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Attorney(S)
  • Ms. Swapna Seshadri, ;
  • Mr. S Vallinayagam for TNEB,
  • Mr. M.G Ramachandran;
  • Ms. Sneha Venktaramani;
Judges
  • M. Karpaga Vinayagam
  • Chairperson
  • V.J Talwar, Technical Member
Acts
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Citation Codes
Equivalent Citations
citation codes
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Attorney(S)
  • Ms. Swapna Seshadri, ;
  • Mr. S Vallinayagam for TNEB,
  • Mr. M.G Ramachandran;
  • Ms. Sneha Venktaramani;
Judges
  • M. Karpaga Vinayagam
  • Chairperson
  • V.J Talwar, Technical Member
Acts
See more information ...
Smart Summary

Concise Analytical Summary of the Opinion (dated 12 January 2012)

Factual and Procedural Background

This appeal was filed by Power Grid Corporation of India Limited (the Appellant) against the Central Electricity Regulatory Commission's (the Central Commission) order dated 15.2.2011 determining the transmission tariff for the transmission system associated with the Sewa-II Hydro Electric Project (the SEWA-II Hiranagar and SEWA-II Maharanpur 132 kV transmission lines).

Key factual and procedural points extracted from the opinion:

  • Appellant: Power Grid Corporation of India Ltd., a Government Company functioning as the Central Transmission Utility under Section 38 and as an inter-state transmission licensee under Section 39 of the Electricity Act, 2003.
  • Respondents: Central Commission (R-1) and various transmission/distribution licensees and beneficiaries including UPPCL (R-10), and Railways (R-17).
  • An implementation/agreement dated 22.7.2005 was entered into between the Appellant and the National Hydro-Electric Power Corporation (NHPC / Hydro Power Corporation) prescribing coordinated commissioning schedules and an indemnification clause; a zero date was agreed as 1.6.2008.
  • Investment approval required commissioning within 27 months of Letter of Award (Tower Package dated 7.2.2006), implying Commercial Operation Date (COD) around May 2008.
  • Neither the generating project nor the transmission system was ready by May 2008. The Appellant's transmission works were reportedly ready by 31.3.2009 but could not be operated commercially because the generating station was not ready. The lines were commissioned on 5.8.2009 on request of Jammu & Kashmir and declared under commercial operation w.e.f. 1.9.2009.
  • Appellant filed a tariff petition before the Central Commission on 9.3.2010; UPPCL objected on 11.11.2010; data was furnished by the Appellant on 22.12.2010.
  • The first generating unit of SEWA-II was commissioned on 29.6.2010; the complete transmission system was commissioned on 1.7.2010.
  • The Central Commission's impugned order (15.2.2011) allowed Interest During Construction (IDC) and Incidental Expenditure During Construction (IEDC) for the period May 2008 to 31.3.2009, but rejected the Appellant's claim of IDC and IEDC totaling Rs.189.51 lakhs for the period 1.4.2009 to 1.9.2009 on the ground that the Appellant had not built in sufficient safeguards in the indemnification agreement to cover the delay in commissioning of the generating station.
  • Aggrieved, the Appellant filed this appeal. The bench hearing the appeal consisted of Chairperson Justice M. Karpaga Vinayagam and Technical Member V. J. Talwar; judgment dated 12 January 2012.

Legal Issues Presented

  1. Whether the Central Commission was right in rejecting the Appellant's claim for Interest During Construction (IDC) and Incidental Expenditure During Construction (IEDC) for the period 1.4.2009 to 1.9.2009 (amounting to Rs.189.51 lakhs) on the basis that the Appellant did not build sufficient safeguards into the indemnification agreement?
  2. Whether the indemnification clause in the agreement (providing indemnity for a period of six months from the agreed zero date) had elapsed, such that the Appellant could not claim indemnity for delays beyond that six-month period?
  3. Whether, given the Central Commission had accepted earlier portions of delay as justified (force majeure or events beyond the Appellant's control), it should have extended relief (IDC/IEDC) to the period 1.4.2009 to 1.9.2009 as well?

Arguments of the Parties

Appellant's Arguments

  • The indemnity clause in the 22.7.2005 agreement made indemnification applicable for six months from the zero date (1.6.2008), and that period had elapsed. Since the delay beyond that period was due to events beyond the Appellant's control, the Appellant contended the Central Commission should have allowed IDC/IEDC for the subsequent period (1.4.2009–1.9.2009).
  • The Appellant argued it was commercially impractical to require the Hydro Power Corporation to agree to unlimited indemnity and that there is no statutory requirement forcing transmission utilities to include open-ended indemnity clauses; therefore the mutually agreed indemnity limit should not be grounds for disallowing the Appellant's tariff claim.
  • The Central Commission's disallowance was, per the Appellant, based not on any default by the Appellant in carrying out its works but rather on the scope of the commercial indemnity clause with NHPC; the Appellant contended that this reasoning was wrong and the impugned order should be set aside.
  • The Appellant also argued that because the Central Commission accepted that the delay until 1.3.2010 was on account of force majeure affecting NHPC, indemnity should have been allowed for 1.4.2009 to 1.9.2009.

Respondent (UPPCL)'s Arguments

  • The 22.7.2005 agreement required coordinated completion and regular reviews; the zero date was 1.6.2008 and schedules were to be regularly reviewed in quarterly meetings. Thus, the Appellant's contention that the indemnity clause had elapsed was incorrect.
  • According to UPPCL's factual position, the transmission lines were constructed and ready on 1.4.2009; once the Appellant's works were ready, payment of IDC for that additional period did not arise. While the Appellant could seek recovery from NHPC for loss caused by delay, it could not add that amount to its capital cost and thereby increase the transmission tariff payable by beneficiaries.
  • Therefore, the Central Commission's decision to disallow the claimed IDC/IEDC addition to capital cost was justified.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The court's analysis proceeded by examining the contractual clauses, the factual timeline, the Central Commission's findings, and the statutory objective of safeguarding consumer interest under the Electricity Act.

  1. Interpretation of the Agreement:
    • Clause 1(a) of the agreement provided that the zero date for indemnity would be worked out for each generating unit and associated transmission system and that this zero date was to be mutually agreed in quarterly meetings and could be reviewed. The zero date was agreed as 1.6.2008 in the case before the court.
    • Clause 2(a) provided that indemnification by the defaulting party would be calculated only up to a period of six months from the zero date.
    • The court held that Clause 2(a) must be interpreted together with Clause 1(a), which allowed the zero date to be altered in quarterly reviews. Consequently, the Appellant's contention that the indemnity clause had "elapsed" automatically had no basis because the contract expressly permitted periodic review and potential alteration of the zero date.
  2. Practical purpose of the indemnity:
    • The court considered the practical purpose of the indemnity clause and cautioned against an interpretation that would render the indemnity agreement nugatory. It noted that hydro-electric projects often suffer geological and other uncertainties leading to delays; accepting the Appellant’s contention would defeat the object of the agreement which was to secure coordinated completion.
    • The court observed that the Appellant "should have been cautious" and could have specified the zero date in terms keyed to the readiness of either project, rather than a hard calendar date, but this was a contractual drafting point rather than a basis to overturn the Commission's decision.
  3. On the Commission's factual determination of delay:
    • The Central Commission found the delay from May 2008 to March 2009 (11 months) was on account of justified reasons (agitation, ROW problems, forest clearance) and allowed IDC/IEDC for that period.
    • For the subsequent period from 1.4.2009 to 31.8.2009 (five months), the Commission found the delay was not justified because the Appellant had not built sufficient safeguards in the implementation agreement to take care of the delay in commissioning of the generating station. The Commission therefore disallowed IDC and IEDC for that period, quantified as Rs.177.32 lakh (transmission line), Rs.11.78 lakh (sub-station) and Rs.0.41 lakh (PLCC) totaling Rs.189.51 lakh.
    • The court accepted the Commission's assessment that the Appellant could not add the claimed amount to its capital cost, particularly where the generating station's output was not available to the Appellant and where the Commission had allowed tariff with commercial operation date as 1.9.2009.
  4. Statutory and consumer-interest considerations:
    • The court invoked the preamble of the Electricity Act and Section 61(d) to underline the Commission's duty to safeguard consumer interest and to ensure tariffs result in electricity being supplied at the cheapest rates possible.
    • The court accepted the Commission's reasoning that adding Rs.189.51 lakhs to capital cost and thereby increasing annual charges would ultimately be passed through in the ARR of beneficiary utilities and would increase the burden on consumers. That prospective burden weighed against allowing the Appellant's addition to capital cost.
  5. Relevance of earlier Central Commission order relied upon by the Appellant:
    • The Appellant referred to a Central Commission order dated 6.9.2010 (Petition No.57 of 2010) concerning NHPC, in which escalation in capital cost up to 1.3.2010 had been allowed. The court held that the prior order related to determination of tariff for NHPC's hydro project and had no relevance to the indemnity clause or to the Appellant's claim in this case. Thus, that order did not support the Appellant's claim.

Holding and Implications

Holding:

APPEAL DISMISSED

The court concluded there was no merit in the appeal and found no infirmity in the impugned order dated 15.2.2011 of the Central Commission. Consequently, the Appellant's claim for IDC and IEDC amounting to Rs.189.51 lakhs for the period 1.4.2009 to 1.9.2009 was not allowed to be added to the capital cost.

Direct consequences and implications:

  • The Central Commission's determination disallowing addition of Rs.189.51 lakhs to the Appellant's capital cost for the specified period is upheld.
  • Beneficiary utilities were not to be required to pay annual charges on that additional amount from the date of commercial operation, thereby avoiding passing the additional burden to consumers through ARR.
  • The court emphasized contractual interpretation (interaction of Clause 1(a) and Clause 2(a)) and consumer-protection considerations under Section 61(d) in affirming the Commission's decision.
  • The opinion does not identify the creation of a new legal principle or binding precedent beyond applying the agreement's terms and the statutory consumer-interest mandate; no new judicial precedent was announced in this judgment.
  • There was no order as to costs (expressly stated in the opinion).

Case identifiers and disposition: Appeal No. 65 of 2011; impugned order dated 15.2.2011; judgment dated 12 January 2012. Appeal dismissed as devoid of merits; no order as to costs.

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    Power Grid Corporation Of India Ltd v. Central Electricity Regulatory Commission

    PER HONBLE MR. JUSTICE M. KARPAGA VINAYAGAM, CHAIRPERSON

    1. Power Grid Corporation of India, the Appellant has filed this Appeal as against the order dated 15.2.2011 passed by the Central Electricity Regulatory Commission determining the transmission tariff for transmission system associated with Sewa-II Hydro Electric Project viz., SEWA-II- Hiranagar and SEWA-II - Maharanpur 132 kV transmission lines. Judgment in Appeal No 65 of 2011 Page 4 of 16

    2. The short facts of the case are as follows: (a) The Appellant namely Power Grid Corporation of India Limited is a Government Company. It discharges the functions of the Central Transmission Utility under Section

    38 of the Electricity Act 2003. It also performs the function of an inter-state transmission licensee under Section 39 of the Act. The Central Electricity Regulatory Commission (Central Commission) is the 1st Respondent. Respondent No.2 to 16 and Respondent No. 18 are transmission and distribution licensees for various beneficiaries States of Northern Region. Respondent No.17 is Railways also a beneficiary of transmission system set up by the Appellant. (b) The Appellant entered into an agreement with the National Hydro-Electric Power Corporation (Hydro Power Corporation) dated 22.7.2005 containing the terms and conditions mutually agreed to between the Appellant and the Hydro Power Corporation. This agreement provided for matching of the commissioning schedule of the Generating Station to be setup by the Hydro power Corporation and the Associated Transmission System being setup by the Appellant. It also provides for indemnification for the defaulting party in case of delay in the commissioning. The zero date for operation of indemnification clause was agreed to as 1.6.2008. Judgment in Appeal No 65 of 2011 Page 5 of 16 (c) As per the Investment Approval, the transmission system was to be commissioned within 27 months of the date of the Letter of Award for Tower Package. The date of award of Tower Package was 7.2.2006. Accordingly, the Commercial Operation date for the transmission system was May, 2008. (d) However, neither the Generation Project of the Hydro Electric Power Corporation nor the Associated Transmission System of the Appellant were ready for commercial operation as on the schedule time of May, 2008. The Associated Transmission System of the Appellant could not be commissioned in May, 2008 for various reasons which are said to be beyond the control of the Appellant and was ready for commissioning on 31.3.2009 but could not put on commercial operation due to non-commissioning of the Generating Station of Hydro Power Corporation. Ultimately, on 5.8.2009, on the request from the Power Development Department, Government of Jammu & Kashmir, the lines were commissioned. Thereafter, the above lines were declared under commercial operation on 1.9.2009. (e) On 9.3.2010, the Appellant filed a petition before the Central Commission for approval of the transmission tariff for the two concerned lines. (f) On 11.11.2010, the Uttar Pradesh Power Corporation Ltd (UPPCL) (R-10) filed an objection to the Petition filed by Judgment in Appeal No 65 of 2011 Page 6 of 16 the Appellant. On the basis of the objections various details were sought for from the Appellant by the Central Commission. The same were furnished and clarified on 22.12.2010. In the meantime on 29.6.2010, the first unit of the Generating Station by the Hydro Power Corporation was commissioned. Thereupon, the complete transmission system in respect of both the lines were commissioned immediately on 1.7.2010. (g) After hearing both the parties, the Central Commission (R-1) passed the impugned order dated 15.2.2011 determining the transmission tariff. In the said order, the Central Commission allowed the Interest During Construction and Incidental Expenditure During Construction from the period from May, 2008 to 31.3.2009 holding that the delay in the commissioning of the transmission system during the said period was justified. However, the Central Commission rejected the Appellants claim for Interest During Construction and Incidental Expenditure During Construction totalling Rs.189.51 lakhs for the period 1.4.2009 to 1.9.2009 on the ground that the Appellant had not built in the sufficient safeguard as referred to in the indemnification agreement to take care of the delay in the commissioning of the Generating Station. (h) Aggrieved over by the said rejection of the Interest During Construction and Incidental Expenditure During Judgment in Appeal No 65 of 2011 Page 7 of 16 Construction for the said period amounting to Rs.189.51 lakhs, the Appellant has filed this Appeal.

    3. The Learned Counsel for the Appellant has raised the following grounds assailing the impugned order: (a) The Agreement entered into between both the parties provides for indemnification in the event of delay by either party. However, as per the agreement, the indemnification will be applicable only for the delay for a period of 06 months from the zero date for commissioning of the generating system and the Associated Transmission System. Due to the events beyond their control, both the Appellant and the Hydro Power Corporation were unable to commission the respective transmission system and generation station within the said period of six months and as a result the indemnity clause had elapsed. Since the delay cannot be attributed to the fault of the Appellant, the delay during the said 06 months period was allowed by the Central Commission on the ground of existence of sufficient justification. However, the Central Commission wrongly disallowed the delay for the subsequent period namely from 1.4.2009 to 1.9.2009 nearly for 05 months on the ground that the Appellant has not built any sufficient safeguards in the agreement to cover the delay caused by the Hydro Power Corporation. (b) The Central Commission has failed to appreciate that in any commercial agreement, no party will agree to take up Judgment in Appeal No 65 of 2011 Page 8 of 16 unlimited liability for an indefinite period of time. It was not possible for the Appellant to have insisted and made the Hydro Power Corporation to agree to an unlimited period of indemnification. There is no provision either in the Act or under the Regulation whereby the transmission utilities are mandated to incorporate full and absolute indemnity clauses in respect of the generating companies. In the absence of any such statutory provisions it is open to the parties to mutually negotiate and agree to the extent of indemnification possible and mutually agreeable and not beyond thereof. (c) The Central Commission has disallowed the claim of the Appellant not on account of any default in carrying its work but on the ground that the commercial term of indemnity contained agreement with Hydro Power Corporation did not cover the period of delay. This reasoning is wrong. Hence the impugned order is liable to be set aside.

    4. Per Contra, the Learned Counsel appearing for the UPPCL (R- 10) submits the following: (a) The Agreement dated 22.7.2005 between the Appellant and the Hydro Power Corporation is to secure the timely completion of lines as well as the Generating Station so that the entire transmission system becomes operative on the same date. As per the agreement, the zero date was fixed as on 1.6.2008. It further provided that the above schedule for the generating units and the Associated Judgment in Appeal No 65 of 2011 Page 9 of 16 Transmission System shall be regularly reviewed in the quarterly meeting between the Appellant and the Power Corporation. In view of the above, the contention of the Appellant that indemnification clause had elapsed is not correct. (b) Even according to the Appellant, the transmission lines were constructed and became ready on 1.4.2009. Hence, the question of payment of Interest During Construction for the period does not arise. Though the Appellant can claim the amount from the Hydro Power Corporation that this loss was caused to it due to delay in commissioning of the Generating Station by the Hydro Power Corporation, it cannot claim that it shall be added in the capital cost so as to enhance the transmission tariff payable by the beneficiaries. Therefore, the impugned order is perfectly justified.

    5. In the light of the above rival contentions, the following question may arise for consideration: Whether the Central Commission is right in rejecting the claim of the Appellant towards the Interest During Construction and Incidental Expenditure During Construction for the period from 1.4.2009 to 1.9.2009 ?

    6. According to the Appellant, the indemnity clause contained in the indemnification agreement provides for the indemnification to be applicable from the zero date for a period of 06 months Judgment in Appeal No 65 of 2011 Page 10 of 16 and as such, it would become elapsed after a period of 06 months; since the transmission project is delayed for more than

    06 months from the zero date, no indemnity can be claimed by the Appellant under the indemnification clause and that therefore, the Central Commission having accepted that the delay was due to circumstances beyond the control of the Appellant, the Central Commission ought to have allowed for the subsequent period as well.

    7. The Learned Counsel for the Appellant would also contend that since the Central Commission has accepted the entire period till 1.3.2010 to be on account of Force Majeure affecting the Hydro Power Corporation, there cannot be any question of indemnity applicable and therefore, the Central Commission ought to have allowed indemnity in respect of the period being 1.4.2009 to 1.9.2009.

    8. We have carefully considered the submissions made by both the parties.

    9. It is the case of the Appellant that though the transmission lines were ready on 1.4.2009, it could not be commercially operative as the Generating Station was not made ready by the Hydro Power Corporation. However, the Central Commission has taken a view that in case the Appellant has not included its commercial interest in the Agreement entered into with the Hydro Power Corporation, the said amount cannot be included in the capital cost. Judgment in Appeal No 65 of 2011 Page 11 of 16

    10. According to the Central Commission, the delay in the commissioning of the transmission system from May, 2008 to 31.3.2009 was justified and as such the Appellant would be entitled to the benefit for the said period but the Appellant cannot claim for the further period i.e. from 1.4.2009 to 31.8.2009 since the Appellant had not built any sufficient safeguards as referred to in the agreement to take care of the delay in commissioning of the Generating Station. The relevant portion of the impugned order is as under:

    18. We have examined the submission of the Petitioner and objection of the Respondents with regard to time over run. On perusal of documents submitted by the Petitioner, it is noted that the delay of 11 months from May, 2008 to March, 2009 was on account of agitation, ROW problem and forest clearance which appear to be justified for the detailed reasons given by the Petitioner. Moreover, it is noticed that the Petitioner in its letter dated 6.8.2009 informed the Northern Regional Power Committee and the beneficiaries that the transmission lines were test checked on 31.3.2009 but could not be charged due to delay in completion of SEWA-II Hydro Electric Project. It was also mentioned by the Petitioner that on request of Jammu and Kashmir, the transmission lines were charged on 5.8.2009 and was declared under commercial operation w.e.f. 1.9.2009. Therefore, we find that the delay of five months is not justified as the Petitioner has not built in the sufficient safeguard in the implementation Agreement to take care of the delay in the commissioning of the Generating Station. Accordingly, IEDC and IDC have not been allowed from 1.4.2009 till 31.8.2009 which amount to Rs.177.32 lakh, Rs.11.78 lakh and Rs.0.41 lakh in respect of transmission line, sub-station and PLCC respectively.

    11. As mentioned above, it is the case of the Appellant that due to the event beyond the control of the Appellant under the Force Judgment in Appeal No 65 of 2011 Page 12 of 16 Majeure circumstances, the delay cannot be attributed to any fault of the Appellant as the delay for the earlier period was allowed by the Central Commission on the ground of the existence of the sufficient justification provided by the Appellant for the delay and the Commission ought to have rejected for the subsequent period.

    12. It is noticed that the agreement dated 22.7.2005 between the Appellant and the Hydro Power Corporation is to secure coordinated completion of the transmission lines as well as the Generating Stations so that the entire system becomes operative simultaneously.

    13. As per clause 1(a) of the Agreement, the zero date from which the indemnification agreement shall be applicable was to be worked out for each generating units and the Associated Transmission System. This has to be mutually agreed in the quarterly meeting between the parities within 03 months of the investment approval which will form an integral part of the Agreement. The said date was agreed upon as 1.6.2008. However, as provided in the above schedule, the period shall be regularly reviewed in the Quarterly Meeting between the parties. Therefore, the contention of the Appellant that indemnity clause got elapsed has no basis.

    14. That apart, clause 2 (a) of the Agreement which relates to the indemnification by the defaulting party to the either party provides that the same will be calculated only up to a period of

    06 months from the zero date. This clause has to be interpreted Judgment in Appeal No 65 of 2011 Page 13 of 16 along with the clause 1 (a) under which the zero date can be altered. If the contention of the Appellant that the indemnity period of six months from zero date had elapsed as both projects got delayed is accepted, then the very purpose of indemnifying agreement would be lost. Due to geological uncertainties, the commissioning of hydro-electric projects gets delayed. Therefore the Appellant should have been cautious and should have taken care to specify zero date from the date either of the project was ready for commissioning instead of firm date.

    15. The perusal of the entire Agreement would show that the object of the Agreement is that the Appellant as well as the Hydro Power Corporation will arrange its works so that the lines as well as the Generating Stations are completed simultaneously and within the time frame. The Agreement has also provided that in case of any default by any party, it will compensate to either party in respect of Interest During Construction for a period of 06 months from the zero date which could be reviewed by the parties periodically as mentioned earlier. In view of this clause providing for the periodical review, the contention of the Appellant that indemnification Clause had lapsed and hence they are entitled to add amount of Rs.189.51 lakhs in the capital cost is misplaced.

    16. The first unit of the Sewa-II generating Station of the Hydro Power Corporation was commissioned on 29.6.2010. So from that period the benefit of the transmission system became Judgment in Appeal No 65 of 2011 Page 14 of 16 available to the Appellants. However, the Appellant has filed the tariff petition even prior to the said commissioning date and the Central Commission has allowed the tariff to the Appellant for its transmission system by taking the date of commercial operation as 1.9.2009. Therefore, the Appellant cannot claim addition of Rs.189.51 lakhs in the capital cost especially when the Power Corporation is liable to pay the transmission tariff to the Appellant without any benefit as the power generated from SEWA-II Generating Station of Hydro Power Corporation was not available.

    17. The Appellant had relied upon the order dated 6.9.2010 passed by the Central Commission in the Petition No.57 of 2010 filed by the Power Corporation for determination of tariff for SEWA Hydro Electric Project Stage-II from 01.03.2010 to 31.03.2014. The impugned order in this case has been passed on 15.2.2011, but the Appellant has relied upon the order passed on 6.9.2010, in the Petition which has been filed by the Hydro Power Corporation for determination of tariff for its project and as such this has no relevance for the purpose of the present case. In that case, the Central Commission allowed escalation in the capital cost of the Hydro Project upto 1.3.2010 which has nothing to do with the indemnity clause in the agreement of the Appellant and the Hydro Power Corporation in question.

    18. As per the preamble of the Act and the Section 61 (d) of the Act, the Commission has to safeguard the consumers interest so that all the tariff, transmission tariff as well as the retail tariff Judgment in Appeal No 65 of 2011 Page 15 of 16 for distribution of electricity has to be so determined that the electricity is supplied to the consumers on the cheapest rates. If the claim of Rs.189.51 lakhs made by the Appellant is added in the capital cost of the transmission system on the date of the commercial operation i.e. on 1.9.2009, the beneficiary utilities have to pay the annual charges on the said amount for all the times to come. This additional charges would be passed through in ARR of beneficiaries approved by the Appropriate Commission which in turn add to the burden of the consumers. As such there is no merit in the claim made by the Appellant.

    19. Summary of Our Findings (a) As per Clause 2 (a) of the Agreement, the indemnification by the defaulting party will be calculated only upto a period of 06 months from the zero date. This Clause has to be interpreted along with Clause 1 (a) under which the zero date can be altered. The said date was agreed upon as 1.6.2008. However, the period shall be regularly reviewed in the Quarterly Meeting between the parties. Therefore, the contention of the Appellant that indemnification Clause got elapsed has no basis. (b) As per preamble and Section 61 (d) of the Act, the Commission has to safeguard the consumers interest so that all the tariff, transmission tariff as well as the retail tariff for distribution of electricity has to be so determined in such a way that the electricity is Judgment in Appeal No 65 of 2011 Page 16 of 16 supplied to the consumers on the cheapest rates. If the claim of Rs.189.51 Lakhs made by the Appellant is added in the Capital Cost, Additional burden will have to be borne by the consumers. Therefore, the Central Commission is right in rejecting the said claim of the Appellant towards the Interest During Construction and Incidental Expenditure During Construction for the period 1.4.2009 to 1.9.2009.

    20. In view of our above findings, we conclude that there is no merit in this Appeal as we do not find any infirmity in the impugned order. Consequently, the Appeal is liable to be dismissed.

    21. Accordingly, the Appeal is dismissed as being devoid of merits. However, there is no order as to cost. (V J Talwar ) (Justice M. Karpaga Vinayagam) Technical Member Chairperson Dated: 12th January, 2012 REPORTABLE/NON-REPORTABLE

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    Power Grid Corporation Of India Ltd v. Central Electricity Regulatory Commission
    (Jan 12, 2012)