and agreement fee applicable toLong Term Open Access Customers at the time of seeking the Open Access.(ii) The request of the Respondent No. 1 for reducing the reserved capacity ofwheeling has to be governed by Clause 13(h) of the Intra-State Open AccessRegulation applicable to Short Term Open Access customers.iii) The State Commission has correctly utilised its inherent powers to decidethe matter regarding reduction in reserved capacity of the Respondent No. 1.iv) There is no infirmity in findings of the State Commission that nocompensation is payable to the Appellant for reduction in reserve capacityby the Respondent No. 1.22. The above findings, as mentioned earlier, would squarely apply to the facts ofthe present case as well.23. The learned Counsel for the Appellant has cited Bihar State Electricity Board & Anr.v. UMI Special Steel Limited 1 (2000) 8 SCC 560. The issue in the said case is differentfrom the issue in the present case. In that case, there was no issue of the status of theAgreement which conflicts the Regulation. In the present case, the sole issue is whetherthe provision of the statutory Regulations can be overridden by the Agreement betweenthe parties or not. As indicated above, the State Commission has correctly decided onthe basis of the Regulations which will prevail over the Agreement.24. Summary of Our FindingsThe Chairman and Ors. v. Madras Cements Ltd. and Anr.(M. Karpaga Vinayagam, J. (Chairperson))(i) The Respondent No. 1 has to be treated as Short Term Open Acess customerin terms of Intra-State Open Access Regulations, 2005 in spite of the EnergyWheeling Agreement entered into between the Appellant and the RespondentNo. 1 being for a period of 3 years and In spite of its having deposited theregistration fee and agreement fee applicable for Long Term Open Accesscustomer at the time of seeking the Open Access.(ii) The request of the Respondent No. 1 for termination of wheelingarrangement from its generating plant to its unit at Ariyalur will be governedby Clause 13(h) of the Intra-State Open Access Regulations applicable toShort Term Open Access customers.(iii) The State Commission has correctly utilised its inherent powers to decidethe matter regarding termination of wheeling arrangement to the Ariyalurunit of the Respondent No. 1.(iv) There is no infirmity in the findings of the State Commission that no compensationis payable by the Respondent No. 1 to the Appellant consequent of the terminationof the wheeling arrangement requested by the Respondent No. 1.25. In view of the above findings, we hold that the order impugned passed by theState Commission is perfectly valid in the law, as it would not suffer from any infirmity.26. Hence the Appeal is dismissed being devoid of merits.27. However, there is no order as to costs.0971i1 Ed.: MANU/SC/0677/2000: JT 2000 (Suppl 3) SC 68: 2001 (1) PLJR 61: 2000 (7) SCALE371: (2000) 8 SCC 561: (2000) 8 SCC 561: 2001 (1) UC 122: 2001 (1) UJ 313: (2000) 8 SCC 560ENERGY LAW REPORTS SEPTEMBER, 201253

0972Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]2012 ELR (APTEL) 0972*BEFORE THE APPELLATE TRIBUNAL FOR ELECTRICITY, NEW DELHI(APPELLATE JURISDICTION)Power Grid Corporation of India Ltd., Haryanav.Central Electricity Regulatory Commission, New Delhi and Ors.APPEAL NO. 155 OF 2011DECIDED ON: 10.05.2012CoramP.S. Datta, J., Member (Judicial) and V.J. Talwar, Member (Technical)CounselFor Appellant/Petitioner/Plaintiff: M.G. Ramachandran and Anand K. Ganesan,Advs.For Respondents/Defendant: Pradeep Misra, Suraj Singh, Advs. for R-10, R.B. Sharma,Adv. for R-13 and Manu Seshadri, Adv. for R-1Acts/Rules/RegulationsElectricity Act, 2003Section 2(16) [p. 0977, para 14 f]Section 2(31) [p. 0979, para 16 c]Section 2(40) [p. 0979, para 16 c]Section 3(4) [p. 0976, para 10 h]Section 7 [p. 0977, para 14 f]Section 10 [p. 0977, para 14 f]Section 38 [p. 0973, para 1 c]Section 39 [p. 0977, para 14 f]Section 40 [p. 0977, para 14 f]Central Electricity Regulatory Commission Tariff Regulations, 2009Regulation 4 [p. 0976, para 10 h]Regulation 12 [p. 0978, para 15 f]Regulation 15 [p. 0974, para 3 a]Regulation 15(2) [p. 0975, para 5 d]Regulation 3(31) [p. 0975, para 5 c]Regulation 3(40) [p. 0975, para 5 c]ISSUES AND FINDINGSWhether a Transmission Licensee was entitled to additional return on equity of 0.5per cent in case instead of commissioning of entire project as a whole a unit or unitsor a line or a group of lines were commissioned?Held, element of the transmission project appertains to the scope and ambit of theword transmission system. It means that element of the transmission work which isapplicable in a given situation. It is the scheme as a whole, not a part thereof, thatwould qualify a transmission licensee to entitlement to additional return on equity.abcdefghi* MANU/ET/0086/201254ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghiPower Grid Corporation of India Ltd., Haryana v. CERC, New Delhi and Ors.(P.S. Datta, J., Member (Judicial))Interpretation of different provisions of Act does hardly have too much of relevancein conspectus of the fact situation in which interpretation of Regulation 15 (2) of theRegulations, 2009 is called for. Element of the transmission project does not meanonly one element to the exclusion of others, if there are more than one, and Commissiondoes appear to have rightly held that the project as a whole had not been commissionedwithin time schedule. Appeal dismissed.P.S. Datta, J., Member (Judicial)JUDGMENT1. Power Grid Corporation of India, a Central Transmission Utility within the meaningof Section 38 of the Electricity Act, 2003, engaged in the transmission of electricityand other functions as assigned under the said Act preferred this appeal beingaggrieved with the order dated 1 st August, 2011 passed in the Petition No. 329 of2010 passed by the Central Electricity Regulatory Commission determining thetransmission Tariff for the 400 kV D/C Kanpur- Ballabhgarh line along with itsassociated bays under the transmission system associated with the Northern RegionSystem Strengthening Scheme-IX in Northern Region for the period from the date ofthe commercial operation, i.e. 1 st November, 2010 to 31 st March, 2014.2. Along with the Central Electricity Regulatory Commission which is the Respondentno 1 there are 17 other Respondents who include amongst others distributioncompanies of the States of Rajasthan, Himachal Pradesh, Punjab,, Power DevelopmentDepartment of the State of Jammu & Kashmir, Chandigarh Administration, NorthCentral Railway, New Delhi Municipal Council, Delhi Transco Ltd, BSES YamunaPower Ltd, BSES Rajdhani Power Ltd, and North Delhi Power Limited, and UttarPradesh Power Corporation Limited, and of these 18 Respondents the Uttar PradeshPower Corporation Limited (Respondent no 10) and the BSES Rajdhani Power Limited,(Respondent no 13) are contesting the appeal by filing their respective writtenresponses, and the Respondent no 1, CERC though it has not filed any writtenresponse made its oral submissions in support of the impugned order, while othersare not contesting despite service.3. While adjudicating upon the disputes raised in the appeal we will have occasionto refer to some of the provisions of the CERC Tariff Regulations, 2009 that cameinto force with effect from 1 st April, 2009, but, for the present it is worthwhile to referto certain facts relevant for determination of the dispute. The Appellant is said tohad undertaken implementation of the Transmission System associated with theNorthern Region System Strengthening Scheme-IX in the Northern Region. The Boardof Directors of the Appellant by a memorandum dated 7 th July, 2008 accorded approvaland expenditure sanction to the transmission project and approved an investmentof Rs. 525.14 crore based on 1 st quarter of 2008 price level. The scope of the projectwas scheduled to be Commissioned within a period of 36 months from the date ofinvestment approval. The scheduled date of the completion worked out as7 th July, 2011. The first element of the project, i.e., the 400 kV D/C Kanpur-Ballabhgarh Transmission line along with its associated bays was actually putunder commercial operation on 1 st November, 2010, that is, in less than 28 monthsfrom the date of investment approval and well before the Scheduled Date of completion.Pursuant to such commercial operation of the above element of the transmissionsystem line/element, the Respondent beneficiaries are having the benefit of suchline as such line is being used to service the conveyance of power for the Respondent0973ENERGY LAW REPORTS SEPTEMBER, 201255

0974Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]beneficiaries. Accordingly, the Appellant has become entitled to Tariff for the abovetransmission line with effect from 1 st November, 2010 notwithstanding that the otherelements of the project as a whole was not Commissioned on 1 st November, 2010. Inthe circumstances, the Appellant also became entitled to claim additional Return onEquity as per Regulation 15 read with the Appendix II to the Tariff Regulations,2009 for early Commissioning of the particular transmission element/line, namely,400 KV D/C Kanpur- Ballabhpur Transmission Line. The Appellant on 13 th December,2010 filed a petition, being Petition No. 329 of 2010 before the Central Commissionfor approval of the final transmission Tariff from the date of commercial operationof the above element of the system i.e., 1 st November, 2010 to 31 st March, 2014. On1 st August, 2010 the CERC passed the impugned order inter alia holding that theAnnexure II to the Tariff Regullations, 2009 provides additional return on equityonly for Commissioning of the entire project before the Scheduled Date and notindividual elements of the project.4. The Appellant contends as follows:(a) The CERC narrowly interpreted the provisions of the Tariff Regulationsindependent of the provisions of Appendix II to the Tariff regulations, 2009 andRegulations 3(31), 3(40) and Regulation No 4 and more importantly contrary tothe scheme and objective of incentivizing the Utilities for early Commissioningof the transmission line and early availability of such line for the beneficiaries.Regulation 15 deals with the early Commissioning of the project in a generalmanner and the same has to be read with the time line specified for completionof each unit or block or element of the transmission project as provided inAppendix II to the Tariff Regulations, 2009. This is further in the context ofRegulation No 4 providing for the transmission line, the definition of the term“Project’’ and the fact that the transmission element or line forming part of theProject can be independently Commissioned and put to service for the benefit ofthe beneficiaries.(b) The Commission failed to appreciate that an individual transmission linecan also be a transaction system and, therefore a Project within the meaning ofthe Regulation No. 3(31 read with Regulation 15 entitles the Utility to theadditional return on equity of 0.5 per cent.(c) The Central Commission failed to appreciate that the Appendix II to theTariff Regulations, 2009 specifically provides that the completion time scheduleis to be reckoned from the date of investment approval up to the date ofcommercial operation of the units or block or element of transmission projectas applicable. The Appendix II does not provide that the entire project has tobe completed within the time frame specified.(d) The Central Commission erred in construing the provisions of Regulation15 and Appendix ii to the Tariff Regulations, 2009 to mean that the entireproject has to be completed within the time frame specified for the same.Regulation 15 provides that and additional return on equity would be allowedin the event of the project being completed within timelines specified in theAppendix II to the Tariff Regulations, 2009 regarding the completion ofindividual elements of the transmission projects, the same has to be harmoniouslyconstrued to mean that the time period specified in the Appendix II applies tothe individual elements of the project.(e) The Central Commission failed to appreciate that the early availability ofthe transmission line has resulted in the system being available early as wellabcdefghi56ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghiPower Grid Corporation of India Ltd., Haryana v. CERC, New Delhi and Ors.(P.S. Datta, J., Member (Judicial))as reducing the cost of interest during construction which is to be borne by thebeneficiaries of the project. The Appellant ought to be incentivized for providingsuch benefit to the beneficiaries.5. The Respondent No 13 of the appeal, namely BSES Rajdhani Power Limited fileda counter-affidavit contending that the word ‘project’ has a wide and flexible meaningand its applicability is required to be examined on the basis of the facts and figuresof each case. The first proviso to the Regulation No. 15(2) provides an additionalreturn on equity of 0.5 per cent if the project is completed within the time linespecified in Appendix II of the Tariff Regulations, 2009. The time line for thecompletion of the transmission project is calculated in accordance with the timelinestipulated for the applicable element of the transmission project from the variouselements of the transmission project mentioned in the Appendix II Given thedescription of the transmission line and the sub-station it would appear that thetransmission line, associated sub- station including equipment associated fall strictlywithin the ambit of ‘project’ as defined under Regulation No. 3(31) read with theRegulation 3(40) of the Tariff Regulations, 2009. Thus, all the elements mentionedin the Investment Approval are part of the project and unless the project as a wholeis completed, the Appellant is not entitled to the additional return on equity interms of the Regulation 15(2) of the Tariff Regulations, 2009. The Investment Approvalclearly stipulates the scope of the project. The change in the stance and the contentionby the Appellant especially after incorporation of the first proviso under Regulation15(2) of the Tariff Regulations, 2009. by misconstruing and misinterpreting theprovisions of the Regulation 15 and the Appendix Ii of the said Regulations, 2009 issolely guided by unreasonable profit motive. The contention of the Appellant thatthe Respondents have only benefited as a result of early availability of the transmissionline being one of the elements of the transmission project is not entirely correct. TheAppellant also stands benefited in getting the early return on 30 per cent of theequity capital in the form of return on equity. Ofcourse, the Appellant is entitled toreturn on equity capital only from the date of the commercial operation. Accordingly,it is submitted that the appeal may be dismissed.6. The Respondent No. 10, the UP Power Corporation Limited has filed a written noteof submission which actually takes the place of reply to the memorandum of theappeal of this Respondent. It contends that even though a unit of a generating stationmay be completed before the time schedule but, that will not give a right to the GenerationCompany a claim of 0.5 per cent additional return unless all the units of a generatingstation are completed and the generating station itself has achieved the date ofcommercial operation. It is further contended that the first proviso to regulation 15 ofRegulations, 2009 is that the Generation Company or the Transmission Licensee shallbe provided with 0.5 per cent additional return on equity so that they may make anendeavour to complete the entire transmission system before the time schedule whichwill ultimately save the interest during construction and this will also be beneficial tothe beneficiaries. This proviso makes a balance between the Transmission Licensee/Generation Company and the beneficiaries. On the one hand, the generator/Transmission Licensee gets 0.5 per cent additional return on equity for the entire lifeof the transmitting system/generating station while the beneficiaries get the benefit ofreduction in capital cost due to less interest during construction.7. The point for consideration is whether the Appellant is entitled to additionalreturn on equity of 0.5 per cent in terms of Regulation No. 15(2) of the CentralElectricity Regulatory Commission Tariff Regulations, 2009.0975ENERGY LAW REPORTS SEPTEMBER, 201257

0976Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]8. We have heard Mr. M.G. Ramachandran, appearing with Mr. Anand K. Ganesan,learned Advocates for the Appellant, Mr. Pradeep Mishra and Mr. Suraj Singh,learned Advocates for the Respondent No. 10, Mr. R.B. Sharma, learned Advocateappearing for Responder No.-13 and Mr. Manu Sheshadri, learned Advocate appearingfor the Central Commission.9. The facts are not in dispute. This was the implementation scheme for implementationof the transmission system associated with Northern Region System StrengtheningScheme- IX in the Northern Region. Investment approval was made by the Board ofDirectors’ on 7 th July, 2008. The scope of the work covered under the project was:Transmission Line:(a) Kanput-Ballabhgarh 400 kV D/C lineSub-stations:(a) Extension of existing Kanpur substation(b) Extension of existing Ballabhgarh substationi. 40 per cent series compensation on proposed Kanpur-Ballabhgarh 400kV D/C Line(c) Reactive Compensation(80) MVAR line reactors on each circuit at both ends on proposed Kanpur-Ballabhgarh 400 kV D/C Line10. The project was to be Commissioned within a period of 36 months from the dateof investment approval and the scheduled date of completion was worked out at7 th July, 2011. According to the Appellant, the first element of the Project i.e. 400 kvD/C Line along with this associated bays was actually put under commercial operationon 1 st November, 2010 which was less than 28 months and well before the scheduleddate of completion. Thus, the beneficiaries are having the benefit of such line whichhas been put to service and accordingly the Appellant is also entitled to Tariff for theabove transmission line with effect from 1 st November, 2010 although the other elementsof the project as a whole was not Commissioned on 1 st November, 2010. In theCircumstances, the Appellant is entitled to claim additional return of equity asper Regulation 15(2) read with Appendix-II to the Tariff Regulations, 2009. Accordingto Mr. Ramachandran, in the context of the definition of the transmission system aswe find in Regulation 3(40) and the definition of the term ‘project’ as appearing inRegulation 3(31) one transmission element or line forming part of the project can beindependently Commissioned for the benefit of the beneficiaries, and that would entitlea transmission licensee to additional return on equity of 0.5 per cent. That is to say,an individual transmission line can also be a transmission system and, therefore, aproject within the meaning of Regulation 3(31) read with Regulation 15 entitles theutility for additional return on equity. Appendix II specifically provides that thecompletion time schedule is to be reckoned from the date of investment approval upto the date of commercial operation of the units or block or element of transmissionproject as a whole. Thus, Regulation 4 enables determination of Tariff either for thetransmission system as a whole or for transmission line or substation, and thetransmission system, as defined in Section 3(4) means a line or a group of line withassociation sub-station etc. Appendix-II specifies the completion schedule for elementsof transmission project and not the entire transmission system as a whole.11. Mr. R.B. Sharma, learned Advocate appearing for Respondent No. 13 submitsthat the argument of Mr. Ramachandran is not sound enough because for the purposeabcdefghi58ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghiPower Grid Corporation of India Ltd., Haryana v. CERC, New Delhi and Ors.(P.S. Datta, J., Member (Judicial))of acquisition of additional return on equity of 0.5 per cent, law demands completionof the project as a whole and completion of a unit or units, or line or a group of linewhich forms part of the total transmission system which is the project in questionhere does not entitle the developer or the Transmission Licensee to the additionalreturn on equity of 0.5 per cent. According to Mr. Sharma, interpretation ofAppendix-II, as made by Mr. Ramachandran is not a correct one because there hasto be a harmonious reading of the relevant provision of the Regulations, 2009 andfor the purpose of claiming additional return on equity, it is the system as a wholethat has to be pressed into service. It is further submitted that all the elementsmentioned in investment approval are parts of the project and if the project is notcompleted as a whole, the Appellant is not entitled to additional return on equity. Itis further submitted that the contention of the Appellant that the Respondents havebenefited as a result of early availability of transmission line being one of the elementsof the transmission project is not correct. On the other hand, the Appellant has beenbenefited in getting the early return on equity of 30 per cent.12. Mr. Pradeep Mishra, Learned Advocate appearing for the Respondent No. 10contradicted Mr. Ramachandran submitting that a unit of a Generating Station maybe completed before the time schedule but, that will not entitle the GenerationCompany or the Transmission Licensee to claim additional return on equity becauseunless the total system is Commissioned and put to the use of the beneficiaries,there cannot be any question of providing additional return on equity of 0.5 per cent.The logic behind avoiding additional return on equity of 0.5 per cent is to incentivisethe developer in order that in the interest of the beneficiaries, the project is completedand furthermore, interest during construction could be saved.13. Mr. Manu Seshadri, the learned Advocate appearing for the Commission supportsthe reasoning of the Commission made in the impugned order and prays for dismissalof the appeal.14. Mr. Ramachandran in his written note of argument extensively referred to theprovisions of Section 2(16), 7, 10, 38, 39 and 40 of the Electricity Act, 2003 in supportof his submission that it is the duty of the Central Transmission Utility to ensuresmooth flow of electricity from the Generating Stations to the load centre and theimportance of the Central Transmission Utility cannot be under-rated. To our mind,the provisions of these sections extensively quoted in the written note of argumentcan hardly have any manner of application to the facts and Circumstances of thepresent Appeal. The role of the Central Transmission Utility is not the issue here. Itis further submitted that the decision of the Central Electricity Regulatory Commissionamounts to substitution in effect the words ‘transmission project as a whole’ inplace of ‘element of transmission project’ as appearing in Appendix-II of the TariffRegulations 2009. It is submitted that there needs to be adopted a consistent viewand if the Tariff for the transmission element is to be determined all logicalconsequences including application of the additional return on equity for earlycompletion needs to be applied, and once the Tariff determination process isundertaken, there cannot be any artificial restriction on the application of TariffRegulations.15. The central point in this appeal is whether a Transmission Licensee is entitledto additional return on equity of 0.5 per cent in case instead of Commissioning ofthe entire project as a whole a unit or units or a line or a group of lines areCommissioned. Admittedly, in the case, the project as a whole was not Commissioned0977ENERGY LAW REPORTS SEPTEMBER, 201259

0978Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]although, according to the Appellant, within a period of less than 28 months, a unitwas Commissioned and whether that Commissioning of unit or a group of linesforming part of the transmission system in question will entitle the Appellant toclaim additional return on equity of 0.5 per cent is the question here. It is necessaryfor us to read the Regulations 3(31), 3(40), 4 and 15 (2) together with Appendix-II tothe said Regulations 15(2).(31) ‘project’ means a generating station or the transmission system, as the casemay be, and in case of a hydro generating station includes all components ofgenerating facility such as dam, intake water conductor system, power generatingstation and generating units of the scheme, as apportioned to power generation(40) ‘transmission system’ means a line or a group of lines with or withoutassociated sub-station, and includes equipment associated with transmissionlines and sub-stations;4. Tariff determination. (1) Tariff in respect of a generating station may bedetermined for the whole of the generating station or (a) stage or unit or blockof the generating station, and Tariff for the transmission system may be determinedfor the whole of the transmission system or the transmission line or sub-station.(2) For the purpose of determination of Tariff, the capital cost of the projectmay be broken up into stages and distinct units or blocks, transmission linesand sub-systems forming part of the project, if required:Provided that where break-up of the capital cost of the project for differentstages or units or blocks and transmission lines or sub-stations is notavailable and in case of on-going projects, the common facilities shall beapportioned on the basis of the installed capacity of the units, line lengthand number of bays:Provided further that in relation to multi-purpose hydro schemes,with irrigation, flood control and power components, the capitalcost chargeable to the power component of the scheme only shallbe considered for determination of Tariff.15. Return on Equity. (1) Return on equity shall be computed in rupee terms,on the equity base determined in accordance with regulation 12.(2) Return on equity shall be computed on pre-tax basis at the base rate of 15.5per cent to be grossed up as per Clause (3) of this regulation:Provided that in case of projects Commissioned on or after 1 st April, 2009,an additional return of 0.5 per cent shall be allowed if such projects arecompleted within the timeline specified in Appendix-II:The Appendix-II of the Tariff Regulations, 2009 provides as follows:The completion time shall be reckoned from the date of the investmentapproval by the Board (of the generating company or the transmissionlicensee), or the CCEA clearance as the case may be, up to the date ofcommercial operation of the units or element of transmission project asapplicable.There are two notes after the heading ‘’C. Transmission Schemes”. Note 1 isrelevant. It is as follows:In case a scheme having combination of the abovementioned types ofprojects, the qualifying time schedule of the activity having maximumtime period shall be considered for the scheme as a whole.abcdefghi60ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghiPower Grid Corporation of India Ltd., Haryana v. CERC, New Delhi and Ors.(P.S. Datta, J., Member (Judicial))16. Now, the thrust of the of the argument of the learned Counsel for the Appellantlies in reading the definition of the word ‘project’ and that of the ‘transmissionsystem’ together in order that, according to the learned Counsel, there is no difficultyin accepting the proposition that even when one element or a unit or a line or agroup of lines are completed the generator or the transmission licensee would beentitled to the additional return on equity of 0.05 per cent as per Regulation No. 15 (2)of the Central Electricity Regulatory Commission Tariff Regulations, 2009 and theefficacy of the Note 1 to the Appendix II to the said Regulation 15(2) will have noeffect. It is submitted that if the definition of the word ‘project’ and the definition ofthe words ‘transmission system’ are not read together then the very purpose of thescheme of the Act becomes otiose and gets defeated. After having read the relevantprovisions of the Act and those of the Regulations as were referred to us it appearsto us that the argument of the learned Counsel for the Appellant is difficult toaccept for the primary reason that the import of the word ‘project’ as appearing inSection 2(31) of the Act comprises both generation and transmission because theRegulations, 2009 is meant for both. Definitely, the import of the word ‘transmissionsystem’ as occurring in Section 2(40) of the Act has been incorporated in to thedefinition of the word ‘project’ because transmission system is also a project as ageneration is also a project and the transmission system means a line or a group oflines with or without associated sub-station, and it also includes equipment associatedwith transmission lines and sub-stations. In fact, over emphasis on reading the twowords together do not lead us anywhere. A transmission system may be in a case ofa particular project a line or any number of groups of lines and they again may bewith or without associated sub-station, and inclusively the transmission systemmay comprise equipment associated with transmission lines and sub-stations. Now,having seen the scope of the work or project it appears that this transmission projectconsisted of laying down a 400 kV D/C line and two extension works of the twoexisting substations and one reactive compensation on proposed Kanpur- Ballabhgarh400 kV D/C line. This is the transmission project that was required to be completedwithin the time frame. In this scenario the definition of the word ‘project’ as we findin Section 2(31) of the Act does not really render any assistance to the Appellant, forhaving read the Regulation 15(2) together with the Appendix II as also the note 1 tothe said Regulation no 15 (2) of the Tariff Regulations, 2009 it does not appear thatcompletion of a part of the project does entitle the Appellant to claim for additionalreturn on equity of 0.5 per cent. The words ‘’ up to the date of commercial operationof the units or block or element of transmission project as applicable’’ as occurringin Appendix II of the Regulation 15(2) of the Regulations, 2009 has no magicalcharm in it. The argument of the learned Counsel for the Appellant that the impugnedorder of the Commission has the effect of substituting the words ‘transmission projectas a whole’ in the place of the expression ‘element of transmission project’ canhardly be agreed to because the definition of the word ‘transmission system’ is acomprehensive one and the completion in time schedule may relate to, in case ofany particular project, units, or block or element of transmission project as may beapplicable to such project. The description of the work covered under the transmissionproject is what we have seen earlier. Completion of a part of the total work coveredunder the project is not what is contemplated in the Regulation 15(2) read with theAppendix II and the Note thereto. The element of the transmission project appertainsto the scope and ambit of the word transmission system. It means that element ofthe transmission work which is applicable in a given situation. If it had been theintention of the authors of the Regulations that completion of a part of a work or a0979ENERGY LAW REPORTS SEPTEMBER, 201261

0980Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]part of the project or a part of the transmission system would entitle the transmissionlicensee to claim additional return on equity then they would have expressly madeprovision there for and made separate time frame for each of the units or each of theparts of the total works to be implemented within a specific timeframe from the dateof investment approval. That has not been done. It is the scheme as a whole, not apart thereof, that would qualify a transmission licensee to the entitlement to theadditional return on equity. Interpretation of different provisions of the Act doeshardly have too much of relevance in the conspectus of the fact situation in whichinterpretation of the regulation 15 (2) of the Regulations, 2009 is called for. Theelement of the transmission project does not mean only one element to the exclusionof others, if there are more than one, and the Commission does appear to haverightly held that the project as a whole has not been Commissioned within the timeschedule.17. Thus, in ultimate analysis in our considered view the appeal does not succeed.Accordingly, the appeal is dismissed but, without costs.abc2012 ELR (APTEL) 0980*BEFORE THE APPELLATE TRIBUNAL FOR ELECTRICITY, NEW DELHI(APPELLATE JURISDICTION)The Chairman, TNEB Tamil Nadu Electricity Board, and Ors.v.M/s Ind Barath Thermal Power Ltd. andRegulatory Commission (Represented by its Secretary), ChennaiAPPEAL NO. 145 OF 2011DECIDED ON: 23.05.2012CoramM. Karpaga Vinayagam, J. (Chairperson) and V.J. Talwar, Member (Technical)CounselFor Appellant/Petitioner/Plaintiff: R. Venkataramani, Sr. Adv., S. Vallinayagam,Aljo K. Joseph and C. Kaliaperumal, Advs.For Respondents/Defendant: Rahul Balaji, T. Srinivasa Murthy, Advs. for R 1, SenthilJagadeesan and Krishna Dev, Advs.Acts/Rules/RegulationsElectricity Act, 1948Section 18A [p. 0985, para 12 f]Section 21 [p. 0986, para 13 a]Electricity (supply) Act, 2003Section 2(72) [p. 0988, para 18 c]Section 2(73) [p. 0988, para 18 c]defghi* MANU/ET/0105/201262ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghiThe Chairman, TNEB and Ors. v. M/s Ind Barath Thermal Power Ltd. and Anr.(M. Karpaga Vinayagam, J. (Chairperson))Section 2(75) [p. 0990, para 31 a]Section 2(16) [p. 0985, para 10 c]Section 2(19) [p. 0988, para 18 c]Section 7 [p. 0987, para 17 c]Section 9 [p. 0985, para 10 d]Section 9(1) [p. 0987, para 17 d]Section 10 [p. 0984, para 4 b]Section 10(1) [p. 0987, para 17 c]Section 12 [p. 0986, para 16 f]Section 13 [p. 0986, para 16 g]Section 14 [p. 0986, para 16 g]Section 15 [p. 0986, para 16 g]Section 21 [p. 0986, para 13 a]Section 28 [p. 0989, para 27 d]Section 32 [p. 0989, para 27 e]Section 39 [p. 0984, para 6 f]Section 40 [p. 0984, para 6 f]Section 42(2) [p. 0985, para 8 a]Section 40(2) [p. 0989, para 30 i]Section 54 [p. 0989, para 28 g]Section 73(b) [p. 0987, para 17 c]Section 159 [p. 0989, para 27 e]Section 160 [p. 0989, para 27 e]Section 161 [p. 0989, para 27 e]Section 164 [p. 0991, para 41 e]Section 181 [p. 0991, para 45 i]Section 183 [p. 0987, para 17 g]Intra-State Open Access Regulation, 2005Regulation 9 [p. 0983, para 2 e]Regulation 9(1)(b) [p. 0990, para 36 c]ISSUES AND FINDINGSWhether responsibility to construct the dedicated transmission line was of generatingcompany (Respondent) which established generating station or the Transmission Licensee(Appellant) which is responsible to establish the intra-state transmission system?Held, It is the duty of generating company to establish a dedicated transmissionline. Dedicated transmission line is not a transmission line in terms of definitionunder Section 2(72) of Act. Similarly, dedicated transmission line is not a distributionsystem in terms of the definition of Section 2(19) of Act. Term “Transmission licensee”has been defined in Section 2(73) of Act as “transmission Licensee” means a licenseeauthorized to establish or operate transmission lines. Since, dedicated transmissionslines is neither a transmission line or distribution system, it cannot be the duty ofAppellant, transmission licensee, to establish and operate a dedicated transmissionline. Section 10 of Act read with the Electricity (Removal of difficulty) fifth order,2005 makes it clear that it is the duty of the generating company to establish thededicated transmission lines.0981ENERGY LAW REPORTS SEPTEMBER, 201263

0982Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]Whether provisions of Section 10 dealing with duties of generating company aresubjected to Sections 39 and 40 related to duties and functions of State TransmissionUtility and Transmission Licensee respectively?Held, rule of construction is well settled that in an enactment, when there are twoprovisions which cannot be reconciled with each other, they should be so interpretedin such a way that the effect is given to both. Concept that the effect should given toboth, is the very essence of rule. Thus, a construction that reduces one of provisionsto a “use-less lumber” or “dead letter” is not harmonious construction. In presentcase, interpretation of phrase “subject to provision of Act” would include provisionof Section 39 and 40 of Act, would render provision of Section 10 relating to ‘dedicatedtransmission line’ a dead letter. Such a construction would not be acceptableWhether State Commission’s Intra-state Open Access Regulations 2005 can over-ridethe specific provisions of parent Act?Held, Intra-state Open Access Regulations, 2005 are made under Section 181 of 2003Act. These Regulations framed by State Commission are required to be consistentwith the provisions of the parent Act and Rules to carry out the provisions of the Act.By way or interpretation of Regulation, State Commission could not give a directionwhich was contrary to provisions of Section 10 of the Electricity Act. Impugned orderwas set aside. Generating company is governed by Section 10 of Electricity 2003 Act.Generating Company alone was liable to construct transmission line at its own cost.Therefore, Respondent Generating Company was directed to get dedicated transmissionlines constructed at its own cost as per Section 10 of 2003 Act.JUDGMENTM. Karpaga Vinayagam, J. (Chairperson)1. The Tamil Nadu Electricity Board through its Chairman and other officers hasfiled this Appeal challenging the impugned order dated 20 th April, 2011 passed bythe Tamil Nadu State Commission.2. The short facts are as follows:(i) The Appellant is the State Transmission Utility as well as a TransmissionLicensee in the State of Tamil Nadu.(ii) M/s Ind Barath Thermal Power Ltd, the first Respondent, is a generatingcompany which has established a generating station at Swaminatham, TuticorinDistrict, Tamil Nadu in two stages having two units of 150 MW each understage I and another one unit of 150 MW under stage II of the project.(iii) Presently, the first Respondent generating company has another generatingstation Ind Barath Powergen Limited having three units of 63 MW each. Thisgenerating station is connected with 230 kV Meelavittan substation of theAppellant, which in turn is connected to 230 kV Chekkanoorani sub-stationthrough a 230 kV S/C line on D/C towers.(iv) To evacuate power from its generating station at Swaminatham, the 1stRespondent Generating Company proposed to lay a 230 kV D/C line to existing230 kV substation at Meelavittan and stringing of 2nd circuit of 230 kVMeelavittan – Chekkanoorani S/c on D/c line.abcdefghi64ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghiThe Chairman, TNEB and Ors. v. M/s Ind Barath Thermal Power Ltd. and Anr.(M. Karpaga Vinayagam, J. (Chairperson))(v) The above proposal of the Respondent Generating Company was notacceptable to the Appellant as it would cause transmission constraints beyondChekkanoorani and additional system would have to be laid to diapers thepower from Chekkanoorani substation.(vi) The Appellant carried out load flow studies and proposed three alternativesto evacuate power from the generating station of the Respondent GeneratingCompany. Finally, one of alternatives suggested by the Appellant was agreedupon by both the parties. The acceptable alternative involved the following lines:(a) 230 kV D/C line from the generating station to new Arupukkotaisubstation – 80 kM(b) 230 kV D/C line from generating station to Meelavittan substation –6 kM(c) Stringing of second circuit of existing 230 kV Meelavittan –Chekkanoorani line.(vii) The Appellant has also proposed to carryout the above works at the costof the Respondent Generating Company as deposit works.(viii) The 1st Respondent Generating Company offered to bear the entire coststringing of second circuit of 230 kV Meelavatan – Chekkanoorani S/C onD/C line. However, the Appellant permitted the use of the free arm of thisline for the purpose of stringing 2 nd circuit on the condition that RespondentGenerating Company would have share for the capital cost of the towers ofthe line incurred by the Appellant which forms part of the transmissionnetwork of the Appellant.(ix) Aggrieved by this decision of the Appellant, the Respondent GeneratingCompany filed a petition before the State Commission seeking for a direction tothe Appellant to calculate the transmission charges or the wheeling charges forthe system required for evacuation facility for the generator as per the Regulation 9of Intra State Open Access Regulation, 2005. It is stated in the petition that theRespondent Generating Company proposed to sell power generated from itspower plant outside the state of Tamil Nadu by utilising the transmission networkof the Appellant and that therefore the Respondent Generating Company requiredgrid connectivity with the transmission system of the Appellant.(x) The Appellant opposed this move by filing a counter explaining the variousprovisions of the Act regarding the non feasibility of different course of action.(xi) After hearing both the parties, the State Commission passed the impugnedorder issuing the following direction to the Appellant:“Transmission Licensee has to construct the dedicated transmission line andrecover the charges from generator as per Clause 9(1)(b) of the Intra State OpenAccess Regulation, 2005. Alternatively, if the generator consents, the TransmissionLicensee may construct dedicated transmission line as a deposit work.”(xii) This impugned order had been passed on 20 th April, 2011. Thereupon, theRespondent Generating Company by the letter dated 29 th April, 2011 informedthe Appellant that they would not propose to give consent for construction asa deposit work and called upon the Appellant to construct the dedicatedtransmission line as directed by the State Commission.(xiii) Hence, the Appellant, feeling aggrieved over the direction issued by theState Commission that the Appellant shall construct the dedicated transmission0983ENERGY LAW REPORTS SEPTEMBER, 201265

0984Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]line and recover charges from the generator as per Regulations, 2005, has filedthis Appeal.3. According to the Appellant, It is the duty of the Generating Company (R-1) toestablish, operate and maintain the dedicated transmission lines.4. The Appellant has further contended that the proposed transmission lines arerequired for evacuation of power from the generating station of the Respondent assuch these lines are ‘Dedicated Transmission lines’ as defined in the 2003 Act. It isfurther pointed out that Section 10 of the 2003 Act mandates generating company toestablish dedicated transmission line and as such, the State Commission has wronglyrelied upon State Commission’s Intra State Open Access Regulations, 2005 andissued the impugned directions ignoring the fact that the said regulations aresubordinate legislation and, therefore, cannot over ride the substantive provisionsof the parent Act i.e. 2003 Act,5. On the contrary, it is the contention of the Generating Company (R-1), that it isthe duty of the Appellant as STU and Transmission Licensee in the State of TamilNadu, to construct the said transmission system. It is further contended by theRespondent Company that Section 10 of the 2003 Act, opens with the wordings‘subject to the provisions of the Act’ and so, Section 10 is not absolute in the light ofthe other Sections like Section 40 which lays down that the duties of the transmissionlicensee would include to build, maintain and operate intra-state transmission systemand accordingly it is the duty of the Appellant being a transmission licensee toconstruct the dedicated transmission lines which is part of intra-state transmissionsystem and not the Respondent Generating Company.6. In the light of the above rival contentions, the following questions would arise forconsideration:(i) Whose responsibility is to construct the dedicated transmission line – Is itthe generating company (Respondent) which established generating stationor the Transmission Licensee (Appellant) which is responsible to establish theintra-state transmission system?(ii) Whether provisions of Section 10 dealing with duties of generating companyare subjected to Sections 39 and 40 related to duties and functions of StateTransmission Utility and Transmission Licensee respectively?(iii) Whether the State Commission’s Intra-state Open Access Regulations 2005can over-ride the specific provisions of parent Act.7. We shall now deal with each of the above questions one by one. The first questionfor consideration is as to whose responsibility is to construct the dedicatedtransmission line – Is it the generating company which established generatingstation or the Transmission Licensee which is responsible to established the intrastatetransmission system?8. The main argument of the Appellant revolves around the Section 10 of the 2003Act. The said Section is as follows:“10. Duties of the generating companies –(1) Subject to the provisions of this Act,the duties of a generating company shall be to establish, operate and maintaingenerating stations, tie-lines, sub-station and dedicated transmission lines connectedtherewith in accordance with the provisions of this Act or the rules or regulationsmade thereunder.abcdefghi66ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghiThe Chairman, TNEB and Ors. v. M/s Ind Barath Thermal Power Ltd. and Anr.(M. Karpaga Vinayagam, J. (Chairperson))(2) A generating company may supply electricity to any licensee in accordance withthis Act and the rules and regulations made thereunder and may, subject to the regulationsmade under Sub-section (2) of Section 42, supply electricity to any consumer.(3) Every generating company shall-(a) submit technical details regarding its generating stations to the AppropriateCommission and the Authority;(b) co-ordinate with the Central Transmission Utility or the State TransmissionUtility, as the case may be, for transmission of the electricity generated by it.”9. The reading of the Section 10 of 2003 ACT, reproduced above, would make itclear that it is duty of the generating company to construct the dedicated transmissionlines for evacuation of power from the generator up to the Substation of theAppellant..10. Dedicated Transmission line is defined in Section 2(16) of the Act as under:dedicated transmission lines’ means any electric supply-line for point to pointtransmission which are required for the purpose of connecting electric lines or electricplants of a captive generating plant referred to in Section 9 or generating stationreferred to in Section 10 to any transmission lines or sub-stations or generating stations,or the load centre, as the case may be.11. A dedicated transmission line as per Section 2(16) of the 2003 Act meansany electricity supply line for point to point transmission, which is required forthe purpose of correcting electric lines or electric plants of a captive generatingplant, referred to in Section 9 or generating station referred to in Section 10 toany transmission line or substations or generating stations or the load centre asthe case may be. In the present case, the transmission lines in question connectthe generating station of the Respondent with the Sub-Stations of the Appellant.Therefore, the said lines qualify to be dedicated transmission lines as per Section2(16) of the Act.12. Further, it is to be noted that while the provision of Section 10 which refers tothe dedicated transmission line is a new provision under 2003 Act is mandatory innature, the corresponding provision in Section 18A of Electricity (supply) Act, 1948was not mandatory.13. Let us now refer to the corresponding provision contained in the Section 18A of1948 Act which dealt with the duties of the generating company and the same isreproduced below:“18 A Duties of Generating Company –(1) Subject to the provisions of this Act, aGenerating Company shall be charged with the following duties, namely:-(a) to establish, operate and maintain such generating stations and tie-lines, substationsand main transmission lines connected therewith, as may be required tobe established by the competent government or governments in relation to theGenerating Company.(b) to operate and maintain in the most efficient and economical manner the generatingstations, tie lines, sub-stations and main transmission lines, assigned to it by thecompetent government or governments in co-ordination with the Board or Boards, asthe case may be, and the Government or agency having control over the power system,if any, connected therewith; and0985ENERGY LAW REPORTS SEPTEMBER, 201267

0986Energy Law Reports (ELR) [Vol. 2, Part 4, 2012](c) to carry out, subject to the provisions of Section 21, detailed investigations andprepare schemes, in co-ordination with the Board or Boards, as the case may be, forestablishing generating stations and tie-lines, sub-stations and transmission linesconnected therewith, in such manner as may be specified by the Authority.”14. The perusal of the above provision in the repealed 1948 Act would make it clearthat under that Act, the generating company was merely required to establish maintransmission lines as may be required to be established by the competent Government.In other words, the Government may require or may not require the generatingcompany to establish main transmission line. On the contrary, Section 10 of the2003 Act mandates that generating company shall establish, operate and maintainthe dedicated transmission lines connected therewith in accordance with the provisionsof this Act. Thus, the Section 10 of the 2003 Act becomes mandatory by which thegenerating company is mandated to construct its own dedicated transmission lineswhich connect the substation of the Appellant.15. It is important to note that when the legislature makes certain provision in thestatute, it must be with some purpose. Therefore, we have to see the purposebehind the providing new provision in Section 10 of the Act. Earlier establishmentof generating plants and transmission lines were being entrusted to differentagencies. In such cases there were instances of mismatch between theCommissioning of the generating station and associated transmission lines. Insome cases generating station would be ready for Commissioning but, associatedlines were not ready and vise-a-versa. In both the cases there was associated lossto the power sector. In order to avoid the problem of mismatch and to have bettercoordination between the Commissioning of both the assets, the legislatureconsidered to be desirable to entrust both the responsibilities to a single agencyi.e. to the generating company.16. In this context, it would be worthwhile to refer to the provisions of Sections 12and 14 of the 2003 Act which would clarify the whole situation. Let us quote theSection 12 and 14:12. Authorised persons to transmit supply, etc., electricity- No person shall –(a) transmit electricity; or(b) distribute electricity ; or(c) undertake trading in electricity,Unless he is authorized to do so by a licence issued under Section 14, or is exemptunder Section 13.14. Grant of licence – The Appropriate Commission may, on an application made toit under Section 15, grant a licence to any person –(a) to transmit electricity as a transmission licensee; or(b) to distribute electricity as a distribution licensee; or(c) to undertake trading in electricity as an electricity trader, In any area as maybe specified in the licence:17. According to these provisions, no person would supply or transmit electricitywithout obtaining license from the appropriate Commission. Just after enactment of2003 Act, there was a doubt entertained by some Commissions as to whether thegenerating company would also be required to obtain a transmission license toconstruct, operate and maintain a dedicated transmission line under Section 10 ofabcdefghi68ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghiThe Chairman, TNEB and Ors. v. M/s Ind Barath Thermal Power Ltd. and Anr.(M. Karpaga Vinayagam, J. (Chairperson))the Act. In order to remove this doubt, the Ministry of Power, Government of Indiaissued “The Electricity (Removal of Difficulties) Fifth order 2005” on 7 th June, 2005clarifying that a generating company establishing a dedicated transmission linewould not require a transmission license under the Act. This means a generatingcompany, which is not required to obtain license for generation, need not obtainseparate transmission license while establishing a dedicated transmission line. Thisorder of the Government is quoted below:THE ELECTRICITY (REMOVAL OF DIFFICULTIES) FIFTH ORDER, 2005Whereas the Electricity 2003 Act (36 of 2003) (hereinafter referred to as theAct), came into force on the 10th June, 2003;And whereas Section 7 of the Act provides that any generating company mayestablish, operate and maintain a generating station without obtaining a licenceunder this Act if it complies with the technical standards relating to connectivitywith the grid referred in clause (b) of Section 73;And whereas Sub-section (1) of Section 10 of the Act provides that subject tothe provisions of this Act, the duties of a generating company shall be toestablish, operate and maintain generating stations, tie-lines, sub-stations anddedicated transmission lines connected therewith in accordance with theprovisions of this Act or the rules or regulations made thereunder;And whereas Sub-section (1) of Section 9 of the Act provides that notwithstandinganything contained in this Act, a person may construct, maintain or operate acaptive generating plant and dedicated transmission lines;And whereas a dedicated transmission line in terms of Sub-section (16) of Section 2of the Act is an electrical supply line for point-to-point transmission for connectinga captive generating plant or a generating station to any transmission line orsub-stations or generating stations or the load centre, as the case may be;And whereas such a dedicated transmission line is neither a transmissionline in terms of Sub-section (72) of Section 2 of the Act nor it is a distributionsystem connecting the point of a connection to the installation of consumer interms of Sub-section (19) of Section 2 of the Act;And whereas difficulties have arisen regarding the requirement of a transmissionlicence for establishing, operating or maintaining a dedicated transmission line;Now, therefore, the Central Government in exercise of its powers conferred bySection 183 of the Act hereby makes the order in respect of establishing, operatingor maintaining a dedicated transmission line, not inconsistent with theprovisions of the Act, to remove the difficulties, namely:1. Short title and commencement.—(1) This order may be called theElectricity (Removal of Difficulty) Fifth order, 2005.(2) It shall come into force on the date of publication in the Official Gazette.2. Establishment, operation or maintenance of dedicated transmissionlines.—A generating company or a person setting up a captive generatingplant shall not be required to obtain license under the Act forestablishing, operating or maintaining a dedicated transmission line ifsuch company or person complies with the following:(a) Grid code and standards of gird connectivity;(b) Technical standards for construction of electrical lines;0987ENERGY LAW REPORTS SEPTEMBER, 201269

0988Energy Law Reports (ELR) [Vol. 2, Part 4, 2012](c) System of operation of such a dedicated transmission line as per thenorms of system operation the concerned State Load Despatch Centre (SLDC)or Regional Load Despatch Centre (RLDC).(d) Directions of concerned SLDC or RLDC regarding operation of thededicated transmission line.18. Reading of the above order would indicate the following features:(emphasis Added)”(1) It is the duty of the generating company to establish a dedicated transmissionline.(2) Dedicated transmission line is not a transmission line in terms of thedefinition under Section 2(72) of the Act. Similarly, the dedicated transmissionline is not a distribution system in terms of the definition of Section 2(19) ofthe Act.(3) The Term “Transmission licensee” has been defined in Section 2(73) of theAct as “transmission Licensee” means a licensee authorized to establish oroperate transmission lines.19. These features would indicate that since the dedicated transmissions lines isneither a transmission line or distribution system, it cannot be the duty of theAppellant, the transmission licensee, to establish and operate a dedicated transmissionline. One of the functions of the Appellant, as a transmission licensee under Section 40of the Act is to build, maintain and operate an efficient, co-ordinated and economicalintra-State transmission system.20. The State Commission has also taken note of this order of the Government andhas observed in the impugned order that under Clause 2 of the Electricity (Removalof Difficulties) fifth order 2005, a generating company shall not require to obtainlicense under the Act for establishing, operating and maintaining a dedicatedtransmission line, if the said company complies with certain conditions. In fact, theState Commission has specifically held that Section 10 of the Act read with Electricity(Removal of Difficulties) fifth order, 2005 casts a duty on a generating company toestablish a dedicated transmission line.21. In the light of above discussions the first question is answered in favour of theAppellant.22. The second question for consideration is as to whether provisions of Section 10dealing with duties of generating company are subjected to Sections 39 and 40related to duties and functions of State Transmission Utility and TransmissionLicensee respectively?23. The Respondent Generating Company has contended that the Section 10 providesthat the applicability of the said Section is subject to other provisions of the Act viz.Section 40 of the Act which provides that the transmission licensee shall establishintra-state transmission system as such the reading of the Sections 10 and 40 wouldmake it clear that it is the duty of the Appellant i.e. transmission licensee to build,operate and maintain intra-state transmission system and that the lines in questionwould also form a part of the intra-state transmission system. This argument of theRespondent Company does not deserve acceptance for the simple reason that if it isaccepted, it would render the provision of Section 10 relating to dedicated transmissionline completely otiose.abcdefghi70ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghiThe Chairman, TNEB and Ors. v. M/s Ind Barath Thermal Power Ltd. and Anr.(M. Karpaga Vinayagam, J. (Chairperson))24. The rule of construction is well settled that in an enactment when there are twoprovisions which cannot be reconciled with each other, they should be so interpretedin such a way that the effect is that effect is given to both. This is what is known asthe rule of harmonious construction. Thus, the concept that the effect should begiven to both, is the very essence of the rule. Thus, a construction that reduces oneof the provisions to a “use-less lumber” or “dead letter” is not harmoniousconstruction.25. Hence the interpretation of the phrase “subject to provision of the Act” wouldinclude provision of Section 39 and 40 of the Act would render the provision ofSection 10 relating to ‘dedicated transmission line’ a dead letter. Such interpretationcannot be accepted.26. It is true that the Section 10 is subject to the other provisions of the Act. But theother relevant provisions which will come under the phrase –”subject to the provisionsof the Act” will be of no help to the 1st Respondent Generating Company. Section 10casts two responsibilities on the generating company; firstly as a generating companyto establish, operate a generating station and secondly as a transmission companyto establish, operate and maintain dedicated transmission line.27. The responsibility as a generating station is subjected to the following provisionsof the 2003 Act.(i) Section 7 dealing with the grid connectivity;(ii) Section 28 in regard to the directions of Regional Load Dispatch Centre(RLDC);(iii) Section 32 relating to the directions of State Load Dispatch Centre(SLDC);(iv) Section 159 relating to protection of Railways etc;(v) Section 160 relates to protection of telegraphic lines etc;(vi) Section 161 relates to notice of Accident and inquiries.28. Second responsibility as an owner of dedicated transmission line is subjected tothe following Sections:(i) Section 12 and 14 relate to transmission license;(ii) Section 28 relates to direction of RLDC;(iii) Section 32 relates to the direction of SLDC;(iv) Section 54 relates to the control of transmission and use of electricity;(v) Section 159 relates to protection of Railways etc;(vi) Section 160 relates to the protection of telegraphic lines etc;(vii) Section 161 relates to the notice of Accident and inquiries.29. The Section 39 of the 2003 Act prescribe the duties of State Transmission Utilityand Sub-Section 2(c) speaks of an efficient, co-ordinated and economical system ofintra-state transmission lines for smooth flow of electricity from a generating stateto the load centres. This Section does not require the STU to construct any transmissionline leave alone the dedicated transmission line.30. Section 40 of the 2003 Act gives the duties of a transmission licensee. Sub-Section 2of Section 40 provides mandates the licensee, inter alia, to build intra-state transmissionsystem.31. In the present case, the lines in question are “the dedicated transmission lines”connecting the generating station of the Respondent to the substation of the Appellant0989ENERGY LAW REPORTS SEPTEMBER, 201271

0990Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]which, as clarified by the Electricity (removal of difficulty) fifth order 2005, is not atransmission line in terms of Section 2(75) of the Act.32. Thus, Section 40 of the 2003 Act which deals with the duties of the transmissionlicensee i.e. the Appellant. This has got nothing to do with the dedicated transmissionlines as referred to in Section 10 of the 2003 Act.33. That apart, Section 39 and 40 did not provide the non-obstante clause becausethe legislature did not find any contradiction between the provisions of the Section10, Section 39 and Section 40 of the 2003 Act.34. Accordingly, the second question is also answered in favour of the Appellant35. The third question is as to whether the State Commission’s Intra-state OpenAccess Regulations 2005 can over-ride the specific provisions of parent Act?36. The State Commission in the impugned order relied upon the Regulation togrant the Relief to the Generating Company. Let us now deal with the Regulations.The relief claimed by the Generating Company (R-1) through its petition filed beforethe State Commission was on the basis of the Regulation 9(1)(b) of the Intra-StateOpen Access Regulation, 2005. Let us now quote the said Regulation 9.9. Charges for open accessThe following charges as applicable are payable by the open access customer.(1) Transmission charge or wheeling charge(a) Transmission charges payable to State Transmission Utility/TransmissionLicensee and wheeling charges payable to Distribution Licensee, by an openaccess customer shall be determined by the Commission. Wheeling charges shallbe determined on the basis of same principles as laid down for intra statetransmission charges.(b) Where a dedicated transmission system or a distribution system usedfor open access has been constructed for exclusive use of an open accesscustomer, the transmission charges or wheeling charges for such dedicatedsystem shall be worked out by the Licensee and got approved by the Commissionand shall be borne entirely by such open access customer till such time thesurplus capacity is allotted and used for by other persons or purposes.(c) In case intra state transmission system or distribution system is used by anopen access customer in addition to inter-state transmission system, transmissioncharges and wheeling charges as fixed and approved by the Commission shallbe payable for use of intra-state system in addition to payment of transmissioncharges for inter-state transmission.37. The term used in Regulation 9(1)(b) is “ where a dedicated Transmission Systemhas been constructed for exclusive use of an open access customer”. The primarycondition for the operation of this Regulation relates to the dedicated system whichhas been constructed. In the impugned order, the State Commission has held thatthe Regulation 9(1)(b) enables the Appellant to construct a dedicated transmissionline and to recover the recurring charges from a generator and accordingly directedthe Appellant to construct a dedicated transmission line for the RespondentGenerating Company and to collect the charges from the said generating company.38. The State Commission was, in fact, aware of the Legal position narrated inparas above and the same was admitted by it in the impugned order. The Stateabcdefghi72ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghiThe Chairman, TNEB and Ors. v. M/s Ind Barath Thermal Power Ltd. and Anr.(M. Karpaga Vinayagam, J. (Chairperson))Commission specifically held that “piecing together the various provisions of the2003 Act, it appears that the generating company is charged with the task ofestablishing, operating and maintaining the dedicated transmission lines. It alsoheld in the impugned order that the Section 10 of the Act read with electricity(Removal of Difficulties) fifth order, 2005 casts a duty on generating company toestablish a dedicated transmission line. Despite that, the State Commission haswrongly held that the enabling provision of fifth order, 2005 does not block thegenerator with adequate Authority to perform the task.39. Thus, the State Commission, after having observed that the Legal position asabove, has preferred to hold that the Clause 9 (1) (b) of 2005 Regulations empowersthe transmission licensee to establish a dedicated transmission line and recover therecurring charges from the generator. At the same breath, the State Commission hasheld that it is not obligatory on the part of the Transmission Licensee to do so. Thisapproach is wrong.40. In the impugned order while granting relief to the Respondent Company, theState Commission based its finding on the length of the line. The State Commissionhas also observed that the legislature would not have visualised the situation whichwould involve establishment of dedicated transmission line for a distance as longas 140 Kms.41. The State Commission further held that taking into consideration of the practicaldifficulties of the Generating Company in laying transmission lines for a distanceof 80 Kms up to Aruppukottai substation and 140 Kms up to Chekkanooranisubstation, it would be desirable to entrust the job of establishing the lines in questionto the Appellant as the Appellant had been conferred with the powers of TelegraphAuthority under Section 164 of the 2003 Act and as such, it would be much easierfor it to undertake this task and recover recurring charges from a generator as theIntra-state Open Access Regulations, 2005 would enable such an arrangement.42. The above findings of the State Commission are totally wrong on two counts.Firstly, Section 10 of the Act, in fact, has not made any distinction, on the basis ofthe length of the line. Secondly, the powers of Telegraph Authority under Section 164of the 2003 Act could also be conferred upon the generating Companies by the StateGovernment.43. Neither the provisions of clause 9 (1) (b) of Regulations, 2005 nor any otherclause of said Regulations provide for the construction of a dedicated transmissionline for evacuating power from the generating station to the substation by theAppellant. In other words, the careful reading of 2005 Regulation would reveal thatthe said Regulations do not cast any obligation on the Appellant to construct thededication transmission lines.44. It is quite strange on the part of the State Commission to take a view which iscontrary to Section 10 of the Electricity 2003 Act while rendering a finding to theeffect that 2003 Act did not visualize the situation which would involve establishmentof dedicated transmission line for a long distance. By this finding, the State Commissionhas virtually attempted to go into the virus of the provisions of the Act and proceedto grant relief contrary to the provisions of the 2003 Act. Such interpretation is notsustainable in law.45. Intra-state Open Access Regulations, 2005 are framed under Section 181 of the2003 Act. These Regulations framed by the State Commission are required to be0991ENERGY LAW REPORTS SEPTEMBER, 201273

0992Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]consistent with the provisions of the parent Act and Rules to carry out the provisionsof the Act. By way of interpretation of the Regulation, the State Commission can notgive a direction which is contrary to the substantive provision of the Section 10 ofthe Electricity Act.46. The Intra-State Open Access Regulations, 2005 provides for the use of transmissionsystem of the State Transmission Utility, on payment of transmission charges andwheeling charges. The transmission system is the property of State TransmissionUtility and the said system is common to be used by all Open Access Customers.The Open Access Customers have to connect to the substations of the StateTransmission Utility through lines to lay down at their own cost. The first Respondent,the generating company can not run away from its duty of constructing a dedicatedtransmission line as mandated under the substantive provision namely Section 10of the 2003 Act.47. The learned Counsel for the Respondent Generating Company contended thatthe Appellant had directed it to deposit Rs 5000 as fee for processing its applicationfor open access in terms of Intra-State Open Access Regulations, 2005 and this veryact of the Appellant would indicate that the Appellant had understood that proposeddedicated transmission lines would be governed under open access. This argumentof the Generating Company is misconceived for the reason that in case, the RespondentGenerating Company desires to sell power outside the state or to some consumerswithin the state, it would require open access for the use of transmission system ofthe Appellant, irrespective of the fact who would construct the dedicated transmissionlines. The dedicated transmission lines would terminate at substation of the Appellant.Then, it would require open access to transmit its power from the substation to thedestination point within or outside the state of Tamil Nadu. Thus, demand of Rs 5000as fee for processing the Respondent’s application for open access has nothing todo with the dedicated transmission line.48. As a matter of fact, it is to be stated that it would be beneficiary for the generatingcompany if it constructs its dedicated transmission line on its own. If the dedicatedtransmission line is constructed by the Appellant, then the generating companywould be liable to pay annually about 20 per cent of its cost as transmission chargesand the ownership of the line would be with the Appellant. On the other hand, ifthe dedicated transmission line is constructed by the Generating Company (R-1) itis not liable to pay any transmission charges for the use of lines and at the sametime, the ownership of line would remain with the generating company.49. In view of above, the third question is also answered in favour of the Appellant.50. Summary of Our Findings(i) Section 10 of the Act read with the Electricity (Removal of difficulty) fifthorder, 2005 makes it clear that it is the duty of the generating company toestablish the dedicated transmission lines.(ii) The rule of construction is well settled that in an enactment, when thereare two provisions which cannot be reconciled with each other, they shouldbe so interpreted in such a way that the effect is given to both. This is whatis known as the rule of harmonious construction. The concept that the effectshould given to both, is the very essence of the rule. Thus, a constructionthat reduces one of the provisions to a “use-less lumber” or “dead letter” isnot harmonious construction. In the present case the interpretation of theabcdefghi74ENERGY LAW REPORTS SEPTEMBER, 2012

abcdeThe Electricity Dept., Nani Daman v. Jt. Electricity Regulatory Commission, Gurgaon(Rakesh Nath, Member (Technical))phrase “subject to provision of the Act” would include provision of Section 39and 40 of the Act would render the provision of Section 10 relating to ‘dedicatedtransmission line’ a dead letter. Such a construction would not be acceptable.(iii) Intra-state Open Access Regulations, 2005 are made under Section 181of the 2003 Act. These Regulations framed by the State Commission arerequired to be consistent with the provisions of the parent Act and Rules tocarry out the provisions of the Act. By way or interpretation of the Regulation,the State Commission cannot(iv) give a direction which is contrary to the provisions of the Section 10 ofthe Electricity Act.51. In view of our above findings, the impugned order dated 20th April, 2011 is setaside. It is declared that the generating company is governed by Section 10 of theElectricity 2003 Act and as such Generating Company alone is liable to constructtransmission line at its own cost. It would, therefore, be appropriate to direct theRespondent Generating Company to get the dedicated transmission lines constructedat its own cost as per Section 10 of the 2003 Act. Accordingly directed.52. In order to overcome the apprehended difficulty of laying down dedicatedtransmission line as per the mandate of Section 10 of the Act and avoid furtherdelay, the generator may take the help of the Appellant transmission licensee to getthe dedicated transmission lines erected by the Appellant on deposit work basispaying the full cost.53. Hence, the Appeal is allowed. The impugned order is set aside. However, thereis no order as to costs.0993fgh2012 ELR (APTEL) 0993*BEFORE THE APPELLATE TRIBUNAL FOR ELECTRICITY, NEW DELHI(APPELLATE JURISDICTION)APPEAL NO. 35 OF 2012DECIDED ON: 25.05.2012The Electricity Department, Nani Damanv.Joint Electricity Regulatory Commission, GurgaonCoramM. Karpaga Vinayagam, J. (Chairperson) and Rakesh Nath, Member (Technical)CounselFor Appellant/Petitioner/Plaintiff: M.G. Ramachandran, Anand K. Ganesan andSwapna Seshadri, Advs.For Respondents/Defendant: Dinesh Kapoor, Aditya Kr. Singhal and R. Sharma, Advs.i* MANU/ET/0103/2012ENERGY LAW REPORTS SEPTEMBER, 201275

0994Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]Cases referredShankarbhai Dhavlu Waghmare v. JERC & Anr. Appeal No. 159 of 2011 (Affirmed)[p. 0997, para 13 f]Daman Industries Association v. Electricity Department of Daman and Diu and Anr. AppealNo. 169 of 2011 (Affirmed) [p. 0999, para 16 e]Acts/Rules/RegulationsElectricity Act, 2003Section 61 [p. 0995, para 3 h]Section 61(g) [p. 0998, para 13 b]Section 62 [p. 0998, para 13 h]Electricity Act, 1910 [p. 0999, para 20 i]Tariff Regulations, 2009Regulation 6 [p. 0997, para 13 g]Regulation 6(1) [p. 0997, para 13 h]Regulation 6(2) [p. 0997, para 13 h]JERC (Terms and condition for Determination of Tariff) Regulations, 2009Regulation 28 [p. 1001, para 31 e]ISSUES AND FINDINGSWhether Joint Commission had erred in increasing the retail supply Tariff for domestic,BPL and agriculture consumers resulting in Tariff shock for these categories ofconsumers?Held, Commission, disregarded the proposals of second Respondent which hadbeen published and determined Tariff giving Tariff shock to subsidized categoriesof consumers. Final approved Tariff should have some semblance with proposalswhich were published by licensee or Commission.” Regarding Tariff shock to domesticand agriculture consumers, findings of Tribunal in its Judgment dated28 th February, 2012 in Appeal No. 159 of 2011 would squarely apply to the presentcase. Accordingly, impugned order was set aside and matter remanded to JointCommission for re-determination of Tariff.Whether the Joint Commission has erred in providing for variation in Tariff of domesticconsumers with Fuel and Power Purchase Cost Adjustment determined in accordancewith the formula decided in the Tariff Order?Held, Power Purchase Cost Adjustment formula had already been set aside by thisTribunal in its Judgment in case of Daman Industries Association v. ElectricityDepartment of Daman & Diu and Another with direction to the Joint Commission tore-determine formula afresh. Accordingly, this issue did not survive.Whether the Joint Commission was correct in directing the Appellant to supply allthe consumers with the contracted load exceeding 1500 kVA at a voltage of 66 kVwithout considering the practical problems with respect to supply to the existingconsumers and the substantial expenditure required for such change?Held, order regarding the supply voltage had been passed by Joint Commission onbasis of the petition filed by Appellant. Thus, Appellant could not blame JointCommission for specifying voltage levels for consumers with load exceeding 1500kVA. However, Joint State Commission has made only slight modification withabcdefghi76ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghiThe Electricity Dept., Nani Daman v. Jt. Electricity Regulatory Commission, Gurgaon(Rakesh Nath, Member (Technical))conditions of supply in impugned order. Joint Commission was directed to considerthe issue of shifting of existing consumers to higher voltage as a consequence ofimpugned order and decide the matter after hearing all concerned and consideringcost benefit analysis of such transfer. Accordingly, this matter was remanded backto Joint CommissionWhether Joint Commission had erred in restricting Bad and Doubtful debts to 1 per centof outstanding arrears in contravention to Tariff Regulation?Held, “the receivables” indicated in Regulation 28 are the total receivables at currentTariff rate and not the arrears outstanding. Information sought as per format 18 ofRegulations relating to audited amount of receivables bad and doubtful debts wouldnot infer that allowance of bad debts had to be limited to 1 per cent of arrearsoutstanding. However, State Commission has discretion to allow bad debts upto 1per cent of receivables after the licensee gets the receivables audited. It is not bindingon Joint Commission to allow 1 per cent of receivables a bad debts. Licensee hadalso not indicated if audited accounts for previous year were submitted to JointCommission. Joint Commission might reconsider the provision of bad debts afteraudited accounts were submitted by Appellant in Truing up.Rakesh Nath, Member (Technical)JUDGMENT1. This Appeal has been filed by the Electricity Department, Daman and Diu againstthe order dated 3 rd October, 2011 passed by the Joint Electricity Regulatory Commission(“Joint Commission”) determining the Annual Revenue Requirement and Tariff forthe Appellant for the FY 2011-12.2. The Appellant is a Department of the Government of India undertaking the activityof distribution and retail supply of electricity in the Union Territory of Daman andDiu. For the development of the Union Territory of Daman and Diu, the Governmentof India has issued various policies giving incentives to the manufacturing sector.Consequently, a large number of manufacturing units have been established in theUnion Territory. Accordingly, the consumption pattern of electrical energy in theUnion Territory comprises of 93 per cent by industrial consumers and rest 7 per centconsumption by all other categories including domestic, commercial and agriculture.The consumption of domestic and agriculture category of consumers is very smalland constitute only about 4 per cent and 1.8 per cent respectively of the totalconsumption.3. In pursuance of Section 61 of the Electricity Act, 2003, the Joint Commission hasframed the Tariff Regulations, 2009. In accordance with the Tariff Regulations,the Joint Commission took up the matter of approving ARR and Tariff of theAppellant for the FY 2011-12. By order dated 3 rd October, 2011 the Joint Commissiondisposed of the Tariff petition and approved ARR and Tariff of the Appellant forthe FY 2011-12.4. In the impugned Tariff order the State Commission has enhanced the Tariff of theDomestic and Agriculture categories substantially. The Joint Commission also notifieda Power Purchase Cost Adjustment formula providing for adjustment of variationin the cost of power purchase by the Appellant to all the categories of consumersexcept the Agriculture and BPL consumers.0995ENERGY LAW REPORTS SEPTEMBER, 201277

0996Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]5. Aggrieved by the above impugned order, the Appellant filed a review petitionbefore the Joint Commission which was dismissed by order dated 4 th November, 2011,holding that there was no error apparent on the face of the record.6. Aggrieved by the main impugned order dated 3 rd October, 2011, the Appellanthas filed this Appeal.7. The Appellant has raised the following issues in the Appeal:(7.1) Tariff shock to domestic and agriculture consumers:- The State Commissionfailed to appreciated that the Tariff order mainly affected the Domestic, BelowPoverty Line (“BPL”), agriculture and commercial categories which consumeonly 3.8 per cent, 0.16 per cent and 1.79 per cent respectively of total electricityconsumption. The Joint Commission erred in fixing the Tariff in a manner thatcaused substantial Tariff shock to the Domestic, BPL and agriculture consumers,when the revenue on this account to the Appellant is not much. Besidesminuscule consumption, such categories also do not contribute to the growingelectricity requirement of the Union Territory. Similarly, the Power PurchaseCost Adjustment formula devised by the Appellant would also adversely affectthe domestic consumers.(7.2) Supply at designated voltage level: The Joint Commission in the impugnedorder has directed that supply to consumers having contracted load above1500 kVA shall necessarily be at 66 kV and the supply at 11 kV can only be forconsumers having contracted load between 100 kVA to 1500 kVA. Thesedirections would lead to undue hardship and difficulty as no distinction hasbeen made between the existing and new consumers. There are large numberof existing consumers whose load is in excess of 1500 kVA and who are beingsupplied at 11 kV presently. Such consumers have installed the switchgearand transformers, etc., at 11 kV at considerable expense. The Appellant hasalso laid 11 kV network to supply to them at 11 kV. If the supply voltage ofthese consumers is shifted to 66 kV, the same would involve expenditure tothe tune of Rs. 10 crores in construction of 66 kV sub-station for the consumeras well as the Appellant. The Appellant will also have to lay down 66 kVlines to supply such consumers which besides substantial expenditure willalso create right of way related problems. Laying of 66 kV transmission line isalso not feasible for many existing consumers considering the location ofconsumer premises, density of population, etc. Discretion should be availableto the Appellant for such supplies.(7.3) Bad debts: The Joint Commission has restricted the provision of bad debtsto 1 per cent of the outstanding arrears of the Appellant for the previous yearand not to the receivables of the Appellant. Thus, only Rs. 0.4 Crores has beenallowed as bad and doubtful debts as against Rs. 6.6 Crores claimed by theAppellant. The State Commission should have allowed the bad and doubtfuldebts upto 1 per cent of the total receivables as per the Regulations.8. On the above issues the State Commission has filed reply.8.1 We have heard the learned Counsel for the Appellant and the learned Counselfor the Joint Commission.9. In the light of the submissions made by the learned Counsel for Appellant andthe learned Counsel for the Joint Commission, the following questions would arisefor our consideration:abcdefghi78ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghiThe Electricity Dept., Nani Daman v. Jt. Electricity Regulatory Commission, Gurgaon(Rakesh Nath, Member (Technical))(i) Whether the Joint Commission has erred in increasing the retail supplyTariff for the domestic, BPL and agriculture consumers resulting in Tariff shockfor these categories of consumers?(ii) Whether the Joint Commission has erred in providing for variation in Tariffof domestic consumers with Fuel and Power Purchase Cost Adjustmentdetermined in accordance with the formula decided in the Tariff order?(iii) Whether the Joint Commission was correct in directing the Appellant tosupply all the consumers with the contracted load exceeding 1500 kVA at avoltage of 66 kV without considering the practical problems with respect tosupply to the existing consumers and the substantial expenditure required forsuch change(iv) Whether the Joint Commission has erred in restricting the Bad and Doubtfuldebts to 1 per cent of the outstanding arrears in contravention to the TariffRegulation?10. The first issue is regarding Tariff shock to domestic and agriculture consumers.11. The contention of the learned Counsel for the Appellant is that the Joint Commissionhas failed to appreciate the clauses 5.5.3 of the Tariff Policy according to which theincrease in Tariff should be gradual so that there is no Tariff shock. Further there isno rationale for increasing the Tariff for such consumers so substantially, whenthere is no significant impact on the revenue of the Appellant.12. We notice that the Joint Commission in the impugned order has increased theTariff for domestic category by 41 per cent to 60 per cent in different slabs ofenergy consumption and for agriculture consumers with connected load upto 10 HPby 400 per cent and for agriculture consumers with load beyond 10 HP and upto99 HP by 200 per cent resulting in Tariff shock. For LIG consumers in domesticcategory the increase in Tariff is by 400 per cent. The sharp increase in Tariff hasbeen resorted to with a view to keep the Tariff of all the categories of consumerswithin + 20 per cent of the average cost of supply, as per article 8.3 of the TariffPolicy.13. Similar issue has been decided by this Tribunal in its Judgment dated 28 th February,2012 in Appeal No. 159 of 2011 in the matter of Shankarbhai Dhavlu Waghmare v.JERC & Anr. relating to retail Tariff of the Union Territory of Dadra & Nagar Haveliwhich also has consumption pattern of industrial and other categories of consumerssimilar to that of Daman and Diu. The relevant extracts of the Judgment are reproducedbelow:14. Bare reading of this Regulation 6 reproduced above would reveal that theCommission has neither specified the manner in which cross subsidies are to bereduced and nor has indicated any Roadmap with intermediate mile stones forreduction of cross subsidies. The Sub-regulation (1) of Regulation 6 provides themethodology to evaluate cross subsidy and Sub-regulations (2) states that crosssubsidy would be reduced within ‘reasonable’ period. It is important to note thatthe Tariff Policy was notified in January 2006 and it required cross subsidies tobe reduced gradually and brought within ± 20 per cent of average cost of supplyby the end of year 2010-11. Thus, the policy makers gave a transition period offive years to bring down the cross subsidies within reasonable and sustainablelevels so as to reduce it gradually without giving ‘Tariff Shock’ to any category.However, the Commission in this case brought down the same by a single stroke0997ENERGY LAW REPORTS SEPTEMBER, 201279

0998Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]by substantially increasing the Tariff for subsidized categories giving ‘Tariff Shock’to these consumers. By doing so, the Commission has followed the ‘letter’ and notthe ‘Spirit’ of the Policy.16. Clause 5.5.3 of National Electricity Policy stressed upon the need of reductionof cross subsidies as over the last few decades cross-subsidies had increased tounsustainable levels. It further states that the Cross-subsidies hide inefficiencies andlosses in operations of licensees and therefore there is an urgent need to correct thisimbalance without giving Tariff shock to consumers. The existing cross-subsidiesfor categories of consumers would need to be reduced progressively and gradually.Conjoint reading amendment to Section 61(g) with Clause 5.5.3 of National ElectricityPolicy would make it clear since the cross subsidies hide the inefficiencies and truelosses in the operation of the licensees, these need to be reduced gradually withoutgiving Tariff shock to subsidized category of consumers. In the present case thedistribution losses are around 6-7 per cent only, which are one of the minimum inthe country. Therefore, it cannot be held that distribution licensee is inefficient andprevailing cross subsidies are hiding its inefficiencies and system losses. The crosssubsidies in this case are present to meet other social obligations. The consumer mixin this UT is highly skewed in favour of industrial consumers with about 97 percent of total sale of power in the area of supply. With this consumer mix, 1 per centcross subsidy provided by the subsidising category would result in 32 per cent crosssubsidy to subsidized category. Conversely, restricting cross subsidy to subsidizedcategory within 20 per cent would mean 0.6 per cent cross subsidy from subsidizingcategory i.e. virtually eliminating cross subsidy from subsidizing consumers. Provisionof restricting cross subsidy to + 20 per cent in Tariff Policy is applicable to areaswhere proportion of both the categories, subsidizing and subsidized, are comparable.The same yard stick cannot be applied in areas where consumer mix is highly biasedin favour of one category.17. In view of our findings elaborated above, we are of the opinion that the Commissionhas not determined the Tariff in accordance with the provisions of the Act, its ownTariff Regulations and Policies for the following reasons:I. The Commission was required to be guided by the National Electricity Policyand Tariff Policy while framing Tariff Regulations under Section 61 of the Actand principles of these policies are to be incorporated in the Regulations itself.Once the Regulations have been framed, the Commission is bound to follow itsown Regulations.II. Tariff Regulations framed by the Commission did not take in to account theimportant features of the Policies viz., the cross subsidies are to be reducedgradually and brought down to a level of + 20 per cent within five years. Forwhich the Commission was required to lay down Roadmap with intermediateMile Stones.III. The Commission has followed the provisions of Tariff Policy by ‘Letters’and not by ‘Sprit’ of these Policies and that too while determining the Tariffunder Section 62 of the Act and not while framing the Regulations as requiredof it under Section 61 of the Act.IV. Therefore, it cannot be held that since the Commission has followedstatutory provisions of the Act, Tariff increase cannot be said to give Tariffshock.”abcdefghi80ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghiThe Electricity Dept., Nani Daman v. Jt. Electricity Regulatory Commission, Gurgaon(Rakesh Nath, Member (Technical))20. Perusal of above table would reveal that where as the Tariff of subsidized categorieshas increased substantially, the Tariff for main subsidizing category viz. HT IndustrialCategory has not been touched at all. It is also noted that the 2nd Respondent hadproposed increase in Tariff for subsidizing categories only and had published publicnotice accordingly. In these notices there was no mention of impending substantialincrease in Tariff for Domestic and Agricultural Categories. Obviously when theirTariff was not proposed to be enhanced, the consumers of these categories would notparticipate in the process. The Commission, however, totally disregarded the proposalsof the second Respondent which had been published and determined Tariff givingTariff shock to subsidized categories of consumers. We are not conveying or suggestingthat the Commission is bound by the proposals of the licensee. We are just expressingthat the final approved Tariff should have some semblance with the proposals whichwere published by the licensee or the Commission.”22. In the light of our findings above, we deem it fit to remand back the impugnedTariff Order with the direction to redetermine the Tariff for all the categories in viewof our observations given above.14. The above finding of the Tribunal will also apply to the present case. Weaccordingly set aside the impugned order and remand the matter to the JointCommission for re-determination of Tariff.15. The second issue is regarding Power Purchase Cost Adjustment (“PPCA”) formula.16. The Tribunal by order dated 29 th February, 2012 in Appeal No. 169 of 2011 in thecase of Daman Industries Association v. Electricity Department of Daman and Diu and Anr.has already set aside the PPCA formula directing the Joint Commission to determinethe said formula afresh. The relevant extracts of the Judgment are reproduced below:“(ii) The formula specified by the Joint Commission in the impugned order is set aside asit is inconsistent with the conditions specified therein and the Tariff Regulations. However,we have given some directions to the Joint Commission in Paragraph 10.6 above in regardto allowing the Power Purchase Cost Adjustment to the Respondent No. 1.”Accordingly, this issue does not survive.17. The third issue is regarding voltage level for supply to consumers with connectedload exceeding 1500 kVA.18. According to learned Counsel for the Appellant shifting of supply to highervoltage levels will require substantial financial investment by the consumers aswell as the Appellant and will create right of way related problems. Even if suchmandate is to be given, it should apply to new consumers for whom transformers/sub-stations and other equipments need to be established for the first time and notfor the existing consumers for whom investments have already been made.19. According to learned Counsel for the State Commission, the earlier Tariff Orderfor FY 2010-11 also had similar provision for supply, which was decided on thebasis of the notification dated 26 th July, 2004 submitted by the Appellant with itsTariff Petition. Similar provision has been made for the FY 2011-12.20. Let us first examine the notification dated 26 th July, 2004 issued under the provisionof the Electricity Act, 1910. The relevant provision is reproduced below:“6. Supply to consumers having connected load between 100 kVA to 1500 kVA willbe generally at 11 kV and for more than 1500 kVA at 66 kV. However, the voltage ofsupply shall be at the discretion of the department.”0999ENERGY LAW REPORTS SEPTEMBER, 201281

01000Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]At the time of issuing of the above notification the Joint Commission had notbeen constituted and it became operational only in the year 2008.21. The Tariff order for the FY 2010-11 provided for the following under generalterms and conditions of the Tariff schedule.Supply to consumers having contracted load between 100 kVA to 1500 kVA will begenerally at 11 kV and for more than 1500 kVA at 66 kV. The consumer who requiresload more than 25000 kVA, the voltage of supply shall be at 220 kV level.22. The petition filed by the Appellant for the ARR and Tariff for the FY 2011-12before the Joint Commission also proposed the above provision of Tariff order forFY 2010-11 to be continued in the FY 2011-12.23. The Joint Commission in the impugned order has decided the condition of supplyfor the FY 2011-12 as under:Supply to consumers having contracted load between 100 kVA to 1500 kVA will be at11 kV and for more than 1500 kVA at 66 kV. The consumer who require load morethan 25000 kVA, the voltage of supply shall be at 220 kV level.24. We notice that the order regarding the supply voltage has been passed by theJoint Commission on the basis of the petition filed by the Appellant. Thus, theAppellant could not blame the Joint Commission for specifying the voltage levelsfor consumers with load exceeding 1500 kVA. However, the Joint State Commissionhas made only slight modification with conditions of supply in the impugned order.Instead of supply will be “generally at 11 kV” as indicated in the previous orderand the petition, the impugned order states that the supply “will be at 11 kV.”However, there is no discussion in the impugned order regarding shifting of theexisting consumers having load more than 1500 kVA from 11 kV to 66 kV.25. Regarding supply to existing consumers which may have to shift to highervoltage as a consequence of the impugned direction of the Joint Commission, it mayconsider the issues raised by the Appellant regarding difficulties faced in the changeover and after hearing the concerned parties i.e. the Appellant and the consumers,and considering the cost benefit analysis in change over of the existing consumersto higher voltage decide the matter. Accordingly, we remand the matter relating tochange over of the existing consumers to higher voltage to the Joint Commission.26. The fourth issue is regarding bad debts.27. According to the learned Counsel for the Appellant the Joint Commission shouldhave allowed bad debts upto 1 per cent of the receivables as per the Regulationsinstead of restricting it to 1 per cent of the outstanding arrears.28. Learned Counsel for the Joint Commission relied on the findings of the JointCommission in the impugned order.29. Let us first examine the Regulations. The relevant provision of the Regulation inreproduced below:“28. Bad and Doubtful DebtsThe Commission may, after the generating company/licensee gets the receivables audited,allow a provision for bad debts up to 1 per cent of receivables in the revenue requirementof the generating company/licensee.”According to the above Regulation, the Joint Commission may allow bad debts upto1 per cent of receivables after the licensee gets the receivables audited.abcdefghi82ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghiThe Electricity Dept., Nani Daman v. Jt. Electricity Regulatory Commission, Gurgaon(Rakesh Nath, Member (Technical))0100130. The Appellant in its petition had claimed Rs. 6.61 Crores towards previous badand doubtful debts which was 1 per cent of the proposed ARR of Rs. 661.42 Crores.31. The Joint Commission in the impugned order has held as under:-The ED-DD has projected the provision for bad and doubtful debts at Rs. 6.61crore for FY 2011-12 as detailed in the Table 5.24 below:Table 5.24: Provision for bad and doubtful debts projected by ED-DD forF1' 2011-12Particulars FY 2011-12Annual revenue requirement 661.42Provision for bad & doubtful debts as per cent of receivables 1 per centProvision for bad & doubtful bets 6.61Source: Table 25 of PetitionThe ED-DD has submitted that the provision for bad and doubtful debts hasbeen considered at 1% of the revenue requirement.Commission's AnalysisThe ED-DD has furnished the arrears due from consumers at Rs. 40.28 crore atthe end of Feb 2011.Regulation 28 of JERC (Terms and condition for Determination of Tariff)Regulations, 2009 read as follows:The Commission may, after the generating company / licensee gets thereceivables audited, allow a provision for bad debts upto 1% of receivablesin the revenue requirement of the generating company / licensee".The receivables obviously mean the debtors for electricity supplied i.e. arrearsoutstanding but not the receivables equivalent to the ARR. These receivablesare to be duly audited for considering any provision for bad debts.Accordingly, 1% percent of arrears amount of Rs. 40.28 crore works out asRs. 0.40 CroreThe Commission, accordingly, approves provision for bad and doubtfuldebts at Rs 0.40 crore for the year 2011-12 as against Rs. 6.61 crore projectedby EDDD.32. In our opinion “the receivables” indicated in the Regulation 28 are the totalreceivables at the current Tariff rate and not the arrears outstanding. The informationsought as per format 18 of the Regulations relating to audited amount of receivablesbad and doubtful debts will not infer that the allowance of bad debts has to belimited to 1 per cent of the arrears outstanding. However, the State Commission hasthe discretion to allow bad debts upto 1 per cent of the receivables after the licenseegets the receivables audited. It is not binding on the Joint Commission to allow1 per cent of the receivables a bad debts. The licensee has also not indicated if theaudited accounts for the previous year were submitted to the Joint Commission.33. In view of above, we do not want to interfere with the order of the Joint Commissionin regard to bad debts. However, the Joint Commission may reconsider the provisionfor bad debts after the audited accounts are submitted by the Appellant in theTruing upENERGY LAW REPORTS SEPTEMBER, 201283

01002Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]34. Summary of our findings:(i) Regarding Tariff shock to domestic and agriculture consumers, the findingsof the Tribunal in its Judgment dated 28 th February, 2012 in Appeal No.159 of 2011 will squarely apply to the present case. Accordingly, we setaside the impugned order and remand the matter to the Joint Commissionfor re-determination of Tariff.(ii) The Power Purchase Cost Adjustment formula has already been set asideby this Tribunal in its Judgment dated 29 th February, 2012 in Appeal No. 169of 2011 in the case of Daman Industries Association v. Electricity Departmentof Daman & Diu and Another with direction to the Joint Commission to redeterminethe formula afresh. Accordingly, this issue does not survive.(iii) Regarding supply voltage for HT consumers, we direct the Joint Commissionto consider the issue of shifting of the existing consumers to higher voltage asa consequence of the impugned order and decide the matter after hearing allconcerned and considering cost benefit analysis of such transfer. Accordingly,this matter is remanded back to the Joint Commission.(iv) According to Regulation 28, the Joint Commission may after considering theaudited account for receivables allow bad and doubtful debts upto 1 per cent ofreceivables. The receivables here refer to the total receivables and not outstandingarrears. However, providing 1 per cent for bad debts in the ARR is not bindingon the Joint Commission. The Appellant has also not indicated if the auditedaccounts were submitted to the Joint Commission. Accordingly, we do not wantto interfere with the findings of the Joint Commission in this regard. However,the Joint Commission may reconsider the provision of bad debts after the auditedaccounts are submitted by the Appellant in the Truing up.34. Accordingly, the Appeal is allowed to the extent indicated above. No orderas to costs.abcdef2012 ELR (APTEL) 1002*BEFORE THE APPELLATE TRIBUNAL FOR ELECTRICITY, NEW DELHI(APPELLATE JURISDICTION)Balmukund Sponge and Iron Pvt. Ltd. and Ors.v.Damodar Valley Corporation and Anr.I.A. NO. 135 OF 2012 IN DFR NO. 706 OF 2012DECIDED ON: 03.05.2012CoramM. Karpaga Vinayagam, J. (Chairperson) and Rakesh Nath, Member (Technical)CounselFor Appellant/Petitioner/Plaintiff: Ajit Kumar Sinha, Sr. Adv., Ajit Kumar, AshwaryaSinha, Dhanajay Kumar Pathak and K. Sundaram, Advs.ghi* MANU/ET/0100/201284ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghiBalmukund Sponge and Iron Pvt. Ltd. and Ors. v. Damodar Valley Corporation and Anr.(M. Karpaga Vinayagam, J. (Chairperson))01003For Respondents/Defendant: M.G. Ramachandran, Anand K. Ganesan, SwagatikaSahoo, Swapna Seshadri, Advs. for R-1 and Nikhil Nayyar, Adv. for R-2Cases referredJ. Kumaradasan Nair and Anr. v. Iric Sohan and Ors. MANU/SC/0186/2009: (2009) 12SCC 175: AIR 2009 SC 1333: 2010 (2) ALT 27 (SC): 2009 4 AWC (Supp) 3923 SC:ILR 2009 (2) Kerala 75: JT 2009 (2) SC 707: (2009) 3 MLJ 522 (SC): 2009 (2) SCALE544: (2009) 3 SCR 238: 2009 (2) UJ 913 [p. 1006, para 23 h]Shakti Tubes Ltd. tr. Director v. State of Bihar and Ors. MANU/SC/8471/2008: (2009)1 SCC 786: AIR 2009 SC 1200: 2009 2 AWC (Supp) 1364 SC: JT 2008 (13) SC 365:2009 (2) PLJR 11: RLW 2009 (2) SC 1669: 2008 (16) SCALE 93[p. 1006, para 23 h]Acts/Rules/RegulationsCode of Civil Procedure (CPC)Section 80 [p. 1008, para 37 i]Central Electricity Regulatory Commission Regulations, 2009Regulation 5 [p. 1005, para 9 b]Constitution of IndiaArticle 226 [p. 1005, para 9 a]Electricity Act, 2003Section 42(5) [p. 1006, para 19 e]Section 42(6) [p. 1006, para 19 e]Section 42(7) [p. 1006, para 19 e]Limitation ActSection 14 [p. 01004, para 5 d]ISSUES AND FINDINGSWhether delay of 246 days in filing the Appeal had been properly explained? Whetherin facts and circumstances of case, Section 14 of limitation Act, could be invoked forexcluding period of pendency of Writ Petition before High Court?Held, Application to condone delay did not disclose the sufficient cause or justificationfor permitting Applicants to file the Appeal with the delay of 246 days. Applicationto condone the delay of 246 days could not be allowed in light of facts of case whichwould clearly indicate that, Section 14 of limitation Act would not apply since therewas no bona fide on part of Applicants to file the Appeal with long delay afterexhausting remedy before High Court. Application dismissedORDERM. Karpaga Vinayagam, J. (Chairperson)1. M/s Balmukund Sponge and Iron Private Ltd. and others are the Applicants/Appellants.2. Damodar Valley Corporation, the first Respondent herein, being a Licensee isengaged in the business of generation and transmission of electricity.3. The Appellants/Applicants are the high tension consumers of Damodar ValleyCorporation having the supply of electricity between 33 and 132 KV through primarydedicated transmission lines.ENERGY LAW REPORTS SEPTEMBER, 201285

01004Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]4. On 26 th March, 2011 the Central Commission passed order determining theprovisional Tariff for Damodar Valley Corporation for the period from 2009 to 2014.5. Having aggrieved over the same the Appellants/Applicants have filed an Appealbefore this Tribunal as against the provisional Tariff Order dated 23 rd June, 2011. Sincethere is a delay of 246 days in filing the Appeal, the Applicants/Appellants filed anApplication i.e. I.A. No. 135 of 2012 to condone the said delay in filing the Appeal. Theexplanation offered by the Applicants for condonation of delay is as follows:(1) Though the impugned order was passed on 23 rd June, 2011 by the CentralCommission determining the provisional Tariff on the strength of CentralElectricity Regulatory Commission(Terms and Conditions of Tariff) Regulations,2009 the Applicants/Appellants did not approach the Tribunal challengingthe said order directly. On the advice of lawyers, the Applicants preferred theWrit Petitions before the Jharkhand High Court on 4 th August, 2011 challengingthe said Regulations as well as impugned Tariff Order dated 23 rd June, 2011.The High Court after hearing all the parties, dismissed the Writ Petition. However,the High Court was pleased to grant liberty to the Applicants to approach theTribunal by its order dated 20 th March, 2012. Thereupon, after makingarrangements for filing an Appeal through the Counsel, the Appeal wasultimately filed on 10 th April, 2012. That was how the delay was caused.(2) Under Section 14 of Limitation Act, the time taken in prosecuting the matterin another forum in good faith, which has no jurisdiction shall be deductedwhile computing the period of limitation. Therefore, the period during thependency of the Writ Petition before the Jharkhand High Court between4 th August, 2011, the date of filing Writ Petition and 20 th March, 2012, the dateof disposal of the Writ Petition shall be excluded. If the same is excluded therewill be no delay in filing the Appeal.6. On these grounds urged on behalf of the Applicants for condonation of delay, thelearned Counsel for Damodar Valley Corporation and Central Commission,Respondents were heard.7. They vehemently opposed the application mainly contending that the Applicants/Appellants are not bona fide in approaching this Tribunal after a long delay sincethey approached the Tribunal for the same relief which had been rejected by theHigh Court on merits.8. The questions that arise for consideration are these-(1) whether the delay of 246days in filing the Appeal has been properly explained? (2) whether in the facts andCircumstances of the case, Section 14 of limitation Act could be invoked for excludingthe period of pendency of Writ Petition before the High Court?9. On going through the applications for condonation of delay as well as the replyfiled by the Respondents we conclude that explanation offered by the Applicants isnot satisfactory as it does not show sufficient cause and Section 14 of limitation actwould not apply to the present facts of the case. The reasons of the above conclusionare as follows:(1) According to the Applicants, the impugned order was passed on23 rd June, 2011; immediately thereafter, the Applicants and other consumershad preferred a Writ Petition before the High Court, Jharkhand challengingthe impugned Tariff and seeking for allied reliefs; after hearing the parties, theHigh Court dismissed the Writ Petition by order dated 20 th March, 2012 afterabcdefghi86ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghiBalmukund Sponge and Iron Pvt. Ltd. and Ors. v. Damodar Valley Corporation and Anr.(M. Karpaga Vinayagam, J. (Chairperson))giving liberty to the Applicants to approach this Tribunal and thereupon theApplicants filed the Appeal on 10 th April, 2012 and that was how the delaywas caused. The perusal of the Writ Petitions filed by the Applicants beforethe High Court Jharkhand would indicate the Applicants made specific prayersin the Writ Petition under Article 226 of the Constitution of India.(i) The first prayer is to quash the validity of the Clause-4 of Regulation5 of the Central Commission’s Tariff Regulations, 2009.(ii) The second prayer is to quash the impugned order dated 23 rd June, 2011passed by the Commission.0100510. Admittedly, these issues relating to these prayers have been considered anddealt with by High Court and dismissed rejecting those prayers.11. In the present memo of Appeal it is noticed that the principal ground raised bythe Applicants is that the impugned order dated 23 rd June, 2011 is not valid in law.It is noticed that the very same ground has been raised before the High Court whichin turn dismissed the Writ Petition and rejected the above prayer.12. Therefore, as against the High Court order the appropriate remedy for Applicantsis to file Appeal before the Supreme Court and not before this Tribunal. As correctlypointed out by the learned Counsel for the Respondents, the Applicants can not bepermitted to raise the very same ground challenging impugned order before thisTribunal under guise of the present Appeal particularly when this ground has beendealt with on merits and concluded as against the Applicants by the order dated20 th March, 2012 by the High Court.13. It is contended by the Appellant that High Court in its order dated 20 th March, 2012gave the liberty to the Applicants to raise the issues by filing Appeal in this Tribunal.14. Let us refer to the relevant observation made by the High while giving the libertyto the Applicants to approach the Tribunal on specific issues after rejecting the groundof challenge to the impugned order dated 23 rd June, 2011. The same is as follows:53. In view of the above reasons, we do not find any force in the challenge to orderdated 23rd June, 2011 on any of the grounds.54. Some of the Petitioners also raised objection that bills are not in accordance withthe order dated 23 rd June, 2011. This Court is not entering into this controversy, soas to examine the factual aspect which was the component, could have been added inthe bill which could not have been added. For such disputes, the appropriate remedyis before the Appellate forum and not before this Court under Article 226 of theConstitution of India.55. Consequently, we find no merit in the Writ Petitions preferred by these WritPetitioners, hence all the Writ Petitions are dismissed and the interim order passed bythis Court is vacated.15. So, the above observation made by the High Court would make it clear themerits of the impugned order have been considered by the High Court and thegrounds urged by the Applicants challenging the same impugned order have beenturned down by the High Court. However, High Court granted liberty only to somepetitions when they raised objection that the bills issued by the Damodar ValleyCorporation were not in accordance with the impugned order dated 23 rd June, 2011,directing them to approach the appropriate Appellate forum on that issue. Therefore,the liberty was not granted to the Applicants to raise the merits of the matter in theENERGY LAW REPORTS SEPTEMBER, 201287

01006Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]Writ Petition which has already been decided and on the other hand, the HighCourt gave the liberty only to raise with regard to the issue where the bills wereissued in accordance with the impugned order or not.16. In other words, the liberty granted by the High Court in its order dated20 th March, 2012 was confined to the issue that the bills raised by the Damodar ValleyCorporation were not in accordance with the impugned order dated 23 rd June, 2011and not on other issues. This liberty can not be taken as licence by the Applicants tochallenge the impugned order dated 23 rd June, 2011 before this Tribunal on merits.17. That apart, no ground has been raised in this Appeal with reference to the issuerelating to the correctness of the bills as if it was not in accordance with the impugnedorder. The perusal of the memo of Appeal would squarely indicate their main groundsurged in this Appeal are with reference to the Legality and the validity of theimpugned order dated 23 rd June, 2011 on merits, which had already been decidedby the High Court as against the Applicant.18. After having obtained liberty from the High Court to raise billing disputes abovebefore the Appellate forum, the Applicants have filed this Appeal raising the groundchallenging the impugned order, with reference to which already decision wasarrived at by the High Court as against the Applicant.19. That apart, the billing disputes in respect of which liberty was given to raisebefore the appropriate forum can not be raised before this Tribunal and this can beraised only before the consumer redressal forum and Ombudsman underSection 42(5)(6) & (7) of Electricity Act, 2003.20. The main question raised before the High Court is that as to whether the impugnedprovisional order dated 23 rd June, 2011 passed by Central Commission can be implementedby the Damodar Valley Corporation to recover the Tariff from the Applicants and otherconsumers and whether the said order amounts to retrospective recovery.21. In this Appeal the Applicants challenged the impugned order on the very samegrounds without raising the billing disputes for which liberty was given and thiswill amount to re-agitating issues which have been considered by the High Courtand decided on merits by the High Court in the order dated 20 th March, 2012. Thiscan not be permitted.22. Let us come to second question. The Applicants have contended that the periodspent for prosecuting the Writ Petition before the High Court has to be deductedunder Section 14 of limitation act and if that is deducted the Appeal has to beconstrued to have been filed within time.23. The learned Senior Counsel appearing for the Applicants in support of the saidplea has cited the Judgment of Hon’ble Supreme Court in civil Appeal No. 7315 of208 decided on 16 th December, 2008 (2009) 1 SCC 786 - Skahti Tubes Limited v. Stateof Bihar and others 1 ) and in Civil Appeal No. 943-44 of 2009 decided on 12 th February,2009 (2009) 12 SCC 175 - J. Kumaradasn Nair and Another v. Iric Sohan and others 2 ).abcdefgh1 Ed.: MANU/SC/8471/2008: AIR 2009 SC 1200: 2009 2 AWC (Supp) 1364 SC: JT 2008 (13)SC 365: 2009 (2) PLJR 11: RLW 2009 (2) SC 1669: 2008 (16) SCALE 932 Ed.: MANU/SC/0186/2009: AIR 2009 SC 1333: 2010 (2) ALT 27 (SC): 2009 4 AWC (Supp)3923 SC: ILR 2009 (2) Kerala 75: JT 2009 (2) SC 707: (2009) 3 MLJ 522 (SC): 2009 (2) SCALE544: (2009) 3 SCR 238: 2009 (2) UJ 913i88ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghiBalmukund Sponge and Iron Pvt. Ltd. and Ors. v. Damodar Valley Corporation and Anr.(M. Karpaga Vinayagam, J. (Chairperson))0100724. Let us now look into the Section 14 of the limitation act to find whether it wouldapply to the facts of the present case:14. Exclusion of time of Proceeding bona fide in Court without jurisdiction.(1) In computing the period of limitation for any suit the time duringwhich the Plaintiff has been prosecuting with due diligence another civilProceeding, whether in a Court of first instance or of appeal or revision,against the defendant shall be excluded, where the Proceeding relates tothe same matter in issue and is prosecuted in good faith in a Courtwhich, from defect of jurisdiction or other cause of a like nature, is unableto entertain it.(2) In computing the period of limitation for any application, the timeduring which the applicant has been prosecuting with due diligenceanother civil Proceeding whether in a Court of first instance or of appealor revision against the same party for the same relief shall be excluded,where such Proceedings is prosecuted in good faith in a Court which,from defect of jurisdiction or other cause of a like nature, is unable toentertain it.25. The perusal of the above provision would make it clear that the time taken forprosecuting the Proceedings which were pursued before the wrong forum with duediligence and good faith is to be excluded if the Court or Tribunal is satisfied of thebona fide on the part of the Applicants.26. There are two aspects in the matter:(i) The Proceedings must have been initiated by the Applicants before thewrong forum and ultimately the same must have been rejected by the forum onthe ground of jurisdiction or other cause of like nature.(ii) The Proceedings were processed by the Applicants with bona fide impressionthat the said forum had the jurisdiction to entertain the Proceedings.27. Both these aspects are absent in this case. During the pendency of the WritPetition before Jharkhand High Court, the specific objection was raised by the DamodarValley Corporation with reference to the maintainability of the Writ Petition byraising the issue of availability of alternative remedy to the Appellant/Applicantnamely the Appellate forum to the Appellant.28. The above submissions made by the Damodar Valley Corporation were stronglyopposed by the Applicants and others. In fact, they prayed the High Court to exercisethe extraordinary jurisdiction under Article 226 of the Constitution of India to gointo validity of the Regulations as well as the merits of the case including on theLegality and validity of the recovery of Tariff as per the provisional order dated23 rd June, 2011. The High Court of Jharkhand rejected the objection raised by theDamodar Valley Corporation and decided to proceed with the matter to deal withthe validity of the Regulation and the merits of the issues. The High Court ultimatelyafter hearing the parties on all the issues dismissed the Writ Petition rejecting allthe grounds urged by the Applicants/Appellants on merits.29. Thus, the Applicants after obtaining the order from the High Court on merits arenow seeking to approach this Tribunal for the same relief. As such, there is no bonafide on the part of the Applicants in seeking the same relief and the condonation ofdelay in filing of the present Appeal before this Tribunal.ENERGY LAW REPORTS SEPTEMBER, 201289

01008Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]30. The appropriate remedy for the Applicants, as pointed by the Respondents,would be to file an Appeal before the Hon’ble Supreme Court as against the order ofthe High Court.31. As a matter of fact, it is pointed out that some of the Petitioners of the WritPetition filed the Appeal before the Hon’ble Supreme Court and Hon’ble SupremeCourt entertained the said Appeal, but, it dismissed application filed by their seekingfor the stay of the impugned provisional order of the Commission by the orderdated 4 th April, 2012. Only after having known about the same, the Applicants havechosen to present Appeal raising the same issues as contained in the Writ Petitionalong with application to condone delay of 246 days.32. The Application to condone delay does not disclose the sufficient cause or justificationfor permitting the Applicants to file the Appeal with the delay of 246 days.33. It is true that the Hon’ble Supreme Court in the decision cited by the learnedSenior Counsel for the Applicants, observed that the liberal approach is to be adoptedwhile considering the condonation of delay. In the very same decision, the Hon’bleSupreme Court held that when there is lack of bona fide and lack of diligence inprosecuting the matter then the delay can not be condoned.34. In this case, as we observed earlier, we do not find any bona fide in prosecutingthe matter before the High Court through Writ Petition and obtaining the interimrelief till the disposal of the Writ Petition and after having known that the stay wasrefused by the Hon’ble Supreme Court in the Appeal filed by others, the Applicantshave chosen to approach this Tribunal raising the very same issues which havealready been decided by the High Court.35. That apart, it is to be stated that Hon’ble Supreme Court categorically held inthe decision referred to by learned Senior Counsel for Applicants/Appellants thatSection 14 of the Limitation Act would be applicable only in such cases where theProceedings were initiated in the wrong forum i.e. forum having no jurisdiction toentertain it in consequence of the bona fide mistake of law on defect of procedureand not in cases where party has chosen to seek for altogether a different remedybefore different Court having jurisdiction to grant relief. If this principle has beenapplied to the present case, the Section 14 can not be invoked in this case.36. As indicated above, the Applicants have specifically pleaded before the HighCourt that High Court alone had the jurisdiction and accordingly prayed the HighCourt to go into the issue and decide the matter on merits and only on that basis,the merits have been decided by the High Court as against the Applicants/Appellants.37. The Hon’ble Supreme Court in 1973 SSC 381 has specifically laid down theprinciple which as follows:The objection as to the maintainability of the suit was taken at the veryinitial stage but, that was resisted and the Appellant invited a decision bythe District Munsif. Even at the stage of revision against that order in theHigh Court he took the risk of proceeding with the suit. This was, therefore,not a case of prosecuting the previous proceedings bona fide. But on the otherhand, he deliberately did so may be for obvious reason that if he had towithdraw the suit he would have to give notice under Section 80, C.P.C tothe Government; wait for the expiry of the period of notice of two monthsand thereafter, file a fresh suit. To avoid this he though he would take achance but, that chance boomeranged against him. It is not a case where heabcdefghi90ENERGY LAW REPORTS SEPTEMBER, 2012

abM/s. Indian Wind Power Association, Chennai v. TN Electricity Regulatory Commission(Rakesh Nath, Member (Technical))prosecuted due to ignorance of law or bona fide mistake nor can it be saidthat he had misconceived the suit.0100938. This observation made by the Hon’ble Supreme Court would squarely apply tothe present case. The application to condone the delay of 246 days can not beallowed in the light of the facts narrated above which would clearly indicate thatSection 14 of the limitation Act would not apply since there is no bona fide on thepart of the Applicants to file the Appeal with the long delay after exhausting theremedy before the High Court.39. Thus, the Application is dismissed. Consequently, the Appeal is also rejected.cd2012 ELR (APTEL) 1009*BEFORE THE APPELLATE TRIBUNAL FOR ELECTRICITY, NEW DELHI(APPELLATE JURISDICTION)M/s. Indian Wind Power Association Rep. by its Secretary General, Chennaiv.Tamil Nadu Electricity Regulatory Commission, Tamil Nadu Electricity BoardRep by its Chairman and The Chief Financial Controller, Chennai[Alongwith IA No. 119 of 2012 in Appeal No. 56 of 2012]eIA NO. 105 OF 2012 IN APPEAL NO. 51 OF 2012DECIDED ON: 03.05.2012CoramM. Karpaga Vinayagam, J. (Chairperson) and Rakesh Nath, Member (Technical)fghiCounselFor Appellant/Petitioner/Plaintiff: Rahul Balaji, T. Srinivasa Murthy, Advs. in IANo. 105 of 2012 in Appeal No. 51 of 2012 and N.L. Rajah, S.S. Swaminadhan,Saurabh Gupta and Arun Anbumani, Advs. in IA No. 119 of 2012 in Appeal No.56 of 2012For Respondents/Defendant: S. Vallinayagam, Adv.Acts/Rules/RegulationsElectricity Act, 2003Section 142 [p. 1011, para 2 f]Section 146 [p. 1011, para 2 f]ISSUES AND FINDINGSWhether Applicants were entitled for interim orders for stay of impugned order passedby Tamil Nadu Electricity Regulatory Commission validating levy of excess demandand energy charges?Held, there was a prima facie case to stay the operation of impugned order passed onbasis of clarification as given by Electricity Board with effect from 25 th June, 2010 for* MANU/ET/0097/2012ENERGY LAW REPORTS SEPTEMBER, 201291

01010Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]calculation of penalty for excess demand and excess energy. Balance of conveniencewas also in favour of Appellants. Interim relief sought for in these interlocutoryapplications was against collection of penalty and not the normal electricity chargesdue to Electricity Board. Electricity Board was restrained from collection of excessenergy charges and excess demand charges in terms of clarification dated 25 th June, 2010issued by Electricity Board for period till the passing of impugned order. In case ofdismissal of appeals and confirmation of impugned order by this Tribunal, Appellantswould be liable to pay penalty for excess energy and excess demand charges asper impugned order along with interest for delay in payment. Applications allowed.Rakesh Nath, Member (Technical)ORDER1. The IA Nos. 105 of 2012 and 119 of 2012 have been filed by M/s Indian WindPower Association and Southern India Mills Association respectively for interimOrders for stay of the impugned order dated 28 th December, 2011 passed by theTamil Nadu Electricity Regulatory Commission validating levy of excess demandand energy charges in terms of the clarification given in the letter dated 25 th June, 2010of Tamil Nadu Electricity Board (“Electricity Board”).2. The brief facts of the case are as under:(2.1) The Appellants are the Associations consisting of members who haveinvested in putting up wind energy generators.(2.2) Tamil Nadu Electricity Regulatory Commission passed an order dated28 th November, 2008 regarding imposition of restrictions and control of powersupply due to power shortage in the state and levy of excess demand chargesand energy charges on consumption by HT consumers for exceeding theirenergy and demand quota. Before this on 17 th November, 2008, the ElectricityBoard issued a memo for computation of the energy and demand quota of theHT consumer. According to the memo dated 17 th November, 2008 for fixingenergy and demand quota, the actual energy supplied (monthly average) forthree months average by the captive power plant was to considered. The StateCommission by order dated 28 th November, 2008 also directed that the methodfor determination of demand and energy quota for the wind energy captiveusers would be same as that of other captive users. The State Commission alsopermitted utilization of the banked wind energy between 1 st December, 2008 to30 th April, 2009 in five equal monthly instalments, wherever necessary byenhancing the demand and energy quota subject to evening peak hourrestrictions.(2.3) Subsequently, the State Commission in a suo moto Proceeding No. 1 of2009 passed an order on 28 th October, 2009 giving detailed directions forcomputing base energy consumption and base demand for the captive usersincluding the wind energy captive users for the period from 1 st November, 2008to 31 st October, 2009 and also for future i.e. with effect from 1 st November, 2009.The following directions were given in the State Commission’s order dated28 th October, 2009 for future:(i) From 1 st November, 2009, the base demand and base energy may continueto be fixed with reference to the formula laid down by the ElectricityBoard in their memo dated 1 st November, 2008.abcdefghi92ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghiM/s. Indian Wind Power Association, Chennai v. TN Electricity Regulatory Commission(Rakesh Nath, Member (Technical))(ii) Unutilized banked energy as on 1 st November, 2009 may be utilizedby the captive users from 1 st November, 2009 up to 31 st March, 2010 infive equal instalments. In addition the current generation would also beeligible for additional energy and additional demand quota, both currentgeneration as well as the energy drawn from the bank would count forcomputation of equivalent demand.(iii) From 1 st November, 2009, the captive users shall declare on the firstof every month, the energy proposed for captive use for the followingmonth, which shall be considered for the purpose of energy quota anddemand quota respectively in terms of the memo of the Electricity Boarddated 17 th November, 2008. The energy so declared shall roughly be themonthly average generation.(iv) Peak hour current generation as well as peak hour banked energyshall be eligible for peak hours utilization every month subject to limit ofone twelfth of annual peak hour generation..(v) Energy which remains unutilized as on 31 st March, 2010 shall beeligible for Encashment at the rate of prescribed by the State Commission.(2.4) The Chief Financial Controller of the Electricity Board by letter dated25 th June, 2010 issued a clarification to all the Superintending Engineers of thedistribution circles of the Board that the actual energy supplied by the captivepower plant as indicated in the memo dated 17 th November, 2008 was meantonly the actual energy adjusted.(2.5) Subsequent to the above clarification the Electricity Board which was sofar computing the quota based on the energy generation of the captive windenergy generator started using the revised method of computing quota basedon actual energy adjusted from the wind energy generator.(2.6) Aggrieved by the clarification dated 25 th June, 2010 issued by the ElectricityBoard, the Appellants filed a petition before the State Commission requestingfor directions to the Electricity Board to strictly follow its memo dated17 th November, 2008 and/order dated 28 th October, 2009 passed by the StateCommission and to calculate the quota on the basis of units injected into Gridby the wind energy generators and not on the basis of units consumed by theconsumer industries and also to punish the Electricity Board under Section 142and 146 of the Act, 2003.(2.7) The State Commission in the impugned order dated 28 th December, 2011after detailed analysis of its orders dated 28 th October, 2009 and 20 th March, 2009and the Electricity Board’s orders dated 17 th November, 2008 and 25 th June, 2010held that the clarification dated 25 th June, 2010 issued by the Board was inorder but, to be fair the same clarification should have effect from 25 th June,2010. However, the State Commission noted that the Electricity Board hadusurped the Authority of the State Commission in clarifying a matter arisingfrom previous orders of the Commission and decided to issue Show CauseNotice under Section 142 of the Act to the Electricity Board official for issuingthe clarification in circular dated 25 th June, 2010.(2.8) Aggrieved by the above order of the State Commission dated28 th December, 2011, the Appellant have filed these Appeals and by the IAsare seeking interim orders for the stay of the impugned order.01011ENERGY LAW REPORTS SEPTEMBER, 201293

01012Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]3. The learned Senior Counsel for the Appellants argued that the State Commissionon one hand decided to proceed against the Electricity Board’s official underSection 142 of the Act for usurping the Authority of the Commission in issuingclarification dated 25 th June, 2010 and on the other hand allowed effect of theclarification retrospectively with effect from 25 th June, 2010. It is further contendedthat the clarification on this issue should take effect only w.e.f. 28 th December, 2011and not from 25 th June, 2010 since it was only by the impugned order, the clarificationwas approved. He further submitted that the Board would rework the bills based ontheir clarification dated, 25 th June, 2010 from the date of clarification and wouldimpose excess demand and excess energy charges on the Applicant’s members andin that event the members of applicant’s associations would be gravely affected ifdemands were made and collected. Further, it is pointed that the State Commissionitself during the Proceedings before it had granted stay pending disposal of thepetition.4. Learned Counsel for the Electricity Board argued vehemently opposing grant ofstay. According to him, if the full supplied energy is taken for deemed demandcalculation, instead of the adjusted energy, then the wind energy generator havingbanking facility will enjoy double benefit of deemed demand causing loss to theElectricity Board.5. We have heard and carefully considered the submissions of both parties. Havingregard to the facts and circumstances of this case, we find that there is a prima faciecase to stay the operation of the impugned order passed on the basis of the clarificationas given by the Electricity Board with effect from 25 th June, 2010 for calculation ofpenalty for excess demand and excess energy. The balance of convenience is also infavour of the Appellants. The interim relief sought for in these interlocutory applicationsis against collection of penalty and not the normal electricity charges due to theElectricity Board. At the same time, we should ensure that the Electricity Board isprotected from any financial loss caused to them due to this interim order.6. After considering the rival contentions of the parties and the material on record,we are inclined to restrain the Electricity Board from collection of excess energycharges and excess demand charges in terms of the clarification dated 25 th June, 2010issued by the Electricity Board for the period till the passing of the impugned orderdated 28 th December, 2011.7. However, in case the Appeals are dismissed and the impugned order isconfirmed by this Tribunal, the Appellants will be liable to pay the penalty forexcess energy and excess demand charges as per the impugned order alongwith interest for delay in payment. We make it clear that the excess energy chargesand excess demand charges could be levied by the Electricity Board in terms ofits circular dated 25 th June, 2010 only with effect from the date of impugned orderi.e. 28 th December, 2011.8. The IAs No. 105 of 2012 and 119 of 2012 are allowed with the above directions.abcdefghi94ENERGY LAW REPORTS SEPTEMBER, 2012

01013a2012 ELR (DELHI) 1013*IN THE HIGH COURT OF DELHI AT NEW DELHIIndraprastha Gas Ltd.v.Petroleum and Natural Gas Regulatory Board and Anr.bW.P.(C) NO. 2034/2012 AND CM NOS. 4370/2012 & 5617/2012DECIDED ON: 01.06.2012JudgesArjan Kumar Sikri C.J. and Rajiv Sahai Endlaw J.cdefghiCounselFor Appellant/Petitioner/Plaintiff: Parag Tripathi, Sr. Adv. with Shiv Kumar Pandey,Tejas, Niraj Pathak, Buddy Ranganathan, Bahar Dhawan, Swati Sharma andNitesh Jain, Advs.For Respondents/Defendant: A.S. Chandhiok, ASG with I.S. Alag, J.S. Lamba, RakeshDewan and Rishabh Bhutani, Advocates for R-1; Sachin Datta, CGSC withAbhimanyu Kumar, Adv; B.M. Sehgal, Adv. for Dr. Jatin Thukral, IntervenerCases referredA.C. Jose v. Sivan Pillai MANU/SC/0341/1984: (1984) 2 SCC 656: AIR 1984 SC 921:1984 (1) SCALE 454: [1984] 3 SCR 74: 1984 (16) UJ 558 (Relied On)[p. 1026, para 22 a]Academy of Nutrition Improvement v. Union of India MANU/SC/0805/2011: (2011) 8SCC 274: 2011 6 AWC (Supp) 6010 SC: 2012 CriLJ 321: JT 2011 (8) SC 16: 2011 (3)KLT (SN) 45: 2011-2-LW (Crl) 477: 2011 (3) RCR (Criminal) 784: 2011 (7) SCALE307: [2011] 8 SCR 680 (Relied On) [p. 1024, para 18 c]Ashoka Smokeless Coal India (P) Ltd. v. Union of India MANU/SC/8741/2006: (2007)2 SCC 640: 2007 (3) ALT 20 (SC): 2007 (1) CTLJ 1 (SC): JT 2007 (1) SC 125: 2006(13) SCALE 102: [2006] Supp (9) SCR 954 (Relied On) [p. 1027, para 25 b]Chhotobhai Jethabhai Patel and Co. v. The IndusTrial Court, Maharashtra Nagpur Bench,Nagpur MANU/SC/0431/1972: (1972) 2 SCC 46: AIR 1972 SC 1268: 1972LabIC444:(1972) I LLJ 657 SC: [1972] 3 SCR 731 (Discussed) [p. 1018, para 5 c]DLF Qutab Enclave Complex Educational Charitable Trust v. State of Haryana MANU/SC/0116/2003: (2003) 5 SCC 622: AIR 2003 SC 1648: 2003 4 AWC (Supp) 3233SC: 2003 (2) SCALE 145: [2003] 2 SCR 1 (Relied On) [p. 1023, para 15 f]DLF Universal Ltd. v. Director, Town and Country Planning Department, Haryana MANU/SC/1133/2010: (2010) 14 SCC 1: AIR 2011 SC 1463 (Relied On) [p. 1022, para 12 e]Dr. Indramani Pyarelal Gupta v. W.R. Natu MANU/SC/0066/1962: AIR 1963 SC 274:(1963) 65 BomLR 378: [1963] 1 SCR 721 (Relied On) [p. 1026, para 24 g]Ispat Industries Ltd. v. Commissioner of Customs, Mumbai (2006) 12 SCC 583 (Discuused)[p. 1018, para 5 c]Johny Thomas v. Union of India MANU/KE/0683/2008 (Affirmed) [p. 1027, para 26 c]Kalidas Dhanjibhai v. State of Bombay MANU/SC/0042/1954: AIR 1955 SC 62: AIR421954Supreme Court62: (1955) 57 BomLR 702: 1955 CriLJ 193: (1954) II LLJ 694SC: [1955] 1 SCR 887 (Relied On) [p. 1026, para 22 b]* MANU/DE/2313/2012ENERGY LAW REPORTS SEPTEMBER, 201295

01014Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]Lohia Machines Ltd. v. Union of India MANU/SC/0153/1985: (1985) 2 SCC 197: AIR1985 SC 421: (1985) 1 CompLJ 249 (SC): (1985) 44 CTR (SC) 328: [1985] 152 ITR308 (SC): 1985 (1) SCALE 115: [1985] 2 SCR 686: [1985] 20 TAXMAN 9 (SC)(Relied On ) [p. 1026, para 22 b]M.C. Mehta v. Union of India WP(C) No. 13029/1985) (Mentioned) [p. 1017, para 5 B]Maharashtra State Board of Secondary and Higher Secondary Education v. Paritosh BhupeshKurmarsheth MANU/SC/0055/1984: AIR 1984 SC 1543: (1984) 86 BomLR 428:1984 (2) SCALE 30: (1984) 4 SCC 27: [1985] 1 SCR 29: 1984 (16) UJ 1107 (Discussed)[p. 1019, para 7 F]N.C. Dhoundial v. Union of India MANU/SC/1027/2003: (2004) 2 SCC 579: AIR2004 SC 1272: 2004 (1) ALD (Cri) 291: 2004 (2) ALT 7 (SC): 2004 1 AWC (Supp)516 SC: 97 (2004) CLT 790 (SC): [2004 (2) JCR 129 (SC)]: 2005-1-LW (Crl) 150: 2004(2) PLJR129: 2003 (10) SCALE 60: [2003] Supp 6 SCR 674: 2004 (1) UJ 746 (Discussed)[p. 1018, para 5 d]Naraindas Indukhya v. The State of Madhya Pradesh MANU/SC/0066/1974: (1974) 4SCC 788: AIR 1974 SC 1232: 1973 (21) BLJR 171: 1974MPLJ729 (SC): 1974MPLJ729(SC): [1974] 3 SCR 624 (#############) [p. 1018, para 5 d]O.N.G.C. v. Association of Natural Gas Consuming Industries of Gujarat MANU/SC/0324/1990: AIR 1990 SC 1851: (1990) 2 CompLJ 89 (SC): JT 1990 (2) SC 516: 1990(1) SCALE 900: 1990 Supp (1) SCC 397: 1990 (Supp) SCC 397: [1990] 3 SCR 157(Relied On) [p. 1022, para 12 g]P. Malaichami v. M. Andi Ambalam MANU/SC/0250/1973: (1973) 2 SCC 170: AIR1973 SC 2077: [1973] 3 SCR 1016 (Discussed) [p. 1018, para 5 d]Prag Ice & Oil Mills v. Union of India MANU/SC/0493/1978: (1978) 3 SCC 459: AIR1978 SC 1296: 1978 CriLJ 1281a: [1978] 3 SCR 293 (Relied On) [p. 1022, para 12 h]Pratap Chandra Mehta v. State Bar Council of Madhya Pradesh MANU/SC/0912/2011:(2011) 9 SCC 573: 2012 3 AWC 2296 SC: (SC Supp l) 2011 (5) CHN248: 2012 (2)JLJ44 (SC): JT 2011 (9) SC 135: 2011 (3) KLT (SN) 105: 2011 (III) MPJR (SC) 178:2011 (4) PLJR296: 2011 (4) RCR (Civil) 183: 2011 (8) SCALE 506: 2011 (5) UJ 2931(Discussed) [p. 1020, para 7 a]PTC India Ltd. v. Central Electricity Regulatory Commission MANU/SC/0164/2010:(2010) 4 SCC 603: AIR 2010 SC 1338: 2010 (4) ALT 9 (SC): 2010 3 AWC (Supp)2709 SC: 2010 (5) BomCR 762: 2010ELR (SC) 269: JT 2010 (3) SC 1: 2010 (3)SCALE 55: [2010] 3 SCR 609: 2010 (3) UJ 1203 (Discussed) [p. 1019, para 7 f]Rossi v. Edinburgh Corporation [1905] A.C. 21 (Relied On) [p. 1023, para 16 h]S. Sethuraman v. R. Venkataraman MANU/SC/7675/2007: (2007) 6 SCC 382: AIR2007 SC 2499: JT 2007 (7) SC 82: 2008-1-LW763: (2007) 5 MLJ 449 (SC): 2007 (7)SCALE 301: (2007) 2 SCC (L&S) 471: [2007] 6 SCR 922 (Relied On)[p. 1026, para 22 a]Shree Vindhya Paper Mills Ltd. v. Union of India MANU/MH/0194/1983: (1983) 1CompLJ 361 (Bom): AIR 1983 Bom 270 (Discussed) [p. 1025, para 22 f]Shri Sitaram Sugar Company Limited v. Union of India MANU/SC/0249/1990: (1990)3 SCC 223: AIR 1990 SC 1277: (1990) 2 CompLJ 18 (SC): JT 1990 (1) SC 462: 1990(1) SCALE 475: [1990] 1 SCR 909 (Discussed) [p. 1019, para 7 h]Tata Power Company Limited v. Reliance Energy Limited MANU/SC/1991/2009: (2009)16 SCC 659: [2009] 10 SCR 625 (Relied On) [p. 1024, para 16 a]Transmission Corporation of Andhra Pradesh Limited v. Sai Renewable Power (P) Ltd.MANU/SC/0486/2010: (2011) 11 SCC 34: 2010ELR (SC) 697: JT 2010 (7) SC 1:[2010] 8 SCR 636: 2010 (7) UJ 3299 (Relied On) [p. 1022, para 12 h]abcdefghi96ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghiIndraprastha Gas Ltd. v. Petroleum and Natural Gas Regulatory Board and Anr.(Rajiv Sahai Endlaw, J.)01015U.P. Power Corp. Ltd. v. NTPC Ltd. MANU/SC/0346/2009: (2009) 6 SCC 235: 2009(3) ALD 139 (SC): 2009ELR (SC) 13: JT 2009 (3) SC 462: 2009 (3) SCALE 620:[2009] 4 SCR 1060: 2009 (2) UJ 966: (2009) 2 UPLBEC 1075 (Relied On)[p. 1023, para 12 b]UP. Co-operative Cane Unions Federations v. West UP. Sugar Mills Association MANU/SC/0455/2004: (2004) 5 SCC 430: AIR 2004 SC 3697: 2004 (3) CTC 590: [2004]Supp (3) SCR 23 (Relied On) [p. 1021, para 10 a]West Uttar Pradesh Sugar Mills Association v. State of Uttar Pradesh MANU/SC/0063/2012: (2012) 2 SCC 773: 2012 3 AWC 2731 SC: JT 2012 (1) SC 380: 2012 (1) SCALE491 (Relied On) [p. 1021, para 10 b]Acts/Rules/RegulationsElectricity Act, 2003 [p. 1019, para 7 f]Petroleum and Natural Gas Regulatory Board Act, 2006Section 11 [p. 1021, para 10 d]Section 11(e) [p. 1019, para 7 c]Section 12 [p. 1023, para 13 c]Section 15 [p. 1025, para 22 g]Section 16 [p. 1017, para 5 h]Section 2(x) [p. 1026, para 24 f]Section 2(zn) [p. 1019, para 7 b]Section 21(2) [p. 1026, para 23 f]Section 22 [p. 1016, para 4 h]Section 46 [p. 1023, para 13 c]Section 52 [p. 1023, para 13 d]Section 61 [p. 1017, para 5 e]Section 61(2) clauses (n), (t), (za) [p. 1019, para 7 c]Section 61(2)(za) [p. 1024, para 18 c]Sections 2(i), (m), (w) [p. 1019, para 7 b]Sections 2(zk) and (w) [p. 1022, para 11 d]ISSUES AND FINDINGSWhether impugned order fixing the maximum retail price or requiring Petitioner todisclose Network Tariff and Compression Charges to its consumers was liable tobe quashed?Held, prices are generally governed / regulated by market forces. Price fixation/regulation/control is essentially a clog on the freedom of trade and commerce conferredthe status of a fundamental right. However wherever the circumstances so justify,same has been treated as a reasonable restriction. However such restriction onfundamental right has to be by legislative mandate only. PNGRB Act does not conferany power on the Board to fix/regulate price of gas as has been done vide theimpugned order. Any provision therein having the effect of empowering the Boardto fix price or Network Tariff or Compression Charges for CNG, as long as nottransportation Rate, was beyond the competence of Board and ultra vires the PNGRBAct and of no avail. Petroleum and Natural Gas Regulatory Board was not empoweredto fix or regulate the maximum retail price at which gas was to be sold by entities asPetitioner, to consumers. Board was also not empowered to fix any component ofENERGY LAW REPORTS SEPTEMBER, 201297

01016Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]Network Tariff or Compression Charge for an entity such as Petitioner having itsown distribution network. Provisions of Regulations in so far as construed by Boardto be so empowering it were held to be bad/illegal. Accordingly, impugned order tothe extent so fixing the maximum retail price or requiring Petitioner to discloseNetwork Tariff and the Compression Charges to its consumers was struck down/quashed. Petition allowed.Rajiv Sahai Endlaw, J.1. The petition impugns,JUDGMENT(i) the order dated 9 th April, 2012 of the Respondent No. 1 Petroleum andNatural Gas Regulatory Board (hereinafter called “Board”);(ii) the Petroleum and Natural Gas Regulatory Board (Determination of NetworkTariff for City or Local Natural Gas Distribution Networks and CompressionCharge for CNG) Regulations, 2008 (hereinafter called “Tariff Regulations”);(iii) Regulation 17(5) of the Petroleum and Natural Gas Regulatory Board(Authorizing Entities to Lay, Build, Operate or Expand City or Local NaturalGas Distribution Networks) Regulations, 2008 (hereinafter called “NetworkRegulations”);(iv) Regulation 7 of the Petroleum and Natural Gas Regulatory Board (Code ofPractice for Quality of Service for City or Local Natural Gas DistributionNetworks) Regulations, 2010 (hereinafter called “Quality Regulations”);(v) Scheme for Consumer Welfare Fund 2011; and,(vi) alternatively in the event of the Board being held to have power to fixnetwork tariff and compression charges, seeks direction for re-fixing thereofby following principles of natural justice.2. Notice of the petition was issued. Finding the petition to be entailing a purequestion of law as to the power of the Board to fix the rates, as done by the impugnedorder dated 9 th April, 2012, the learned ASG appearing for the Respondents statedthat no counter-affidavit was required to be filed. Further, owing to the urgencyexpressed, the matter was immediately set down for final hearing. Liberty was alsogranted to the Petitioner to avail the appellate remedy qua the quantum of the ratesfixed by the Board. The Counsels have been heard.3. We may also notice that though the multifarious challenge to various provisionsas aforesaid is made in the writ petition but the Counsels, at the time of arguments,confined their submissions to the entitlement of the Board to fix the tariff, as done inthe impugned order dated 9 th April, 2012 and made their submissions qua the Actand the various Regulations in this context only. We are therefore proceeding toadjudicate the said aspect only.4. The Board, vide the impugned order dated 9 th April, 2012 issued in exercise ofpowers under Section 22 of the Petroleum and Natural Gas Regulatory Board Act,2006 (PNGRB Act) and the Network Regulations has, (a) determined the NetworkTariff and Compression Charges for CNG in respect of Delhi City Gas Distribution(CGD) Network of the Petitioner at ` 38.58 per MMBTU and ` 2.75 per KG respectivelyw.e.f. 1 st April, 2008; (b) directed the Petitioner to recover the said Network Tariffand Compression Charges for CNG separately through an invoice, without anyabcdefghi98ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghiIndraprastha Gas Ltd. v. Petroleum and Natural Gas Regulatory Board and Anr.(Rajiv Sahai Endlaw, J.)01017premium or discount on a non-discriminatory basis; (c) directed the Petitioner toappropriately reduce the selling price of CNG from the date of issuance of thisorder; and, (d) left the modalities and time frame for refund of the differential NetworkTariff and the Compression Charges for CNG recovered by the Petitionerw.e.f. 1 st April, 2008 in excess from its consumers to be decided subsequently.5. The plea/contention of the Petitioner is -(i) that it was established in the year 1998 to comply with the direction of theSupreme Court in M.C. Mehta v. Union of India [WP(C) No. 13029/1985)] forintroduction of an alternative fuel in the form of CNG to mitigate pollutionlevels in the City of Delhi;(ii) that it is a Joint Venture Company of GAIL (India) Limited, Bharat PetroleumCorporation Ltd. and the Government of Delhi and has been authorized tosupply, sell and distribute Compressed Natural Gas (CNG) for the AutomobileSector as well as Piped Natural Gas (PNG) to the domestic, commercial andindustrial consumers in the cities of Delhi, Noida, Greater Noida, Ghaziabad;(iii) towards the said end, the Petitioner speedily expanded its network byarranging gas, laying down and building a network of interconnected pipelinesspread all over the city and set up of CNG Station etc., all at a huge cost;(iv) that the Petitioner was already operating the CGD Network under permission,allocation and authorization of the Central Government at the time of enactmentof the PNGRB Act in the year 2006 and the said position was recognized bythe PNGRB Act also;(v) the Board constituted under the PNGRB Act, on 19 th March, 2008 notifiedthe Petroleum and Natural Gas Regulatory Board (Exclusivity for City or LocalNatural Gas Distribution Network) Regulations, 2008 (hereinafter called“Exclusivity Regulations”) in exercise of its powers under Section 61 of thePNGRB Act;(vi) that the Board vide its letter dated 9 th January, 2009, while recognizing theauthorization granted to the Petitioner by the Central Government, grantedExclusivity to the CGD Network of the Petitioner for the National CapitalTerritory of Delhi, subject to the condition that the Petitioner shall submitNetwork Tariff and Compression Charges for CNG as per the Tariff Regulationsfor the approval of the Board within 30 days thereof;(vii) that though it was the contention of the Petitioner that the Board was notempowered to fix prices but the Petitioner nevertheless submitted the NetworkTariff to the Board;(viii) WP(C) No. 9022/2009 was filed by the Petitioner in this Court challengingthe action of the Board of initiating the process of granting authorization toothers, by calling tenders for the city of Ghaziabad. The said writ petition wasallowed by Division Bench of this Court vide judgment dated 21 st January, 2010reported as 170 (2010) DLT 80 holding that the Board did not have the powerto grant authorization in the wake of non-notification of Section 16 of thePNGRB Act. The Board challenged the said judgment by filing SLP(C) 5408/2010 but during the pendency of the said SLP the Respondent No. 2 Union ofIndia on 12 th July, 2010 notified Section 16 w.e.f. 15 th July, 2010;(ix) that the Board on 1 st September, 2010 in exercise of its powers underSection 61 of the PNGRB Act notified the Quality Regulations (supra) requiringENERGY LAW REPORTS SEPTEMBER, 201299

01018Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]the entities as the Petitioner to, in the bills to be raised by them on the consumersinter alia state the Network Tariff and Compression Charges for CNG;(x) that the Supreme Court vide order dated 12 th May, 2011 in the SLP (supra)permitted the Board to deal with the applications for authorization on theconditions mentioned therein;(xi) that upon the intent of the Board to fix tariff, that too from a retrospectivedate, becoming apparent to the Petitioner, the Petitioner objected thereto;(xii) that the Board has no power to fix and regulate Network Tariff andCompression Charges.Reliance is placed on:(a) Ispat Industries Ltd. v. Commissioner of Customs, Mumbai (2006) 12 SCC 583laying down that in the case of conflict between the Act and the Rules, the Actis to prevail;(b) N.C. Dhoundial v. Union of India 1 (2004) 2 SCC 579, Naraindas Indukhya v.The State of Madhya Pradesh 2 (1974) 4 SCC 788, Chhotobhai Jethabhai Patel andCo. v. The IndusTrial Court, Maharashtra Nagpur Bench, Nagpur 3 (1972) 2 SCC 46and P. Malaichami v. M. Andi Ambalam 4 1973 2 SCC 170 all laying down thatbodies created under a Statute derive their power from the Statute and have nounlimited jurisdiction.6. Since the challenge in the petition is to the power of the Board to direct thePetitioner to, while charging its consumers, disclose the Network Tariff and theCompression Charges and to also fix the said Network Tariff and CompressionCharges, we deem it appropriate to, before noticing the arguments urged by theSenior Counsel for the Petitioner, record as to how the learned ASG appearing forthe Respondents has shown the source of or justified the said power.7. The learned ASG has drawn our attention to:(i) Regulations 3 and 4 of the Exclusivity Regulations making the same applicableto an entity as the Petitioner and explaining the rationale for allowing suchExclusivity; (ii) the letter dated 9 th January, 2009 of the Board to the Petitionergranting exclusivity to the Petitioner inter alia on the term/condition that thePetitioner shall submit the Network Tariff and Compression Charges for CNGas per the Quality Regulations for approval of the Board; (iii) on the basis ofthe above, it is contended that the Petitioner having accepted the said term asa condition for obtaining exclusivity is bound by a contractual obligation withthe Board and is now estopped from challenging the power of the Board;(iv) attention is also invited to the letter dated 11 th February, 2009 of the Petitionerto the Board accepting the said power of the Board;(v) attention is invited to letters dated 25 th March, 2009 of the Board and29 th May, 2009 of the Petitioner to justify contractual basis for the power of the1 Ed.: MANU/SC/1027/2003: AIR 2004 SC 1272: 2004 (1) ALD (Cri) 291: 2004 (2) ALT 7 (SC):2004 1 AWC (Supp) 516 SC: 97 (2004) CLT 790 (SC): [2004 (2) JCR 129 (SC)]: 2005-1-LW (Crl)150: 2004 (2) PLJR129: 2003 (10) SCALE 60: [2003] Supp 6 SCR 674: 2004 (1) UJ 7462 Ed.: MANU/SC/0066/1974: AIR 1974 SC 1232: 1973 (21) BLJR 171: 1974MPLJ729 (SC):1974MPLJ729 (SC): [1974] 3 SCR 6243 Ed.: MANU/SC/0431/1972: AIR 1972 SC 1268: 1972LabIC444: [1972] 3 SCR 7314 Ed.: MANU/SC/0250/1973: AIR 1973 SC 2077: [1973] 3 SCR 1016abcdefghi100ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghiIndraprastha Gas Ltd. v. Petroleum and Natural Gas Regulatory Board and Anr.(Rajiv Sahai Endlaw, J.)Board to fix Network Tariff and Compression Charges. It is urged that thePetitioner having dealt with the Board, so understanding the powers of theBoard, cannot now be heard otherwise;(vi) attention is invited to “Introduction” and “Statement of Objects and Reasons”of the PNGRB Act to urge that the same was enacted to protect the interest ofthe consumers;(vii) it is similarly pointed out that Sections 2(i), (m), (w) of the PNGRB Act areall intended to ensure that the consumer is not exploited;(viii) particular attention is invited to Section 2(zn) of the Act defining the“transportation rate”;(ix) on the basis of Section 11(e) it is contended that the Board is empowered toregulate inter alia the transportation rates;(x) the Rule making provision i.e. Section 61 is shown to be, ‘without prejudiceto the generality of the powers’ and thus not exhaustive; particular attentionis invited to Section 61(2) clauses (n), (t), (za) to show that Board is empoweredto make regulations qua transportation tariff and any other matter which isrequired to be or may be specified by Regulations or in respect of which provisionis to be made by Regulations;(xi) it is contended that the writ petition nowhere shows as to how theRegulations made are inconsistent with the Act;(xii) it is argued that if it were to be held that the Board cannot control tariff,no purpose would be served in fixing the transportation cost which the Petitioneralso admits the Board to be empowered to;(xiii) it is argued that the Board is not fixing the retail price of CNG but is onlyfixing the transportation cost;(xiv) Reliance is placed on:(a) PTC India Ltd. v. Central Electricity Regulatory Commission 5 (2010) 4SCC 603 dealing with the powers of the Appellate Tribunal constitutedunder the Electricity Act, 2003;(b) Maharashtra State Board of Secondary and Higher Secondary Education v.Paritosh Bhupesh Kurmarsheth 6 AIR 1984 SC 1543 to contend that indetermining the constitutionality of the Regulations, the Court shouldonly see whether the Regulations fall within the scope and ambit of thepower conferred by the Statute on the delegatee, whether the Regulationis inconsistent with the provision of the parent Statute and whether theRegulation infringes any of the fundamental rights or other restrictionsor limitation imposed by the Constitution;(c) Shri Sitaram Sugar Company Limited v. Union of India 7 (1990) 3 SCC 223laying down that the action of a delegatee must reasonably relate to thepurpose of the enabling legislation;010195 Ed.: MANU/SC/0164/2010: AIR 2010 SC 1338: 2010 (4) ALT 9 (SC): 2010 3 AWC (Supp)2709 SC: 2010 (5) BomCR 762: 2010ELR (SC) 269: JT 2010 (3) SC 1: 2010 (3) SCALE 55:[2010] 3 SCR 609: 2010 (3) UJ 12036 Ed.: MANU/SC/0055/1984: (1984) 86 BomLR 428: 1984 (2) SCALE 30: (1984) 4 SCC 27:[1985] 1 SCR 29: 1984 (16) UJ 11077 Ed.: MANU/SC/0249/1990: AIR 1990 SC 1277: (1990) 2 CompLJ 18 (SC): JT 1990 (1) SC462: 1990 (1) SCALE 475: [1990] 1 SCR 909ENERGY LAW REPORTS SEPTEMBER, 2012101

01020Energy Law Reports (ELR) [Vol. 2, Part 4, 2012](d) Pratap Chandra Mehta v. State Bar Council of Madhya Pradesh 8 (2011) 9SCC 573 to contend that the powers of the delegatee have to be construedkeeping in mind the objects sought to be achieved by the Statute and thepower to frame Rules has to be given a wider rather than a restrictivescope so as to render the legislative object achievable; that the legislatureprovides a general Rule making power to carry out the purpose of theAct and when such a power is given, the Rules framed therein if satisfythe functionality of the object of the enactment are valid. (xv) that thequantum of the Network Tariff and the Compression Charges fixed bythe Board are not to be gone into these proceedings and, if the Board isfound to be entitled to fix the same, are to be subject matter of appealbefore the Appellate Authority already preferred by the Appellant; and,xvi) that keeping in view the objective of the PNGRB Act, the Regulationspermitting the Board to fix the Network Tariff and the Compression Chargesand the action of the Board so fixing the Network Tariff and theCompression Charges cannot be interfered with.8. The crux of the argument of the Senior Counsel for the Petitioner is that the Act,vide Section 22 thereof empowers the Board to only fix the transportation tariff; thatthe transportation rate, as per Section 2(zn) is the rate to be charged either by acommon carrier or a contract carrier of gas from a person engaged in marketing ofgas, for moving the gas. It is argued that the Act no where empowers/authorizesthe Board to fix the price to be charged by a marketeer of gas from its consumers. Wetherefore, without elaborating on the submissions in this regard, first intend toexamine the provisions of the Act in this respect.9. However before doing so, it is necessary to deal with the contention of the learnedASG that the impugned order dated 9 th April, 2012 does not fix the retail price ofgas and only fixes the Network Tariff inasmuch as if that were to be the position,the question would only be, whether the fixation of Network Tariff and CompressionCharges to be charged by the Petitioner from its consumers, does not affect the totalprice to be charged by the Petitioner. In this regard it may be noted that the impugnedorder dated 9 th April, 2012 itself requires the Petitioner to reflect such NetworkTariff and Compression Charges fixed by the Board “through appropriate reductionin selling prices” and defers the decision on modalities and time frame for “refund”of differential Network Tariff and Compression Charge for CNG for the period from1 st April, 2008 till the order dated 9 th April, 2012. Had the order dated 9 th April, 2012impugned in this petition not been of fixation of retail price of gas to be charged bythe Petitioner from its consumers, mention of “reduction in sale price” and of “refundby the Petitioner of the Network Tariff and Compression Charge for CNG chargedby the Petitioner in excess of the rate so fixed by the Board” would not have beenmade in the impugned order. The argument of the learned ASG that the Board byfixing the Network Tariff and the Compression Charges is not fixing the price to becharged by the Petitioner from its consumers, thus cannot be accepted. The questionfor adjudication then is, whether the Act authorizes the Board to do so and whetherthe intent of the legislature was to confer a power of price fixation on the Board.abcdefgh8 Ed.: MANU/SC/0912/2011: 2012 3 AWC 2296 SC: (SC Supp l) 2011 (5) CHN248: 2012 (2)JLJ44 (SC): JT 2011 (9) SC 135: 2011 (3) KLT (SN) 105: 2011 (III) MPJR (SC) 178: 2011 (4)PLJR296: 2011 (4) RCR (Civil) 183: 2011 (8) SCALE 506: 2011 (5) UJ 2931i102ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghiIndraprastha Gas Ltd. v. Petroleum and Natural Gas Regulatory Board and Anr.(Rajiv Sahai Endlaw, J.)0102110. The Preamble to the PNGRB Act undoubtedly describes it as, to provide for theestablishment of the Board to regulate inter alia “marketing and sale of natural gasso as to protect the interests of consumers”. Regulation of marketing and sale, wouldgenerally speaking, include regulation of price. This line of judgments and adiscussion thereon can be found in UP. Co-operative Cane Unions Federations v. WestUP. Sugar Mills Association 9 (2004) 5 SCC 430, holding the power of regulation to beall-encompassing. We may notice that the ratio of the said judgment has alreadybeen referred to a Larger Bench vide West Uttar Pradesh Sugar Mills Association v.State of Uttar Pradesh 10 (2012) 2 SCC 773. Similarly, price fixation is also generallytowards protection of interest of consumers. Thus, from a reading of the Preamble tothe Act, it definitely follows that the Board constituted thereunder is empowered to“fix the price”. However such an objective, reflected in the Preamble to the statute isnot enough and a provision for price fixation has to exist in the body of the statutealso. As is obvious from the arguments of the learned ASG as noted above, there isno specific provision of the PNGRB Act empowering the Board to control/regulateor fix the price at which gas is to be sold to the consumer and which power is beingsought to be exercised by the Board. Section 11 of the PNGRB Act, while prescribingthe functions which the Board is to perform, does not state, as it ought to havestated/prescribed, had the legislature intended the Board to perform the function ofcontrolling/regulating/fixing the price of natural gas, to perform such function.What falls for determination is whether the power to control/regulate/determineprice can be deduced from the functions as described in the following clauses ofSection 11 of the Act and which alone can be said to have closest nexus if any toprice regulation/fixation:“11. Functions of the Board.- The Board shall-(a). Protect the interest of consumers by fostering fair trade and competitionamongst the entities;(e). regulate, by regulations, -(i) ……….(ii) transportation rates for common carrier or contract carrier;(iii) ……….(f). in respect of notified petroleum, petroleum products and natural gas-(i) ………..(ii) ensure display of information about the maximum retail pricesfixed by the entity for consumers at retail outlets;(iii) monitor prices and take corrective measures to prevent restrictivetrade practice by the entities;(iv) ……….(v) provide, by regulations, and enforce, retail service obligationsfor retail outlets and marketing service obligations for entities;(vi) monitor transportation rates and take corrective action to preventrestrictive trade practice by the entities;(j) perform such other functions as may be entrusted to it by the CentralGovernment to carry out the provisions of this Act.”9 Ed.: MANU/SC/0455/2004: AIR 2004 SC 3697: 2004 (3) CTC 590: [2004] Supp (3) SCR 23810 Ed.: MANU/SC/0063/2012: 2012 3 AWC 2731 SC: JT 2012 (1) SC 380: 2012 (1) SCALE 491ENERGY LAW REPORTS SEPTEMBER, 2012103

01022Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]11. We are of the opinion that none of the aforesaid clauses can be construed as prescribingprice control/regulation as a function of the Board. Clause (a) supra while prescribingprotection of interest of consumers limits the same to, by fostering fair trade and competitionamongst entities engaged in distributing, dealing, transporting, marketing gas. Thefunction of the Board thereunder is of regulating the inter se relationship of entitiesunder the Act and not to regulate/control the relationship between the entities underthe Act and the consumers. Similarly, Clause (f) while prescribing function of monitoringprices limits the same to taking corrective measures to prevent restrictive trade practicesby the entities. Thus only if the Board finds that the marketeers of gas in a particulararea have formed a cartel or are indulging in any other restrictive trade practices, is theBoard empowered to monitor prices. Such is not the case of the Board in the presentinstance. The Petitioner even though till date the exclusive marketeer of gas in Delhi,has not been accused of any restrictive trade practice and the power exercised also isnot in the name of monitoring price. Another sub-clause of Clause (f) of Section 11confers function on the Board to ensure display of information about Maximum RetailPrice. Again, had the intent of the legislature been to confer the power on the Board tofix the Maximum Retail Price, nothing prevented the legislature from providing soexpressly. Instead, functions of enforcing retail service obligations and marketing serviceobligations only have been conferred by the legislature. The definition of retail serviceobligations and marketing service obligations in Sections 2(zk) and (w) also do notinclude obligation to sell at the prices fixed by the Board.12. That brings us to the question as to whether prices can be fixed/regulated/controlledand if so, how. Prices are generally governed / regulated by market forces. Pricefixation/regulation/control is essentially a clog on the freedom of trade and commerceconferred the status of a fundamental right. However wherever the circumstances sojustify, the same has been treated as a reasonable restriction. However such restrictionon fundamental right has to be by legislative mandate only. The Supreme Court recentlyin DLF Universal Ltd. v. Director, Town and Country Planning Department, Haryana 11(2010) 14 SCC 1, finding no provision in the statute (Haryana Development andRegulation of Urban Areas Act, 1975) empowering the Director to fix the sale price,held directions fixing the sale price to be beyond the limits laid down by the empoweringAct and suffering from lack of power and void. It was observed that an order whichis not within the powers given by the empowering Act, has no legal legs to stand onand is a nullity. It was further held that a power of imposing restrictions on profitpercentages, time limit on construction and handing over of such construction doesnot encompass within itself the right to exercise power in manner that inhibits termsof contract and freedom granted therein. Similarly, in O.N.G.C. v. Association of NaturalGas Consuming Industries of Gujarat 12 AIR 1990 SC 1851 it was observed that pricefixation is a legislative function. Even the seven Judge Bench of the Supreme Court inPrag Ice & Oil Mills v. Union of India 13 (1978) 3 SCC 459 had observed that unless bythe terms of a particular statute, price fixation is made a quasi-judicial function, it isreally legislative in character. The Supreme Court in Transmission Corporation of AndhraPradesh Limited v. Sai Renewable Power (P) Ltd. 14 (2011) 11 SCC 34 also opined that11 Ed.: MANU/SC/1133/2010: AIR 2011 SC 146312 Ed.: MANU/SC/0324/1990: (1990) 2 CompLJ 89 (SC): JT 1990 (2) SC 516: 1990 (1) SCALE900: 1990 Supp (1) SCC 397: 1990 (Supp) SCC 397: [1990] 3 SCR 15713 Ed.: MANU/SC/0493/1978: AIR 1978 SC 1296: 1978 CriLJ 1281a: [1978] 3 SCR 29314 Ed.: MANU/SC/0486/2010: 2010ELR (SC) 697: JT 2010 (7) SC 1: [2010] 8 SCR 636: 2010(7) UJ 3299abcdefghi104ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghiIndraprastha Gas Ltd. v. Petroleum and Natural Gas Regulatory Board and Anr.(Rajiv Sahai Endlaw, J.)01023fixation of tariff is a statutory function, to be performed by a Statutory Authority infurtherance of the provisions of the relevant laws; finding the Electricity Act, 2003 tobe requiring the appropriate Commission to determine the tariff, it was held to beempowered to do so. In contrast, the Board with which we are concerned in thepresent case, as aforesaid is not found to have been assigned the function of fixing theNetwork Tariff or the Compression Charges as it has purported to do. The SupremeCourt in U.P. Power Corp. Ltd. v. NTPC Ltd. 15 (2009) 6 SCC 235 has held that regulatoryprovisions are required to be applied having regard to the nature, textual context andsituational context of each statute.13. Coming back to the PNGRB Act, Section 12 thereof while conferring jurisdictionon the Board to entertain complaints and of resolution of disputes also does notmention complaints of sale beyond any retail price as may be fixed by the Board,but only mentions contravention of display of retail price at retail outlets. Similarly,Section 46 of the Act while prescribing punishment for unauthorized activities doesnot deal with punishment if any for sale beyond the retail price fixed by the Board.Section 52 while prescribing the obligations of entities as the Petitioner does notrequire them to sell gas at the prices fixed by the Board.14. The aforesaid analysis of the PNGRB Act does not show the Board to have beenconferred power to regulate the Maximum Retail Price of gas. In the absence of anyprovision to the said effect in the Act, the mention in the Preamble to the Act toregulation of marketing and sale of natural gas is to be necessarily read as withoutthe power to fix the Maximum Retail Price. Price fixation being a restriction onfundamental right, such a power cannot be inferred by conjectures and has to beexpressly conferred. As aforesaid no such power/function has been conferred onthe Board and the learned ASG also during the arguments has struggled to dig outsuch a power in the Board by seeking to extrapolate different provisions of the Act.15. The Supreme Court in DLF Qutab Enclave Complex Educational Charitable Trust v.State of Haryana 16 (2003) 5 SCC 622 held that a regulatory Act must be construedhaving regard to the purpose it seeks to achieve and a Statutory Authority cannotask for something which is not contemplated under the statute. The statute in thatcase relating to regulation of user of land was construed to be not imposing anylimitation prohibiting transfer of land not affecting its user. It would thus be seenthat the powers of regulation under a statute were held to be not unlimited and aright of regulation was held to be confined to the language of the statute and not allpervasive. The basic rule of interpretation of statutes that the Court shall not gobeyond the statute unless it is absolutely necessary so to do and that purposiveconstruction would be resorted to only when literal interpretation leads to manifestinjustice or absurdity, was applied. In our view the principle applied therein holdsgood in the facts of the present case also. Merely because the Board has been conferredwith regulatory powers will not be interpreted to empower the Board to exercisepowers which the statute has not conferred on it.16. The House of Lords as far back as in Rossi v. Edinburgh Corporation [1905] A.C.21 held that provisions in restraint of trade ought not to be interpreted as by implication15 Ed.: MANU/SC/0346/2009: 2009 (3) ALD 139 (SC): 2009ELR (SC) 13: JT 2009 (3) SC 462:2009 (3) SCALE 620: [2009] 4 SCR 1060: 2009 (2) UJ 966: (2009) 2 UPLBEC 107516 Ed.: MANU/SC/0116/2003: AIR 2003 SC 1648: 2003 4 AWC (Supp) 3233 SC: 2003 (2)SCALE 145: [2003] 2 SCR 1ENERGY LAW REPORTS SEPTEMBER, 2012105

01024Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]extending the restrictions in restraint of trade further than the legislature hassanctioned. To the same effect is the dicta of the Supreme Court in Tata Power CompanyLimited v. Reliance Energy Limited 17 (2009) 16 SCC 659 where it was held that saveand except for the exercise of regulatory power which is specifically recognized bythe statute, it is not open to the regulatory body (Electricity Regulatory Commissionin that case) to exercise a power which is not incorporated in the statute.17. We are also of the view that in the absence of any provision to the said effect in theAct, such a power cannot be inferred from the rule making power or by referring tothe omnibus rule making power. It is also worth mentioning that there is no indicationwhatsoever in the Act as to the factors which are to govern such price fixation.18. As far as the reliance by the learned ASG on Section 61(2)(za) is concerned, weare of the view that in the absence of any such power in the Board under the Act, nosuch power can be conferred by the Board on itself under the guise of makingregulations. The Supreme Court recently in Academy of Nutrition Improvement v. Unionof India 18 (2011) 8 SCC 274 reiterated that conferment of rule making power by anAct does not enable the rule making authority to make a rule which travels beyondthe scope of the enabling Act.19. That brings us to transportation rate/transportation tariff which undoubtedlyfinds mention in the Act and to the question whether the Network Tariff and theCompression Charges fixed by the Respondent are within the ambit of the saidtransportation rate. Section 2(zn) of the Act defines “transportation rate” as:“transportation rate”, in relation to common carrier or contract carrier or a cityor local natural gas distribution network, means such rate for moving each unitof petroleum, petroleum products or natural gas as may be fixed by regulations.”Section 22 titled “Transportation Tariff” is as under:-“22. Transportation tariff.-(1) Subject to the provisions of this Act, the Boardshall lay down, by regulations, the transportation tariffs for common carriersor contract carriers or city or local natural gas distribution network and themanner of determining such tariffs.(2) For the purposes of Sub-section (1), the Board shall be guided by the following,namely:(a) the factors which may encourage competition, efficiency, economicuse of the resources, good performance and optimum investments;(b) safeguard the consumer interest and at the same time recovery of costof transportation in a reasonable manner;(c) the principles rewarding efficiency in performance;(d) the connected infrastructure such as compressors, pumps, metering units,storage and the like connected to the common carriers or contract carriers;(e) bench-marking against a reference tariff calculated based on cost ofservice, internal rate of return, net present value or alternate mode of transport;(f) policy of the Central Government applicable to common carrier, contractcarrier and city or local distribution natural gas network.”17 Ed.: MANU/SC/1991/2009: [2009] 10 SCR 62518 Ed.: MANU/SC/0805/2011: 2011 6 AWC (Supp) 6010 SC: 2012 CriLJ 321: JT 2011 (8) SC16: 2011 (3) KLT (SN) 45: 2011-2-LW (Crl) 477: 2011 (3) RCR (Criminal) 784: 2011 (7)SCALE 307: [2011] 8 SCR 680abcdefghi106ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghiIndraprastha Gas Ltd. v. Petroleum and Natural Gas Regulatory Board and Anr.(Rajiv Sahai Endlaw, J.)0102520. The contention of the Senior Counsel for the Petitioner is that the said transportationrate/transportation tariff is the rate/tariff which the entity which has an interconnectednetwork of gas pipelines and associated equipment used for transportingnatural gas from a bulk supply high pressure transmission main to the mediumpressure distribution grid and subsequently to the service pipes supplying naturalgas to domestic, industrial or commercial premises and CNG stations is entitled tocharge from the marketeers of gas. It is urged that the Act contemplates an entityengaged only in laying down and maintaining such network alone without being amarketeer of gas and which entity has been described as a contract carrier. It isfurther urged that the Act also contemplates a marketeer of gas which has laiddown its own network of gas pipelines and the associated equipment as the Petitionerhas done and empowers the Board to compel such an entity, as the Petitioner to, inits own distribution network carry/move the gas of other marketeers also. The SeniorCounsel for the Petitioner contends that though the Petitioner at present is the onlymarketeer of gas with exclusivity rights, in future upon other marketeers coming inthe fray, can be compelled by the Board to in its own network, also carry/move thegas of such other marketeers. It is contended that the transportation rate/transportationtariff referred to in the Act is the rate/tariff which such common carrier or a marketeerwith own distribution network is to charge from other marketeers of gas. The argumentis that the transportation rate/transportation tariff mentioned in the Act is the rate/tariff charged by one entity under the Act from another and not the rate/tariff whichthe marketeer of gas under the Act is to charge from the consumers.21. As noticed above, while Section 2(zn) uses the expression “transportation rate”,Section 22 uses the expression “transportation tariff”. It was as such enquired fromthe Senior Counsel for the Petitioner whether there is any difference between ‘rate’and ‘tariff’. The Senior Counsel for the Petitioner has answered the said query byinviting attention to Transmission Corporation of Andhra Pradesh Ltd. (supra) whichdescribes tariff as a table or a book or a catalogue of rates. It is further contendedthat there is no difference between the two. We may however notice that PTC IndiaLtd. (supra) also defines tariff as including within its ambit fixation of rates.22. In so far as the contention of the learned ASG of the Petitioner, irrespective of thePNGRB Act, being contractually bound to be governed by the rates/tariff prescribedby the Board is concerned, the Senior Counsel for the Petitioner has referred us toShree Vindhya Paper Mills Ltd. v. Union of India 19 AIR 1983 Bombay 270 where it wasobserved that “law is not determined by conduct of the parties or by their view ofit”. We even otherwise are of the opinion that if the Board is not found to beempowered to regulate the Maximum Retail Price of gas under the statute by whichit has been created, it cannot wrest such a power by imposing the same as a conditionwhile exercising the other powers vested in it. The Board, under Section 15 of thePNGRB Act is empowered to register entities desirous inter alia of marketing naturalgas. If the Board is not empowered to regulate/control price, the Board cannot,while registering entities, impose a condition that such entities would be bound bythe maximum retail price fixed by the Board. Such a condition if any imposed by theBoard would be void in as much as the Board, being a creature of statute, cannotperform any act beyond those which it has been authorized to perform. The Petitionerby conduct could not have conferred upon the Board a jurisdiction which it does19 Ed.: MANU/MH/0194/1983: (1983) 1 CompLJ 361 (Bom): AIR 1983Bom270ENERGY LAW REPORTS SEPTEMBER, 2012107

01026Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]not derive under the PNGRB Act. It was held in S. Sethuraman v. R. Venkataraman 20(2007) 6 SCC 382 that if jurisdiction cannot be conferred by consent, it cannot clothethe authority to exercise the same in an illegal manner. Similarly in A.C. Jose v. SivanPillai 21 (1984) 2 SCC 656 it was held that agreement or participation not permissibleor authorized by law cannot estop challenge thereto. Mention may also be made ofKalidas Dhanjibhai v. State of Bombay 22 AIR 1955 SC 62 where application for registrationunder a statute was held to be not coming in the way of subsequent challenge to theneed/requirement for such registration. The Supreme Court in Lohia Machines Ltd. v.Union of India 23 (1985) 2 SCC 197 also held that acquiescence in an earlier exercise ofa rule making power which was beyond the jurisdiction of the rule making authoritycannot make a similar exercise at a subsequent date valid.23. The word “transport” and the expression “transportation rate/transportationtariff” connote the cost of movement from one place to another. The goods which aremoved generally are not of the transporter. If the intent of the legislature had been toempower the Board to fix the Maximum Retail Price of gas and further if the legislaturehad thought that cost of transportation was to be one of the factors to be taken intoconsideration while fixing the said retail price, the legislature would not have stoppedat providing for fixation of such transportation rate only. The provision for fixation,only of transportation rate, clearly connotes that the transportation rate is the rate tobe charged by the transporter for the goods of the others. In the present case, thetransportation is to be of the gas belonging to another entity by the common carrier orby the marketeer also having own distribution network. We are therefore inclined toaccept the contention of the Senior Counsel for the Petitioner that the transportationrate provided for in the Act is the rate to be charged by one entity under the Act fromanother for transporting/carrying/moving gas of other. The same can by no stretchof imagination have relevance to Maximum Retail Price of gas, though the transportationcost so fixed by the Board may have a bearing on the case of a price to be charged bya marketeer of gas not having its own distribution network but utilizing the distributionnetwork of another entity under the Act. This position is fortified from Section 21(2).24. We may at this stage notice that the Section 2(x) of the Act does define the “MaximumRetail Price” as the “maximum price fixed by an entity at which the natural gas maybe sold to the retail consumers” and includes in the same all taxes, cess and levies,local or otherwise and freight or commission payable to the dealers. The same is alsoindicative of the maximum retail price being fixed by the entities under the Act themselvesand not by the Board. We had during the hearing enquired as to whether any of theother provisions of the Act uses the expression ‘Maximum Retail Price’ as has beendefined in Section 2(x). We are told that the only reference thereto is in Section 11(supra) where the entities are required to display the maximum retail price. The ApexCourt in Dr. Indramani Pyarelal Gupta v. W.R. Natu 24 AIR 1963 SC 274 held that one ofthe tests to determine whether a statutory body is vested with a particular power is tosee whether exercise of such power is contra-indicated by any specific provision of20 Ed.: MANU/SC/7675/2007: AIR 2007 SC 2499: JT 2007 (7) SC 82: 2008-1-LW763: (2007)5 MLJ 449 (SC): 2007 (7) SCALE 301: (2007) 2 SCC (L&S) 471: [2007] 6 SCR 92221 Ed.: MANU/SC/0341/1984: AIR 1984 SC 921: 1984 (1) SCALE 454: 1984 (16) UJ 55822 Ed.: MANU/SC/0042/1954: AIR 421954Supreme Court62: (1955) 57 BomLR 702: 1955CriLJ 193: (1954) II LLJ 694 SC: [1955] 1 SCR 88723 Ed.: MANU/SC/0153/1985: (1985) 2 SCC 197: AIR 1985 SC 421: (1985) 1 CompLJ 249 (SC):(1985) 44 CTR (SC) 328: [1985] 152 ITR 308 (SC): 1985 (1) SCALE 115: [1985] 2 SCR 68624 Ed.: MANU/SC/0066/1962: (1963) 65 BomLR 378: [1963] 1 SCR 721abcdefghi108ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghiIndraprastha Gas Ltd. v. Petroleum and Natural Gas Regulatory Board and Anr.(Rajiv Sahai Endlaw, J.)01027the enactment bringing such statutory body into existence. Judged by this test, Section 2(x)providing for the Maximum Retail Price to be fixed by the entity as the Petitioner itselfis contra-indicative of the Board though regulatory in function, having such a powerto fix the Maximum Retail Price.25. In the context of price fixation, the Supreme Court in Ashoka Smokeless Coal India(P) Ltd. v. Union of India 25 (2007) 2 SCC 640 held the Central Government in that caseto be forbidden from issuing any direction which will have an impact over the price(of coal in that case) when there was no control over price.26. We find a Single Judge of the Kerala High Court in Johny Thomas v. Union of IndiaMANU/KE/0683/2008 also to have concluded that the PNGRB Act does not dealwith petroleum and petroleum products as an essential commodity and to havebeen not intended to regulate the trade and commerce of an essential commodity.27. We thus conclude that the PNGRB Act does not confer any power on the Boardto fix/regulate price of gas as has been done vide the impugned order dated9 th April, 2012. Having held so, we do not deem it necessary to deal with the otherRegulations impugned in the writ petition and suffice it is to state that any provisiontherein having the effect of empowering the Board to fix the price or the NetworkTariff or Compression Charges for CNG, as long as not Transportation Rate, isbeyond the competence of the Board and ultra vires the PNGRB Act and of no avail.28. As far as the reliance by the learned ASG on PTC India Ltd. is concerned, the sameis found to be of no application since in relation to electricity with which that judgmentwas concerned, there was always a Tariff Policy and further since the Electricity Act,2003 was also found to be conferring a power on the Commission to determine tariff.29. Before parting with the matter, we may record that the Senior Counsel for thePetitioner has also cited other judgments on impermissibility of retrospectivity inprice fixation and on non compliance of principle of natural justice but in the lightof above, need is not felt to burden this judgment with the same.30. We thus allow this writ petition to the extent of holding that the Petroleum andNatural Gas Regulatory Board is not empowered to fix or regulate the maximumretail price at which gas is to be sold by entities as the Petitioner, to the consumers.We further hold that the Board is also not empowered to fix any component ofNetwork Tariff or Compression Charge for an entity such as the Petitioner havingits own distribution network. The provisions of the Regulations (supra) in so far asconstrued by the Board to be so empowering it are held to be bad/illegal. Accordingly,the order dated 9 th April, 2012 to the extent so fixing the maximum retail price orrequiring the Petitioner to disclose the Network Tariff and the Compression Chargesto its consumers is struck down/quashed. Rule is made absolute. We may alsorecord that though we had not granted any interim stay of the order dated9 th April, 2012 which came into force immediately but the matter having been takenup immediately for hearing, the intent was that no coercive/penal steps shall betaken against the Petitioner for non-compliance thereof.The Respondent having co-operated in expeditious disposal of the matter, no orderas to costs.25 Ed.: MANU/SC/8741/2006: 2007 (3) ALT 20 (SC): 2007 (1) CTLJ 1 (SC): JT 2007 (1) SC125: 2006 (13) SCALE 102: [2006] Supp (9) SCR 954ENERGY LAW REPORTS SEPTEMBER, 2012109

01028Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]2012 ELR (DELHI) 1028*IN THE HIGH COURT OF DELHI, AT NEW DELHIaM/s Waryam Steel Castings (P) Ltd., Punjabv.Punjab State Power Corporation Limited and Ors.APPEAL NO. 198 OF 2011DECIDED ON: 27.07.2012bJudgesP.S. Datta, Judicial Member and V.J. Talwar, Technical Member, JJ.CounselFor Appellant/Petitioner/Plaintiff: Laliet KumarFor Respondents/Defendant: Anand Ganeshan for R-1 and Sakesh Kumar for R-2Cases referredBadri Kedar Paper Private Limited v. Uttar Pradesh Electricity Regulatory Commissionand Ors. MANU/SC/8452/2008: (2009) 3 SCC 754: AIR 2009 SC 1783: 2008 ELR(SC) 745: 2009 (1) SCALE 137: 2009 (1) UJ 403 (Mentioned) [p. 1032, para 5 c]LML Ltd. v. State of Uttar Pradesh and Ors. MANU/SC/0086/2008: (2008) 3 SCC 128:AIR 2008 SC 1032: 2008 (56) BLJR 483: 2 (2008) CLT 71: 2007 (14) SCALE 469(Mentioned) [p. 1032, para 5 c]Acts/Rules/RegulationsConstitution of IndiaArticle 227 [p. 1033, para 7 h]Article 14 [p. 1034, para 12 g]Electricity Act, 2003]Section 62(2) and (5) [p. 1040, para 40 c]Indian Electricity Act 1910 [p. 1029, para 3 g]ISSUES AND FINDINGSWhether cost of equipment adopted by State Commission in determining the chargesfor use of the system was liable to be set aside?Held, charges for use of additional 66/11 kV system can only be determined usingthe cost of equipment prevalent at the time of laying of such system. Commissionhad used ‘cost of replacement method’, which, was a correct approach to determinethe charges for the additional 66/11 kV system.Whether State Commission had erred in adopting transformation losses at 0.5 percent as furnished by Power Corporation?Held, contention of Appellant before this Tribunal in Appeal No. 192 of 2009 wasthat the actual incremental transmission losses were 2 per cent and transformationlosses were 0.5 per cent. Appellants could not be permitted to take an entirely differentstand and claim that voltage surcharge should have been determined taking intoaccount transformation losses at 0.2 per cent only.cdefghi* MANU/DE/3711/2012110ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghiM/s Waryam Steel Castings (P) Ltd. v. Punjab State Power Corpn. Ltd. and Ors.(V.J. Talwar, (Technical Member))01029Whether State Commission had erred in including O&M expenses twice in the chargesfor additional 66/11 kV system?Held, Tribunal had categorically directed to determine charges for use of additional66/11 kV transmission system. Determination of transmission charges or wheelingcharges had to be carried out in accordance with regulations specified by StateCommission and would include Return on Equity, Depreciation, O&M expenses,interest on loan and working capital etc. State Commission had considered O&Mexpenses only once and not twice as alleged by the Appellant. No reason to interferewith impugned order of State Commission. Appeal dismissed.V.J. Talwar, (Technical Member)JUDGMENT1. The Appellant, Warayam Steel Casting (P) Limited is a HT Consumer of electricityin the State of Punjab having a contracted load of more than 2500 kVA. The PunjabState Power Corporation Limited (Power Corporation) is the sole distribution licenseesin the state of Punjab and is the first Respondent herein The Punjab State ElectricityRegulatory Commission (State Commission) is the second Respondent. In compliancewith this Tribunal’s order dated 16 th July, 2010, the State Commission had passedan order on 19 th January, 2011 re-determining the voltage surcharge recoverablefrom the Power Intensive Units (PIUs) including the Appellant in the State of Punjab.2. Being aggrieved with the impugned order dated 19 th January, 2011, the Appellanthave filed this appeal.3. The facts of this case, leading to the filing of this Appeal are as follows:i. The Appellant have got large supply of electricity connection having the contractdemand of more than 2500 kVA and have been paying the electricity bills regularly.At the time of grant of electricity connections, an agreement was entered intobetween the Appellant and the Punjab State Electricity Board, predecessor of thePower Corporation, the first Respondent herein. As per the agreement, it wasthe duty of the Electricity Board to lay transmission network and to provideelectricity connections through its own electrical lines and electricity plants.The Electricity Board has distributed electricity through the three voltage supplysystem viz. LT, HT and EHT systems. Since the Board had sanctioned the powerconnections to the Appellant at 11 kV supply voltage, the Appellant depositedthe entire expenses for laying down the 11 kV lines from distribution mains ofRespondent - 1 to premises of the Appellant with the Electricity Board in accordancewith the Clause VI(b) of the Schedule of Indian Electricity Act 1910.ii. In the year 1995, the Electricity Board issued a Memo to the PIUs includingthe Appellant and other prospective induction furnaces units having load above1500 kVA, instructing them to shift from 11 KV to 66 kV voltage supply or elsethey would be liable to pay surcharge @ 17.5 per cent. Questioning this, theAppellants and others took up the matter with the State Government. Thereuponthe State Government constituted a High-Powered Committee to go into thematter. Ultimately, the High-Powered Committee recommended for the withdrawalof memo of conversion to 66 kV thereby all the existing units could be allowedto run on 11 kV voltage supply without payment of any surcharge.iii. On receipt of the recommendations of this High-powered Committee, the StateGovernment constituted another Committee, comprising of the members of theENERGY LAW REPORTS SEPTEMBER, 2012111

01030Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]Electricity Board as well as its Members of industries. In that Committee also, itwas decided that all existing units should be exempted from converting to 66 kVand exempted from the levy of 17.5 per cent surcharge. On 8 th June, 1999, theElectricity Board issued circular accepting the above recommendations of theCommittee and withdrawing its memo imposing the surcharge. It further directedthat the surcharge already paid would be adjusted against the future bills.iv. The Electricity Board filed ARR & Tariff petition before the State Commissionfor the FY 2003-04 with a proposal to charge 17.5 per cent surcharge on inductionfurnaces who have not shifted to 66 kV supply voltage. The Furnaces Associationfiled objection against the proposal and brought to the notice of the State Commissionabout the issuance of the circular dated 8 th June, 1999 by the Electricity Boardwithdrawing the proposal to impose surcharge. In response to the said objection,the Electricity Board itself submitted a reply dated 17 th March, 2003 admitting theprevious withdrawal of instructions to impose surcharge @ 17.5 per cent.v. Thereupon, on 11 th October, 2004, the Electricity Board issued another circularfor imposing levy of additional billing of 10 per cent on consumption recordedat 11 kV corresponding to demand recorded above 2500 kVA. Accordingly,the State Commission passed the tariff order for the FY 2004-05 holding thatall consumers with contract demand exceeding 2500 kVA and up to 4000 kVAhave to pay 10 per cent extra on energy supply at 11 kV and consumers havingdemand of above 4000 kVA to pay a surcharge of 17.5 per cent. However, onthe representation by various Industrial Consumers Associations, the ElectricityBoard withdrew the implementation of the circular dated 11 th October, 2004.Even then, the tariff order for FY 2006-07 was passed by the State Commissionfixing the surcharge @ 10 per cent for consumers with contract demand exceeding2500 kVA and up to 4000 kVA catered at 11 kV. Against this order theAssociations filed a Review Petition before the State Commission, which inturn dismissed the same.vi. The Appellants thereupon filed a Writ Petition before the High Court asagainst the demand for high voltage surcharge and ultimately the High Courtdismissed the Writ Petition with the observation that the Appellant shallapproach the Appellate Tribunal for Electricity. In spite of this direction, theAppellants had chosen to file the Appeal against the order as LPA before theDivision Bench of the High Court.vii. Thereafter, the impugned tariff order was passed in respect of the FY 2009-10by the order dated 8 th September, 2009 by the State Commission reiterating thatthe large supply consumers with a contract demand exceeding 2500 kVA andup to 4000 kVA catered at 11 kV are liable to pay a surcharge of 10 per cent onconsumption charges including demand charges as compensation fortransformation losses and incremental line losses. Similarly, the large supplyconsumers having contract demand exceeding 4000 kVA catered at 11 kV arelevied a surcharge of 17.5 per cent.viii. Aggrieved by the order dated 8 th September, 2009 passed by the StateCommission some of the large industrial consumers (including the Appellantin the present appeal) filed an appeal being No. 192 of 2010 before this Tribunal.The Tribunal passed the judgment in Appeal 192 of 2009 on 16 th July, 2010directing the State Commission to re-determine the Voltage surcharge.ix. In compliance of the judgment and order of this Tribunal dated 16 th July, 2003the State Commission passed the impugned order dated 16 th January, 2011abcdefghi112ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghire-determining the voltage surcharge in accordance with the directions ofthis Tribunal.x. Hence the Appellants have presented this Appeal alleging that the StateCommission had not followed the directions of the Tribunal in determiningthe voltage surcharge in letter and spirit.010314. During the pendency of the appeal, one important development had taken placein regard to the issue under consideration. Since this development may have impacton the final outcome, it would be desirable to discuss this before we examine thecase on merits.5. As pointed out in Para 4(vi) above some of the large industrial consumers includingthe Appellants had filed a Writ Petition before the High Court of Punjab and Haryanaas against the demand for voltage surcharge and ultimately the High Court dismissedthe Writ Petition with the observation that the Appellant shall approach the AppellateTribunal for Electricity. In spite of this direction, the Appellants had chosen to filean Appeal against the order as LPA being No. 605 of 2009 before the DivisionBench of the High Court. On 9 th September, 2011 the Division Bench of the HighCourt dismissed the said LPA upholding the levy of voltage surcharge @ 10 percent from the consumers having contract demand between 2500 kW to 4000 kWand 17.5 per cent from the consumers having contract demand of more than 4000kW. The relevant portion of the High Court’s judgment is reproduced below:25. The perusal of the tariff order dated 30 th November, 2004 further shows thatinsistence of the Board for conversion of supply of Large Scale Power Consumersto 66 KV supply has a public purpose. It was explained that supply at highervoltage levels causes significant cost saving to the Board in terms of infrastructureprovisioning for supply and associated savings in technical losses. Theconnections at higher voltage are to avoid the technical losses, transformationlosses and line losses. Therefore, while giving incentives to large supply consumersgetting supply at 33 kV or above, the levy of surcharge on the consumers, whoare not availing connections of higher voltage serves the public purpose.26. Still further, the categorization of consumers having contract demand ofmore than 2500 kVA after June, 1995 and pre June, 1995 is not justified. Bothset of consumers are power intensive units. There is no reason as to why preJune 1995 consumers should be dealt with separately and distinctively exceptfor the reason that they are old units. Being old units, they may require additionaltime to shift to supply at 66 kV. But even after 16 years, such units have notshifted to supply at 66 kV.27. In view of the said fact, we find that not only the Board has proposedsurcharge in respect of consumers of prior to June 1995 period, but also theCommission has discussed and approved such surcharge. The failure to mentionsuch surcharge in the abridged Public Notice is inconsequential, when thecomplete Annual Revenue Requirement was available on the website of theCommission as also of the Electricity Board. The contents of Annual RevenueRequirement were known to the Induction Furnace units, which is evidentfrom the fact that objections were filed and dealt with by the Commission.28....29....M/s Waryam Steel Castings (P) Ltd. v. Punjab State Power Corpn. Ltd. and Ors.(V.J. Talwar, (Technical Member))30. Therefore, we do not find that claim of surcharge from the large industrialconsumers for not shifting to 66 kV suffers from any illegality or irregularity.ENERGY LAW REPORTS SEPTEMBER, 2012113

01032Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]The learned Single judge has examined the tariff order from various anglesand did not find any illegality. We have re-examined the issue and find No.illegality in the tariff order claiming surcharge.31....32...33...34...35. It is, thus, argued that now the Appellants have been issued demands notin respect of surcharge on the consumption more than 4000 kVA or consumptionover and above 2500 kVA, but on the entire consumption. Since the Appellantshave set up their industrial units after the aforesaid communication containedin Commercial Circular No. 52/2004 dated 11 th October, 2004 (Annexure P-2in LPA No. 298 of 2009), therefore, the Board is estopped to claim any othertariff then what was circulated in the aforesaid Circular. Reliance is placedupon LML Ltd. v. State of Uttar Pradesh and Ors. 1 (2008) 3 SCC 128 and BadriKedar Paper Private Limited v. Uttar Pradesh Electricity Regulatory Commissionand Ors. 2 (2009) 3 SCC 754.36. We do not find any merit in the said argument as well. Soon after theCommercial Circular No. 52/2004 (Annexure P-2 in LPA No. 298 of 2009)was issued on 11 th October, 2004, the tariff order was published on 30 th November,2004 though made effective from 1 st October, 2004 i.e. prior to the date of issuanceof said circular. The Tariff Order passed by the Commission does not contemplatethat surcharge has to be on the consumption after giving benefit of 2500 kVAor 4000 kVA, as the case may be. After the Act came into force, the Board cancharge for consumption of electricity only in terms of the Tariff Order. Therecannot be any variation by the Board unilaterally against the terms of theTariff Order. Since the Circular has the effect of variation of the Tariff Order,therefore, such Circular is contrary to law and violates the mandate of the Actand the Regulations framed thereunder.37. The doctrine of promissory estoppel sought to be invoked against the Boardis not applicable to the facts of the present case, as on the day when suchpromise was made, it was against Statute i.e. the Act and the Tariff Regulations.Such terms of the Commercial Circular were against the Tariff Order for theyear 2004-05 as well as for the subsequent Tariff Orders. Any promise, whichis contrary to law, cannot be enforced. Therefore, the judgments referred to bythe learned Counsel for the Appellants are not applicable.38. Another argument, which is required to be noticed, is that the Circulardated 28 th November, 2007 cannot withdraw the manner of calculations ofsurcharge conveyed vide Circular dated 11 th October, 2004. In the Circular dated28 th November, 2007, it has been pointed out that the Commercial Circularearlier issued on 11 th October, 2004 is against the Tariff Order and has noeffect. It is to give the effect to law i.e Tariff Order, the said Circular has beenissued. It is not the retrospective withdrawal of the circular, but only to statethat the surcharge is to be levied only in terms of Tariff Order.1 Ed.: MANU/SC/0086/2008: AIR 2008 SC 1032: 2008 (56) BLJR 483: 2 (2008) CLT 71: 2007(14) SCALE 4692 Ed.: MANU/SC/8452/2008: AIR 2009 SC 1783: 2009 3 AWC (Supp) 2471 SC: 2008ELR(SC) 745: 2009 (1) SCALE 137: 2009 (1) UJ 403abcdefghi114ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghiM/s Waryam Steel Castings (P) Ltd. v. Punjab State Power Corpn. Ltd. and Ors.(V.J. Talwar, (Technical Member))39. In view of the above, we do not find any merit in the second set of appealsas well.40. However, we find merit in the arguments raised by the Appellants that thesurcharge is being claimed from 1 st April, 2004 though the tariff order for theyear 2004-05 was made effective from 1 st October, 2004. In view of the saidfact, we are of the opinion that such surcharge can be claimed from thepower intensive units such as the Appellants from 1 st October, 2004 alone interms of the tariff order Annexure P-21 and not from any date earlier thanthe date notified by the Commission. Therefore, the appeals are allowed tothe limited extent that the surcharge at the rate of 10 per cent from unitshaving sanctioned contract demand of 2500 kVA to 4000 kVA and at therate of 17.5 per cent from the units having contract demand of more than4000 kVA shall be applicable from 1 st October, 2004.01033(Emphasis added)6. Perusal of the judgment of the High Court would reveal that the High Court haslaid down the following propositions:i. The levy of surcharge on the consumers, who are not availing connections athigher voltage serves the public purpose.b. The demand for categorization of consumers having contract demand ofmore than 2500 kVA after June, 1995 and pre June, 1995 is not justifiedc. The claim of surcharge from the large industrial consumers for not shiftingto 66 kV does not suffer from any illegality or irregularity.d. The Tariff Order passed by the Commission did not contemplate that surchargehas to be on the consumption after giving benefit of 2500 kVA or 4000 kVA, asthe case may be. After the Act came into force, the Board can charge forconsumption of electricity only in terms of the Tariff Order. There cannot beany variation by the Board unilaterally against the terms of the Tariff Order.e. The doctrine of promissory estoppel sought to be invoked against the Board is notapplicable to the facts of the present case, as on the day when such promise wasmade, it was against the Act and the Tariff Regulations. Such terms of the CommercialCircular were against the Tariff Order for the year 2004-05 as well as for the subsequentTariff Orders. Any promise, which is contrary to law, cannot be enforced.f. The surcharge at the rate of 10 per cent from units having sanctioned contract demandof 2500 kVA to 4000 kVA and at the rate of 17.5 per cent from the units having contractdemand of more than 4000 kVA shall be applicable from 1 st October, 2004.(Emphasis Added)7. Clearly, the High Court has upheld the validity of the levy of surcharge at 10 per centand 17.5 per cent from the units having contracted demand of 2500 kVA to 4000kVA and above 4000 kVA respectively in the State Commission’s Tariff Order forthe year 2005-06. It also held that such levy of surcharge is for the public purpose.As per Article 227 of the Constitution of India, the High Courts have general powerof superintendence over all the Courts and Tribunals in the State. It is the settledlaw that the High Court exercises its jurisdiction of superintendence over all courtsand Tribunals where the cause of action originates. The order of state Commissionhaving been subjected to the constitutional jurisdiction of the High Court was examinedby the High Court which passed the aforesaid order that binds the State Commission,ENERGY LAW REPORTS SEPTEMBER, 2012115

01034Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]all concerned including the Power Corporation, the Appellants as also this Tribunal,no matter whether this Tribunal is or is not physically located in the State.8. The Appellant contended that this judgment of High Court would not have anyimpact on the present case as it was delivered in Appeal against the State Commission’sTariff Order for the year 2005-06. The present appeal is against the order of the StateCommission passed in compliance with the Tribunal’s order dated 16 th July, 2010 passedin Appeal No. 192 of 2009 against the Tariff order for the year 2009-10. Each tariff orderstands on its own footing and accordingly has to be dealt with on its own merits.9. We do not agree with the above contention of the Appellant. It is true that each tarifforder is separate and has to be dealt with its own merits. But, for the purpose of achievinggreater predictability and certainty in the tariffs to attract investments in the powersectors, the principles adopted in various tariff orders has to be same unless modifiedthrough Regulations or by an order of Superior court. Thus, the principle enunciated bythe High Court that the State Commission has powers to prescribe voltage surcharge of10 per cent and 17.5 per cent on the consumers having contracted demand of 2500 kVAto 4000 kVA and more that 4000 kVA respectively without questioning its rationality orbasis is binding on subsequent tariff orders also.10. In view of above discussions and in the light of High Court’s judgment in LPA605 of 2009 dated 9 th September, 2011, the Appeal is liable to be dismissed. However,in view of the fact that the Appellant has alleged that the State Commission has notimplemented the Tribunal’s directions in Appeal No. 192 of 2009, we are inclinedto examine the issue on its merits.11. The learned Counsel for the Appellant has raised many grounds including theapplicability of the surcharge. Most of the grounds raised by the Appellant hadbeen raised in the LPA being No. 605 of 2009 before the High Court and had beenrejected by the High Court. During the proceedings the learned Counsel for theAppellant conceded some of the issues including the applicability of surcharge.12. The Appellant has pressed for the following issues:(i) The cut off point as 2500 kVA for charging voltage surcharge, has been fixed bythe Commission. The surcharge is levied on total load of the consumers havingCD exceeding 2500 kVA, whereas there is no surcharge levied on consumershaving CD less than 2500 kVA. Therefore, the Petitioners are also entitled to payno surcharge on the load upto first 2500 kVA. As such, the surcharge levied onthe whole load is in violation of Article 14 of the Constitution of India.(ii) That the order of the Tribunal clearly mentions in Para 48 (iii) that “.........Thelevy of the surcharge which is said to be compensatory in nature has to berational.........”, meaning thereby that the surcharge ‘has to be compensatory innature and not punitive.’ But penal element has been added by the Commissionin violation of the directions of the Tribunal.(iii) That the Commission has wrongly accepted the data supplied by PowerCorporation as correct and authentic and made the calculations to computesurcharge based on this data. The data supplied by Power Corporation waserroneous, incorrect and unauthentic. The calculations supplied by theAppellants were completely ignored by the State Commission.13. We shall now deal with each of the issues raised by the Appellant. The first issue isrelated to levy of surcharge on complete consumption instead of consumption over andabove the threshold limit of 2500 kVA and 4000 kVA as the case may be. This issue hadabcdefghi116ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghiM/s Waryam Steel Castings (P) Ltd. v. Punjab State Power Corpn. Ltd. and Ors.(V.J. Talwar, (Technical Member))01035been dealt with by the High Court and had been decided against the Appellant. Thefindings of the High Court in para 36 of its judgment is reproduced below:36. We do not find any merit in the said argument as well. Soon after the CommercialCircular No. 52/2004 (Annexure P-2 in LPA No. 298 of 2009) was issued on11 th October, 2004, the tariff order was published on 30 th November, 2004 thoughmade effective from 1 st October, 2004 i.e. prior to the date of issuance of said circular.The Tariff Order passed by the Commission does not contemplate that surchargehas to be on the consumption after giving benefit of 2500 kVA or 4000 kVA, as thecase may be. After the Act came into force, the Board can charge for consumptionof electricity only in terms of the Tariff Order. There cannot be any variation by theBoard unilaterally against the terms of the Tariff Order. Since the Circular has theeffect of variation of the Tariff Order, therefore, such Circular is contrary to lawand violates the mandate of the Act and the Regulations framed thereunder.14. The applicability of voltage surcharge is not akin to domestic tariff which isbased on slab wise consumption by the consumer. The rationale behind voltagesurcharge is that a surcharge is to be levied on consumers taking supply of electricityat a voltage level lower than the designated voltage level and cannot be telescopicfor the reason explained below:15. Consider a consumer taking supply of electricity to the extent of 3000 kVA willneed to take all the 3000 kVA at the designated voltage level of 66 KV and not thatup to 2500 kVA at 11 KV and the balance 500 kVA at 66 KV. In the circumstances,the cost, expenses and losses to the Power Corporation and also the savings inadditional investments to the consumers is on the entire load of 3000 kVA. This isthe essential difference and flaw in the contention of the Appellants while comparingthe voltage surcharge to tax slabs etc. These cannot be split into two or more slabsfor the purpose of calculation and levy of voltage surcharge.16. In the light of the above discussions and the decision of the High Court, whichis binding on this Tribunal as well, the issue is decided against the Appellant.17. The second issue raised by the Appellant is related to the Penal Element includedin the voltage surcharge. The learned Counsel for the Appellant has stated that thisTribunal in its Judgment and order dated 16 th July, 2010 in Appeal No. 192 of 2009had held the voltage surcharge has to be compensatory in nature and must notinclude any penal element. The State Commission has violated the directions of thisTribunal by including the penal element in the voltage surcharge.18. The learned Counsel for the State Commission reiterated the views of StateCommission expressed in the Impugned order dated 16 th January, 2011 as well inthe order dated 23 rd October, 2011 rejecting the Review Petition No. 13 of 2011 filedby another industrial consumer. It also relied on the Judgment of High Court inLPA No. 605 of 2009 dated 9 th September, 2011.19. This issue had also been considered by the Division Bench of the High Court inLPA 605 of 2009 and had been decided against the Appellant. The findings of theHigh Court in Para 25 of its Judgment reads as under:25. The perusal of the tariff order dated 30 th November, 2004 further shows thatinsistence of the Board for conversion of supply of Large Scale Power Consumersto 66 KV supply has a public purpose. It was explained that supply at highervoltage levels causes significant cost saving to the Board in terms of infrastructureprovisioning for supply and associated savings in technical losses. TheENERGY LAW REPORTS SEPTEMBER, 2012117

01036Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]connections at higher voltage are to avoid the technical losses, transformationlosses and line losses. Therefore, while giving incentives to large supply consumersgetting supply at 33 kV or above, the levy of surcharge on the consumers, whoare not availing connections of higher voltage serves the public purpose.20. The directions of this Tribunal in Appeal No. 192 of 2009 relating to compensatorynature of voltage surcharge is contained in para 48(iii) of the judgment dated16 th July, 2010 and is reproduced below:48 (iii) Even though the State Commission while fixing the tariff shall ensurethat the tariff shall reflect the cost of electricity, in this case, the State Commissionhad neither determined the cost of supply to different classes and categories ofconsumers, nor it determined the difference in cost of supply at different voltagelevels to the category of Appellants while deciding the surcharge and hassimply accepted the suggestion of the Board. The State Commission cannotmechanically accept the suggestion made by the Electricity Board and fix thesurcharge @ 10 per cent and 17.5 per cent respectively. The levy of surchargewhich is said to be compensatory in nature has to be rational. Therefore, thefinding about the rate of surcharge is not based on the correct reasoning.21. The total Perusal of the judgment would reveal that it was the Appellant whothemselves made the submissions that levy of surcharge is compensatory is in natureand the Tribunal accepted the stand placed before the Tribunal. Accordingly, thisobservation of the Tribunal cannot be held as direction of this Tribunal. Further, theTribunal in Para 33 of its Judgment dated 16 th July, 2010 has expressed its concern overthe defiant attitude of the Appellants in that Appellants in that Appeal in these words:33. As mentioned above, by statutory dispensation, the Appellants were to takesupply at 66 kV and not at 11 kV since the year 2000. By resisting the move tothe voltage at which the Appellants were required to take supply, the Appellantswere defiant and contravention of the law and direction. The surcharge hasbeen levied on the Appellants as per the tariff order dated 30 th November, 2004which was passed for the FY 2004-05. This tariff order clearly deals with theAppellants objections to the levy of surcharge on the induction furnace consumerscatered supply at 11 kV. In rejecting the objections of the Appellant, the StateCommission clearly observed that as per the then present policy, the Appellants,if catered at 11 kV have to compensate the Electricity Board by making paymentof surcharge for transformation losses and incremental line losses and servicecharge, etc, incurred in this regard. Therefore, this contention urged by the learnedCounsel for the Appellant would also fail.22. It is settled law that any person who contravenes or violates the law is liable topay penalty.23. Let us now examine the findings of the State Commission in the impugnedorder. The relevant portion of the Impugned order reads as under:8.... However, if the surcharge payable is determined on the basis of thesecosts alone then there might be no incentive to shift to the requisite voltageswhile considerations of public policy, on the other hand, dictate that it wouldbe desirable to ensure that the shift to the prescribed voltages be effected. Witha view to attain this objective, the Commission deems it necessary to add apenal element while determining surcharges that need to be imposed.Accordingly, the Commission deems it fair and reasonable that those consumerswho do not comply with rational policy prescriptions on supply voltage mustabcdefghi118ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghiM/s Waryam Steel Castings (P) Ltd. v. Punjab State Power Corpn. Ltd. and Ors.(V.J. Talwar, (Technical Member))bear extra cost as compared to those who have made additional investmentsand are obtaining supply at the requisite voltages....0103724. In the light of above findings and the decision of Division Bench of the HighCourt this issue is also decided against the Appellant.25. The third issue raised by the Appellant is regarding correctness of the datasubmitted by the Power Corporation to the State Commission.26. The learned Counsel for the Appellant contended that the data submitted by thePower Corporation suffered from many infirmities and the State Commission haderroneously accepted the same as correct and accurate and re-determined the voltagesurcharge based on this inaccurate data. The inaccuracies in the data pointed outby the learned Counsel for the Appellant are related to (i) Cost of equipment, (ii)Higher Transformation losses and (iii) Double accounting of O&M charges.27. The learned Counsel for the Power Corporation vehemently refuted the contentionsof the Appellant. He submitted that the Commission has correctly determined thevoltage surcharge based on the data submitted by the Power Corporation whichwas correct and accurate.28. We have heard the learned Counsels for the Appellant and the Respondents onthese points. We would now deal with each of the points raised by the Appellantlisted above one by one.29. First point raised by the Appellant is related to cost of equipment adopted by theState Commission in determining the charges for use of the system. The learnedCounsel for the Appellant made elaborate submissions on this point which aresummarised below:i. The Tribunal had directed the Respondent Commission to fix the “chargesfor use of additional 66/11Kv transmission system for Appellant and similarlyplaced consumers”. The Tribunal has no where directed the RespondentCommission to recover the cost of lying down the new net work of 66KV bythe Respondent Power Corporation. The intent and object of the order was tocalculate the charges for the use of 66/11kv transmission system.ii. Since the Petitioner was consumer of Electricity prior to 1995 and no newsystem had been/was to be laid by the Respondent utility and therefore, theState Commission was only required to hypothetically calculate the chargebased on 1995 rates.iii. The State Commission had wrongly calculated the charges by taking intoconsideration the capacity/rating of the existing power transformers (whichwere installed in the year 1995) and had further taken in to account the ratesof 2009-2010 for the total cost of transformer (including cost of line,alliedequipment, land& departmental charges) feeding the consumer.iv. The Tribunal in its judgment had permitted to calculate the charges for “USE”of the 66/11kv transmission system and had not asked the State Commission tocalculate the cost of ‘laying down” of 66/11kv transmission system. The word‘USE’ only signifies the existence of the network and, therefore, the RespondentCommission has committed an error in taking in to account the rates of 2009.v. If the rates of 2005-2006 were taken in to account then the charges wouldhave come down to 4.55 per cent and 3.82 per cent instead of 5.88 per cent and4.96 per cent respectivelyENERGY LAW REPORTS SEPTEMBER, 2012119

01038Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]30. The learned Counsel for the State Commission vehemently refuted the contentionsof the Appellant and submitted that the Tribunal in its Judgement in Appeal No.192 of 2009 had not directed the State Commission to determine the voltage surchargeusing the charges for use of existing system. On the contrary, the direction was todetermine the charges for use of additional 66/11 kV transmission system. Therelevant portion of the judgment is quoted below:39...Difference in cost of supply to the category of Appellants at 11 kV compared to66 kV would be on account of transformation loss for step down from 66kV to 11kV, incremental transmission losses at 11 kV, and charges for use of additional 66/11 kV transmission system.(Emphasis added)31. Charges for use of additional 66/11 kV system can only be determined using thecost of equipment prevalent at the time of laying of such system.32. The findings of the State Commission on this point are set out below:8. To ascertain the reasonability of the levy of 10 and 17.5 per cent surcharge,the Commission has also attempted to ascertain the extra expenditure that wouldbe incurred by those consumers who shift from 11 KV and obtain supply at 33/66 KV. The relevant data was obtained from PSPCL for the year 2009-10 whichindicates that consumers with contract demand above 4000 KVA required to becatered at 66 KV would bear additional cost for creation of a 66 KV sub-stationand associated infrastructure which corresponded to 6.74 per cent surchargeafter accounting for 3 per cent rebate availed at this voltage. In the case ofconsumers with contract demand between 2500 and 4000 KVA, proposing toobtain supply at 66 KV, the surcharge equivalent would work out to 5.68 percent. It is, thus, seen that the figures of surcharge leviable on the basis ofassumed transformation/line losses and carrying cost as brought out in Para7 above correspond roughly to the results obtained when additional cost incurredby consumers shifting to higher voltages is taken into account. However, theCommission, in line with the directions of APTEL is inclined to rely on figuresobtained after working out actual carrying cost and transformation/line losses.However, if the surcharge payable is determined on the basis of these costsalone then there might be no incentive to shift to the requisite voltages whileconsiderations of public policy, on the other hand, dictate that it would bedesirable to ensure that the shift to the prescribed voltages be effected. With aview to attain this objective, the Commission deems it necessary to add apenal element while determining surcharges that need to be imposed.Accordingly, the Commission deems it fair and reasonable that those consumerswho do not comply with rational policy prescriptions on supply voltage mustbear extra cost as compared to those who have made additional investmentsand are obtaining supply at the requisite voltages. Taking this into account,the Commission determines that consumers presently liable to pay surchargeof 10 and 17.5 per cent will pay a revised surcharge of 7 and 10 per centrespectively.33. Perusal of findings of the Commission on the point would reveal that theCommission has used ‘cost of replacement method’, which, in our opinion, is acorrect approach to determine the charges for the additional 66/11 kV system.34. The second point raised by the Appellant is related to higher transformationlosses. The learned Counsel for the Appellant contended that the State Commissionabcdefghi120ENERGY LAW REPORTS SEPTEMBER, 2012

abcdefghiM/s Waryam Steel Castings (P) Ltd. v. Punjab State Power Corpn. Ltd. and Ors.(V.J. Talwar, (Technical Member))01039had erred in adopting transformation losses at 0.5 per cent as furnished by thePower Corporation. The transformation losses, as per the tender floated by the PowerCorporation, must not exceed 0.2 per cent.35. The learned Counsel for the State Commission submitted that the Tribunal haddirected the State Commission to determine the difference in cost of supply to thecategory of Appellants at 11 kV as compared to 66 kV taking into account thetransformation loss for step down from 66kV to 11 kV and also the incrementaltransmission losses. The State Commission has assumed transformation losses at0.5 per cent and incremental transmission losses are likely to occur on 2 kM long11 kV line at 2.05 per cent.36. In order to decide this contentious issue it would be desirable to set out therelevant portion of this Tribunal’s Judgement in Appeal No. 192 of 2009 whichreads as under:42. It is contended on behalf of the Appellants that the levy of surcharge at 10per cent and 17.5 per cent, which is compensatory in nature, has no rationalor connection with the actual loss of 2 per cent incremental transmission lossand 0.5 per cent transmission loss i.e. total of 2.5 per cent.43. It is, however, observed that 0.5 per cent transformation loss indicated bythe Commission on pages 70 and 99 of the impugned order as quoted by theAppellants relates to transformation loss of generator transformer at a generatingstation. The generator transformer is a different and more sophisticated classof transformer compared to 66/11 kV transformers used in the distributionsystem. The transformation losses as applicable to generator transformers cannotbe applied to distribution transformers which are likely to have highertransformation losses.37. Perusal of the above would make it clear that the Appellants had contendedbefore this Tribunal in Appeal No. 192 of 2009 that the actual incremental transmissionlosses were 2 per cent and transformation losses were 0.5 per cent. The Appellantscannot be permitted to take an entirely different stand and claim that the voltagesurcharge should have been determined taking into account transformation lossesat 0.2 per cent only. Accordingly, this point is also decided against the Appellant.38. Third and last point raised by the Appellant is related to O&M expenses. TheAppellant has alleged that the State Commission has erred in including O&M expensestwice in the charges for additional 66/11 kV system. At first place, these chargesshould not have been included at all. In case these charges were required to beincluded, it should have been included only once and not twice. While pressing forthis contention, the Appellant has referred to the Annexure to the Impugned order.According to the Appellant, the carrying cost (19 per cent ) shown in Col (G) of theAnnexure includes Return on Equity (14 per cent ) and O&M expenses (5 per cent ).However, the Commission had considered O&M expenses at 5 per cent again asindicated at col (I) of the Annexure. The Appellant further contended that O&Mexpenses should not have been included in the charges for use of additional 66/11kV system as these have already been considered in the tariff. Inclusion of thesecharges again in the charges for use of additional system would amount to doublecharging.39. We are unable to accept the plea of the Appellant for exclusion of O&M expensesfrom charges for use of additional system on the ground that these charges havealready been included in the tariff. The Tribunal had categorically directed to determineENERGY LAW REPORTS SEPTEMBER, 2012121

01040Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]charges for use of additional 66/11 kV transmission system. Determination oftransmission charges or wheeling charges have to be carried out in accordancewith the regulations specified by the State Commission and would include Returnon Equity, Depreciation, O&M expenses, interest on loan and working capital etc.40. It would be pertinent to mention that the Appellants in Appeal No. 192 of 2009had taken similar plea in regard to losses and the Tribunal in Para 32 of its judgmenthas expressed the following observations:32. The next contention urged by the learned Counsel for the Appellants isthat the recovery of surcharge for transformation and incremental line lossesare included in the tariff. According to the Learned Counsel for the Appellants,since tariff for transmission and distribution are required to be separatelydetermined in accordance with provisions of the Sub-sections (2) and (5) ofSection 62 of the Electricity Act, 2003, the loss on account of various attributesincluding the transformation and incremental line losses are required to beincluded in the transmission tariff and if the consumer is required to paycompensatory surcharge towards transformation and incremental line losses,then the same will tantamount to double recovery. This contention, in ourview, does not deserve acceptance mainly because the transformation lossesand incremental line losses which would occur due to the failure of theconversion from 11 kV to 66 kV as directed by the Electricity Board are entirelydifferent from the transmission and distribution losses of the system.41. As regards the alleged inclusion of O&M charges twice, the learned Counsel forthe Respondent Power Corporation gave detailed clarification as under:i. The State Commission has not taken the O&M expenses twice but hasconsidered the same only once.ii. In the calculation sheet reproduced as Annexure to the Impugned order, thecolumn number (G) showing ‘Carrying Cost of the power transformer etcattributable to the consumer & borne by PSPCL’ does not include any part ofthe O&M expenses, but only includes the Return on Equity/interest at the rateof 14 per cent on the capital cost and depreciation at the rate of 5 per cent.iii. Therefore, 5 per cent included in the Column (G) is the depreciation andnot the O&M expenses. These are all capital cost elements and are not revenuecost elements such as O&M expenses.iv. The O&M expenses taken as 5 per cent are shown in Column (I) which is adistinct element considered by the State Commission independent of depreciationat the rate of 5 per cent.42. In view of the detailed clarification submitted by the Respondent, we are of theopinion that the State Commission had considered O&M expenses only once andnot twice as alleged by the Appellant. This point is also decided against the Appellant.In the light of our above findings, we do not find any reason to interfere with theimpugned order of the State Commission. The State Commission has implementedthis Tribunal’s Judgment and order in Appeal No. 192 of 2009 in letter and spirit.The Appeal is accordingly dismissed being devoid of merits. However, there is noorder as to costs.abcdefghi122ENERGY LAW REPORTS SEPTEMBER, 2012

Energy Law ReportsA Monthly JournalIndia’s first exclusive journal on EnergyCovering Orders and Judgments of the Supreme Court,High Courts and Appellate Tribunal for Electricity (APTEL)MAY - SEPTEMBER, 2012Mode of CitationYear ELR (Court) Page®Authorised Agency for publishing Orders of APTEL123

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Consolidated Index: Subject Index(January - April, 2012)iContentsArrangement of Cases[Alphabetical]Supreme Court• CESC Ltd. v. Chief Post Master General and Ors. 11.05.2012 ......... 0801• DSR Steel (P) Ltd. v. State of Rajasthan and Ors. 01.05.2012 ......... 0657APTEL• Balmukund Sponge and Iron Pvt. Ltd. and Ors. v.Damodar Valley Corporation and Anr. 03.05.2012 ......... 1002• Brihanmumbai Electric Supply and Transport Undertaking ofBrihanmumbai Municipal Corporation, India v. MaharashtraElectricity Regulatory Commission, Mumbai 22.03.2012 ......... 0837• Brihanmumbai Electricity Supply and Transport Undertaking,Mumbai v. Maharashtra Electricity Regulatory Commission,Mumbai and Ors. 04.04.2012 ......... 0881• Chandrakant M. Parekh and Anr. v. Electricity Deptt. ofDadara and Nagar Haveli and Anr. 15.03.2012 ......... 0734• Cochin Port Trust, Kerala v. Kerala State Electricity Boardand Kerala State Electricity Regulatory Commission, Kerala 11.04.2012 ......... 0908• Daman Industries Association, Daman v. Electricity Departmentof Daman & Diu, Daman and Anr. 29.02.2012 ......... 0599• DPSC Limited, Kolkata v. West Bengal Electricity RegulatoryCommission, Kolkata 01.03.2012 ......... 0586• Gail India Limited, New Delhi v. Shyam Industires, Gujaratand Petroleum and Natural Gas Regulatory Board, New Delhi 09.03.2012 ......... 0697• GRIDCO Limited, Bhubaneswar v. Orissa Electricity RegulatoryCommission, Bhubaneswar and Ors. 01.03.2012 ......... 0615• Gridco Limited, Orissa v. M/s. Global Energy Pvt. Ltd.,New Delhi and Ors. 10.04.2012 ......... 0916• Haryana Power Generation Corporation Ltd., Panchkula v.Haryana Electricity Regulatory Commission, Panchkula 01.03.2012 ......... 0633• Haryana Vidyut Prasaran Nigam Limited, Panchkula v.Haryana Electricity Regulatory Commission, Uttar HaryanaBijli Vitran Nigam Ltd., Panchkula and Dakshin HaryanaBijli Vitran Nigam Limited, Hisar 17.04.2012 ......... 0914ENERGY LAW REPORTS SEPTEMBER, 2012125

ii Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]• Himachal Pradesh State Electricity Board, Shimla v.Himachal Pradesh Electricity Regulatory Commission,• M/s Narayanpur Power Company Private Ltd. v.KERC, Bangalore and Anr. 15.02.2012 ......... 0523• M/s. Indian Wind Power Association, Chennai v.Tamil Nadu Electricity Regulatory Commission,Tamil Nadu Electricity Board Rep by its Chairman andThe Chief Financial Controller, Chennai 03.05.2012 ......... 1009• Madhya Pradesh Power Generation Company Ltd.,Jabalpur (M.P.) v. Madhya Pradesh Electricity RegulatoryCommission, Jabalpur (M.P.) and Ors. 01.03.2012 ......... 0665• Magnum Power Generation Limited, New Delhi v. HaryanaElectricity Regulatory Commission, Haryana and Ors. 23.03.2012 ......... 0810• Mula Pravara Electric Co-Operative Society Ltd., Maharashtra v.Maharashtra Electricity Regulatory Commission and Ors. 26.03.2012 ......... 0869• NTPC Limited, New Delhi v. Central Electricity RegulatoryCommission, New Delhi and GRIDCO Limited, Orissa 19.04.2012 ......... 0955• Orissa Power Transmission Corporation Limited, Orissa v.Orissa Electricity Regulatory Commission, Bhubaneswar and Ors. 11.04.2012 ......... 0873• Power Grid Corporation of India Ltd., Haryana v.Central Electricity Regulatory Commission, New Delhi and Ors. 10.05.2012 ......... 0972• Power Grid Corporation of India Ltd., Haryana v.CERC, New Delhi and Ors. 28.02.2012 ......... 0593• Punjab State Transmission Corporation Limited, Punjab v.PSERC, Chandigarh and Ors. 02.03.2012 ......... 0560• Reliance Infrastructure Limited, Mumbai v. The MaharashtraElectricity Regulatory Commission, Mumbai 23.03.2012 ......... 0735• Reliance Infrastructure Limited, Mumbai v. The MaharashtraElectricity Regulatory Commission, Mumbai andM/s. Wardha Power Company Ltd., Hyderabad 23.03.2012 ......... 0738• Reliance Infrastructure Limited, Mumbai v. The MaharashtraElectricity Regulatory Commission, Mumbai and Ors. 23.03.2012 ......... 0756• Reliance Infrastructure Limited, Mumbai v. The MaharashtraElectricity Regulatory Commission, Mumbai and Ors. 23.03.2012 ......... 0760• Saheli Export Private Limited, Chennai v. Joint ElectricityRegulatory Commission, Haryana, Electricity DepartmentGovernment of Puducherry and Renewable EnergyAgency Pondicherry, Puducherry 29.03.2012 ......... 0860• Shimla and Jai Prakash Hydro Power Ltd (JHPL), Shimla 19.04.2012 ......... 0933• Silvassa Industries Association v. Joint Electricity RegulatoryCommission and Anr. 14.03.2012 ......... 0711• Sulochana Cotton Spinning Mills Pvt. Ltd. v.Tamil Nadu Electricity Board, Chennai And Ors. 01.03.2012 ......... 0623• The Chairman Tamil Nadu Electricity Board, Chennai and Anr.v. Sree Rengaraaj Power India (P) Ltd., Tamilnadu and Anr. 19.03.2012 ......... 0726• The Chairman, The Member (Distribution), Chennai and126ENERGY LAW REPORTS APRIL, 2012

Consolidated Index: Arrangement of Cases(January - April, 2012)iiiThe Superintending Engineer (PEDC), Perambalur v.Madras Cements Ltd. and Tamil Nadu Electricity RegulatoryCommission, Chennai 19.04.2012 ......... 0963• The Chairman, TNEB Tamil Nadu Electricity Board, and Ors. v.M/s Ind Barath Thermal Power Ltd. and RegulatoryCommission (Represented by its Secretary), Chennai 23.05.2012 ......... 0980• The Electricity Department, Nani Daman v.Joint Electricity Regulatory Commission, Gurgaon 25.06.2012 ......... 0993• Torrent Energy Limited, Ahmedabad v. Dakshin GujaratVij Company Ltd., Surat and Ors. 23.03.2012 ......... 0772• Vegan Inc, Mumbai v. The Maharashtra ElectricityRegulatory Commission and Ors. 23.03.2012 ......... 0770High Court• Ajay Gupta v. BSES Rajdhani Power Ltd. 10.04.2012 ......... 0790• Berjinder Singh v. LT. Governor of Delhi & Ors. 24.02.2012 ......... 0649• C. Ramakrishna v. Electricity Regulatory CommissionEmployees’ Association and Ors. 26.04.2012 ......... 0927• Indraprastha Gas Ltd. v. Petroleum andNatural Gas Regulatory Board and Anr. 01.06.2012 ......... 1013• M/s Waryam Steel Castings (P) Ltd., Punjab v.Punjab State Power Corporation Limited and Ors. 27.07.2012 ......... 1028Arrangement of Cases[Chronological]Supreme Court• CESC Ltd. v. Chief Post Master General and Ors. 11.05.2012 ......... 0801• DSR Steel (P) Ltd. v. State of Rajasthan and Ors. 01.05.2012 ......... 0657APTEL• Balmukund Sponge and Iron Pvt. Ltd. and Ors. v.Damodar Valley Corporation and Anr. 03.05.2012 ......... 1002• Brihanmumbai Electric Supply and Transport Undertaking ofBrihanmumbai Municipal Corporation, India v. MaharashtraElectricity Regulatory Commission, Mumbai 22.03.2012 ......... 0837• Brihanmumbai Electricity Supply and Transport Undertaking,Mumbai v. Maharashtra Electricity Regulatory Commission,Mumbai and Ors. 04.04.2012 ......... 0881ENERGY LAW REPORTS APRIL, 2012127

iv Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]• Chandrakant M. Parekh and Anr. v. Electricity Deptt. ofDadara and Nagar Haveli and Anr. 15.03.2012 ......... 0734• Cochin Port Trust, Kerala v. Kerala State Electricity Boardand Kerala State Electricity Regulatory Commission, Kerala 11.04.2012 ......... 0908• Daman Industries Association, Daman v. ElectricityDepartment of Daman & Diu, Daman and Anr. 29.02.2012 ......... 0599• DPSC Limited, Kolkata v. West Bengal ElectricityRegulatory Commission, Kolkata 01.03.2012 ......... 0586• Gail India Limited, New Delhi v. Shyam Industires, Gujaratand Petroleum and Natural Gas Regulatory Board, New Delhi 09.03.2012 ......... 0697• GRIDCO Limited, Bhubaneswar v. Orissa ElectricityRegulatory Commission, Bhubaneswar and Ors. 01.03.2012 ......... 0615• Gridco Limited, Orissa v. M/s. Global Energy Pvt. Ltd.,New Delhi and Ors. 10.04.2012 ......... 0916• Haryana Power Generation Corporation Ltd., Panchkula v.Haryana Electricity Regulatory Commission, Panchkula 01.03.2012 ......... 0633• Haryana Vidyut Prasaran Nigam Limited, Panchkula v.Haryana Electricity Regulatory Commission, Uttar HaryanaBijli Vitran Nigam Ltd., Panchkula and Dakshin HaryanaBijli Vitran Nigam Limited, Hisar 17.04.2012 ......... 0914• Himachal Pradesh State Electricity Board, Shimla v.Himachal Pradesh Electricity Regulatory Commission,Shimla and Jai Prakash Hydro Power Ltd (JHPL), Shimla 19.04.2012 ......... 0933• M/s Narayanpur Power Company Private Ltd. v.KERC, Bangalore and Anr. 15.02.2012 ......... 0523• M/s. Indian Wind Power Association, Chennai v.Tamil Nadu Electricity Regulatory Commission,Tamil Nadu Electricity Board Rep by its Chairmanand The Chief Financial Controller, Chennai 03.05.2012 ......... 1009• Madhya Pradesh Power Generation Company Ltd.,Jabalpur (M.P.) v. Madhya Pradesh Electricity RegulatoryCommission, Jabalpur (M.P.) and Ors. 01.03.2012 ......... 0665• Magnum Power Generation Limited, New Delhi v. HaryanaElectricity Regulatory Commission, Haryana and Ors. 23.03.2012 ......... 0810• Mula Pravara Electric Co-Operative Society Ltd., Maharashtra v.Maharashtra Electricity Regulatory Commission and Ors. 26.03.2012 ......... 0869• NTPC Limited, New Delhi v. Central Electricity RegulatoryCommission, New Delhi and GRIDCO Limited, Orissa 19.04.2012 ......... 0955• Orissa Power Transmission Corporation Limited, Orissa v.Orissa Electricity Regulatory Commission, Bhubaneswar and Ors. 11.04.2012 ......... 0873• Power Grid Corporation of India Ltd., Haryana v.Central Electricity Regulatory Commission, New Delhi and Ors. 10.05.2012 ......... 0972• Power Grid Corporation of India Ltd., Haryana v.CERC, New Delhi and Ors. 28.02.2012 ......... 0593• Punjab State Transmission Corporation Limited, Punjab v.PSERC, Chandigarh and Ors. 02.03.2012 ......... 0560128ENERGY LAW REPORTS APRIL, 2012

Consolidated Index: Arrangement of Cases(January - April, 2012)v• Reliance Infrastructure Limited, Mumbai v. The MaharashtraElectricity Regulatory Commission, Mumbai 23.03.2012 ......... 0735• Reliance Infrastructure Limited, Mumbai v. The MaharashtraElectricity Regulatory Commission, Mumbai andM/s. Wardha Power Company Ltd., Hyderabad 23.03.2012 ......... 0738• Reliance Infrastructure Limited, Mumbai v. The MaharashtraElectricity Regulatory Commission, Mumbai and Ors. 23.03.2012 ......... 0756• Reliance Infrastructure Limited, Mumbai v. The MaharashtraElectricity Regulatory Commission, Mumbai and Ors. 23.03.2012 ......... 0760• Saheli Export Private Limited, Chennai v. Joint ElectricityRegulatory Commission, Haryana, Electricity DepartmentGovernment of Puducherry and Renewable EnergyAgency Pondicherry, Puducherry 29.03.2012 ......... 0860• Silvassa Industries Association v. Joint Electricity RegulatoryCommission and Anr. 14.03.2012 ......... 0711• Sulochana Cotton Spinning Mills Pvt. Ltd. v.Tamil Nadu Electricity Board, Chennai And Ors. 01.03.2012 ......... 0623• The Chairman Tamil Nadu Electricity Board, Chennai and Anr.v. Sree Rengaraaj Power India (P) Ltd., Tamilnadu and Anr. 19.03.2012 ......... 0726• The Chairman, The Member (Distribution), Chennai andThe Superintending Engineer (PEDC), Perambalur v.Madras Cements Ltd. and Tamil Nadu ElectricityRegulatory Commission, Chennai 19.04.2012 ......... 0963• The Chairman, TNEB Tamil Nadu Electricity Board, and Ors. v.M/s Ind Barath Thermal Power Ltd. and RegulatoryCommission (Represented by its Secretary), Chennai 23.05.2012 ......... 0980• The Electricity Department, Nani Daman v.Joint Electricity Regulatory Commission, Gurgaon 25.06.2012 ......... 0993• Torrent Energy Limited, Ahmedabad v. Dakshin GujaratVij Company Ltd., Surat and Ors. 23.03.2012 ......... 0772• Vegan Inc, Mumbai v. The Maharashtra ElectricityRegulatory Commission and Ors. 23.03.2012 ......... 0770High Court• Ajay Gupta v. BSES Rajdhani Power Ltd. 10.04.2012 ......... 0790• Berjinder Singh v. LT. Governor of Delhi & Ors. 24.02.2012 ......... 0649• C. Ramakrishna v. Electricity Regulatory CommissionEmployees’ Association and Ors. 26.04.2012 ......... 0927• Indraprastha Gas Ltd. v. Petroleum and NaturalGas Regulatory Board and Anr. 01.06.2012 ......... 1013• M/s Waryam Steel Castings (P) Ltd., Punjab v.Punjab State Power Corporation Limited and Ors. 27.07.2012 ......... 1028ENERGY LAW REPORTS APRIL, 2012129

vi Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]Subject IndexAdoption of transformation losses at 0.5 per cent — Whether State Commission haderred in adopting transformation losses at 0.5 per cent as furnished by PowerCorporation? — Held, contention of Appellant before this Tribunal in Appeal No. 192of 2009 was that the actual incremental transmission losses were 2 per cent andtransformation losses were 0.5 per cent. Appellants could not be permitted to take anentirely different stand and claim that voltage surcharge should have been determinedtaking into account transformation losses at 0.2 per cent only.M/s Waryam Steel Castings (P) Ltd., Punjab v.Punjab State Power Corporation Limited and Ors.Appeal No. 198 of 2011 at page 1028Decided On: 27.07.2012MANU/DE/3711/2012Allowance of depreciation — Whether Depreciation upto 90 per cent can be allowed?— Held, this issue also has been considered by this Tribunal holding that,depreciation cannot be denied forever and directed Central Commission to allowunpaid portion of depreciation (upto 90 per cent) after the plant has lived itsdesignated useful life. Issue relating to computation of Interest on loan has beendecided by Tribunal rejecting Appellant’s contention by giving valid reasons. Issuerelating to interest on loan in Tariff due to de-capitalisation of certain assets hasbeen held by this Tribunal holding that, cumulative repayment of loan proportionateto the assets de-capitalised is required to be reduced and directed the CentralCommission to act accordingly.NTPC Limited, New Delhi v. Central Electricity RegulatoryCommission, New Delhi and GRIDCO Limited, OrissaAppeal No. 88 of 2007, at page 0955, Decided On: 19.04.2012MANU/ET/0076/2012Amendment of MYT Regulations, 2009 — Was impugned order of Commissiondated, 26 th May, 2010 passed in Petition No. 8 of 2010 declining prayer of Appellantfor amendment of MYT Regulations, 2009 could at all be a subject matter of challengeunder Section 111 of the Electricity Act, 2003? — Held, Impugned order of Commissiondated, 26 th May, 2010 could not be the subject-matter of challenge in an appeal underSection 111 of the Electricity Act.Madhya Pradesh Power Generation Company Ltd., Jabalpur (M.P.) v. MadhyaPradesh Electricity Regulatory Commission, Jabalpur (M.P.) and Ors.Review Petition No. 3 of 2011, Decided On: 01.03.2012, at page 0665MANU/ET/0044/2012Annual Revenue Requirements — Whether the State Commission was right indisallowing the claim of interest on loan while determining the annual revenuerequirements and bulk supply price of the Appellant for the year 2010-11? —Held,this issue was covered by findings of the Tribunal in judgment dated 30 th August,2011 in Appeal No. 88 of 2009. Accordingly, the Appellant and the State Commissionwere directed to take up matter regarding debt service of loan with the State Governmentto finalise its position in the matter at the earliest. If the State Government did notagree to extend the date for keeping the debt service of loan in abeyance in a reasonabletime, then the State Commission should pass on the same in the ARR of the Appellant.Regarding the Pension Trust Bond, the State Commission was directed to verify the130ENERGY LAW REPORTS APRIL, 2012

claim of the Appellant in the true up of the financials for the Financial Years 2009-10and 2010-11 and decide the matter accordingly.GRIDCO Limited, Bhubaneswar v.Orissa Electricity Regulatory Commission, Bhubaneswar and Ors.Appeal No. 106 of 2010, Decided On: 01.03.2012, at page 0615MANU/ET/0038/2012Appellate power of Tribunal — Whether appellate power of Tribunal under Section111 of Act enabled it to direct Commission to amend MYT Regulations? — Held,Regulation 56 did not entitle Commission to come down from norms and it was onlywhen regulation 58 was exercised to amend regulation 56 that Commission might inits wisdom lower down norms and benchmarksMadhya Pradesh Power Generation Company Ltd., Jabalpur (M.P.) v. MadhyaPradesh Electricity Regulatory Commission, Jabalpur (M.P.) and Ors.Review Petition No. 3 of 2011, Decided On: 01.03.2012, at page 0665MANU/ET/0044/2012Applicability of Clause — Whether Clause 3.4.2(i) would be applicable in presentcase? — Held, bare reading of Clause 3.4.2 would reveal that, right to terminate contractwould occur, when fulfillment of condition subsequent was delayed beyond3 rd March, 2011 and seller had not furnished additional performance guarantee. Bothconditions viz., continued delay beyond 9 months and non-furnishing additionalcontract performance guarantee would have to be satisfied for giving terminationnotice. Admittedly, in present case, seller had not furnished additional contractperformance guarantee but, had fulfilled conditions subsequent of entering in to fuelsupply agreement with Vidhesh Coal on 22 nd February, 2011. Thus, Clause 3.4.2(i)would not be applicable in present caseReliance Infrastructure Limited, Mumbai v.The Maharashtra Electricity Regulatory Commission, Mumbaiand M/s. Wardha Power Company Ltd., HyderabadAppeal No. 115 OF 2011, Decided On: 23.03.2012, at page 0738MANU/ET/0050/2012Applicability of doctrine — Whether Tribunal was right in rejecting contention urgedon behalf of Appellants that, doctrine of Promissory Estoppel was attracted in facts ofcase and concurring with the view taken by Commission that, incentive scheme wasapplicable only upto 31 st March, 2007 or till Commission issued a tariff order whicheverwas earlier — Held, an appeal under Section 125 of Electricity Act, 2003, is maintainablebefore this Court only on grounds specified in Section 100 of Code of Civil Procedure.Section 100 of CPC, in turn permits filing of an appeal only if case involves a substantialquestion of law. Findings of fact recorded by Courts below, which would in presentcase, implied Regulatory Commission as Court of first instance and Appellate Tribunalas Court hearing first appeal, cannot be re- opened before this Court in an appeal underSection 125 of the Electricity Act, 2003. Just as High Court cannot interfere with concurrentfindings of fact recorded by Courts below in a second appeal Under Section 100 of CPC,so also this Court would be loathed to entertain any challenge to concurrent findings offact recorded by Regulatory Commission and Appellate Tribunal. There had been nounequivocal representation regarding continuation of scheme till 31 st March, 2007. Therewas no material to support contention that, Appellants had indeed made any investmentor changed their position to their detriment so as to attract doctrine of promissoryestoppel. Revision petition was filed before Tribunal but, Tribunal refused to interferewith decree or order earlier made. It simply dismissed review petition. Decree in such acase suffered neither any reversal nor an alteration or modification. It was an order bywhich, review petition was dismissed thereby affirming decree or order. In such aENERGY LAW REPORTS APRIL, 2012 131vii

viii Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]contingency, there was no question of any merger and anyone aggrieved by decree ororder of Tribunal or Court should have to challenge within time stipulated by law,original decree and not order dismissing review petition. Time taken by a party indiligently pursing remedy by way of review may in appropriate cases be excluded fromconsideration while condoning delay in filing of appeal, but such exclusion orcondonation would not imply that, there was a merger of original decree and orderdismissing review petition. No substantial question of law arose. Appeals dismissed.DSR Steel (P) Ltd. v. State of Rajasthan and Ors.Civil Appeal Nos. 3814, 4393 and 4396 of 2007,Decided On: 01.05.2012 at page 0657MANU/SC/0350/2012Applicability of Provision — Whether provisions of Section 10 dealing with duties ofgenerating company are subjected to Sections 39 and 40 related to duties and functionsof State Transmission Utility and Transmission Licensee respectively? — Held, ruleof construction is well settled that in an enactment, when there are two provisionswhich cannot be reconciled with each other, they should be so interpreted in such away that the effect is given to both. Concept that the effect should given to both, is thevery essence of rule. Thus, a construction that reduces one of provisions to a “use-lesslumber” or “dead letter” is not harmonious construction. In present case, interpretationof phrase “subject to provision of Act” would include provision of Section 39 and 40of Act, would render provision of Section 10 relating to ‘dedicated transmission line’a dead letter. Such a construction would not be acceptableThe Chairman, TNEB Tamil Nadu Electricity Board, and Ors. v.M/s Ind Barath Thermal Power Ltd. and Regulatory Commission(Represented by its Secretary), ChennaiAppeal No. 145 of 2011 at page 0980Decided On: 23.05.2012MANU/ET/0105/2012Applicability of Regulation — Whether State Commission while dealing with issueof consumer contribution reduced from regulated equity for financial year 2007-08and financial year 2008-09 had wrongly relied upon Regulations 76.1.1? — Held,State Commission had fairly admitted in its counter-affidavit that, treatment of thisissue by State Commission in impugned order was due to inadvertent error and wouldbe corrected in the next Tariff Order of Appellant. In view of admissions made by theState Commission, reliance of State Commission on Regulation 76.1.1 of Regulationwas wrong. Therefore, same should be corrected by State Commission in next TariffOrder as it had undertaken through its counter-affidavitReliance Infrastructure Limited, Mumbai v. The Maharashtra ElectricityRegulatory Commission, Mumbai and Ors.Appeal No. 150 OF 2009, Decided On: 23.03.2012 at page 0760MANU/ET/0052/2012Assignment of PPA — Whether the Power Purchase Agreement dated, 16 th January,2004 could be assigned in favour of the Respondent No. 2 without the consent of theAppellant and in the absence of any valid transfer scheme under the Karnataka StateAct, 1999 as alleged by the Appellant? — Held, the act of assignment of the PPA wasby virtue of the provision of Section 14 of the State Act, 1999 read with the Governmentof Karnataka’s notification dated 10 th May, 2005.M/s Narayanpur Power Company Private Ltd. v. KERC, Bangalore and Anr.Appeal No. 31 of 2011,Decided On: 15.02.2012, at page 0523MANU/ET/0023/2012132ENERGY LAW REPORTS APRIL, 2012

Consolidated Index: Subject Index(January - April, 2012)ixAuxillary Consumption — Whether the State Commission had provided relaxationwith regard to the auxillary consumption? — Held, with regard to AuxiliaryConsumption, the State Commission had provided relaxation in the auxiliary powerconsumption in most of the cases namely units No. 5 to 8 of the Panipat ThermalPower Station. In fact, the State Commission had provided a higher auxiliary powerconsumption of 9 per cent as against the norms of 8.5 per cent. With regard to RajivGandhi Thermal Power Plant Units 1 and 2, the said units of 660 MW capacity andwere of new technology. The norms applicable to those units were to be same as thatof generating Stations of more than 500 MW with Natural Draft Cooling Tower. Thesaid units were expected to be Commissioned during last quarter of the year 2010. Forthe above technology, there were no particular Regulations framed by the StateCommission as the same were not envisaged at the time of framing of Regulations inthe year 2008. The Central Commission Regulations 2009 provide 6 per cent Auxiliaryconsumption for these units. Since State Commission did not make any provisionwith regard to these high capacity units fitted with new technology, it has adoptedCentral Commission Regulations and relaxed it to 8.5 per cent instead of 6 per cent.The Appellant could not have any grievance on the above issue as the StateCommission had in fact allowed relaxed norms i.e. the applicable norms for suchgenerating units in the country as prescribed by the Central Commission. TheAppellant could not claim the same norms as was applicable to the other generatingunits which were not based on the above technology for which separate norms wereprescribed in the Regulations framed by the State Commission in the year 2008.Haryana Power Generation Corporation Ltd., Panchkula v.Haryana Electricity Regulatory Commission, PanchkulaAppeal No. 131 of 2011,Decided On: 01.03.2012, at page 0633MANU/ET/0035/2012Availability of Generation Plant — Whether State Commission had rightly restrictedthe availability of generation plant to 2002-2003 level ignoring higher declaredavailability during the year 2003 – 2004 — Held, Since the Appellant had not submitteddaily generation data for the full year, it could not be said that Appellant had achieveddeclared availability of 90 per cent for the year 2003-2004. Claim of Appellant ofhigher availability could not be brushed aside as aberration. Appellant was directedto submit daily generation data to carry out detailed analysis of the data to arrive atcorrect conclusion.Magnum Power Generation Limited, New Delhi v. Haryana ElectricityRegulatory Commission, Haryana and Ors.Appeal No. 118 of 2010, Decided On: 23.03.2012 at page 0810MANU/ET/0056/2012Bridging the Revenue gap — Whether the State Commission was right in disallowingthe claim of Bridging the Revenue gap while determining the annual revenuerequirements and bulk supply price of the Appellant for the year 2010-11? — Held,this issue was covered in the judgment of this Tribunal in Appeal No. 88 of 2009.Accordingly, this issue was decided in favour of the Appellant and the StateCommission was directed to true up the financials of the Appellant for the FinancialYears 2009-2010 and 2010-11 and allow actual costs with carrying cost.GRIDCO Limited, Bhubaneswar v.Orissa Electricity Regulatory Commission, Bhubaneswar and Ors.Appeal No. 106 of 2010,Decided On: 01.03.2012, at page 0615MANU/ET/0038/2012ENERGY LAW REPORTS SEPTEMBER, 2012 133

x Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]Capital Expenditure — Whether Capital expenditure was not justifiably determinedand State Commission ignored the substantial transmission project to meet the growingload demand of power in the State of Punjab? — Held, the Commission did not commitany grave error in allowing expenditure of Rs. 600 crore relying on actual capitalexpenditure of Rs. 306 crore from April 2010 to January 2011 and the proposedexpenditure for February and March 2011. The Commission found that the projectedexpenditure for the year 2011-12 was on higher side when compared to the actualexpenditure level achieved by the transmission licensee. In fact, the Commissionallowed 50 per cent more than the capital expenditure for the 2010-11. In the impugnedorder, the Commission observed that the during the review for FY 2011-12 theCommission would consider any expenditure if made and the carrying cost for theamount of the capital expenditure, being a genuine cost and was passed throughTariff what was significant was that for SLDC business the Appellant reduced itrevised capital expenditure from Rs. 56.66 crore to Rs. 30 crore and Commissionallowed Rs. 25 crore. Therefore, on this issue no major irregularity was found.Punjab State Transmission Corporation Limited, Punjab v.PSERC, Chandigarh and Ors.Appeal No. 76 of 2011,Decided On: 02.03.2012, at page 0560MANU/ET/0041/2012Compensation — Whether State Commission was justified in not awarding anycompensation to Appellant Board while granting relief to Respondent Company? —Held, when reserved capacity was not provided by Appellant to Respondent Companyexclusively, question of compensation did not arise. State Commission was right inholding that, no compensation was payable to Appellant for reduction in reservecapacity by Respondent No. 1. Appeal dismissedThe Chairman Tamil Nadu Electricity Board, Chennai and Anr. v. SreeRengaraaj Power India (P) Ltd., Tamilnadu and Tamil Nadu ElectricityRegulatory Commission, ChennaiAppeal No. 108 of 2011 and I.A. No. 178 of 2011,Decided On: 19.03.2012 at page 0726MANU/ET/0047/2012Computation of Aggregated Revenue Requirement and Revenue Gap — WhetherCommission was justified in its computation of Aggregate Revenue Requirement andRevenue Gap in true up exercise for the FY 2008-2009? — Held, amount additionallyrecovered through vigilance drives was included under non-tariff income. Alternativeargument that, additional recovery was provisional in nature was rightly repelled.Brihanmumbai Electric Supply and Transport Undertaking ofBrihanmumbai Municipal Corporation, India v.Maharashtra Electricity Regulatory Commission, MumbaiAppeal No. 8 of 2011, Decided On: 22.03.2012 at page 0837MANU/ET/0058/2012Computation of Amount of Sales — Whether Commission was correct in determiningamount of sales at 4390 MU for FY 2010- 2011 in course of deciding APR for theFY 2009-2010 and ARR for FY 2010-2011? — Held, proportion of slab ‘above 1000unit’ worked out to 38 per cent and hence, projected sales to this consumption slabwere considered as 333 MU. Fact was that, financial year 2010-2011 was now overand actual sales for FY 2010-2011, according to Appellant come to 4267.05 MU asagainst 4390 MU. A table had been given in rejoinder affidavit but, it could not beclear whether these facts were presented before Commission. Commission mightconsider new figure and might pass appropriate order upon examination.134ENERGY LAW REPORTS APRIL, 2012

Consolidated Index: Subject Index(January - April, 2012)xiBrihanmumbai Electric Supply and Transport Undertaking ofBrihanmumbai Municipal Corporation, India v.Maharashtra Electricity Regulatory Commission, MumbaiAppeal No. 8 of 2011, Decided On: 22.03.2012 at page 0837MANU/ET/0058/2012Computation of Interest — Whether State Commission should have allowed passthrough expenses on account of interest liability and past losses upto FY 2006-2007?— Held, for year 2007-2008, computation of the approved interest was based on certainprinciples which had been narrated in Para 5.4.4.1 to 5.4.4.21 of Commission’sTransmission Tariff order dated 22 nd March, 2007 in Case No. 56 of 2006. There wasno justification to reconsider decision of Commission again for passing extra burdenof interest. Appeal allowed in partOrissa Power Transmission Corporation Limited, Orissa v.Orissa Electricity Regulatory Commission, Bhubaneswar and Ors.Appeal No. 90 of 2009, Decided On: 11.04.2012MANU/ET/0061/2012Computation of Share on Gains and Loses — Whether Commission was justified inits treatment on sharing on gains and losses in course of true up for FY 2008-2009? —Held, regarding issue, that was, computation of sharing of gains and losses for FY 2008-2009, Commission had accepted that, it was an inadvertent error and amount ofRs. 13.29 crore would be added to ARR of subsequent year.Brihanmumbai Electric Supply and Transport Undertaking ofBrihanmumbai Municipal Corporation, India v.Maharashtra Electricity Regulatory Commission, MumbaiAppeal No. 8 of 2011, Decided On: 22.03.2012 at page 0837MANU/ET/0058/2012Computation on Energy availability and Power Purchase Cost — WhetherCommission was justified in its treatment on energy availability and power purchasecost in course of deciding APR for FY 2009-2010 and ARR for FY 2010-2011? — Held,Regarding issue namely, energy availability and power purchase cost for FY 2010-2011 Commission as at page 57 of e counter-affidavit had averred that, upon verificationCommission found that, there had been an inadvertent error in computation, andAppellant’s ARR should have included this amount of Rs. 6.24 crore.Brihanmumbai Electric Supply and Transport Undertaking ofBrihanmumbai Municipal Corporation, India v.Maharashtra Electricity Regulatory Commission, MumbaiAppeal No. 8 of 2011, Decided On: 22.03.2012 at page 0837MANU/ET/0058/2012Computation on Interest Expenses — Whether Commission was justified in itstreatment on Interest Expenses for FY 2008-2009? — Commission did not appear tohave disputed that, capital value of assets which was required to be serviced wasRs. 131.99 crore. Amount capitalised had to be in ratio of 70:30. Appellant claimedRs. 32.42 crore as normative equity which was utilizable with Rs. 85.07 crore claimedto be raised through loan. This point did require re-examination in accordance withRegulations which provide for normative loan @ 70 per cent on capitalisation allowedafter 1 st April, 2005.Brihanmumbai Electric Supply and Transport Undertaking ofBrihanmumbai Municipal Corporation, India v.Maharashtra Electricity Regulatory Commission, MumbaiAppeal No. 8 of 2011, Decided On: 22.03.2012 at page 0837MANU/ET/0058/2012ENERGY LAW REPORTS SEPTEMBER, 2012135

xii Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]Condonation of Delay — Whether Appellant/Applicant was entitled to condonationdelay of 433 days in filing Appeal as against impugned order dated 18 th September, 2010— Held, it was evident that, there was not only lack of diligence and lack of promptnesson part of Applicant to file an Appeal even after disposal of Review Petition in timebut, also there was a lack of bona fide on part of Appellant in causing undue delay byfiling a review after review before State Commission. Supreme Court had specificallyheld that, when there was a lack of bona fide, then sufficient cause shown in explanationcould not be inferred and in that event, Application to condone delay should bedismissed. GRIDCO, in order to keep issue alive for a long time or in order to createuncertainty to ensure their monopoly, had caused artificial delay due to theirlackadaisical attitude which lacked bona fide. State Commission only in public interestof consumers, had decided to issue intra-state licence to Respondent, which wouldensure healthy competition between utilities which would ultimately benefitconsumers thereby public interest was safeguarded. Present Application to condonedelay of 433 days was liable to be dismissed mainly on ground of lack of bona fideand accordingly, same was dismissed. Application dismissed.Gridco Limited, Orissa v. M/s. Global Energy Pvt. Ltd., New Delhi and Ors.I.A. NO. 30 of 2012 IN DFR NO. 110 of 2012Decided On: 10.04.2012 at page 0916MANU/ET/0062/2012Condonation of Delay — Whether application to condone delay of 279 days inre-filing the Appeal filed by Applicant/Appellant was liable to be quashed? — Held,there was no satisfactory explanation given either in the Affidavit or in the oralsubmissions made before this Tribunal. There was a huge delay of 279 days in refilingpresent Appeal, which had not been explained, when Act itself said that, it hadto be disposed of within 180 days. There was a lack of diligence on part of Applicantin prosecuting matter from beginning. Hence, present application to condone thedelay of 279 days in re-filing Application was dismissed and consequently, Appealwas also rejected.Haryana Vidyut Prasaran Nigam Limited, Panchkula v.Haryana Electricity Regulatory Commission, Uttar Haryana Bijli Vitran NigamLtd., Panchkula and Dakshin Haryana Bijli Vitran Nigam Limited, HisarI.A. NO. 134 of 2012 IN DFR NO. 891 of 2011Decided On: 17.04.2012MANU/ET/0070/2012Condonation of Delay — Whether Applications filed by Appellant/Applicant forcondoning delay was liable to be allowed? Whether Applicant was diligent or not? —Held, each case had to be weighed from its facts and circumstances in which partyacted and behaved. In present case, Applicant’s conduct would not indicate thatApplicant was a responsible litigant who kept quiet for a long period. When therewas a continued negligence and lack of diligence, apparent on part of Applicant, thenthis Tribunal could not condone huge delay so as to affect interest of Opposite Party.No valid reasons to condone the delay. Applications dismissed.Mula Pravara Electric Co-Operative Society Ltd., Maharashtra v.Maharashtra Electricity Regulatory Commission and Ors.IA Nos. 90 and 91 of 2012 in DFR Nos. 1652 and 1661 of 2010Decided On: 26.03.2012 at page 0869MANU/ET/0057/2012Condonation of Delay — Whether delay of 246 days in filing the Appeal had beenproperly explained? Whether in facts and circumstances of case, Section 14 of limitationAct, could be invoked for excluding period of pendency of Writ Petition before High136ENERGY LAW REPORTS APRIL, 2012

Consolidated Index: Subject Index(January - April, 2012)xiiiCourt? — Held, Application to condone delay did not disclose the sufficient cause orjustification for permitting Applicants to file the Appeal with the delay of 246 days.Application to condone the delay of 246 days could not be allowed in light of facts ofcase which would clearly indicate that, Section 14 of limitation Act would not applysince there was no bona fide on part of Applicants to file the Appeal with long delayafter exhausting remedy before High Court. Application dismissedBalmukund Sponge and Iron Pvt. Ltd. and Ors. v.Damodar Valley Corporation and Anr.I.A. NO. 135 OF 2012 IN DFR NO. 706 OF 2012 at page 1002Decided on: 03.05.2012MANU/ET/0100/2012Conduct of Enquiry — Whether an outside agency could enquire into the conduct ofAppellant? — Held, Admittedly, Chairman was only officer in organization of4 th Respondent who was superior to Appellant. Regulations do not speak aboutengaging a third party agency to enquire into conduct of an employee of APERC.However, Regulations also do not prohibit the Chairman from engaging a third partyagency to conduct enquiry. Only condition was that, enquiring authority should besuperior in rank to that of charged employee. When a third party agency was engaged,question of enquiring officer being subordinate, equal or superior in rank to that ofcharged officer did not arise. Indeed in such an eventuality, disciplinary authorityshould take care to see that, a suitable third party agency should be engaged to holddisciplinary enquiry. Therefore, it was open for 5 th Respondent-Chairman to act in hisdual capacity. Rules and Regulations envisaged enquiry by 5 th Respondent-Chairmanor by his nominee and not by an external agency through intervention of Court.5 th Respondent-Chairman of APERC shall conduct enquiry all by himself in hiscapacity as an enquiry officer. In such a situation, he shall indeed consider enquiryreport later as Competent Authority. Since, Appellant himself had invited the 5 thRespondent-Chairman to conduct enquiry, the Appellant shall not be entitled to claimlater that, Competent Authority himself was not entitled to conduct enquiry and that,enquiry report of enquiry conducted by Competent Authority himself was vitiated.Order of single Judge consequently, was set aside. Appeal disposed of.C. Ramakrishna v. Electricity RegulatoryCommission Employees’ Association and Ors.Writ Appeal No. 778 of 2011Decided On: 26.04.2012 at page 0927MANU/AP/0314/2012Consistency Between Legislation — Whether Section 14 of Karnataka Electricity StateAct, 1999 is consistent with the Second proviso to Section 39 read with Section 131 ofAct and is saved in terms of Section 185(3) of the Act 2003? — Held, Section 14 of theKarnataka Electricity Reform Act, 1999 did not have any impact in relation toSections 39, 41, 131 and Section 185 (3) of the Electricity Act 2003 in view of theGovernment of India’s notification dated 9 th June, 2004 which has direct bearing onthe provisions of the State Act.M/s Narayanpur Power Company Private Ltd. v.KERC, Bangalore and Anr.Appeal No. 31 of 2011,Decided On: 15.02.2012, at page 0523MANU/ET/0023/2012Constitutionality — Whether the first proviso of Rule 4 of the Delhi Electricity RegulatoryCommission (Salary, Allowances and Other Conditions of Service of the Chairpersonand Members) Rules, 2001 (the Rule 2001) is unconstitutional and ultra vires ofENERGY LAW REPORTS SEPTEMBER, 2012137

xiv Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]Articles 14 and 16 of the Constitution because the service rendered by the Petitioner asChairman, CBDT is unrelated to the organisation in question which he took, viz.Chairman, DERC? — Held, it was not in doubt that Rule 4 of the Rules 2001 along withproviso were in existence when the post of Chairman of the DERC was notified towhich the Petitioner applied and was selected. It was also a matter of record that theterms were conveyed to the Petitioner for acceptance vide offer of appointment letterdated 15 th February, 2006 which included the aforesaid condition of reducing the payby the amount of pension received. The Petitioner had tendered his acceptance to thisoffer of the appointment and therefore, accepted the conditions with free will and consent.Thus, normally when this position was accepted by the Petitioner with open eyes andmind, it was not permissible for him to challenge the action of the Respondents. At thetime of acceptance, he knew that he would be given pay after the deduction of pensionwhich he was already drawing. The principle of “equal pay for equal work” would notarise. In case, the Petitioner was to serve wherefrom he was retired, he would haverendered his duties by getting the same pay. When such a person becomes Chairman ofa Regulatory Authority, which can again be called a post under the dominion of Unionof India, how he can be given the salary as well as pension in two different accountsthereby making his pay much more than the pay fixed under the Rules. Therefore, therewas a proper justification and rationale for such a proviso relating to deduction ofpension as the pension is also drawn from the Government only. The question ofdiscrimination also did not arise as it was the total emoluments and moneys drawn bythe Petitioner which had to be taken into consideration, viz. pay and pension. Oncethese two were added, the emoluments received are not less than that of the Member ofthe Regulatory Board. The argument of discrimination was, thus, fallacious. The petitionswere held to be without any merits, the same were accordingly dismissed.Berjinder Singh v. LT. Governor of Delhi & Ors.W.P. (C) No. 12205 of 2009 and W.P. (C) No. 3507 of 2011,Decided On: 24.02.2012, at page 0649MANU/DE/0939/2012Construction of transmission lines — Whether responsibility to construct the dedicatedtransmission line was of generating company (Respondent), which establishedgenerating station or the Transmission Licensee (Appellant), which is responsible toestablish the intra-state transmission system? — Held, It is the duty of generatingcompany to establish a dedicated transmission line. Dedicated transmission line isnot a transmission line in terms of definition under Section 2(72) of Act. Similarly,dedicated transmission line is not a distribution system in terms of the definition ofSection 2(19) of Act. Term “Transmission licensee” has been defined in Section 2(73)of Act as “transmission Licensee” means a licensee authorized to establish or operatetransmission lines. Since, dedicated transmissions lines is neither a transmissionline or distribution system, it cannot be the duty of Appellant, transmission licensee,to establish and operate a dedicated transmission line. Section 10 of Act read with theElectricity (Removal of difficulty) fifth Order, 2005 makes it clear that it is the duty ofthe generating company to establish the dedicated transmission lines.The Chairman, TNEB Tamil Nadu Electricity Board, and Ors. v.M/s Ind Barath Thermal Power Ltd. and Regulatory Commission(Represented by its Secretary), ChennaiAppeal No. 145 of 2011 at page 0980Decided On: 23.05.2012MANU/ET/0105/2012Contribution to Contingency Reserve — Whether Commission’s treatment oncontribution to contingency reserve in respect of APR for FY 2009-2010 and ARR for138ENERGY LAW REPORTS APRIL, 2012

Consolidated Index: Subject Index(January - April, 2012)xvFY 2010-2011 was justified? — Held, Regulation 76.9 of Regulations provided forCCR of a sum not less than 0.25 per cent and not more than 0.5 per cent of originalfixed assets. Thus, regulation 76.9 stretched a range within which Commission had toexercise its discretion and it did not appear that, Commission’s determination of CCRwas faulty. It provided CCR @ 0.25 per cent of opening GFA as against Rs. 7.18 croreand Rs. 7.87 crore projected by Appellant.Brihanmumbai Electric Supply and Transport Undertaking ofBrihanmumbai Municipal Corporation, India v.Maharashtra Electricity Regulatory Commission, MumbaiAppeal No. 8 of 2011, Decided On: 22.03.2012 at page 0837MANU/ET/0058/2012Deduction — Whether State Commission was not justified in deducting amount ofRs. 4.71 Crore for Financial Year 2007-08? — Held, State Commission had fairly statedin its counter-affidavit that, in case Appellant furnished materials before StateCommission to substantiate the claim, same would be allowed in next AnnualPerformance Review Order of the Appellant. In view of statement made by StateCommission, Appellant was directed to furnish materials before State Commission tosubstantiate claim with reference to power purchase through Demand SideManagement (DSM) and in that event, State Commission would allow same in nextAPR OrderReliance Infrastructure Limited, Mumbai v. The Maharashtra ElectricityRegulatory Commission, Mumbai and Ors.Appeal No. 150 of 2009, Decided On: 23.03.2012 at page 0760MANU/ET/0052/2012Deduction of Amount — Whether Commission was justified in repeating thededuction of the sum of Rs. 1.34 crore for impact due to truing up for FY 2007-2008after cost benefit analysis in computation of the ARR and Revenue Gap for FY 2010-2011? — Held, Commission had averred that, there had been an inadvertent error incomputation, and Appellant’s ARR should not have been reduced by this amount ofRs. 1.34 crore in FY 2010-2011, since same had already been considered while truingup for FY 2008-2009Brihanmumbai Electric Supply and Transport Undertaking ofBrihanmumbai Municipal Corporation, India v.Maharashtra Electricity Regulatory Commission, MumbaiAppeal No. 8 of 2011, Decided On: 22.03.2012 at page 0837MANU/ET/0058/2012Delay — Whether explanation given by the Appellant with regard to the delay inmaking a claim was satisfactory or not? — Held, the Appellant had made the claimimmediately after the mistake committed by the Respondent Board came to itsknowledge only after the audit inspection and as such the explanation for the delaymay be accepted as satisfactory. In view of the findings, the impugned order sufferedfrom infirmity and hence the impugned order was liable to be set aside. Accordingly,the appeal was allowed. The impugned order was set-aside. The Respondent Boardwas directed to adjust the said banked units in the future bills or to refund the amounttowards the cost of the said banked unutilised unit of energy along with the interest atshort term SBI PLR (Prime Lending Rate).Sulochana Cotton Spinning Mills Pvt. Ltd. v.Tamil Nadu Electricity Board, Chennai And Ors.Appeal No. 41 of 2011,Decided On: 01.03.2012, at page 0623MANU/ET/0037/2012ENERGY LAW REPORTS SEPTEMBER, 2012139

xvi Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]Demand — Whether Respondents had authority and power under Indian PostOffice Act, 1898 or Post Office Guide or any other Rule/guidelines to demandalleged deficit amount of postage from “sender” of postal articles, after receivingsame from “sender” without any objection to deficit amount and after deliveringpostage articles to addressee without claiming any deficit amount from“addressee”? — Held, for applicability of Clause 34, conditions precedent were(a) breach of any of conditions of license to use franking machine (b) cancellationof license to use franking machine (c) a sum due to department on account ofpostage. Such conditions had not been fulfilled in present case nor any avermenthad been made and no such stand had been taken by Postal Authority. Therefore,Clause 11(10)(xv) or Clause 34 was not applicable in present case. Division Benchof High Court erred in holding that, provisions of Clause 11(10) (xv) and Clause34 were attracted in present case. According to Section 11 of Indian postal Act,1898 the “addressee” will be liable to pay deficit Charges, if any, once addresseeaccepts the postal article and opens it. On the other hand the “sender” will beliable to be charged for deficit postage, if it is detected at time of postage or ifaddressee refuse or return the postage or if addressee is dead or cannot be found.It was not the case of Postal Authority that, any of postage had been refused orreturned by any of addressee or any addressee was dead or could not be found. Inabsence of any such allegation, no charge could be made from sender companyunder Section 11 of Act, and Company could not be made liable to pay postage orsum due thereon for franking, there was no occasion for authority to exercisepower under Section 12 to recover such due from sender- company. Postal Authoritymislead sender company, which caused charging of lesser amount for bills wasevident from letters written by Director. Failure on part of Postal Authority toensure correct postage as per Clause 30(iv) was also not in dispute. Mistake havingbeen committed by Postal Authority and there being failure on part of office ofPostal Authority to check postal articles and postage for recovering amount fromaddressee, it was not open for Postal Authority to pass on such liability on sendercompanyor to recover same from Company. Demand notice being not proper wasrightly held to be illegal by Single Judge. Demand notice and order passed byDivision Bench of High Court was set aside; portion of direction given by SingleJudge authorizing the Postal Authority to decide issue afresh and allowing themto retain amount till such decision was also set aside. Appeals allowedCESC Ltd. v. Chief Post Master General and Ors.Civil Appeal Nos. 2606 and 2607 of 2006,Decided On: 11.05.2012 at page 0801MANU/SC/0441/20Denial of return on equity —Whether State Commission had erred in not allowingany Return on Equity to Appellant? — Held, admittedly, there were no TariffRegulations for RoE to Appellant. State Commission was directed to take up the issueof RoE on share capital of Prescribed amount with State Government and if no responsewas received from State Government within a reasonable time, decide the issue as perlaw. ROE on additional equity during FY 2009-2010, State Commission was directedto consider same on basis of documents submitted by Appellant regarding actualequity infusion.Orissa Power Transmission Corporation Limited, Orissa v. Orissa ElectricityRegulatory Commission, Bhubaneswar and Ors.Appeal No. 90 of 2009, Decided On: 11.04.2012MANU/ET/0061/2012140ENERGY LAW REPORTS APRIL, 2012

Consolidated Index: Subject Index(January - April, 2012)xviiDepreciation — Whether Depreciation can be considered for deemed repayment ofloan? Whether cost of maintenance spares limited to 1 per cent of the historical costwould cover the cost of spares for maintenance of additional equipment? — Held,Tribunal in Appeal No. 139 and 140 of 2006 decided this issue holding thatdepreciation is an expense and therefore it cannot be considered for deemedrepayment of loan. Since, depreciation is an expense it represents a decline in valueof assets because of use, wear or obsolescence. Tribunal in Appeal No. 139 and 140of 2006 decided in favour of Appellant holding that under Clause 18 of the CERCRegulations, additional capitalisation after date of commercial operation isrecognised as part of capital expenditure and cost of additional equipment is notincluded in historical cost. Cost of maintenance spares limited to 1 per cent of thehistorical cost would not cover the cost of spares for the maintenance of the additionalequipment. Issue relating to Non-Consideration of Normative Transit Loss for coalreceived through Railway System has also been covered by Tribunal’s Judgment infavour of Appellant.NTPC Limited, New Delhi v. Central Electricity RegulatoryCommission, New Delhi and GRIDCO Limited, OrissaAppeal No. 88 of 2007, at page 0955Decided On: 19.04.2012MANU/ET/0076/2012Depreciation — Whether depreciation was correctly determined by the Commission?— Held, on depreciation the Commission allowed 4.81 per cent instead of 4.88 per cent.According to the Commission the rate of 4.81 per cent was based on the audited accountof the Board for the year 2008-09, 2009-10, 2010-11 and 2011-12 and further, the erstwhileBoard did not provide any information with regard to the date of Commissioning ofeach asset on the ground that large number of asset of different categories were addedduring the year. Again, the assets and liabilities of the unbundled entities had not beenfinalised. Accordingly, the Commission adopted the methodology of weighted averagerates of depreciation derived from the audited accounts of the erstwhile Board whileapproving depreciation charges in its successive Tariff orders.Punjab State Transmission Corporation Limited,Punjab v. PSERC, Chandigarh and Ors.Appeal No. 76 of 2011,Decided On: 02.03.2012, at page 0560MANU/ET/0041/2012Determination of Administration and General Expenses — Whether Commissionwas justified in its treatment on APR for FY 2009-2010 and ARR for FY 2010-2011with regard to A & G Expenses? — Held, Even if 6.04 per cent growth rate for FY 2009-2010 was considered, A & G Expenses would work out to Rs. 76.89 crore whichwould be almost equal to A & G Expenses approved for FY 2008-2009 after truing up.However, in A & G expenses for FY 2009-2010 and FY 2010-2011 derived from basefigure for FY 2008-2009 might have to be revised if A & G expenses were revised byState Commission.Brihanmumbai Electric Supply and Transport Undertaking ofBrihanmumbai Municipal Corporation, India v. Maharashtra ElectricityRegulatory Commission, MumbaiAppeal No. 8 of 2011, Decided On: 22.03.2012 at page 0837MANU/ET/0058/2012Determination of Cost — Whether cost of equipment adopted by State Commission indetermining the charges for use of the system was liable to be set aside? — Held,ENERGY LAW REPORTS SEPTEMBER, 2012141

xviii Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]charges for use of additional 66/11 kV system can only be determined using the costof equipment prevalent at the time of laying of such system. Commission had used‘cost of replacement method’, which, was a correct approach to determine the chargesfor the additional 66/11 kV system.M/s Waryam Steel Castings (P) Ltd., Punjab v.Punjab State Power Corporation Limited and Ors.Appeal No. 198 of 2011 at page 1028Decided on: 27.07.2012MANU/DE/3711/2012Determination of cost — Whether the State Commission erred in determiningdepreciation, employees cost, interest on working capital and transmission &distribution losses and not accounting for the surplus of Respondent No. 2 for thepast years in the ARR for the FY 2011-12? — Held, There is no reason to interferein the findings of the Joint Commission with regard to determination ofdepreciation, employees cost, T&D losses and adjustment of surplus for theprevious yearsSilvassa Industries Association v. Joint Electricity RegulatoryCommission through Secretary, Gurgaon, (Haryana) andElectricity Department, through Secretary, SilvassaAppeal No. 175 of 2011 and I.A. No. 263 of 2011,Decided On: 14.03.2012MANU/ET/0042/2012Determination of Employee’s Expenses — Whether Commission was justified in itstreatment on APR for the FY 2009-2010 and ARR for the FY 2010-2011 with regard toemployee’s expenses? — Held, Tariff Regulations, 2005 did not specify any growthrate, while CERC Regulations, 2009 specified a growth rate of 5.72 per cent for fiveyear control period which was arrived at after considering WPI and CPI, as against6.35 per cent and 8.49 per cent considered by Commission in impugned order andthat if growth rates indicated by Appellant were considered employees expensesworked out to Rs. 153.85 crore and Rs. 168 crore for FY 2009-2010 and FY 2010-2011,which were found to be marginally higher than employees expenses allowed byCommission in impugned order. However, employees expenses for FY 2009-2010 andFY 2010-2011 derived from base figure for 2008-2009 would have to be revised, ifemployees expenses for FY 2008-2009 were revisedBrihanmumbai Electric Supply and Transport Undertaking ofBrihanmumbai Municipal Corporation, India v.Maharashtra Electricity Regulatory Commission, MumbaiAppeal No. 8 of 2011, Decided On: 22.03.2012 at page 0837MANU/ET/0058/2012Determination of Interest Expenses — Whether Commission committed error indeciding in APR of FY 2009-2010 and determination of ARR for FY 2010-2011 thatinterest expenses for FY 2009-2010 should be Rs. 14.68 crore as against Rs. 19.17 croreand for FY 2010-2011 at Rs. 16.71 crore as against Rs. 30.12 crore estimated byAppellant? — Held, Regulation 73.5 gives discretion to Commission to allow relaxationin debt–equity ratio norm where Applicant reasonably demonstrates inability to raiseloan capital up to stipulated norm on account of market constraints and other factors.Regulation 73 did not dealt with any situation as to what would happen in case,where actual equity invested was lower than normative equity. Commission wasfound to have allowed interest expenses treating for both years the entire amount asloan except government grant and contributions from consumers with no provisionfor normative equity. Issue needed re-examination.142ENERGY LAW REPORTS APRIL, 2012

Consolidated Index: Subject Index(January - April, 2012)xixBrihanmumbai Electric Supply and Transport Undertaking ofBrihanmumbai Municipal Corporation, India v.Maharashtra Electricity Regulatory Commission, MumbaiAppeal No. 8 of 2011, Decided On: 22.03.2012 at page 0837MANU/ET/0058/2012Determination of Interest on working Capital — Whether interest on workingcapital in true up for FY 2008-2009 should be a sum of Rs. 10.89 crore as was fixedby Commission as against claim of Appellant at Rs. 23.23 crore? — Held, underrecovery of FAC during FY 2008-2009 was alleged to have led to a cash crunch.State Commission had decided case as per Regulations. Thus, there was no errorin order.Brihanmumbai Electric Supply and Transport Undertaking ofBrihanmumbai Municipal Corporation, India v.Maharashtra Electricity Regulatory Commission, MumbaiAppeal No. 8 of 2011, Decided On: 22.03.2012 at page 0837MANU/ET/0058/2012Determination of Power Purchase Cost — Whether the State Commission actedwrongly in not taking into account the audited/actual ex-bus generation of201793 MU determining the amount of allowable Fuel and Power Purchase Cost forthe year 2007-08 which is in violation of the direction given in the remand/orderpassed by this Tribunal for de novo determination? — Held, there was no specificdirection by the Tribunal in its remand/order dated 4 th May, 2010 that the StateCommission was bound to take only the audited figures of ex-bus generation whilemaking the de novo determination. Therefore, the contention that the StateCommission had violated the order passed by this Tribunal on 4 th May, 2010 is nottenable. The State Commission made a meticulous analysis on this aspect and itwas clear that the State Commission applied its mind and reduced the amount fromRs. 261.78 lacs to Rs. 50.42 lacs as a disallowed amount as a result of the appropriateconsideration of the relevant factors. Therefore, the submission of the Appellantthat nothing was considered by the State Commission was liable to be rejected. TheState Commission had taken into consideration all the relevant factors includingthe statutory formula for fixing the fuel power purchase adjustment and correctlyarrived at a proper conclusion. The State Commission had not violated the remandorder of the Tribunal and on the other hand, it had followed the same in letter andspirit and passed the considered order which does not call for any interference.DPSC Limited, Kolkata v. West Bengal ElectricityRegulatory Commission, KolkataAppeal No. 30 of 2011,Decided On: 01.03.2012, at page 0586MANU/ET/0036/2012Determination of Tariff — Whether an enforceable Power Purchase Agreementbetween rooftop solar power generator and distribution licensee was a pre-requisitefor Joint Electricity Regulatory Commission to determine Tariff at which energy wasto be purchased by distribution licensee? — Held, There is no provision in the Act toestablish that the binding PPA between generators and the distribution licensee is apre-requisite for determination of Tariff. An MOU or an initialed draft PPA shouldbe adequate for determination of Tariff. It was the duty of Joint Commission topromote generation of electricity from renewable sources of energy particularly solarwhich was an emerging technology and needed to be promoted due to abundance ofsunshine and large potential available in country. In pursuance of its function underSection 86 (1)(e) of Electricity Act, 2003, State Commission had issued regulationsENERGY LAW REPORTS SEPTEMBER, 2012143

xx Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]specifying purchase of electricity from renewable sources by distribution licenseesas a percentage of its total consumption. Commission, in order to promote solarenergy generation, had specifically specified a percentage of total energyconsumption of distribution licensee to be met from solar energy sources. However,specified Renewable Purchase Obligation could not be achieved by distributionlicensee unless, Joint Commission determines Tariff for procurement of energy fromrenewable sources including solar. Appellant had already been shortlisted forexecution of project under Scheme by concerned nodal agency. Appellant had to setup power project by 31 st March, 2013 to enable Respondent No. 2 to avail benefitsout of Scheme. Therefore, Joint Commission was directed to determine Tariff forprocurement of energy by Respondent No. 2 from Appellant’s solar project proposedto be set up in UT of Puducherry within 45 days from date of this judgment. Signingof a valid PPA between generator and distribution licensee was not a pre-conditionfor determination of Tariff by Joint Commission. An MOU or initialled draft PPAwould suffice. Appeal allowed.Saheli Export Private Limited, Chennai v. Joint Electricity RegulatoryCommission, Haryana, Electricity Department Government of Puducherry andRenewable Energy Agency Pondicherry, PuducherryAppeal No. 22 of 2012,Decided On: 29.03.2012 at page 0860MANU/ET/0055/2012Direction of State Commission — Whether the Joint Commission was correct indirecting the Appellant to supply all the consumers with the contracted load exceeding1500 kVA at a voltage of 66 kV without considering the practical problems withrespect to supply to the existing consumers and the substantial expenditure requiredfor such change? — Held, order regarding the supply voltage had been passed byJoint Commission on basis of the petition filed by Appellant. Thus, Appellant couldnot blame Joint Commission for specifying voltage levels for consumers with loadexceeding 1500 kVA. However, Joint State Commission has made only slightmodification with conditions of supply in impugned order. Joint Commission wasdirected to consider the issue of shifting of existing consumers to higher voltage as aconsequence of impugned order and decide the matter after hearing all concernedand considering cost benefit analysis of such transfer. Accordingly, this matter wasremanded back to Joint CommissionThe Electricity Department, Nani Daman v.Joint Electricity Regulatory Commission, GurgaonAppeal No. 35 of 2012 at page 0993Decided On: 25.06.2012MANU/ET/0103/2012Distribution Loss and Energy input requirement — Whether Commission wasjustified in its treatment on distribution loss and energy input requirement in respectof APR for FY 2009-2010 and the ARR for FY 2010-2011 justified? — Held, Commissionconsidered 10 per cent distribution loss in FY 2009-2010 in accordance with loss levelspecified under MYT trajectory and was subject to final true up for FY 2010-2011 theCommission considered a lower distribution loss trajectory since, actual distributionloss in FY 2008-2009 was 9.29 per cent which was lower than target loss level of10.5 per cent for FY 2008-2009 and even target loss level of 10 per cent for FY 2009-2010.Commission did not appear to have committed wrong in fixing loss level at 9.50per cent for FY 2010-2011, which was a slight reduction of 0.5 per cent over trajectoryconsidered for FY 2009-2010. Moreover MYT Orders had achieved rightly byCommission that, Appellant had already been allowed sharing of efficiency gain.144ENERGY LAW REPORTS APRIL, 2012

Consolidated Index: Subject Index(January - April, 2012)xxiBrihanmumbai Electric Supply and Transport Undertaking ofBrihanmumbai Municipal Corporation, India v.Maharashtra Electricity Regulatory Commission, MumbaiAppeal No. 8 of 2011, Decided On: 22.03.2012 at page 0837MANU/ET/0058/2012Employees cost and O&M Expenses — Whether the Commission was justified inits treatment of the employees cost and other O&M Expenses? — Held, the StateRegulations 2005 as was subsequently amended in the year 2009 in Sub-regulation3 provides that in respect of O&M expenses which include employee expenses theState Commission shall be guided by the Central Regulations so far as the principlesand methodologies are concerned. The order dated 23 rd April, 2010 which the StateCommission passed was upon the application of the erstwhile PSEB for determinationof Tariff for the FY 2010-11 and only a week before the order was passed the saidutility was bifurcated between the Appellant and Respondent No. 2 so that, it didnot occur to the Commission that the Regulation 2005 immediately neededamendment so far as the O&M expenses for the transmission utility was concerned.There was a point in favour of the Commission that though Sub-regulation 3 providedfor following the principle and methodologies specified by the CERC a rider hasbeen attached to the Sub-regulation to the effect that the CERC Regulations mainlyrelated to inter-state transmission of higher quantum of energy at extra high voltageover long distances, while intra-state transmission takes place of lower quantum ofenergy at low voltage and over short distance. The Sub-regulation further providesthat the principles and methodologies specified by the CERC shall be followed asfar as feasible. Overnight it might not have been possible for the State Commissionto lay down its own provision in respect of the O&M expenses for the transmissionutility. It was convenient for the Commission to apportion the expenses between theemployees attached to distribution business and those attached to the transmissionbusiness. So far as the SLDC business was concerned there was not so much ofvariation in respect of employees cost for FY 2011-12 in so far the employees costwas concerned and such variation had been on account of apportionment. TheCommission had its own rationale in approving in the ARR for FY 2011-12 a sum ofRs. 162.82 crore because it took into consideration of the fact that the Appellant hadto pay 40 per cent of the total areas amounting to Rs. 35.49 crore (including SLDC)in FY 2011-12.As per the projection of Appellant of the itself, the terminal benefitsincluding pension payment for transmission utility for FY 2011-12 were in the sumof Rs. 32.83 crore which was allowed as was prayed for. Excluding the sum of Rs.21.81 crore as was originally projected as pay arrear the amount claimed by theAppellant for FY 2011-12 was Rs. 213.67 crore, and as earlier noted this figure wasreached after increase at random of 8.79 per cent over employees expenses for FY 2010-11. It was important to note that against the Tariff order dated 23 rd April, 2010, thatrelated to the FY 2010-11 neither the PSEB nor its successor entity preferred in appeal.The appeal against the order dated 23 rd April, 2010 was preferred by an industrialconsumer and the Government of Punjab which were separately dealt with. Whilewe could advise the Commission to amend its Tariff Regulations and specifynormative O&M expenses in line with the Central Commission’s Regulations so faras the transmission utility was concerned no much fault was found when theCommission fixed a sum of Rs. 105.04 crore in respect of other employees expensesfor transmission utility because for the FY 2010-11 the Commission approvedRs. 99 crore upon which by applying average annual increase in WPI of 8.91 per centand after deducting Rs. 2.55 crore for SLDC business the Commission reached afigure 105.04 crore, but no logic was found behind reducing the arrear pay ofENERGY LAW REPORTS SEPTEMBER, 2012145

xxii Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]Rs. 35.49 crore by 28.48 per cent. The Commission’s reasoning that in the past, ithad been reducing the figure by the said percentage was no ground for maintainingthat reduction particularly when the Appellant was now a separate entity and asper the Government of Punjab notification the Appellant had to pay 40 per cent ofthe total areas amounting to Rs. 35.49 crore. The matter of the fact was that theAppellant, it being a new entity, projected all its figures provisionally. The transferof assets and liabilities of the bifurcated entities were yet to be finalised. There wasample scope for review and true up. Therefore, subject to review as it may happenafter the expiry of the financial year 2011-12, the Commission was ordered to re-examinethe matter and pass appropriate order.Punjab State Transmission Corporation Limited, Punjab v.PSERC, Chandigarh and Ors.Appeal No. 76 of 2011,Decided On: 02.03.2012, at page 0560MANU/ET/0041/2012Employees Expenses — Whether State Commission was justified in its treatment onemployees expenses in course of truing up of aggregate revenue requirement of BESTfor FY 2008-2009? — Held, there was reason to re-visit issue by Commission. Amountof ex gratia payable was fixed at Rs. 9000 as it was amount paid to employees of otherState Government undertakings like Brihanmumbai Municipal Corporation. Basicsalary of employees had not been increased and it was undeniable that majorcomponent was DA, which in relevant year increased by Rs. 5.30 crore out of totalincrease in employees’ expense of Rs. 8.30 Crore. Computation of DA was based uponCPI which, had a direct impact on overtime wages, provident fund contribution etc.DA paid to employees varied as per CPI and increase in CPI during FY 2008-2009 was9.08 per cent as compared to increase of 6.22 per cent during FY 2007-2008. In APRorder dated 15 th June, 2009 in case number 118 of 2008, State Commission had allowedemployees cost for FY 2008-2009 based on increase of 7.31 per cent p.a. on account ofinflation factor corresponding to increase in CPI over the revised level of employeesexpenses as approved for the FY 2007-2008 under the truing up exercise in sameorder. Claimed amount was based upon audited statement of accounts and it was notcase of Commission that upon prudence check it did not fructify any result in favourof Commission.Brihanmumbai Electric Supply and Transport Undertaking ofBrihanmumbai Municipal Corporation, India v.Maharashtra Electricity Regulatory Commission, MumbaiAppeal No. 8 of 2011, Decided On: 22.03.2012 at page 0837MANU/ET/0058/2012Enhancement in rate of interest — Whether the State Commission was justified inenhancing the rate of interest on arrears from 8 per cent to 11.5 per cent as providedunder Article 10.11 of the PPA in the second Review? — Held, since Article 10.11 ofPPA was (apparently) under suspension by virtue of the Commission’s order, Boardcould not be held at fault for delay in making payment and it cannot be directed to paythe interest at penal rate of plus 3 per cent. Simultaneously, Respondent Hydro Powerwould also be required to be compensated for the loss it had suffered due to delay inmaking full payment. Therefore, Respondent Hydro Power was entitled for carryingcost at SBI short term PLR only. Penal rate of article 10.11 at SBI PLR plus 3 per centper annum would not be justified. This would apply to accumulated arrears up to2006-07 only. After issuance of first Tariff Order in February 2007, Article 10.11 ofPPA would become fully operational and interest rate as per this article i.e SBI shortterm PLR plus 3 per cent per annum would be payable to the Respondent Hydro146ENERGY LAW REPORTS APRIL, 2012

Consolidated Index: Subject Index(January - April, 2012)xxiiiPower. Matter remanded to the State Commission for re-determining the interest rateas per this Article. Appeal allowed.Himachal Pradesh State Electricity Board, Shimla v.Himachal Pradesh Electricity Regulatory Commission,Shimla and Jai Prakash Hydro Power Ltd (JHPL), ShimlaAppeal No. 9 of 2011 and appeal No. 178 OF 2010 at page 0933Decided On: 19.04.2012MANU/ET/0075/2012Enhancement of retail supply tariff — Whether Joint Commission had erred inincreasing the retail supply Tariff for domestic, BPL and agriculture consumers resultingin Tariff shock for these categories of consumers? — Held, Commission, disregardedthe proposals of second Respondent which had been published and determined Tariffgiving Tariff shock to subsidized categories of consumers. Final approved Tariff shouldhave some semblance with proposals which were published by licensee or Commission.”Regarding Tariff shock to domestic and agriculture consumers, findings of Tribunal inits Judgment dated 28 th February, 2012 in Appeal No. 159 of 2011 would squarely applyto the present case. Accordingly, impugned order was set aside and matter remanded toJoint Commission for re-determination of Tariff.The Electricity Department, Nani Daman v.Joint Electricity Regulatory Commission, GurgaonAppeal No. 35 of 2012 at page 0993Decided On: 25.06.2012MANU/ET/0103/2012Entitlement to additional return on equity — Entitlement to additional return on equity— Whether a Transmission Licensee was entitled to additional return on equity of0.5 per cent in case instead of commissioning of entire project as a whole a unit or unitsor a line or a group of lines were commissioned? — Held, element of the transmissionproject appertains to the scope and ambit of the word transmission system. It meansthat element of the transmission work, which is applicable in a given situation. It is thescheme as a whole, not a part thereof, that would qualify a transmission licensee toentitlement to additional return on equity. Interpretation of different provisions of Actdoes hardly have too much of relevance in conspectus of the fact situation in whichinterpretation of Regulation 15(2) of the Regulations, 2009 is called for. Element of thetransmission project does not mean only one element to the exclusion of others, if thereare more than one, and Commission does appear to have rightly held that the project asa whole had not been commissioned within time schedule. Appeal dismissed.Power Grid Corporation of India Ltd., Haryana v.Central Electricity Regulatory Commission, New Delhi and Ors.Appeal No. 155 of 2011 at page 0972, Decided On: 10.05.2012MANU/ET/0086/2012Entitlement to Compensation — Whether PPA had any provision, which obligatedthe Appellant to declare plant availability to certain minimum level to qualify forgetting compensation against deemed generation? — Held, Article 8.2 of PPA wouldbecome operative only when declared availability is more than 75 per cent. Appellantwas under obligation to declare annual availability to plant to at least 75 per cent oftested capacity so as to obtain an annual PLF of 75 per centMagnum Power Generation Limited, New Delhi v. Haryana ElectricityRegulatory Commission, Haryana and Ors.Appeal No. 118 of 2010Decided On: 23.03.2012 at page 0810MANU/ET/0056/2012ENERGY LAW REPORTS SEPTEMBER, 2012147

xxiv Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]Entitlement to Deemed Generation Schedule — Whether State Commission wronglyheld that the Appellant could not be held entitled to any deemed generation schedulegiven by Respondent No. 2? — Held, these would be no difficulty to maintaingeneration at 100 per cent of desired level on yearly basis. The contention of Appellantthat any generation over an above the Schedule would not be paid, had not beensubstantiated by Appellant.Magnum Power Generation Limited, New Delhi v. Haryana ElectricityRegulatory Commission, Haryana and Ors.Appeal No. 118 of 2010, Decided On: 23.03.2012 at page 0810MANU/ET/0056/2012Entitlement to refund — Whether the consumers were entitled to refund of excesstransportation charges? — Held, However, the Board thought it fit to direct for therefund the excess charges levied only w.e.f. 1 st October, 2007 namely the date on whichthe Board assumes jurisdiction. Therefore, it cannot be said that the Board has wronglyexercised its jurisdiction. However, it is noticed that the finding which have been givenby the Board with reference to the collection of excess charges was on the basis of theguidelines which have been issued by the Board on 2 nd December, 2010. It is noticed thatthough the Board has assumed jurisdiction on 1 st October, 2007, the complaints havebeen filed by the consumers only on 15 th June, 2010 by the Shyam Industries and on9 th December, 2010 by other consumers. Therefore, it would be appropriate to modify theimpugned order to the effect that the Appellant is liable to refund the excess chargeslevied with interest w.e.f. 2 nd December, 2010, the date of issuance of guidelines.Accordingly, the order is liable to be modified. Therefore, we modify the order to theeffect that the impugned order shall take effect only from 2 nd December, 2010, the date ofissuance of guidelines, instead of 1 st October, 2007 as mentioned in the impugned order.Thus, the impugned order is modified. Appeal is partly allowed.Gail India Limited, New Delhi v. Shyam Industires, Gujarat andPetroleum and Natural Gas Regulatory Board, New DelhiAppeal No. 86 of 2011, Decided On: 09.03.2012, at page 0697MANU/ET/0043/2012Entitlement to Terminal Benefits — Whether the State Commission should haveallowed the terminal benefits according to the Report of the Actuary appointed by theAppellant? — Held, Actuary Reports disputed by Appellant was not available inpresent Appeal. Tribunal might consider this issue in Appeal filed by Appellantchallenging Tariff order for FY 2011-2012. Thus, this issue would not survive as far aspresent Appeal was concerned.Orissa Power Transmission Corporation Limited, Orissa v.Orissa Electricity Regulatory Commission, Bhubaneswar and Ors.Appeal No. 90 of 2009, Decided On: 11.04.2012MANU/ET/0061/2012Extension of appellate power of Tribunal — Whether appellate power of Tribunalcan be extended to exercise of setting aside MYT Regulations on ground of norms setout therein being impossible to be achieved by the Appellant for its generating station(s)— Held, power to remove difficulty does not contemplate removal of hardship thatmay arise as a result of giving effect to regulation. Regulation 57 dealing with powerto remove difficulties is inappropriate and cannot be taken as resort to for downgradingthe benchmarks.Madhya Pradesh Power Generation Company Ltd., Jabalpur (M.P.) v.Madhya Pradesh Electricity Regulatory Commission, Jabalpur (M.P.) and Ors.Review Petition No. 3 of 2011, Decided On: 01.03.2012, at page 0665MANU/ET/0044/2012148ENERGY LAW REPORTS APRIL, 2012

Consolidated Index: Subject Index(January - April, 2012)xxvFixation of Non-tariff income — Whether there was any justification in fixing nontariffincome in true up for the FY 2008-2009 at Rs. 74.78 crore as against Rs. 70.83claimed by the Appellant? — Held, proviso to regulation 76.9.1. of MERC Regulations,2005 clearly provides that amount of appropriation shall be invested in securitiesauthorised under Indian Trusts Act, 1882 within a period of six months of close offinancial year. Commission had rightly reasoned that, if interest on CCR was notconsidered, then it would amount to injustice to consumers who were payingadditional Tariff to enable creation of fund to be utilised. Appellant had to blame toitself for non- investment of CCR in approved securities.Brihanmumbai Electric Supply and Transport Undertaking ofBrihanmumbai Municipal Corporation, India v.Maharashtra Electricity Regulatory Commission, MumbaiAppeal No. 8 of 2011, Decided On: 22.03.2012 at page 0837MANU/ET/0058/2012Fixation of price cap — Whether the State Commission was right in disallowing theclaim of Fixation of price cap while determining the annual revenue requirementsand bulk supply price of the Appellant for the year 2010-11? — Held, in view of thejudgment of this Tribunal in Appeal No. 166 and 168 of 2009 dated 4 th March, 2010,there was no merit in the contention of the Appellant.GRIDCO Limited, Bhubaneswar v.Orissa Electricity Regulatory Commission, Bhubaneswar and Ors.Appeal No. 106 of 2010, Decided On: 01.03.2012, at page 0615MANU/ET/0038/2012Fixation of Retail Price — Whether impugned order fixing the maximum retail priceor requiring Petitioner to disclose Network Tariff and Compression Charges to itsconsumers was liable to be quashed? — Held, prices are generally governed / regulatedby market forces. Price fixation/regulation/control is essentially a clog on the freedomof trade and commerce conferred the status of a fundamental right. However, whereverthe circumstances so justify, same has been treated as a reasonable restriction. Howeversuch restriction on fundamental right has to be by legislative mandate only. PNGRBAct does not confer any power on the Board to fix/regulate price of gas as has beendone vide the impugned order. Any provision therein having the effect of empoweringthe Board to fix price or Network Tariff or Compression Charges for CNG, as long asnot transportation Rate, was beyond the competence of Board and ultra vires thePNGRB Act and of no avail. Petroleum and Natural Gas Regulatory Board was notempowered to fix or regulate the maximum retail price at which gas was to be sold byentities as Petitioner, to consumers. Board was also not empowered to fix anycomponent of Network Tariff or Compression Charge for an entity such as Petitionerhaving its own distribution network. Provisions of Regulations in so far as construedby Board to be so empowering it were held to be bad/illegal. Accordingly, impugnedorder to the extent so fixing the maximum retail price or requiring Petitioner to discloseNetwork Tariff and the Compression Charges to its consumers was struck down/quashed. Petition allowed.Indraprastha Gas Ltd. v. Petroleum and Natural Gas Regulatory Board and Anr.W.P.(C) NO. 2034/2012 and CM Nos.4370/2012 & 5617/2012 at page 1013Decided On: 01.06.2012MANU/DE/2313/2012Fixing Target PLF — Whether the State Commission has ignored the past performanceof these units and fixed the target PLF which is not achievable? — Held, the StateCommission made it clear that the State Commission had in fact considered the pastENERGY LAW REPORTS SEPTEMBER, 2012149

xxvi Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]performance of these units and had relaxed Target PLF from 80 per cent to 75 per cent.Being not satisfied with that, the Appellant claimed for further relaxation on four units.In fact, the Appellant had not provided any material to provide for such a furtherrelaxation. The Appellant had to improve its performance and ensure that the unitsperformed up to the norms. With regard to the Units No. 7 and 8 of the Panipat ThermalPower Station (PTPS), these units were less than 10 years old. Therefore, the StateCommission had determined the applicable Plant Load Factor at 85 per cent only afterconsidering the past performance of these units which had been much beyond 90 percent. Therefore, contention of the Appellant on this issue did not merit considerations.Haryana Power Generation Corporation Ltd., Panchkula v.Haryana Electricity Regulatory Commission, PanchkulaAppeal No. 131 of 2011,Decided On: 01.03.2012, at page 0633MANU/ET/0035/2012Fuel Price Adjustment — Whether the fuel price adjustment ought to be allowed interms of the Regulations on a monthly basis instead of six monthly basis? — Held, theissue was considered by the State Commission in the review order and the relief onthis issue, had already been granted by the State Commission in the review order assuch, the grievance of the Appellant on this issue did not survive.Haryana Power Generation Corporation Ltd., Panchkula v.Haryana Electricity Regulatory Commission, PanchkulaAppeal No. 131 of 2011,Decided On: 01.03.2012, at page 0633MANU/ET/0035/2012Grand of interim relief — Whether Applicants were entitled for interim orders forstay of impugned order passed by Tamil Nadu Electricity Regulatory Commissionvalidating levy of excess demand and energy charges? — Held, there was a primafacie case to stay the operation of impugned order passed on basis of clarification asgiven by Electricity Board with effect from 25 th June, 2010 for calculation of penalty forexcess demand and excess energy. Balance of convenience was also in favour ofAppellants. Interim relief sought for in these interlocutory applications was againstcollection of penalty and not the normal electricity charges due to Electricity Board.Electricity Board was restrained from collection of excess energy charges and excessdemand charges in terms of clarification dated 25 th June, 2010 issued by ElectricityBoard for period till the passing of impugned order. In case of dismissal of appealsand confirmation of impugned order by this Tribunal, Appellants would be liable topay penalty for excess energy and excess demand charges as per impugned orderalong with interest for delay in payment. Applications allowed.M/s. Indian Wind Power Association Rep. by its Secretary General, Chennai v.Tamil Nadu Electricity Regulatory Commission, Tamil Nadu Electricity BoardRep by its Chairman and The Chief Financial Controller, ChennaiIA NO. 105 OF 2012 in appeal no. 51 OF 2012 at page 1009Decided On: 03.05.2012MANU/ET/0097/2012Grant of license — Whether the Appellant is entitled in law to an exclusive license inthe SEZ area of supply to the exclusion of the incumbent distribution licensee, DGVCLby delimiting and reducing its existing area of supply”? — Held, State Commissionhad given a reasoned finding for not granting an exclusive licence. State Commissionhad clearly found that, it would be opposed to consumer interest to divest existinglicensee of its license obligations and grant an exclusive license to Appellant. StateCommission had clearly proceeded on basis that no right was invested with Appellant150ENERGY LAW REPORTS APRIL, 2012

Consolidated Index: Subject Index(January - April, 2012)xxviito claim exclusive license. Co-developer Agreement executed between Developer andthe Co-Developer could not override provisions of Electricity act, 2003 nor it couldhave any implication on powers and functions of State Commission as a statutorybody under the Electricity Act, 2003. This Clause 6 merely provided that, DeveloperDahej SEZ Limited would not grant right of generation and distribution of electricityin SEZ area to any other person. Dahej SEZ Limited had no Authority to give anyassurance that, a licensee under Electricity Act, 2003 should not undertake distributionand retail supply of electricity. Appellant’s reliance on approval of Government ofIndia to Co-Developer Agreement was misconceived. Approval of Government ofIndia to Co-developer Agreement could not, in law, confer a right greater than whatSEZ Act itself had conferred on Developer of SEZ and Appellant. If SEZ Act did notcontemplate an exclusive right, an approval under such Act could not confer anysuch exclusive rightTorrent Energy Limited, Ahmedabad v.Dakshin Gujarat Vij Company Ltd., Surat and Ors.Appeal No. 3 OF 2011, Decided On: 23.03.2012 at page 0772MANU/ET/0054/2012Grossing up of Income Tax — Whether Grossing up of Income Tax for Financial Year2007-2008, 2008-2009 and 2009-2010 was to be allowed? — Held, regarding issuerelated to grossing up of Income Tax, observation made by this Tribunal in Judgmentdated, 5 th January, 2011 in Review application No. 9 of 2010 had to be followed inpresent case alsoReliance Infrastructure Limited, Mumbai v.The Maharashtra Electricity Regulatory Commission, Mumbai and Ors.Appeal No. 150 OF 2009, Decided On: 23.03.2012 at page 0760MANU/ET/0052/2012Grossing up of Income Tax — Whether income tax was to be allowed by grossing up?— Held, Income tax is to be allowed by grossing up to ensure stipulated post taxreturns by State Commission to generators. Regulation 34.2.1 states that “income taxon income of Generation Business of Generating Company shall be allowed forinclusion in annual fixed charges”. If income is equivalent to Return on Equity,difference between income and expenditure as well as other expenses are beingreimbursed through ARR. Accordingly, State Commission had allowed income taxon RoE component in impugned order. This was in accordance with MERC Tariffregulations. Tribunal in Review Application No. 9 of 2010 in Appeal No. 68 of 2009i.e Torrent Power case dated, 5 th February, 2011 had held that, Torrent Power Limitedshould neither benefit nor loose on account of tax payable which was a pass throughin Tariff. Thus, there was no question of generating company making profit on accountof income tax. Appeal disposed of.Reliance Infrastructure Limited, Mumbai v.The Maharashtra Electricity Regulatory Commission, MumbaiAppeal No. 149 OF 2009, Decided On: 23.03.2012 at page 0735MANU/ET/0049/2012Grossing up of Income Tax — Whether Income tax was to be allowed by grossing up?— Held, Income tax is to be allowed by grossing up to ensure stipulated post taxreturns by State Commission to generators. Regulation 34.2.1 states that “income taxon income of Generation Business of Generating Company shall be allowed forinclusion in annual fixed charges”. If income is equivalent to Return on Equity,difference between income and expenditure as well as other expenses are beingreimbursed through ARR. Accordingly, State Commission had allowed income taxon RoE component in impugned order. This was in accordance with MERC TariffENERGY LAW REPORTS SEPTEMBER, 2012151

xxviii Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]regulations. Tribunal in Review Application No. 9 of 2010 in Appeal No. 68 of 2009i.e Torrent Power case dated, 5 th February, 2011 had held that, Torrent Power Limitedshould neither benefit nor loose on account of tax payable which is a pass through inTariff. Thus, there was no question of generating company making profit on accountof income tax. Appeal disposed of.Reliance Infrastructure Limited, Mumbai v.The Maharashtra Electricity Regulatory Commission, Mumbai and Ors.Appeal No. 148 OF 2009, Decided On: 23.03.2012 at page 0756MANU/ET/0051/2012Inclusion of Amount recovered through Vigilance — Whether Commission wasjustified in its treatment in deciding APR for FY 2009-2010 and ARR for FY 2010-2011with respect to retail Tariff ? — Held, amount recovered against vigilance cases werekept in Balance Sheet Account and would be included under Annual RevenueStatement only when such amount was liquidated through separate bills. Commissiondid not find merit in this approach of BEST, since generally, amount recovered throughvigilance drives was included under non- Tariff income.Brihanmumbai Electric Supply and Transport Undertaking ofBrihanmumbai Municipal Corporation, India v.Maharashtra Electricity Regulatory Commission, MumbaiAppeal No. 8 of 2011, Decided On: 22.03.2012 at page 0837MANU/ET/0058/2012Inclusion of O&M Expenses — Whether State Commission had erred in includingO&M expenses twice in the charges for additional 66/11 kV system? — Held, Tribunalhad categorically directed to determine charges for use of additional 66/11 kVtransmission system. Determination of transmission charges or wheeling chargeshad to be carried out in accordance with regulations specified by State Commissionand would include Return on Equity, Depreciation, O&M expenses, interest on loanand working capital etc. State Commission had considered O&M expenses only onceand not twice as alleged by the Appellant. No reason to interfere with impugnedorder of State Commission. Appeal dismissed.M/s Waryam Steel Castings (P) Ltd., Punjab v.Punjab State Power Corporation Limited and Ors.Appeal No. 198 of 2011 at page 1028Decided on: 27.07.2012MANU/DE/3711/2012Inclusion under O&M expenditure of loss on account of de-capitalisation of asset— Whether Central Commission was justified in not allowing alleged loss on accountof de-capitalisation of assets as part of O&M expenditure? — Held, NTPC had madehuge profits on account of Talcher Station as pointed out by Central Commission.Therefore, plea of Appellant for further relaxation on the ground that plant was oldone and outlived its useful life was not tenable. Benefits of Renovation andModernisation such as earning from relaxed operational norms, additional UI chargesand incentive etc. had been achieved but, even then same had not been passed on tothe beneficiary consumers. As per the policy of Central Commission, any loss or profitarising out of de-capitalised assets is to be borne/retained by Appellant. CentralCommission was justified in not allowing alleged loss on account of de-capitalisationof assets as part of O&M expenditure.NTPC Limited, New Delhi v. CERC, New Delhi and GRIDCO Limited, OrissaAppeal No. 88 OF 2007, at page 0955Decided On: 19.04.2012MANU/ET/0076/2012152ENERGY LAW REPORTS APRIL, 2012

Consolidated Index: Subject Index(January - April, 2012)xxixIncrease in expenses over approved limit — Whether increase in actual Conveyanceand Travelling expenses over approved limit to be allowed as per actual in TariffOrder? — Held, expenses being controllable in nature had to be managed by licenseewithin approved levels. Having said so, State Commission had allowed Administrativeand General expenses only to extent approved in APRs and had considered differencebetween allowed Administrative and General expenses and Actual Administrativeand General expenses under sharing of gains and losses due to controlled factors.Reliance Infrastructure Limited, Mumbai v.The Maharashtra Electricity Regulatory Commission, Mumbai and Ors.Appeal No. 150 OF 2009, Decided On: 23.03.2012 at page 0760MANU/ET/0052/2012Interest — Whether the Commission was not proper in its treatment of interest payableon account of diversion of funds? — Held, on the issue of the diversion of fund theTribunal had dealt with in Appeal No. 5 of 2008 and the Appeal No. 63 of 2008. InAppeal No. 63 of 2008, the Government of Punjab specifically challenged the interestpart on diversion of fund. The Commission decided against burdening the consumerswith interest cost on diverted fund to the tune of Rs. 289.92 crore. This Tribunal heldthat the approach of the Commission was correct. Though, the Appellant was now alegal entity it was one of the successor entities of the Board and it had inherited itsassesses and liability. The Government and the Board were responsible for the diversionof capital funds. Therefore, the Commission had disallowed interest cost of Rs. 100.00crore of the Board and the rest of the interest on diverted funds was attributed to theGovernment. Thus, PSTCL had an inherited liability of proportionate diversion of capitalfunds for revenue purpose and accordingly proportionate disallowance of interest wasmade by the Commission. The Commission committed no illegality on this issue.Punjab State Transmission Corporation Limited, Punjab v.PSERC, Chandigarh and Ors.Appeal No. 76 of 2011,Decided On: 02.03.2012, at page 0560MANU/ET/0041/2012Interest on working Capital — Whether State Commission had erred in not allowingany interest on working capital to Appellant? — Held, all amounts payable bydistribution licensees to Appellant were through treasury from revenue of distributionlicensees. Hence, question of there being any gap between payment made by Appellantvis-à-vis the payment to be received by Appellant did not arise. Tariff Regulations ofState Commission also did not provide for any interest on Working Capital and rightfrom FY 2006-2007 onwards no interest on working capital had ever been allowed toAppellant. No reason to interfere with order of State Commission in view of existingpayment mechanism by distribution licensees to GRIDCO/Appellant.Orissa Power Transmission Corporation Limited, Orissa v. Orissa ElectricityRegulatory Commission, Bhubaneswar and Ors.Appeal No. 90 of 2009, Decided On: 11.04.2012MANU/ET/0061/2012Interpretation of Regulation — Whether State Commission’s Intra-state Open AccessRegulations 2005 can over-ride the specific provisions of parent Act? — Held, IntrastateOpen Access Regulations, 2005 are made under Section 181 of 2003 Act. TheseRegulations framed by State Commission are required to be consistent with theprovisions of the parent Act and Rules to carry out the provisions of the Act. By wayor interpretation of Regulation, State Commission could not give a direction whichwas contrary to provisions of Section 10 of the Electricity Act. Impugned order was setaside. Generating company is governed by Section 10 of Electricity 2003 Act. GeneratingENERGY LAW REPORTS SEPTEMBER, 2012153

xxx Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]Company alone was liable to construct transmission line at its own cost. Therefore,Respondent Generating Company was directed to get dedicated transmission linesconstructed at its own cost as per Section 10 of 2003 Act.The Chairman, TNEB Tamil Nadu Electricity Board, and Ors. v.M/s Ind Barath Thermal Power Ltd. and Regulatory Commission(Represented by its Secretary), ChennaiAppeal No. 145 of 2011 at page 0980Decided On: 23.05.2012MANU/ET/0105/2012Investment made in replacement meter — Whether State Commission ought to haveallowed investment made by Appellant in replacement of Meters etc.? — Held, inview of statement by State Commission in Counter-affidavit that, impact of DPR alreadyapproved would be factored in next APR Orders. Accordingly, State Commissionwould do the same at appropriate stage.Reliance Infrastructure Limited, Mumbai v.The Maharashtra Electricity Regulatory Commission, Mumbai and Ors.Appeal No. 150 OF 2009, Decided On: 23.03.2012 at page 0760MANU/ET/0052/2012Issue in present appeal covered by previous — Whether issue in present Appeal hadalready been covered and decided in Judgment in Appeal Nos. 159 of 2011 dated, 28 thFebruary, 2012 and 175 of 2011 dated, 14 th March, 2012? — Since, impugned order inpresent Appeal was common to Appeal Nos. 159 & 175 of 2011, same was set aside.Accordingly, present Appeal was allowed in terms of Judgment passed in AppealNos. 159 of 2011 dated, 28 th February, 2012 and 175 of 2011 dated, 14 th March, 2012.Appeal disposed of.Chandrakant M. Parekh and Anr. v.Electricity Deptt. of Dadara and Nagar Haveli and Anr.Appeal No. 19 OF 2012 AND I.A. NOS. 33 AND 34 OF 2012,Decided On: 15.03.2012, at page 0734MANU/ET/0048/2012Jurisdiction — Whether exercise or non-exercise of powers by State Commission underRegulations 57, 58 and 59 was justifiable under Section 111 of Electricity Act, and ifso, to what extent and in what manner? — Held, Commission’s impugned order didnot suffer from lack of reason and objectivity of facts.Madhya Pradesh Power Generation Company Ltd., Jabalpur (M.P.) v.Madhya Pradesh Electricity Regulatory Commission, Jabalpur (M.P.) and Ors.Review Petition No. 3 of 2011, Decided On: 01.03.2012, at page 0665MANU/ET/0044/2012Jurisdiction — Whether State Commission had jurisdiction to issue impugned directionson petitions filed by consumers as against Tata Power Company, Distribution Licensee?— Held, State Commission had got jurisdiction to deal with a complaint under Section 43of Act read with Section 129 of Act, to issue impugned direction to distribution licenseenamely Tata Power Company for ensuring compliance of provision of Act as well asRegulations in view of fact that, State Commission alone wad competent to issueimpugned directions as this dispute did not involve billing dispute. It was also not asimple case of delay in providing supply to a consumer by distribution licensee but,case of existing consumers of licensee being denied exercise of choice of supply fromother parallel licensee, which could only be decided by State Commission and as such,State Commission had jurisdiction to decide dispute in question. In present case, noticewas served to both distribution licensees viz. BEST and Tata Power Company and theywere heard by Commission. Tata Power Company offered to set up its own distribution154ENERGY LAW REPORTS APRIL, 2012

Consolidated Index: Subject Index(January - April, 2012)xxxisystem in order to supply to complainant consumers. Thus, there was no occasion orneed to appoint an investigating Authority as envisaged under Section 128 of Act, toassist Commission. Commission had also noted in impugned order that “in view ofadmissions made by Tata Power Company in its reply there was no need to issuedirections on this account to Tata Power Company with respect to specific cases ofrequisition for electricity supply”. State Commission had jurisdiction to issue directionsreferred to in impugned order to Tata Power Company, second licensee in South Mumbaiarea relating to its obligation to supply under Section 43(1) of Electricity Act.Brihanmumbai Electricity Supply and Transport Undertaking, Mumbai v.Maharashtra Electricity Regulatory Commission, Mumbai and Ors.Appeal No. 149 of 2010, Decided On: 04.04.2012MANU/ET/0063/2012Jurisdiction — Whether State Commission had no jurisdiction to decide applicationunder Clause 13(h) of ISOA Regulations, 2005 which dealt with Short Term Open AccessCustomers? — Held, Regulations framed by the State Commission which empowers theCommission to invoke the inherent powers of the Commission to make such orders asmay be necessary to meet the ends of justice. They also provide that the Regulationsalready available shall not bar the State Commission from adopting any other procedurewhich is at variance with any of the provisions of these Regulations and if the StateCommission, in view of the reasons to be recorded, deems it necessary to pass appropriateOrders by adopting the different procedure, it can pass suitable orders. The said inherentpowers have been conferred with the State Commission under Clause 24 of theRegulation. Regulations through the saving Clause would empower the StateCommission to pass appropriate orders by invoking the procedure at variance with anyof the provisions of the Regulations or even in the absence of the relevant Regulationshaving been framed. State Commission had correctly utilised its inherent powers todecide matter regarding reduction in reserved capacity of Respondent No. 1.The Chairman Tamil Nadu Electricity Board, Chennai and Anr. v.Sree Rengaraaj Power India (P) Ltd., Tamilnadu and Tamil NaduElectricity Regulatory Commission, ChennaiAppeal No. 108 OF 2011 AND I.A. NO. 178 OF 2011,Decided On: 19.03.2012 at page 0726MANU/ET/0047/2012Jurisdiction — Whether the State Commission has the jurisdiction to declare anAgreement entered into between the Appellant and M/s. Madras Cements Limited asterminated contrary to the terms of the said Agreement? — Held, there are Regulationsframed by State Commission, which empowers the Commission to invoke the inherentpowers of Commission to make such orders as may be necessary to meet the ends ofjustice. They also provide that the Regulations already available shall not bar theState Commission from adopting any other procedure which is at variance with anyof the provisions of these Regulations. State Commission had correctly utilised itsinherent powers to decide the matter regarding termination of wheeling arrangementto Ariyalur unit of Respondent No. 1. There was no infirmity in findings of StateCommission that, no compensation was payable by Respondent No. 1 to Appellantconsequent of termination of wheeling arrangement requested by Respondent No. 1.The Chairman, The Member (Distribution), Chennai and The SuperintendingEngineer (PEDC), Perambalur v. Madras Cements Ltd. and Tamil NaduElectricity Regulatory Commission, ChennaiAppeal No. 8 of 2012, at page 0963Decided On: 19.04.2012MANU/ET/0077/2012ENERGY LAW REPORTS SEPTEMBER, 2012155

xxxii Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]Jurisdiction — Whether this Tribunal has jurisdiction to afford relief to the Appellantas was prayed before the Commission under Section 111 of the Electricity Act, 2003?— Held, to direct the Commission to effect an amendment of the regulation wouldentail encroaching upon the power of Judicial ReviewMadhya Pradesh Power Generation Company Ltd., Jabalpur (M.P.) v.Madhya Pradesh Electricity Regulatory Commission, Jabalpur (M.P.) and Ors.Review Petition No. 3 of 2011, Decided On: 01.03.2012, at page 0665MANU/ET/0044/2012Laying of Distribution Network to Supply Power — Whether Tata Power Companycould be prevented from laying their own distribution network in area of supply ofBEST, being local Authority, in order to supply power to its consumer in its area ofsupply to comply with universal service obligations under Section 43 of Electricity Act,2003? — Held, area of supply of Tata Power Company and BEST were common area ofsupply in sense that both area distribution licensees having common area of supply. InMumbai Island city of South Mumbai Area, Tata Power Company and BEST of MumbaiMunicipal Corporation, were authorised under respective licences to distribute electricityto consumers. It was mandatory on a distribution licensee as such Tata Power Companyto give supply of electricity in time bound manner in terms of Section 43 of ElectricityAct, 2003. Exemption to wheel electricity to a local Authority under Section 42(3) of Act,did not act as a bar to other distribution licensees such as Tata Power Company tooperate and maintain their distribution system of wires and associated facilities betweendelivery points on transmission lines or generating station and point of connection ofinstallation of consumer for supplying electricity to consumers in its area of supply. Adistribution licensee’s duty to supply electricity was of public character and publicduty and in this regard there was no special status could be claimed by Appellant toprohibit or bar or hinder entry of other distribution licensees to supply electricity andbuild their distribution network in furtherance to public duties. Statutory exemption toa local Authority is only to wheeling of electricity and nothing else. Therefore, it had tobe held that, Tata Power was entitled to supply electricity in retail directly to consumerssituated in its area of supply which included Appellant’s area of supply. StateCommission had correctly decided that, Tata Power Company, second licensee, had toset up its own distribution network to supply electricity to Respondent consumers ofAppellant, who wished to change over supply from Appellant to Tata Power Company.Status of Appellant as local Authority engaged in business of supply of electricity couldnot in any way hinder right of exercise of choice of supplier by consumers to switch overto Tata Power Company, the second licensee of area. No infirmity in impugned orderpassed by State Commission. Appeal dismissed.Brihanmumbai Electricity Supply and Transport Undertaking, Mumbai v.Maharashtra Electricity Regulatory Commission, Mumbai and Ors.Appeal No. 149 of 2010, Decided On: 04.04.2012MANU/ET/0063/2012Liability to pay share of cost of Construction — Whether Kerala State Commissionwas right in holding that, Cochin Port Trust, Appellant was liable to pay their shareof cost of construction of Kataribagh sub station to the Kerala State Electricity Board?— Held, Appellant had agreed to pay share of cost of construction in various meetingsheld and Appellant gave an undertaking to Electricity Board that, if State Commissionheld that, Appellant was liable to pay its share of cost of construction, it would certainlypay the same. Accordingly, State Commission went into question about liability andheld in favour of Electricity Board by taking into consideration of all relevant documentsas a whole. However, State Commission fairly held that, out of total amount of liabilityof Prescribed amount had already been paid by Appellant on 7 th January, 1992 itself156ENERGY LAW REPORTS APRIL, 2012

Consolidated Index: Subject Index(January - April, 2012)xxxiiitowards cost of laying underground Cables to Board and same should be adjustedand balance amount alone should be paid to Board. State Commission was right inholding that, Appellant was liable to pay share of cost of construction to ElectricityBoard and its consequent direction. Appeal dismissed.Cochin Port Trust, Kerala v. Kerala State Electricity Board andKerala State Electricity Regulatory Commission, KeralaAppeal No. 157 of 2011 in IA no. 245 of 2011Decided On: 11.04.2012 at page 0908MANU/ET/0067/2012Maintainability of Appeal — Whether appeal maintainable in its present form and merit?— Held, Regulations framed by State Commission or Central Commission do partakecharacter of subordinate or delegate legislation under law and all such subordinatelegislations have force of the statutory law. Therefore, regulations framed by an appropriateCommission are deemed to be legislative enactments having approval of Legislature,when it is put to use by notification. Appeal was not maintainable in its present formMadhya Pradesh Power Generation Company Ltd., Jabalpur (M.P.) v.Madhya Pradesh Electricity Regulatory Commission, Jabalpur (M.P.) and Ors.Review Petition No. 3 of 2011, Decided On: 01.03.2012, at page 0665MANU/ET/0044/2012Maintainability of complaint — Whether the complaint by consumer for refund ofexcess transportation charge was barred by time or continuous in nature? — Held, Itis not disputed as mentioned above that the entire capital cost of the pipeline hasalready been recovered and the Appellant is entitled to charge only operationalexpenditure on a normative basis and nothing more. So, when the excess transportationcharges are levied even after the capital cost of pipelines was recovered, the naturalcause of action for the consumers would accrue continuously. Therefore, the questionof limitation would not arise in this caseGail India Limited, New Delhi v. Shyam Industires, Gujarat andPetroleum and Natural Gas Regulatory Board, New DelhiAppeal No. 86 of 2011, Decided On: 09.03.2012, at page 0697MANU/ET/0043/2012Methodology Adopted to Convert Oil Density — Whether Methodology adopted byRespondent for conversion of oil density was correct? — Held, in the view of categoricalopinion given by M/s Indian Oil Corporation vide there letter dated 1 st March, 2000,that conversion should be done at ambient temperature, the methodology adopted byRespondent for conversion of oil density was correct.Magnum Power Generation Limited, New Delhi v.Haryana Electricity Regulatory Commission, Haryana and Ors.Appeal No. 118 of 2010Decided On: 23.03.2012 at page 0810MANU/ET/0056/2012Nature of agreement – Whether State Commission wrongly held that, RespondentCompany was Short Term Open Access Customer — Whether Energy WheelingAgreement entered into between Appellant and Respondent for three years could not beheld to be short term open access, as it was contrary to Note-1 of clause 6 of ISOARegulations (Intra State Open Access Regulations), 2005? — Held, Short Term OpenAccess Customer is one who avails himself of intra State Open Access for a period of oneyear or less. Long Term Open Access Customer is one who avails himself intra StateOpen Access for a period of five years or more. There is note-1 below the Regulations-6which provides that Open Access applicants intending to be such for a period of lessthan five years shall be considered under Short Term Open Access only when it isENERGY LAW REPORTS SEPTEMBER, 2012157

xxxiv Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]executed at a time for a period not exceeding one year. So, in between the two customers,as mentioned in the above proviso, there is no other sub clause for one who enters intoa intra State Wheeling Agreement for a period of more than one year and less than fiveyears. Reading of clause 6, would make it abundantly clear that, any customer whowould be availing intra State Open Access for a period of more than one year or lessthan five years shall be a Short Term Open Access Customer. Respondent No. 1 havingentered into an Energy Wheeling Agreement with Appellant for a period of 3 years hadto be treated as Short Term Open Access Customer in terms of Intra State Open AccessRegulations, 2005 in spite of it having deposited the registration fee and agreement feeapplicable to Long Term Open Access Customers at time of seeking the Open Access.The Chairman Tamil Nadu Electricity Board, Chennai and Anr. v.Sree Rengaraaj Power India (P) Ltd., Tamilnadu and Tamil NaduElectricity Regulatory Commission, ChennaiAppeal No. 108 OF 2011 AND I.A. NO. 178 OF 2011,Decided On: 19.03.2012 at page 0726MANU/ET/0047/2012Nature of company — Whether State Commission was not right in declaring that,Respondent Company was a short term open access customer, when Respondent Companyitself filed a Petition before State Commission under Clause 12(h) of ISOA Regulationswhich dealt with Long Term Open Access Customers? — Held, Request of RespondentNo. 1 for reducing reserved capacity of wheeling had to be governed by Clause 13(h) ofIntra-State Open Access Regulation applicable to Short Term Open Access customersThe Chairman Tamil Nadu Electricity Board, Chennai and Anr. v.Sree Rengaraaj Power India (P) Ltd., Tamilnadu andTamil Nadu Electricity Regulatory Commission, ChennaiAppeal No. 108 OF 2011 AND I.A. NO. 178 OF 2011,Decided On: 19.03.2012 at page 0726MANU/ET/0047/2012Nature of dispute — Whether in view of Section 12(1)(a) of the Act, the dispute raised bythe Consumer, is covered by the Arbitration Clause under the Agreement entered intobetween the Appellant and Shyam Industries, the concerned complainant and therefore,the jurisdiction of the Board gets ousted? — Held, the crux of the principles laid down bythe various Judgments referred above are as follows: (a) The Legislature intended to providea remedy in addition to the consentient arbitration which could be enforced under theArbitration Act but, it does not confer an automatic right nor create an automatic embargoon the exercise of power by the Judicial Authority under the Act. (b) State Commission andNational Commission are Judicial authorities for the proposes of the Act, in view of theobject of the Act and it would be appropriate that these forums created under the Act areat liberty to proceed with the matter in accordance with the provisions of the Act ratherthan relegating the parties to an arbitration Proceeding. (c) Though the present disputewould have been referable to arbitration, it cannot be done, in view of the provisions of theAct which would override the stipulation contained in the aforesaid condition and theAct would prevail over the general law of arbitration. In the light of the principles laiddown by the various Courts in the above Judgments and also in the light of the findingcorrectly given by the Board holding that the dispute does not involve the arbitral dispute,there is no merit in the contention of the learned Senior Counsel for the Appellant.Accordingly, the 1 st contention urged by the learned Counsel for Appellant would fail.Gail India Limited, New Delhi v. Shyam Industires, Gujaratand Petroleum and Natural Gas Regulatory Board, New DelhiAppeal No. 86 of 2011, Decided On: 09.03.2012, at page 0697MANU/ET/0043/2012158ENERGY LAW REPORTS APRIL, 2012

Consolidated Index: Subject Index(January - April, 2012)xxxvNature of line — Whether the line, in question, is a dedicated line or a spur line? —Held, The lines, in question, falls squarely in the the Petroleum and Natural GasRegulatory Board (Access Code for Common Carrier or Contract Carrier Natural GasPipelines Regulations, 2008) i.e. dedicated pipelines allowed to transport natural gasto specific consumer to meet his requirements and not for resale. For a particular lineto be declared as a common carrier line, the Board has exclusive jurisdiction to makesuch declaration. Unless there is a specific declaration by the Board, the Appellantcannot make any unilateral claim. The Appellant has strangely stated that theAppellant understood these lines to be common carrier pipelines and in thosecircumstances lines should be taken as a common carrier line. The Appellant cannotmerely rely upon its files to establish that these lines to be common carrier pipelines.Virtually, the Appellant is seeking for a direction to treat these lines as a commoncarrier contrary to the provisions of the Act and regulations framed. As per the aboveformula as indicated above, the entire cost of gas pipelines was already recovered bythe Appellant within 30 months. Hence, it cannot be stated that the entire cost of thenetwork was to be recovered only from one consumer by taking the entire capital costof the network. If that be the case, there would be no transportation charges recovered,from any or the other consumers, as the entire capital cost of the total network was tobe recovered only from one consumer. This itself clearly establishes that the line inquestion is only a dedicated pipeline to the consumer premises and not the entirenetwork cost. A line is a spur line only when the same connects or re-intended toconnect to more than one consumer. The definition of the spur line cannot render theprovision of dedicated line in Section 2(j) of the Act or Regulations meaningless. Inview of our above findings, the submissions made by the Appellant on the 2 nd pointwould fail. Accordingly, this is answered in favour of the RespondentsGail India Limited, New Delhi v. Shyam Industires, Gujarat andPetroleum and Natural Gas Regulatory Board, New DelhiAppeal No. 86 of 2011, Decided On: 09.03.2012, at page 0697MANU/ET/0043/2012Non-tariff Income — Whether Commission’s treatment on non-tariff income in respect ofthe APR for FY 2009-2010 and ARR for FY 2010-2011 was justified? — Held, there wassharp increase of non Tariff income from Rs. 55. 53 crore in FY 2007-2008 to Rs. 74.78 crorein FY 2008-2009 and this increase was around 35 per cent. In this scenario, Commissionprojected an increase of 10 per cent over approved NTI for FY 2008-2009 and this wouldbe subject to true up based on actuals against subject to prudence checks.Brihanmumbai Electric Supply and Transport Undertaking ofBrihanmumbai Municipal Corporation, India v.Maharashtra Electricity Regulatory Commission, MumbaiAppeal No. 8 of 2011, Decided On: 22.03.2012 at page 0837MANU/ET/0058/2012Operation and Maintenance Expenses — Whether the State Commission was requiredto approve the operation and maintenance expenses on actual basis? — Held, in AppealNo. 72 and 141 of 2009 would clearly indicate that there was no direction whatsoeverby the Tribunal as claimed by the Appellant that the State Commission was required toapprove the operation and maintenance expenses on actual basis for all times to come.In the present year 2010-11, the State Commission was required to arrive at a normativevalue of O&M expenses in terms of the Regulations framed by the State Commission.Haryana Power Generation Corporation Ltd., Panchkula v.Haryana Electricity Regulatory Commission, PanchkulaAppeal No. 131 of 2011, Decided On: 01.03.2012, at page 0633MANU/ET/0035/2012ENERGY LAW REPORTS SEPTEMBER, 2012159

xxxvi Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]Over-riding effect of SEZ Act — Whether the SEZ Act, 2005 had got over-riding effect onElectricity Act, 2003? — Under scheme of Special Economic Zone Act, Central Governmenthas to first notify to what extent provisions of other Acts are to be made not applicable forSEZ area. Admittedly, there was no notification by Central Government to provide thatlicenses to be granted to a Developer in SEZ area shall be exclusive so as to exclude othersfrom getting a license. In present case, issue was for granting distribution of electricitylicense to Appellant in SEZ area under SEZ Act. There was no provision in Act, 2005regarding grant of distribution of electricity license to SEZ developers. Admittedly,application for license was filed by Appellant under Section 14 and 15 of Electricity Act,2003 read with Gujarat Electricity Regulatory Commission (Distribution License)Regulations, 2005 notified by State Commission. As such, there was no inconsistencybetween Sections of SEZ Act, 2005 and Electricity Act, 2003. Issue with reference to theoverriding effect of the SEZ Act, 2005 on Electricity Act, 2003 does not ariseTorrent Energy Limited, Ahmedabad v. Dakshin Gujarat VijCompany Ltd., Surat and Ors. Appeal No. 3 OF 2011,Decided On: 23.03.2012 at page 0772MANU/ET/0054/2012Party to PPA — Whether the KPTCL had competency to enter into any Power PurchaseAgreement in the context of the provisos to Section 39 and Section 41 of the ElectricityAct 2003? — Held, the provisos to Section 39 and 41 did not constitute bar to theKPTCL to enter into PPA with the Appellant.M/s Narayanpur Power Company Private Ltd. v. KERC, Bangalore and Anr.Appeal No. 31 of 2011, Decided On: 15.02.2012, at page 0523MANU/ET/0023/2012Pay Revision Arrears — Whether the interest/carrying cost on the pay revision arrearsfor Appellant’s employees was to be allowed at SBI PLR rate by the State Commission? —Held, the State Commission in this regard had not rejected the claim of the Appellant. Itmerely directed the Appellant to provide the details of the loan on the interest ratesapplicable. Instead of providing those details, the Appellant had approached this Tribunal,challenging the said order on this issue. This was not a proper approach. Thus, theAppellant was directed to submit the proof hiring loans for payment of salary arrears soas to enable the State Commission to take an appropriate decision in this regard. Withoutdoing that, the Appellant had raised this issue before the Tribunal unnecessarily. Therefore,the Appellant was directed to submit the required details to State Commission to enablethe State Commission to consider the issue of carrying cost and decide the same.Haryana Power Generation Corporation Ltd., Panchkula v.Haryana Electricity Regulatory Commission, PanchkulaAppeal No. 131 of 2011, Decided On: 01.03.2012, at page 0633MANU/ET/0035/2012Payment Security Mechanism — Whether the Commission adequately dealt withthe factor of payment security mechanism? — Held, according to the Appellant, thepayment security mechanism in the form of letter of credit and Escrow arrangementproposed by the Appellant was necessary. The Commission in the impugned orderhad already directed the Appellant to make back to back arrangements with PSPCL tocollect inter-state transmission charges as per the CERC Regulations. The PSPCL hadalso confirmed that it would open LC for intra-state transmission charges payable tothe Appellant for intra-state transmission system.Punjab State Transmission Corporation Limited,Punjab v. PSERC, Chandigarh and Ors.Appeal No. 76 of 2011, Decided On: 02.03.2012, at page 0560MANU/ET/0041/2012160ENERGY LAW REPORTS APRIL, 2012

Consolidated Index: Subject Index(January - April, 2012)xxxviiPerformance of PPA — Whether performance of the Power Purchase Agreement dated,16 th January, 2004 was consistent with specific performance of any contract involvingmovable property under the Specific Relief Act, 1963? —Held, in view of the discussionrendered, the question as to whether performance of the PPA dated 16 th January, 2004was consistent with specific performance of contract involving movable propertyunder the Specific Relief Act, 1963 did not arise.M/s Narayanpur Power Company Private Ltd. v. KERC, Bangalore and Anr.Appeal No. 31 of 2011, Decided On: 15.02.2012, at page 0523MANU/ET/0023/2012Permission to realise power purchase cost — Whether the distribution licensee canbe permitted by the Joint Commission to realise power purchase cost adjustmentfrom the consumers in accordance with the formula decided by the Joint Commissionin the Tariff Order without getting the Tariff amended? — In view of the provisionsof the 2003 Act, Tariff Policy, Tariff Regulations and findings of the Tribunal in OP1 of 2011 and other Judgments, there is no illegality in the Joint Commissionpermitting the Electricity Department (R-2) to compute the Power Purchase CostAdjustment according to the formula and conditions specified by the JointCommission and recover the same from the consumers. Computation of PPCA isonly by mechanical application of the formula. The Authority given to the distributionlicensee is not absolute without any regulatory control of the Commission. The finalPower Purchase Cost to be allowed to the distribution licensee is subject to prudencecheck at the true up stage by the Joint CommissionSilvassa Industries Association v. Joint Electricity RegulatoryCommission through Secretary, Gurgaon, (Haryana) and ElectricityDepartment, through Secretary, SilvassaAppeal No. 175 of 2011 and I.A. No. 263 of 2011,Decided On: 14.03.2012MANU/ET/0042/2012Power of State Commission — Whether the State Commission could declare the wheelingagreement as terminated in a petition under Section 12(h) of the Open Access Regulations2005 which deals with the Long Term Open Access customer after treating the MadrasCements Limited as a Short Term Open Access customer relying on the period of theAgreement mentioned in the Energy Wheeling Agreement? — Held, reading of Clause 6of Tamil Nadu Electricity Commission Intra State Open access Regulations, 2005, in itsentirety makes it clear that any customer who would be availing intra state Open Accessfor a period of more than one year or less than five years shall be a Short Term Open Accesscustomer. Respondent No. 1 has to be treated as Short Term Open Access customer interms of Intra-State Open Access Regulations, 2005 in spite of Energy Wheeling Agreemententered into between Appellant and the Respondent No. 1 being for a period of three yearsand in spite of its having deposited the registration fee and agreement fee applicable forLong Term Open Access customer at the time of seeking the Open Access. Request of theRespondent No. 1 for termination of wheeling arrangement from its generating plant to itsunit at Ariyalur will be governed by Clause 13(h) of the Intra-State Open Access Regulationsapplicable to Short Term Open Access customers.The Chairman, The Member (Distribution), Chennai andThe Superintending Engineer (PEDC), Perambalur v. Madras Cements Ltd.And Tamil Nadu Electricity Regulatory Commission, ChennaiAppeal No. 8 of 2012, at page 0963 Decided On: 19.04.2012MANU/ET/0077/2012Power Purchase Cost — Whether the distribution licensee can be permitted by theJoint Commission to realise PPCA from the consumers in accordance with the formulaENERGY LAW REPORTS SEPTEMBER, 2012161

xxxviii Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]decided by the Joint Commission in the Tariff order without getting the Tariff amended?— Held, in view of the provisions of the Electricity Act, 2003, Tariff Policy, TariffRegulations and findings of the Tribunal in OP 1 of 2011 and other judgments, therewas no illegality in the Joint Commission permitting the Electricity Department (R-1)to compute the PPCA according to the formula and conditions specified by the JointCommission and recover the same from the consumers. Computation of PPCA wasonly by mechanical application of the formula. The Authority given to the distributionlicensee was not absolute without any regulatory control of the Commission. Thefinal Power Purchase Cost to be allowed to the distribution licensee was subject toprudence check at the true up stage by the Joint Commission.Daman Industries Association, Daman v.Electricity Department of Daman & Diu, Daman and Anr.Appeal No. 169 of 2011,Decided On: 29.02.2012, at page 0599MANU/ET/0039/2012Power purchase cost adjustment bills — Whether the Respondent No. 1 was correctin raising power purchase cost adjustment bills retrospectively from June, 2011? —Held, The third issue regarding raising of PPCA bills retrospectively does not survivein view of our findings setting aside the PPCA formula.Silvassa Industries Association v. Joint Electricity RegulatoryCommission through Secretary, Gurgaon, (Haryana) and ElectricityDepartment, through Secretary, SilvassaAppeal No. 175 of 2011 and I.A. No. 263 of 2011,Decided On: 14.03.2012MANU/ET/0042/2012Power Purchase Expenses — Whether Commission was justified in taking into accountdiscount given by TPC-G amounting to Rs. 22.26 crore while considering powerpurchase cost in APR for FY 2009-2010? — Held, power purchase expense had beenallowed in accordance with TPC-G’s Tariff Order. Thus, rebate on power purchasehad not been included under non- Tariff income. No fault with Commission’s order.Brihanmumbai Electric Supply and Transport Undertaking ofBrihanmumbai Municipal Corporation, India v.Maharashtra Electricity Regulatory Commission, MumbaiAppeal No. 8 of 2011, Decided On: 22.03.2012 at page 0837MANU/ET/0058/2012PPCA Bills — Whether the Respondent No. 1 was correct in raising PPCA billsretrospectively from June 2011? — Held,in view of the findings setting aside the PPCAformula this issue did not survive.Daman Industries Association, Daman v.Electricity Department of Daman & Diu, Daman and Anr.Appeal No. 169 of 2011, Decided On: 29.02.2012, at page 0599MANU/ET/0039/2012PPCA mechanism — Whether the PPCA mechanism determined by the JointCommission was valid and correct? — Held, the formula specified by the JointCommission in the impugned order was set aside as it was inconsistent with theconditions specified therein and the Tariff Regulations. However, the JointCommission was directed in regard to allowing the PPCA to the Respondent No. 1Daman Industries Association, Daman v.Electricity Department of Daman & Diu, Daman and Anr.Appeal No. 169 of 2011, Decided On: 29.02.2012, at page 0599MANU/ET/0039/2012162ENERGY LAW REPORTS APRIL, 2012

Consolidated Index: Subject Index(January - April, 2012)xxxixProcedure — Whether the State Commission followed the guidelines laid down bythe Central Electricity Regulatory Commission and principles laid down by the TariffPolicy issued by the Government of India in accordance with Section 3 of the ElectricityAct, 2003? Whether the State Commission failed to fulfill requisites under Section61(d) of Act which requires that the State Commissions, while fixing Tariff, shall beguided by the principle under which recovery of cost of electricity is ensured in areasonable manner? Whether provisions under Section 61(i) of the Act which mandatesthat the State Commission shall be guided by the National Electricity Policy andTariff Policy were ignored by the State Commissiion? — Held, bare reading of Section61 of the Electricity Act, 2003 would make it clear that the State Commissions havebeen mandated to frame Regulations for fixing Tariff under Section 62 of the Act andwhile doing so, i.e. while framing such Regulations, State Commissions are requiredto be guided by the principles laid down in by the Central Commission, NationalElectricity Policy, Tariff Policy, etc. It also provided that while framing the Regulations,the State Commissions shall ensure that generation, transmission and distributionwere conducted on commercial principles; factors which would encourage competitionand safeguard consumer’s interest. Once the State Commission had framed andnotified the requisite Regulations after meeting the requirement of prior publicationunder Section 181(3), it was bound by such Regulations while fixing Tariff underSection 62 of the Act and the Central Commission’s Regulations had no relevance insuch cases. However, the State Commission may follow the Central Commission’sRegulations on certain aspects which had not been addressed in the StateCommission’s own Regulations. The Haryana Electricity Regulatory Commissionhad framed Terms and Conditions for determination of Tariff for generation in theyear 2008 and the State Commission was required to fix Tariff as per these Regulations.However, as per Regulation 33 the State Commission had power to relax any of theprovisions of these Regulations after recording the reasons for such relaxation.Haryana Power Generation Corporation Ltd., Panchkula v.Haryana Electricity Regulatory Commission, PanchkulaAppeal No. 131 of 2011, Decided On: 01.03.2012, at page 0633MANU/ET/0035/2012Quashing of Notice — Whether Notice dated 16 th August, 2011 and consequentproceedings thereof for offences punishable under Section 135 of Electricity Act wereliable to be set aside? — Held, Applicability of Regulation 26 for determining penaltyarises only after there is a determination by conclusive proof that it is a case of DAE ortheft as case may be. External manifestations of tampering, as had been found ininspections conducted in present cases, could only raise a suspicion of DAE. Suspicionwould have to be made good by some tangible evidence of physical means of tamperingbefore presumption could be drawn that, it was the consumer who tampered themeter. That could be established only by showing that, consumer was responsible fortampering meter by some visible means. To bring home charges, against accused,prosecution must have brought conclusive evidence against accused that consumeris responsible for same. Evidence adduced by prosecution must establish beyonddoubts that, consumer is guilty of dishonest abstraction of energy. In present case,there was utter confusing facts, therefore, it would be difficult for Petitioner to facetrial and take his defence, as Respondent/Complainant itself was not sure about as towhat exactly their case was. Petition allowedAjay Gupta v. BSES Rajdhani Power Ltd.CRL. REV. P. 544/2011 & CRL. M.A. NO. 18752/2011(STAY),Decided On: 10.04.2012, at page 0790MANU/DE/1613/2012ENERGY LAW REPORTS SEPTEMBER, 2012163

xl Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]Reasoned order — Whether the State Commission in exercise or non-exercise of powersunder Regulations 57, 58 or 59 is required to give a reasoned order in support of itsdecision - Whether in facts and circumstance of case, Appellant had failed on its partto carry out R&M activities in terms of directions issued by Commission so much sothat such failure led Appellant to come up before Commission or before this Tribunalwith prayer for amendment of Regulations at a time, when Tariff application fordetermining Tariff of Appellant was pending for disposal before Commission or passsuch other Order(s) and this Tribunal might deem just and proper — Held, it is alwaysopen to Commission, if they would like, to undertake any study of norms even afterrejection of prayer for amendment so as to consider feasibility or otherwise of bringingout an amendment of Regulations in course of determination of Tariff application.Within present parameters of Regulation 56, Commission can deviate from norms, ifit so wished and deemed fit. Commission is at liberty, if it would deem proper toamend Regulation 56 on strength of Regulation 58, so as to widen its power to deviate.Commission in course of determination of Tariff may exercise any of powers as isavailable to it, in a suitable situation in their respective jurisdiction. Applicationdismissed.Madhya Pradesh Power Generation Company Ltd., Jabalpur (M.P.) v. MadhyaPradesh Electricity Regulatory Commission, Jabalpur (M.P.) and Ors.Review Petition No. 3 of 2011, Decided On: 01.03.2012, at page 0665MANU/ET/0044/2012Reduction in Administration and General Expenses — Whether State Commissionwas justified in reducing A & G Expenses in course of truing up for the FY 2008-2009to Rs. 72.51 crore as against Rs. 74.80 crore as was claimed by Appellant? — Held, inpetition before Commission, Appellant raised specific point of increase in securitycharges, electricity charges and property insurance charges. Commission had notexamined this point so as to find out whether there was any merit at all in issue. IfCommission upon prudence check and examination and analysis of point wouldhave dismissed the issue, it would have been a different matter, but, when there hadnot been any examination of matter, it was therefore necessary that, Commissionshould look into matter and then pass appropriate order as it would deem fit andproper.Brihanmumbai Electric Supply and Transport Undertaking ofBrihanmumbai Municipal Corporation, India v.Maharashtra Electricity Regulatory Commission, MumbaiAppeal No. 8 of 2011, Decided On: 22.03.2012 at page 0837MANU/ET/0058/2012Reduction in amount of Capitalisation — Whether in truing up for FY 2008-2009,Commission was justified in reducing amount of capitalisation to Rs. 122.20 crore asagainst Rs. 131.99 crore? — Held, Commission stated that, Commission had verifiedcalculations and relevant data, it appeared that, since capitalisation had beensubsequently approved by Commission, corresponding Interest During Constructionshould have been considered and had not been in advertently been considered andCommission accepted the same. Accordingly, Commission would pass appropriateorder on this issue and revised the approved capitalisation.Brihanmumbai Electric Supply and Transport Undertaking ofBrihanmumbai Municipal Corporation, India v.Maharashtra Electricity Regulatory Commission, MumbaiAppeal No. 8 of 2011, Decided On: 22.03.2012 at page 0837MANU/ET/0058/2012164ENERGY LAW REPORTS APRIL, 2012

Consolidated Index: Subject Index(January - April, 2012)xliReduction in Contribution to contingency reserve — Whether there was anyjustification on part of Commission in reducing contribution to contingency reserveby Rs. 3.18 crore? — Held, Regulation 76.9 of MERC Tariff Regulations, 2005 providesthat where licensee has made an appropriation to Contingencies Reserve, a sum notless than 0.25 per cent and not more than 0.5 per cent of original cost of fixed assetsshall be allowed towards such appropriation in calculation of aggregate revenuerequirement. Regulations provide a range within which Commission may considerCCR. It appeared that, in original Tariff Order for FY 2008-2009, Commissionconsidered CCR at 0.25 per cent of opening GFA. It was not that at least 0.5 per cent ofopening GFA must be allowed in each and every case.Brihanmumbai Electric Supply and Transport Undertaking ofBrihanmumbai Municipal Corporation, India v.Maharashtra Electricity Regulatory Commission, MumbaiAppeal No. 8 of 2011, Decided On: 22.03.2012 at page 0837MANU/ET/0058/2012Reduction in return on Equity — Whether return on equity in true up for the FY 2008-2009 was justifiably reduced by Commission against claim of BEST? — Held, returnon equity was with respect to capitalisation and once Commission’s finding on amountof debt was subject to scrutiny then amount of return on equity would vary. Thereseemed to be a point, when Appellant argued that, amount of capitalisation could notbe less than Rs. 131.64 crore , if Commission added Rs. 9.44 crore in figure ofcapitalisation. In rejoinder affidavit Appellant had claimed Rs. 109.04 crore as ROEfor FY 2008-2009 as against Rs. 99.16 crore.This issue needed re-look and reexaminationin accordance with Regulations which provided for normative equity of30 per cent on capitalisation allowed after 1 st April, 2005.Brihanmumbai Electric Supply and Transport Undertaking ofBrihanmumbai Municipal Corporation, India v.Maharashtra Electricity Regulatory Commission, MumbaiAppeal No. 8 of 2011,Decided On: 22.03.2012 at page 0837MANU/ET/0058/2012Rejection of deemed generation claim — Whether State Commission had rightlyignored the claim of Appellant for deemed generation for the year 2005-2006 andthereafter? — Held, The Appellant had admitted on three occasions that it couldrun the plant for reason or other. However, the Appellant continued to declareavailability in terms of Schedule 6 to the PPA. Such an action on part of Appellantcould not be said to be in good faith. No reason to interfere with the decision of StateCommission.Magnum Power Generation Limited, New Delhi v. Haryana ElectricityRegulatory Commission, Haryana and Ors.Appeal No. 118 of 2010, Decided On: 23.03.2012 at page 0810MANU/ET/0056/2012Relaxation — Whether State Commission had provided sufficient relaxation regardingspecefic oil consumption? — Held, with regard to Specific Oil Consumption, the StateCommission had allowed the same after taking into consideration all the previouslevels achieved by the Appellant and after considering the fact that substantialrelaxations have been allowed in other norms and parameters. In view of the above,contention of the Appellant on this issue was misconceived.Haryana Power Generation Corporation Ltd., Panchkula v.Haryana Electricity Regulatory Commission, PanchkulaAppeal No. 131 of 2011, Decided On: 01.03.2012, at page 0633MANU/ET/0035/2012ENERGY LAW REPORTS SEPTEMBER, 2012165

xlii Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]Relaxation — Whether State Commission had provided sufficient relaxation regardingStation Heat Rate? — Held, with regard to Station Heat Rate, the contention was nottenable. The data showed that the State Commission had provided substantialrelaxation as against the norms applicable to the generating stations. Data revealedthat the Station Heat Rate allowed by the State Commission was very close to thenorms provided for in most of the cases. In the case of Units 1 to 4 for the PanipatThermal Power Station and also Units 5 and 6, the State Commission had allowed arelaxation from the norms as provided for in the Regulations. In fact, the relaxationallowed was more than the trajectory which was earlier fixed by the State Commission.The State Commission had given detailed reasons for the Station Heat Rate as approvedin the impugned order. Therefore, it was not open to the Appellant to claim HigherStation Heat Rate.Haryana Power Generation Corporation Ltd., Panchkula v.Haryana Electricity Regulatory Commission, PanchkulaAppeal No. 131 of 2011, Decided On: 01.03.2012, at page 0633MANU/ET/0035/2012Repair and Maintains Expenses — Whether Commission was justified in its treatmenton APR for FY 2009-2010 and ARR for FY 2010-2011 with respect to repair andmaintenance expenses? — Held, merely because in previous years, CPI was consideredin case no. 73 of 2007 and case no. 118 of 2008 was no ground to adopt same line ofreasoning, the fact of matter being that growth rate was taken to be 4.91 per cent and6.05 per cent for FY 2009-2010 and 2010-2011 against CERC’ adoption of growth rateat 5.72 per cent for over a period of five yearsBrihanmumbai Electric Supply and Transport Undertaking ofBrihanmumbai Municipal Corporation, India v.Maharashtra Electricity Regulatory Commission, MumbaiAppeal No. 8 of 2011, Decided On: 22.03.2012 at page 0837MANU/ET/0058/2012Repair and Maintenance Expenses on Hotline Washing — Whether StateCommission ought to have allowed Repair and Maintenance Expenses on HotlineWashing as Appellant had incurred incremental expenses in hotline washing ofTransmission Lines? — Held, Regulation 19 of Tariff Regulations indicate that, 1/3 rd of loss on account of controllable factors has to be passed on as an additionalcharge in the Tariffs and the balance 2/3 rd has to be absorbed by the licensee. A&Gand R&M expenses are controllable factors. State Commission has compared theactual audited expenses with figures projected for Multi Year Tariff Period forpurpose of sharing the efficiency loss/gain as per Regulation 19. State Commissionhad determined A&G and R&M expenses according to its Regulations and MYTTariff OrderReliance Infrastructure Limited, Mumbai v.The Maharashtra Electricity Regulatory Commission, MumbaiAppeal No. 149 OF 2009, Decided On: 23.03.2012 at page 0735MANU/ET/0049/2012Reset of loss level for LT wheeling — Whether Appellant’s request to direct StateCommission to reset loss level for LT wheeling at 11.64 per cent was to be allowed? —Held, Losses in LT system and losses attributable to LT consumers are two differentpropositions. Appellant’s submission in its ARR petition that, losses in its LT systemwere of order of 9 per cent would not mean that, losses attributable to LT consumersmigrating to TPC would also be 9 per cent. Admittedly, power was generated at remotegenerating station and transmitted to load centers on EHT transmission system. At166ENERGY LAW REPORTS APRIL, 2012

Consolidated Index: Subject Index(January - April, 2012)xliiiload centers power was stepped down to 33 kV and 11 kV and distributed in bulk. Itwas again stepped down to LT Voltage (400 Volts) for retail supply. Therefore, aconsumer who availed supply at LT level was liable to bear losses occurred in systemi.e. from generating end to its premises. Thus, a consumer connected at LT level toAppellant’s system was paying for system losses for LT system as well as for HTsystem. Therefore, a migrating consumer at LT level had to pay for losses in LT systemand HT system. Otherwise, differential losses would be loaded on remainingconsumers of Appellant. In regard to distribution losses attributable to LT and HTmigrating consumers, submissions made by Appellant appeared to be correct andtenable. Accordingly, same was accepted and State Commission was directed tocarryout necessary amendment in impugned orderReliance Infrastructure Limited, Mumbai v.The Maharashtra Electricity Regulatory Commission, Mumbai and Ors.Appeal No. 150 OF 2009, Decided On: 23.03.2012 at page 0760MANU/ET/0052/2012Restriction on debts to 1 per cent of outstanding arrears — Whether JointCommission had erred in restricting Bad and Doubtful debts to 1 per cent ofoutstanding arrears in contravention to Tariff Regulation? — Held, “the receivables”indicated in Regulation 28 are the total receivables at current Tariff rate and not thearrears outstanding. Information sought as per format 18 of Regulations relating toaudited amount of receivables bad and doubtful debts would not infer that allowanceof bad debts had to be limited to 1 per cent of arrears outstanding. However, StateCommission has discretion to allow bad debts upto 1 per cent of receivables after thelicensee gets the receivables audited. It is not binding on Joint Commission to allow1 per cent of receivables a bad debts. Licensee had also not indicated if auditedaccounts for previous year were submitted to Joint Commission. Joint Commissionmight reconsider the provision of bad debts after audited accounts were submittedby Appellant in Truing up.The Electricity Department, Nani Daman v. Joint ElectricityRegulatory Commission, GurgaonAppeal No. 35 of 2012 at page 0993Decided On: 25.06.2012MANU/ET/0103/2012Return on Equity — Whether Commission’s treatment on return on equity inrespect of APR for 2009-2010 and ARR for FY 2010-2011 was justified? —Regulation 73.1 speaks of ‘assumption‘ in financing capital expenditure atnormative debt- equity ratio of 70:30. It was Appellant’s case that, it was notcase of Appellant that, entire capitalisation expenditure would be through loan.Matter needed re-examination in light of the facts presented and legal provisionobtaining in a given situationBrihanmumbai Electric Supply and Transport Undertaking ofBrihanmumbai Municipal Corporation, India v.Maharashtra Electricity Regulatory Commission, MumbaiAppeal No. 8 of 2011, Decided On: 22.03.2012 at page 0837MANU/ET/0058/2012Return on Equity — Whether the Commission was justified in fixing return onequity at 14 per cent? Whether return on equity should be in terms of the Regulation21(iii) of the Central Electricity Regulatory Commission (Terms and Conditions ofTariff) Regulations, 2004 or Regulation 15 of the CERC (Terms and Conditions ofTariff) Regulations, 2009? — Held, analysis of Regulation 25 of the State Regulations,ENERGY LAW REPORTS SEPTEMBER, 2012167

xliv Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]2005 as made above makes it clear that it was the intention of the Authority thatpassed the order impugned to follow the CERC Regulations, 2009. The StateCommission was quite conscious of the necessity of following the norms, principlesand methodologies enunciated by the CERC. The norms, principles andmethodologies must be such as are prevalent at a given point of time. Secondly, itwas also the settled position of law that if two interpretations are possible then theinterpretation which is beneficial to the subject should be accepted. On these premiseit was held that given the language employed in Regulation 25 of the StateRegulations, 2005, the principles adopted in Regulation 25 was in the light of theRegulation 21(iii) of the CERC Regulations, 2004 and with the change of theRegulations of the CERC, the CERC Regulations, 2009, would apply. This wasRegulation 15 of the CERC Regulations, 2009. There was a rider in this that CERCRegulations, 2004 which deals with return on equity (Regulation 21(iii)) isintrinsically related to Regulation 7 dealing with tax on income. In the StateRegulations similar provision has been made in Regulation 32. Since Regulation 25of the State Regulations speaks of being guided by the Central Regulations as amendedfrom time to time and as the CERC has framed new Regulation in 2009 (Regulation15), the said Regulation 15 which was applicable in the instant case should beapplied sans the Regulation 7 of the Central Regulation, 2004 inasmuch asRegulation 15 of the CERC Regulations, 2009 had abolished the provision ofRegulation 7 of the CERC Regulations, 2004 and there could not be double advantageaccruable to a transmission company who was of course entitled to the benefit of theCERC Regulations, 2009 (Regulation 15). Once it was held that Regulation 15 of theCERC Regulations, 2009 would become applicable it was implied as also it becameexplicit that tax on income could not be a pass through to the beneficiaries. Regulation15 of the CERC Regulations, 2009 had spoken so in express language so that therecould not be any misapprehension on the question of application of Regulation 7 ofthe CERC Regulations, 2004 or Regulation 32 of the State Regulations, 2005. Appealsucceeded and modification was made as return of equity would not be fixed at 14per cent as per Regulation 25.Punjab State Transmission Corporation Limited,Punjab v. PSERC, Chandigarh and Ors.Appeal No. 76 of 2011, Decided On: 02.03.2012, at page 0560MANU/ET/0041/2012Return on Equity — Whether the State Commission was committed an error when itallowed only 14 per cent return on equity as against the 15.50 per cent pre-tax andwith grossed up return on equity at 19.38 per cent claimed by the Appellant for all itsplants in view of the Central Commission Regulations? — Held, the State Commission,in the present case had followed the Regulations of the State Commission. TheRegulations of the State Commission provide for the return on equity at the rate of14 per cent. While dealing with this issue, the Tribunal in Appeal Nos. 72 and 141 of2009 had directed that the return on equity ought to be allowed only in terms of theRegulations of the State Commission. In terms of the above, the State Commission hadcorrectly followed the Regulations as well as the directions issued by the Tribunaland had accordingly allowed return on equity at the rate of 14 per cent. Therefore, theAppellant could not claim for higher Return on equity more than what was prescribedin the Regulations of the State Commission. Thus, this contention failed.Haryana Power Generation Corporation Ltd., Panchkula v.Haryana Electricity Regulatory Commission, PanchkulaAppeal No. 131 of 2011, Decided On: 01.03.2012, at page 0633MANU/ET/0035/2012168ENERGY LAW REPORTS APRIL, 2012

Consolidated Index: Subject Index(January - April, 2012)xlvRevenue Gap — Whether the Commission was justified in its treatment of revenuegap? — Held, the Appellant demanded revenue gap for the year 2011-12. The entirerevenue gap of the previous Tariff order of 2010-11 has been taken care of in the Tarifforder for the PSPCL for 2011-12. The Commission had its own logic that entire ARR ofthe Appellant was to be met through Tariff increase and the payment of the ARR/Transmission charges payable to the Appellant was to be met by the PSPCL. TheAppellant did not appear to suffer loss.Punjab State Transmission Corporation Limited,Punjab v. PSERC, Chandigarh and Ors.Appeal No. 76 of 2011, Decided On: 02.03.2012, at page 0560MANU/ET/0041/2012Scope of provisions — What is scope and intent of provisions of said Regulations,2009 dealing with ‘power to remove difficulties’(Regulation 57), ‘power to amend’(Regulation 58) and inherent power of Commission (Regulation 59) in context ofexercise of regulatory power to determine Tariff for electricity utilities namely,generating companies? — Held, Regulations 59.2 and 59.3 of Regulation 59 areexercisable in adjudicatory process, not in legislative jurisdiction.Madhya Pradesh Power Generation Company Ltd., Jabalpur (M.P.) v.Madhya Pradesh Electricity Regulatory Commission, Jabalpur (M.P.) and Ors.Review Petition No. 3 of 2011, Decided On: 01.03.2012, at page 0665MANU/ET/0044/2012Security charges — Whether security charges incurred by Appellant for FinancialYear 2007-08 should be allowed on basis of actual, ignoring Tariff Regulationspertaining to Annual Performance Review and sharing of efficiency gains and/or losses? — Held, Appellant not only had also not been able to establish that, suchexpenses were uncontrollable but, Appellant had not been able to place any materialto show that as to what steps it had taken to mitigate such increase. In absence ofsame, said expenses were controllable and had been accordingly treated in accordancewith Tariff Regulations in impugned orderReliance Infrastructure Limited, Mumbai v.The Maharashtra Electricity Regulatory Commission, Mumbai and Ors.Appeal No. 150 OF 2009, Decided On: 23.03.2012 at page 0760MANU/ET/0052/2012Service of document’s Copy — Whether Appellant was not served with the copy ofdocuments in respect of the issue relating to the Truing up of Interest cost andAmortization of cost of Debt Restructuring? Whether Judgment rendered in AppealNo. 120 of 2008 had attained finality? — Held, the Respondent Hydro Power throughthe Affidavit had specifically stated that during the proceedings in MYT applicationfor control period from 2008 – 2011, copies of all miscellaneous documents weresupplied to Appellant when same were filed before State Commission. In fact, alongwith original application, nine additional copies were duly filed before StateCommission. On the basis of averments made in said application, interest forFinancial year 2003-2004 to 2007-2008 and debt restructuring were approved byState Commission. State Commission had referred to the complete details providedin application. On the basis of information furnished by Respondent Hydro Power,interest and debt restructuring expenses had been approved. Materials available onrecord clearly showed that those documents were supplied to Electricity Board. Inrespect of the issues namely Incentive for Higher Plant Availability and Cost ofInfirm Energy, this Tribunal in Appeal No. 120 of 2008 had already decided asagainst the Electricity Board. Admittedly, the findings in that Appeal had not beenENERGY LAW REPORTS SEPTEMBER, 2012169

xlvi Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]challenged in Appeal filed by Board. Judgment rendered in Appeal No. 120 of 2008had attained finality. Claim on these issues had no merit. Appeal dismissedHimachal Pradesh State Electricity Board, Shimla v.Himachal Pradesh Electricity Regulatory Commission,Shimla and Jai Prakash Hydro Power Ltd (JHPL), ShimlaAppeal No. 9 of 2011 and appeal No. 178 OF 2010 at page 0933Decided On: 19.04.2012MANU/ET/0075/2012Special Appropriation — Whether the State Commission was right in disallowingthe claim of Special Appropriation while determining the annual revenuerequirements and bulk supply price of the Appellant for the year 2010-11? — Held,this issue had already been decided by the Tribunal in its judgment dated 30 th August,2011 in Appeal No. 88 of 2009. Accordingly, the principal repayment of debt couldnot form a part of revenue requirement. Further, the State Commission was directed tocarry out the true up for the Financial Year 2008-09 and 2009-10 and allow the shortfallwith carrying cost and also consider the claim of the Appellant regarding the arrearspayable to OPGCL.GRIDCO Limited, Bhubaneswar v.Orissa Electricity Regulatory Commission, Bhubaneswar and Ors.Appeal No. 106 of 2010, Decided On: 01.03.2012, at page 0615MANU/ET/0038/2012Specific performance — Whether relief of specific performance granted by StateCommission in favour of Wardha Power was consistent with provision of Section 23of Special Relief Act? — Held, Provision for liquidity damages in PPA would notaffect right of party to seek specific performance of PPA particularly, when conditionssubsequent were fulfilled. Therefore, relief of specific performance granted by StateCommission in favour of Wardha Power was consistent with provision of Section 23of Special Relief Act and hence, consequential directions issued by State Commissionto Appellant to supply power to Wardha Power as per PPA was justified. Appealdismissed.Reliance Infrastructure Limited, Mumbai v.The Maharashtra Electricity Regulatory Commission, Mumbaiand M/s. Wardha Power Company Ltd., HyderabadAppeal No. 115 OF 2011, Decided On: 23.03.2012, at page 0738MANU/ET/0050/2012Tariff Determination — Whether the CERC was legally justified in reckoning theperiod of execution from the date of investment approval instead of the date of letter ofaward in respect of the elements of interest during construction and incidentalexpenditure during construction? — Held, it was clear that Regulation 7 of the TariffRegulations, 2009 that provides for the capital cost for a project to include the interestduring construction and also incidental expenditure during construction is applicableto the instant case instead of Para 13.12 of the Statement of Object and Reasons as itconcerns with additional return on equity and not capital cost. Consequently, theperiod of 36 months is computable from the date of letter of award and not from thedate of investment approval in respect of interest during construction and incidentalexpenditure during construction. Accordingly, the appeal is allowed but, withoutcost. The impugned order is set aside. The CERC will pass an appropriate order in thelight of the decision rendered herein.Power Grid Corporation of India Ltd., Haryana v. CERC, New Delhi and Ors.Appeal No. 30 of 2011, Decided On: 01.03.2012, at page 0586MANU/ET/0040/2012170ENERGY LAW REPORTS APRIL, 2012

xlviii Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]Transit loss on imported coal — Whether State Commission was correct in notpermitting Appellant the transit loss on imported coal? — Held, if rule of law prescribesthe supremacy of Norm over actual performance, such principle must hold goodwhether the utility performs better than the norm or not. When State owned generatorshad been able to procure imported coal on delivery basis, there was no reason as towhy private generator was not prudent enough to procure coal on similar terms.Therefore, State Commission was correct in not permitting Appellant the transit losson imported coal when it was established that, other generators including State ownedgenerators could procure coal on delivery basis.Reliance Infrastructure Limited, Mumbai v.The Maharashtra Electricity Regulatory Commission, Mumbai and Ors.Appeal No. 148 OF 2009, Decided On: 23.03.2012 at page 0756MANU/ET/0051/2012Transmission and Distribution losses — Whether the Joint Commission had erredin deciding the Transmission and Distribution losses while approving the ARRand Tariff of the Respondent No. 1 for the FY 2011-12? — Held, the State Commissionafter considering the suggestions and objections of the objectors had given a speakingorder regarding determination of T&D losses. On the other hand, the averments ofthe Appellant were vague without any substance. It was also noticed that the T&Dlosses of the Respondent No. 1 could not be considered high by any standard. TheJoint Commission had also been reducing the T&D loss target for the RespondentNo. 1 gradually. The Joint Commission had given proper reason while deciding theT&D loss target for the FY 2010-11 and there was no reason to interfere with thesame.Daman Industries Association, Daman v.Electricity Department of Daman & Diu, Daman and Anr.Appeal No. 169 of 2011, Decided On: 29.02.2012, at page 0599MANU/ET/0039/2012Validity of agreement — Whether Agreement dated, 24 th February, 2011 entered intobetween Wardha Power and Videsh Coal Services Limited was in due satisfactionand conditions subsequent of PPA dated, 4 th June, 2010? — Held, agreement dated,24 th February, 2011 entered into between Wardha Power and Videsh Coal ServicesLimited was in due satisfaction and conditions subsequent of PPA dated, 4 th June, 2010.As such, there was a due fulfilment of conditions subsequent relating to Fuel SupplyAgreement on part of Wardha Power as per term of PPAReliance Infrastructure Limited, Mumbai v.The Maharashtra Electricity Regulatory Commission, Mumbaiand M/s. Wardha Power Company Ltd., HyderabadAppeal No. 115 OF 2011, Decided On: 23.03.2012, at page 0738MANU/ET/0050/2012Validity of mechanism — Whether the Power Purchase Cost Adjustment mechanismdetermined by the Joint Commission was valid and correct? — Held, The formulaspecified by the Joint Commission in the impugned order is set aside as it is inconsistentwith the conditions specified therein and the Tariff Regulations. The Joint Commissionis directed to re-determine the formula taking into account the Regulations and theconditions specified under the PPCA formula. The formula should be such that thereis no scope for ambiguity and it determines the PPCA by mechanical application ofthe formula. The State Commission may also direct the Respondent No. 2 to displaythe computation for PPCA in a consumer friendly format on its website for the benefitof the consumers. As the FY 2011-12 is going to end shortly, the State Commission172ENERGY LAW REPORTS APRIL, 2012

Consolidated Index: Subject Index(January - April, 2012)xlixmay decide the PPCA for the FY 2011-12 and consequent modification in retail supplyTariff after hearing the concerned parties and our directions for specifying the correctformula may be noted for future.Silvassa Industries Association v. Joint Electricity Regulatory Commissionthrough Secretary, Gurgaon, (Haryana) and Electricity Department, SilvassaAppeal No. 175 of 2011 and I.A. No. 263 of 2011,Decided On: 14.03.2012MANU/ET/0042/2012Validity of PPA — Whether the Power Purchase Agreement dated 16 th January, 2004is invalid and not in accordance to law allegedly because of being inconsistent withthe provisions of the Electricity Act, 2003? — Held, PPA dated 16 th January, 2004was valid and according to law. The Karnataka Electricity Reforms Act, 1999 findsits berth in the schedule under serial no. 5 in terms of Sub-section (3) of Section 185of the Electricity Act, 2003. This Section 185 in its Sub-section (3) provides that “theprovisions of the enactments specified in the schedule, not inconsistent with theprovisions of this Act, shall apply to the states in which such enactments areapplicable. Therefore, save the inconsistencies, the provisions of State Reforms Act,1999 are applicable so far as the State of Karnataka is concerned. The State Act, 1999came into force from 1 st June, 1999, while both the Indian Electricity Act, 1910 andthe Electricity (Supply) Act. 1948 stood repealed with effect from 10 th June, 2003when the Electricity Act, 2003 came into force. The Electricity RegulatoryCommissions Act, 1998 also stood repealed on and from 10 th June, 2003.Notwithstanding such repeals, acts done or taken under these Acts shall be deemedto be done under the 2003 Act provided they are not inconsistent with the provisionsof this Act. Again, so long as rules were not framed under the 2003 Act the rulesmade under Sub-section (1) of Section 69 of the Supply Act, 1948 would continue tohave effect.M/s Narayanpur Power Company Private Ltd. v. KERC, Bangalore and Anr.Appeal No. 31 of 2011, Decided On: 15.02.2012, at page 0523MANU/ET/0023/2012Validity of termination notice — Whether termination notice dated, 7 th March, 2011sent by Appellant was valid in law? — Held, in Appellant’s own submissions, sellerWardha Power had permissible time to execute FSA was upto 3 rd March, 2011. Supplyof copy of FSA naturally would take place after 3 rd March, 2011. Delay in supplyingcopy of FSA had already been dealt with. Contracts were entered in to by parties to beexecuted in good faith and for mutual benefits and not for terminating them on one orother grounds. Fact that, Seller had entered into fuel supply agreement withinstipulated time of 9 months and had been able to supply power to Appellant witheffect from schedule date of delivery i.e. 1 st April, 2011 would itself was a testimony forseller’s intention to perform contract. Therefore, termination notice dated,7 th March, 2011 sent by Appellant was not valid in law.Reliance Infrastructure Limited, Mumbai v.The Maharashtra Electricity Regulatory Commission, Mumbaiand M/s. Wardha Power Company Ltd., HyderabadAppeal No. 115 OF 2011, Decided On: 23.03.2012, at page 0738MANU/ET/0050/2012Variation in Tariff — Whether the Joint Commission has erred in providing forvariation in Tariff of domestic consumers with Fuel and Power Purchase CostAdjustment determined in accordance with the formula decided in the Tariff Order?— Held, Power Purchase Cost Adjustment formula had already been set aside by thisENERGY LAW REPORTS SEPTEMBER, 2012173

l Energy Law Reports (ELR) [Vol. 2, Part 4, 2012]Tribunal in its Judgment in case of Daman Industries Association v. ElectricityDepartment of Daman & Diu and Another with direction to the Joint Commission tore-determine formula afresh. Accordingly, this issue did not survive.The Electricity Department, Nani Daman v.Joint Electricity Regulatory Commission, GurgaonAppeal No. 35 of 2012 at page 0993Decided On: 25.06.2012MANU/ET/0103/2012174ENERGY LAW REPORTS APRIL, 2012

NOTESENERGY LAW REPORTS SEPTEMBER, 2012 175

NOTES176ENERGY LAW REPORTS SEPTEMBER, 2012

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