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Advocates
  • Ms. T.S Baghel & Ms. Saumya Sharma, Advocates,
  • Before the Appellate Tribunal for Electricity Appellate Jurisdiction
  • Mr. M.G Ramachandran;
  • Mr. Sudhir Mishra;
Judges
  • E. Padmanabhan, Judicial Member
  • H.L Bajaj, Technical Member
Acts
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Citation Codes
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citation codes
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Advocates
  • Ms. T.S Baghel & Ms. Saumya Sharma, Advocates,
  • Before the Appellate Tribunal for Electricity Appellate Jurisdiction
  • Mr. M.G Ramachandran;
  • Mr. Sudhir Mishra;
Judges
  • E. Padmanabhan, Judicial Member
  • H.L Bajaj, Technical Member
Acts
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Smart Summary

Concise Structured Summary of the Opinion

Factual and Procedural Background

This appeal was filed seeking, among other reliefs, (a) setting aside an order dated 06.10.2005 of the Central Electricity Regulatory Commission (CERC) that adjourned an interlocutory application filed by the appellant for fixation of ad hoc tariff sine die, and (b) directing CERC to determine the tariff for Rihand Super Thermal Power Station for the periods 2001–2004 and 2004–2009 within a time-bound period.

The appeal challenges an order made in IA No.24 of 2003 in Petition No.38 of 2001 on CERC's file. The CERC order (dated 29.8.2005) adjourned sine die the interlocutory application because the Jaipur Bench of the Rajasthan High Court had stayed operation (by interim order dated 10.1.2003) of an earlier CERC order dated 04.10.2002 (in Petition No.30/2002), and parties were pursuing modification of that stay in the High Court.

The Appellate Tribunal observed that an appeal was not maintainable against a mere adjournment under Section 111 of The Electricity Act 2003, but the appellant sought exercise of powers under Section 121 of The Electricity Act 2003. The Tribunal afforded liberty to the appellant to serve respondents on the point of exercising Section 121 powers. After service and hearing, and after considering submissions and the scope of the High Court stay, the Tribunal considered whether it was justified to issue directions to CERC under Section 121 and ultimately issued directions to CERC to take up and decide pending tariff petitions for the subsequent years expeditiously, subject to the conditions set out in the order dated 10 January 2006.

Legal Issues Presented

  1. Whether an appeal was maintainable against the CERC order that merely adjourned an interlocutory application sine die (question of maintainability under Section 111 of The Electricity Act 2003).
  2. Whether the Appellate Tribunal was justified in exercising its powers under Section 121 of The Electricity Act 2003 to issue directions to the Central Electricity Regulatory Commission to take up and dispose of pending tariff petitions for Rihand STPS for the years 2001–02 and subsequent years.

Arguments of the Parties

The opinion contains a record of the parties' positions as presented to the Tribunal. The following summaries are limited to what is explicitly recorded in the opinion.

Appellant's Arguments

  • The appellant sought setting aside of the CERC order that adjourned the interlocutory application and asked the Tribunal to direct CERC to determine ad hoc tariff and to fix tariff for the periods specified (2001–2004 and 2004–2009).
  • The appellant's counsel (Mr. Pradeep Misra) contended that the appellant was seriously prejudiced and was sustaining ongoing losses as a result of the delay.
  • The appellant urged the Appellate Tribunal to exercise powers under Section 121 of The Electricity Act 2003 to issue appropriate directions to CERC.

Respondent No.2's (and allied) Arguments

  • Representations were made that another miscellaneous application for modification of the Rajasthan High Court stay existed and had not been heard by that Court.
  • Respondent No.2's counsel (Mr. M.G. Ramachandran) supported the appellant to a limited extent and submitted that suitable directions might be issued to CERC to dispose of pending petitions (including Petition No.32 of 2001 and IA No.24 of 2003) within a time frame.
  • The learned counsel for the appellant and respondent No.2 jointly represented that the High Court stay was confined to the CERC order dated 04.10.2002 (in Petition No.30/2002) and did not preclude CERC from proceeding in respect of subsequent-period petitions such as Petition No.38 of 2001.
  • While disputing the appellant's factual claims about day-to-day loss on figures, Mr. Ramachandran still contended that CERC should not keep off its hands and should decide pending tariff petitions according to law without undue delay.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Tribunal's analysis proceeded in distinct steps, each grounded in the factual record and the statutory framework referenced in the opinion:

  1. Maintainability: The Tribunal first noted that an appeal is not maintainable against a mere adjournment under Section 111 of The Electricity Act 2003. Because the impugned order was essentially an adjournment sine die, the Tribunal observed that a direct appeal on that basis would not succeed.
  2. Invocation of Section 121: The appellant requested that the Tribunal nonetheless exercise powers under Section 121 of The Electricity Act 2003 to issue directions to CERC. The Tribunal allowed the appellant liberty to serve respondents on the question of whether Section 121 should be exercised.
  3. Scope of the High Court stay: The Tribunal examined the nature and scope of the Rajasthan High Court's interim stay of CERC's 04.10.2002 order. It emphasized the settled proposition (as applied in the opinion) that the effect of a stay is to suspend the operative effect of the order stayed but does not obliterate the order's existence, and the effect of an interim stay is to be read as confined to the order under appeal unless the stay expressly extends beyond it.
  4. Independence of subsequent-period petitions: The Tribunal found that the pending tariff petitions for the years subsequent to the period covered by the order under appeal (i.e., tariff petitions for 2001–02 onwards) were independent proceedings. The parties on both sides fairly conceded that the High Court stay related to the earlier period and did not prohibit CERC from hearing and deciding petitions for subsequent periods.
  5. Statutory context — Section 64(6): The Tribunal referenced Sub-section (6) of Section 64 of The Electricity Act 2003, which the opinion records as providing that a tariff order shall, unless amended or revoked, continue in force for the period specified in that tariff order. The Tribunal observed that any modification by the High Court could affect subsequent tariffs but such consequences could be handled by truing-up or amendment.
  6. Conclusion and exercise of power: On that basis — i.e., the confined scope of the High Court stay, the independence of the subsequent petitions, and the statutory scheme — the Tribunal concluded it was justified in exercising its power under Section 121 to direct CERC to take up and expeditiously dispose of the pending tariff petitions for 2001–02, 2002–03, 2003–04, 2004–05, 2005–06 and other connected interim applications, and to give suitable priority to those matters.
  7. Interim relief and safeguards: The Tribunal declined to grant interim tariff directions at that stage because there were substantial disputes on facts and figures (particularly regarding annual fixed charges proposed in the tariff applications). Instead, it directed CERC to decide the petitions on the merits and allowed the appellant liberty to move an interim application if CERC failed to pass orders within three months.

Holding and Implications

Holding: The Appellate Tribunal, exercising powers under Section 121 of The Electricity Act 2003, issued directions to the Central Electricity Regulatory Commission to take up and expeditiously dispose of the pending tariff applications and connected interim applications relating to Rihand Super Thermal Power Station for the period 2001–02 and subsequent years.

Core Ruling: The Tribunal directed CERC to consider and pass final orders on the pending tariff petitions (for 2001–02 and subsequent years) as expeditiously as possible according to law, after affording opportunity to all parties.

Direct consequences for the parties:

  • CERC is obliged to take up the pending tariff petitions on its file (including requests for fixation of tariff for 2001–02 and subsequent years) and to give them priority and expeditious disposal.
  • The Tribunal declined to direct interim relief on tariff figures at that stage because factual and numerical disputes were contested; the appellant retained liberty to approach the Tribunal for interim relief if CERC did not decide the matters within three months.

The opinion does not set out any new broad legal principle as a precedent beyond the application of the cited statutory provisions and the described approach to the scope of a court-ordered stay; the immediate effect is a directional mandate to CERC in the specific matters before the Tribunal.

Dated decision referenced in the opinion: 10 January 2006 (signed by H.L. Bajaj — Technical Member; Justice E. Padmanabhan — Judicial Member).

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    U.P Power Corporation Ltd. v. Central Electricity Regulatory Commission

    This Appeal has been preferred seeking for the following reliefs : (a) allow the present appeal and set aside the order dated 06.10.2005 passed by Central Electricity Regulatory Commission, New Delhi whereby it adjourned the interlocutory application filed by the Appeal for fixation of ad hoc tariff sine die, (b) further direct CERC to determine the tariff in respect of Rihand Super Thermal Power Station for the period from 2001-2004 and for 2004-2009 as early as possible within a time bound period as directed by this Honble Tribunal, and (c) pass such other order or orders which this Honble Tribunal may deem fit and proper in the interest of justice. No. of correction(s) 2

    2. The appeal has been preferred against the order passed by the first respondent made in IA No.24 of 2003 in petition No.38 of 2001 on the file of the first respondent. The said order reads thus: ORDER (DATE OF HEARING: 29.8.2005) The Interlocutory Application is filed by the respondent, UPPCL for reduction in fixed charges in respect of Rihand STPS. A Civil Miscellaneous Appeal No.133/2002 has been filed by the Rajasthan Rajya Vidyut Prasaran Nigam Ltd. for the Rajasthan High, Jaipur Bench, against the Commissions order dated 4.10.2002 and that Rajasthan High Court has already stayed on 10.1.2003 operation of the said order.

    2. Heard the parties. Shri K.K.Mittal appearing for RRVPNL, Respondent No.2 submitted that another Miscellaneous Application has also been filed before the High Court of Rajasthan for modification of the stay order. This application had not been taken up for hearing by the High Court so far.

    3. In view of the above circumstances, hearing of the Interlocutory Application is adjourned sine die and may be taken up after modification/vacation of stay order dated 10.1.2003 or disposal of the appeal, for which the parties may approach the High Court.

    3. In our considered view no appeal is maintainable against the said order under Section

    111 of The Central Electricity Act 2003, as it is a mere adjournment of the pending proceedings by the first respondent. When this was pointed out to the learned counsel for the appellant, the learned counsel pleaded that this Appellate Tribunal may exercise powers under Section 121 of The Electricity Act 2003 and issue appropriate directions to the first respondent. Without admitting the appeal, liberty was given to the counsel for the appellant to serve the respondents as to why this Appellate Tribunal should not exercise the powers under Section 121 of The Electricity Act 2003.

    4. Accordingly, respondents were served by the counsel for the appellant. Affidavit of service was filed in the Registry by the counsel for the appellant.

    5. Heard Mr. Pradeep Misra, learned counsel appearing for the appellant, Mr. M.G.Ramachandran, Mr. Sudhir Mishra, Ms. T.S. Baghel and Ms Saumya Sharma, Advocates for respondent No.2. Other respondents have not chosen to appear despite service of notice. No. of correction(s) 3

    6. Mr. M.G. Ramachandran, learned counsel appearing for the respondent No.2 solidly supported the counsel for the appellant to the limited extent and submitted that suitable directions may be issued to the first respondent to dispose of the pending petition No.32 of 2001 as well as IA No.24 of 2003 within a time frame.

    7. The learned counsel for the appellant as well as the second respondent fairly and jointly represented that the orders of stay granted by the Jaipur Bench of the Honble Rajasthan High Court has to be confined only in respect of order dated 4.10.2002 made in petition No.30 of 2002 on the file of the first respondent and that there is no impediment for the first respondent from proceeding with the pending petition No.38 of 2001 which is for the subsequent years.

    8. After due consideration of the facts, the submissions made by the learned counsel appearing on either side, interim order of the Honble Rajasthan High Court and the subsequent petition No.38 of 2001 filed by the second respondent herein before the first respondent seeking for fixation of tariff for the subsequent years, we are persuaded to issue and well justified in issuing the directions in exercise of powers under Section 121 of The Electricity Act to the first respondent herein. The point that arises for consideration is: Whether on the facts placed this Appellate Tribunal is justified in issuing directions to the Central Electricity Regulatory Commission in exercise of powers conferred under Sec 121 of The Electricity Act 2003?

    9. Concedingly by order dated 4.10.2002, the first respondent determined the tariff for the period 1.11.1997 to 31.3.2001 and also accorded approval of revised fixed charges for the period 1.4.1997 to 31.10.1997 in respect of Rihand Super Thermal Power Station. The last six paragraphs of the order of the first respondent dated 4.10.2002, which are relevant for the present, are set out hereunder for immediate reference:

    24. The impact of additional capitalization & FERV in the fixed charges for the period 1-4-1997 to 31-10-1997 (date of expiry of validity period of Ministry of Power tariff notification dated 2-11-1992) is as under: Impact of additional capitalization & FERV on Annual Fixed charges for 1997-98 (Rs. in lakhs) Addl Capitalisation FERV Depreciation 0 0 Interest on loan 63 27 Return on Equity 60 26 Total 123 53 No. of correction(s) 4

    25. The Commission, therefore, allows the following impact of fixed charges for the period 1.4.1997 to 31.10.1997: (Rs. in lakhs) Impact due to additional capitalization 123 x 7/12 Impact due to FERV 53 x 7/12

    26. Annual fixed charges for the period 1.11.1997 to 31.3.2001 are allowed as below: (Rs. in lakhs) Particulars 01.11.1997 1998-99 1999- 2000 2000- 01.11.1997 31.3.1998 1.4.1998 31.10.1998 1.11.1998 31.3.1999

    1 2 4 5 6 7 8

    1 Interest on Loan 0 0 0 0 0

    2 Intrest on Working Capital 2187 2069 2196 2061 2002

    3 Depreciation 17665 17886 17886 17955 8167

    4 Return on Equity 13869 13982 18642 18789 18939

    5 O&M Expenses 8127 8940 8940 9834 10817 Total 41848 42877 47664 48639 49925 The payments for part of the year shall be made on pro-rata basis.

    27. The fixed charges decided by us in the preceding paras shall be shared by the respondents in the ratio of energy drawn from Rihand STPS during the relevant period. The petitioner has already recovered fixed charges from the respondents in view of continuation of tariff notification dated 2.11.1992 on ad-hoc basis beyond 31.10.1997. the amount already recovered shall be adjusted against the fixed charges decided by us through this order.

    28. The petitioner has not indicated energy charges payable in the respective year and it has been stated that it is not required as the tariff is for the past period and recalculation will have no effect because operational norms remains unchanged. The respondents also did not raise the issue during the pleadings. In view of this, petitioner/respondents shall not have the option to reopen this issue later on. No. of correction(s) 5

    29. This order disposes of Petition No.30/2002.

    10. As against the said order dated 4.10.2002, the third respondent herein has preferred an appeal on the file of the Jaipur Bench of the Honble Rajasthan High Court and it is pending in S.B. Civil Misc. Appeal No. 133 of 2002 and an interim order has been passed by the Honble High Court. The interim order reads thus This appeal shall be listed on 12.02.2003 and till then the order passed by the Central Electricity Regulatory Commission dated 04.10.2002 is stayed - (Translated from Hindi). Concedingly efforts have been taken by the either side for modification of the interim order as well as for disposal of the appeal but the parties are not successful so far.

    11. In the meanwhile, years rolled and the necessity to fix the tariff for the subsequent period has arisen. Hence, the second respondent moved the petition before the first respondent for fixation of tariff for the subsequent years, namely, 2001-04 as well as 2004-05 and they are pending. The first respondent was moved by way of review as well as by way of a petition for direction by the parties. However, the first respondent, apparently had taken the view that since matter is pending before the Honble High Court it may not be justified to take up and pass orders on the pending tariff applications in view of stay orders and it has adjourned pending matters sine die.

    12. From the facts it is clear that, the subject matter of the pending appeal before the Honble Rajasthan High Court relates to the earlier period and the stay / interim order has to be confined to the order under appeal. The learned counsel on the either side fairly stated that there is no stay or any prohibition or impediment for the first respondent taking up the application / tariff petition filed by the second respondent herein for the subsequent years and passing orders. It is rightly pointed out that the proceedings of the first respondent for the subsequent period are independent proceedings and the counsel appearing on either side fairly submit that the first respondent could consider the petition moved by the second respondent and pending on its file according to the provisions of The Electricity act 2003 and the relevant regulations and pass orders. The order which is under appeal before the Honble Rajasthan High Court also makes it clear that it is for the particular period.

    13. That apart, Sub Section (6) of Section 64 of the Electricity Act 2003 provides that a tariff order shall, unless amended or revoked, continue to be in force for such period as may be specified in the tariff order. The first respondent has already specified the period for which its earlier order which is under appeal to be effective or in force. Of course, any modification by the Honble High Court may have certain degree of effect on the tariff to be No. of correction(s) 6 fixed for the subsequent period. This could be taken care of by truing up exercise or amendment as may be required.

    14. It is the settled position that stay of operation of an order means that the order which has been stayed would not be operative from the date of passing of stay order. It does not mean that the said order has been wiped out from existence. The order of interim stay granted has to be read so as to confine its effect to the order under appeal and not beyond, unless specifically ordered. Hence, we hold that there is no justification for the first respondent to stay off its hands despite the tariff period 2001-02, 2002-03, 2003-04 and 2004-05 have already rolled and tariff petition for those years are kept pending, though we are in the year 2005-06. We do not find any justification for the first respondent to stay off his hands without considering the tariff petition filed for the years 2001-04 and 2004-05 and subsequent years as well, merely because an appeal is pending with respect to tariff fixation for the years prior to 2001-02.

    15. It is pointed out and claimed by Mr. Pradeep Misra, Advocate for appellant, that the appellant herein is seriously prejudiced and sustaining day to day loss. Mr. M.G.Ramachandran on figures and facts disputes the said claims of Mr. Misra and at the same time submits that the first respondent will not be justified in keeping off its hands and it has to take up pending tariff petitions before it and decide the same according to law at the earliest and without further delay.

    16. In our considered view the present applications pending before the first respondent are not covered by interim order passed by the Honble High Court. In the circumstances, we are persuaded to issue directions in exercise of powers conferred by Section 121 of The Electricity Act 2003 to the first respondent, the Central Electricity Regulatory Commission to take up all the applications filed by the second respondent on its file for tariff fixation for the years 2001-02, 2002-03, 2003-04, 2004-05, 2005-06, etc., and all the connected interim applications and give expeditious disposal according to law. It is needless to add that the first respondent may give suitable priority for disposal of the tariff applications.

    17. Mr. Misra, the learned counsel pressed for interim directions but in view of the dispute and serious challenge to the facts and figures, in respect of AFC proposed in tariff applications and all connected petitions for the years 2001-04 to 2004-05, we are not inclined to issue an interim direction at this stage.

    18. However, we make it clear that if within a period of three months from this day, the first respondent for any reason whatsoever is unable to pass orders on the pending tariff No. of correction(s) 7 applications and petitions moved by the second respondent and other parties, we give liberty to the appellant herein to move appropriate interim application.

    19. In the result, we direct the first respondent herein to consider and pass final orders on the pending applications and petition moved by the second respondent seeking fixation of tariff for Rihand Super Thermal Power Station for the period 2001-02 and subsequent years as expeditiously as possible according to law and after affording opportunity to all the parties concerned. Dated at New Delhi this 10 of January 2006. (H.L. Bajaj) (Justice E. Padmanabhan) Technical Member Judicial Member

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    U.P Power Corporation Ltd. v. Central Electricity Regulatory Commission
    (Jan 10, 2006)