U.P.Power Corporation Ltd vs N.T.P.C.Ltd.& Ors

4. The CERC (Terms & Conditions for Determination of Tariff) Regulations, 2001 for the period 1st April, 2001 to 31st March, 2004 came to be notified on 26th March, 2001, pursuant whereto the respondent- Corporation filed Petition No.41 of 2001 for approval of tariff for the relevant tariff period in respect of the generating plant in question. By an Order dated 24th October, 2003, the CERC approved the tariff taking into consideration the capital cost at Rs.940.70 crores as on 1st April, 2001 but did not consider the additional capitalisation claimed by the respondent since the latter was based only on an estimated capital expenditure and was unsupported by an auditor’s certificate. Respondent- Corporation then moved petition No.139 of 2004 before the CERC on 5th October, 2004 seeking approval of the revised fixed charges in respect of the generating plant for the relevant tariff period taking into account the additional capital expenditure incurred during the said period which was estimated at Rs.6.101 crores. By an order dated 31st March, 2005, the CERC disposed of the said petition approving an amount of Rs.4.521 crores towards capital expenditure while disallowing the rest.

6. Aggrieved by the order passed by the CERC the appellant-Corporation approached the Appellate Tribunal for Electricity in Appeal No.36 of 2006. The appellant thereby questioned the CERC’s authority to approve the additional capital expenditure of Rs.4.521 crores as also the power to award relief in the nature specified in para 37 supra. It was contended on behalf of the Corporation that in the absence of approval of the expenditure by CEA as required under Regulation 2.5 of the CERC Regulations, the CERC had no authority to hold that the respondent-NTPC was entitled to additional capitalisation. The Appellate Tribunal for Electricity, however, repelled that contention and dismissed the appeal filed by the appellant on the ground that CERC’s approval of additional capitalisation to the tune of Rs.4.521 crores did not call for any interference and that the respondent-Corporation had placed sufficient material before the CERC to substantiate its claim. The Tribunal declared that the CERC was empowered to undertake a prudent check and approve additional capitalisation after the deletion of Section 43-A(2) of the Electricity (Supply) Act, 1948 because of which deletion CEA ceased to have any role in such matters. The Tribunal further held that the project had been originally approved by CEA as far back as on 5th August, 1986 and was taken over while still incomplete by the respondent-NTPC in 1992. The incomplete items were then completed by the respondent NTPC after the takeover which required investment of additional capital. The Tribunal was, therefore, of the view that the additional capital was well within the approved cost of the project which remained unexecuted on the date of vesting. The Appellate Tribunal, however, accepted the appellant’s contention that the relief regarding the return on equity and interest on loan could not be granted until the next tariff period. Consequently the Tribunal directed deletion of Para 37 of the CERC’s order giving liberty to the CERC to take the said relief into consideration while determining the tariff for the next period. The present appeal assails the correctness of the view taken by the CERC and the Appellate Tribunal.

(b) with the Board constituted for any other State in which it is carrying on its activities in pursuance of sub-

(c) with any other person with consent of the competent government or governments.

21. In Petition No.139 of 2004, the respondent-Corporation sought additional capitalisation of the expenditure on the project in question relevant to the period 2001-2004. The Central Commission determined the additional capitalisation and allowed the same to the respondent, which determination was upheld by the Tribunal with the modification to which we have adverted in the beginning of this order.

Civil Appeal Nos.5361-5362 of 2007

23. In these appeals the order impugned by the appellant places reliance upon the order passed by the Tribunal, in Appeal No.36 of 2006 against which order we have in the foregoing part of this judgment dismissed the appeal preferred by the appellant. On a parity of reasoning these appeals are also destined to be dismissed and are, accordingly, dismissed with costs assessed at Rs.50,000/-.