U.P.Power Corporation Ltd vs National Thermal Power Corp.Ltd.& Ors

4. The Parliament with a view to provide for establishment of a Central Electricity Regulatory Commission and State Electricity Regulatory Commissions, rationalization of electricity tariff, transparent policies regarding subsidies, promotion of efficient and environmentally benign policies and for matters connected therewith or incidental thereto, enacted the Electricity Regulation Commissions Act, 1998 (for short `the 1998 Act'). It came into force with effect from 9th June, 1998.

6. We are in this batch of appeals are concerned with the power of the Central Commission to make tariff and to revise the same at the instance of a generating company. Before, however, adverting to the said questions, we may notice certain undisputed facts.

14. The Corporation had asked the Central Commission to frame tariff in respect of the electricity generated by it wherefor it filed Petition Nos.30/2001 and 44/2001 for determination of tariff for its stations at Korba 7 and Dadri. The Central Commission, upon consideration of the factors placed before it and upon hearing all concerned, including the parties hereto, determined the operational and financial norms applicable, inter alia, for the generating stations of the NTPC which was inclusive of employee's costs. In the said order the Central Regulatory Commission dealt with all aspects of the operation and maintenance expenses after setting up the norms for such determination.

18. It filed a review petition before the Central Regulatory Commission during various periods in respect of its Korba and Dadra projects on 1st October, 2003. However, it did not lay any claim in respect of actual revised costs for the years 1997-1998, 1998-1999 and 1999-2000.

19. Central Regulatory Commission in exercise of its suo motu jurisdiction passed an order in proceeding being No.196 of 20045 to inquire into the actual escalation factor which was found to be less than 6%. Before the Commission certain other issues were also raised. However, on or about 25th April, 2005 and 26th July, 2005 revision applications were filed in respect of Korba and Dadri Power Stations claiming allowance of actual revised costs incurred by the Corporation on account of arrears of paid in 2000-2001.

21. The Commission dismissed the said applications by orders dated 11th August 2005 and 19th October, 2005 inter alia, opining :

24. The Corporation aggrieved by and dissatisfied with the orders of the Commission dated 11th August, 2005 and 19th October, 2005 filed appeals before the Appellate Tribunal. By reason of the impugned judgment and 11 order dated 7th September, 2006 the said appeals have been allowed, directing :-

37. Assuming that Regulation 103 of the 1999 Regulations would be applicable in a case of this nature, the same also confers a wide jurisdiction. The Commission, apart from entertaining an application for review on an 26 application filed by a party, may exercise its suo motu jurisdiction. While the Central Commission exercises a suo motu jurisdiction, the period of limitation prescribed in Regulation 103 shall not apply. There cannot, however, by any doubt whatsoever that while exercising such jurisdiction, the Central Commission must act within a reasonable time. Furthermore, the statute does not provide for the manner in which a petition is to be filed before the Central Commission or the manner in which the tariff order is to be passed or revision or non-revision thereof.

There was, thus, in our opinion, enough justification for filing the application for review of the tariff.

44. There cannot be any doubt whatsoever that the word `regulation' in some quarters is considered to be unruly horse.

See also: Webster's Third New International Dictionary, Vol. II, p. 1913 and Shorter Oxford Dictionary, Vol. II, 3rd Edn., p. 1784."

The 2001 Regulations, however, show that it had a limited duration, viz., three years.

47. There cannot be any doubt whatsoever that for the purpose of making tariff the actual costs required for payment to the employees being a part of the operation and maintenance cost including a sum of Rs. 55 crores, which were to be paid by way of extra amount, could fall for determination by the Central Commission. But, such an application ordinarily could have been filed within the period during which the tariff order was in force.

48. It is difficult to agree with the opinion of the appellate tribunal that increase in the salary with retrospective effect could have been a subject matter for determination of tariff in another period. In a fact situation obtaining herein, we are of the opinion that the claim of the respondent - corporation was not justified as the Central Commission should not have been asked to revisit the tariff after five years and when everybody had arranged its affairs.

49. Regulation 2.7 (d)(iv) of the 2001 Regulations clearly provides that applications must be entertained only in the event any situation arose within the purview thereof and not at any point of time. If the respondent No. 1 was aware that they were to incur an additional expenditure of Rs. 55/- 38 crores, they could have preferred an appeal before the Central Commission. We have been informed at the bar that the appeals were preferred on other issues but not on this one.

52. We, therefore, on the aforementioned ground alone are of the opinion that it was not a fit case where the appellate tribunal should have interfered with the order of the Central Commission.

54. For the reasons aforementioned, the appeals are allowed with costs. Counsel's fee assessed at Rs. 50,000/- in each case.

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