Case: B.S.E.S. Ltd Vs. Tata Power Co. Ltd.

it had appointed consultants. Two members of the Commission had several meetings with the consultants and thereafter the formula was worked out. But the Chairman of the Commission was not present in these meetings. In his dissenting order of Chairman has recorded as under: Para 60. I have had the opportunity to peruse in detail the draft of an order approved and circulated by my colleagues in the Commission, and I am appending a separate dissenting note, in view of my disagreement with them in regard to their calculations. Para 63. As a reflected in paragraph 50 of the order of my colleagues, the order itself is based on the report of the Consultants and the calculations shown in their report. In this behalf, I understand that my colleagues have had several meetings with the consultants and it is on the basis of the working that has been provided by my colleagues that the report has been compiled. .......... Para 64. I am afraid that I was not informed of any of the meetings that my colleagues had with the Consultants, nor was I advised of any minutes of the said meetings till the draft order was circulated. In the circumstances, since the BSES share that was purported to have been communicated by the Commission, it cannot be deemed to be or considered to be a communication made by the Commission, unless the communication was considered by all the Members of the Commission. It would tantamount to only two of the Members taking upon themselves the liberty to communicate the same." 24. The facts mentioned above clearly show that the procedure adopted by the Commission was not fair and proper inasmuch as the Chairman did not participate in the meetings which other two members had with the Consultants, whereunder a formula was devised. Under Regulation 21, the quorum for proceedings before the Commission shall be three. In these circumstances, the High Court was perfectly justified in remitting the matter to the Commission for de novo consideration and no exception can be taken to such a course of action.25. BSES is aggrieved only against the interim arrangement made by the High Court, whereby it has been directed to pay 50 per cent of the standby charges that are payable by TPC to MSEB for its standby facility of 550 MVA. Shri Kapil Sibal, learned senior counsel for BSES, has submitted that the State Government had, on the basis of the recommendation made by the Committee, passed an order on 19.1.1998 directing BSES to pay Rs. 3.5 crores per month to TPC when the liability of TPC to MSEB was Rs. 24.75 crores per month. This shows that the State Government did not apportion the liability of BSES as half of that of TPC. He has also submitted that TPC sells 35 per cent of the power generated by it to BSES and consequently a portion of this burden of Rs. 24,75 crores which TPC is liable to pay to MSEB is passed on by it to the consumers of BSES. Therefore, BSES cannot be saddled with liability to pay half of the amount only on the ground that it has been provided with a standby facility of 275 MVA which is half of the standby facility provided by MSEB to TPC. Learned counsel has also submitted that at best there can be some kind of a sharing on the amount which TPC has to pay to MSEB over and above Rs. 24.75 crores but up to the extent of the aforesaid amount the liability of BSES cannot exceed Rs. 3.5 crores. Shri Sibal has also assailed the order of the High Court on the ground that while making the interim arrangement for equal sharing of standby charges, reliance has been placed on the order of the State Government dated 22.3.2000, though the High Court itself has, in the earlier part of the judgment, held the said order to be without jurisdiction. Shri Chidambaram, learned senior counsel appearing for TPC, has, on the other hand, submitted that the order passed by the State Government on 19.1.1998, whereby BSES was directed to pay Rs. 3.5 crores out of the liability of Rs. 24.75 crores of TPC towards MSEB, was only a pro tem arrangement, as the order itself mentioned that this was subject to revision in tariff. Therefore, the said order has no legal sanctity and cannot bind TPC in any manner. He has also submitted that with effect from 1.4.1999 TPC has only paid half of the standby charges to MSEB and, therefore, the burden of the entire mount has not been passed on to the consumers. Shri Altaf Ahmad, Addl. Solicitor General, appearing for MSEB has submitted that the TPC owes a huge amount to MSEB and the interim arrangement made by the High Court should not be changed or altered in a manner which may prejudicially affect the interest of MSEB. 26. An interim arrangement is normally made on a prima facie consideration of the matter and on broad principles without examining the matter in depth. The matter has been remitted to the Commission by the High Court by the judgment and order dated 3.6.2003 and a period of nearly three and a half months has already elapsed. Regulation 101 of the Central Electricity Regulatory Commission provides that the Commission may normally dispose of the petitions finally within six months of admission. The State Commissions are also expected to follow this time limit for disposal of petitions. Since the order made by the High Court is only by way of interim arrangement of the Commission is expected to decide the disputes finally within a short period, we do not consider it proper to interfere with the order made by the High court in this regard. After the decision of the Commission, the equities can be adjusted and the excess amount paid by any party can be refunded to it along with appropriate interest or can be adjusted in future bills.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]is not possible to accept the contention of Shri Nariman that the State Government had the authority or jurisdiction on 22.3.2000 to determine or quantify the charges which BSES had to pay to TPC under the terms of the license granted to the former as this was subsequent to the formation of the Maharashtra Electricity Regulatoryour opinion, the contention raised has no substance. The legal position has undergone a complete change with the enforcement of the Electricity Regulatory Commissions Act, 1998. In view of Section 29 of the Act, the tariff for intra-State transmission of electricity and tariff for supply for electricity in wholesale, bulk or retail has to be determined by the Electricity Regulatory Commission of the State and a licensee cannot by its unilateral action enhance the charges. The provisions of the Act have an overriding effect by virtue of section 29 of the Act and, therefore any provisions of electricity (supply) Act, 1948, which are inconsistent with the Act would cease to apply and consequently the provisions of Sixth Schedule of the said Act can have no application now. The Sixth Schedule has been made by virtue of Section 57 and 57A of the Electricity (Supply) Act, 1948 and Section 57A contemplates constitution of a Rating Committee by the State Government to examinecharges for the supply of electricity. Section 29(6) of the Act specifically lays down that notwithstanding anything contained in Section 57A and 57B of the Electricity (Supply) Act, 1948, no Rating Committee shall be constituted after the date of the commencement of the Act. The effect of Section 29 and Regulations framed thereunder is that it is no longer open to a licensee or utility to unilaterally increase the tariff. The tariff can be enhanced only after approval of the Commission and charging of an enhanced tariff which has not been approved by the Commission will amount to commission of an offence. Therefore, the notice to enhance the charges given by TPC, which was subsequent to the enforcement of the Act, can have no legal effect.20. Shri Nariman has also submitted that even assuming that the standby charges are a matter relating to tariff as the same are passed on to the consumers, but the sharing of standby charges between TPC and BSES is not a matter relating to determination of tariff and, therefore, the Commission can have no jurisdiction to enter into such an exercise under Section 22 of the Act. The submission proceeds on an assumption that the dispute relates to sharing of standbyprocedure adopted by the Commission was not fair and proper inasmuch as the Chairman did not participate in the meetings which other two members had with the Consultants, whereunder a formula was devised. Under Regulation 21, the quorum for proceedings before the Commission shall be three. In these circumstances, the High Court was perfectly justified in remitting the matter to the Commission for de novo consideration and no exception can be taken to such a course of action.25. BSES is aggrieved only against the interim arrangement made by the High Court, whereby it has been directed to pay 50 per cent of the standby charges that are payable by TPC to MSEB for its standby facility of 550 MVA.BSES cannot be saddled with liability to pay half of the amount only on the ground that it has been provided with a standby facility of 275 MVA which is half of the standby facility provided by MSEB to TPC.An interim arrangement is normally made on a prima facie consideration of the matter and on broad principles without examining the matter in depth. The matter has been remitted to the Commission by the High Court by the judgment and order dated 3.6.2003 and a period of nearly three and a half months has already elapsed. Regulation 101 of the Central Electricity Regulatory Commission provides that the Commission may normally dispose of the petitions finally within six months of admission. The State Commissions are also expected to follow this time limit for disposal of petitions. Since the order made by the High Court is only by way of interim arrangement of the Commission is expected to decide the disputes finally within a short period, we do not consider it proper to interfere with the order made by the High court in this regard. After the decision of the Commission, the equities can be adjusted and the excess amount paid by any party can be refunded to it along with appropriate interest or can be adjusted in future