9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (7) TMI 2025 - SC - Indian LawsDetermination of tariff chargeable by the Damodar Valley Corporation from the consumers of electricity generated and transmitted by the Corporation - grant of transitory period - Section 61 and 62 of the Electricity Act 2003 - HELD THAT - While it is correct that the classes of consumers served by the Corporation are HT-Industrial consumers like Steel Coal Railways etc. beside bulk supply to main beneficiaries of State Electricity Boards of West Bengal and Jharkhand the said fact itself is another peculiar feature which distinguishes the Corporation from other licenses. If in a situation where the Corporation in addition to generation transmission and distribution of electricity is statutorily required to undertake certain social security/beneficial measures like flood control control of soil erosion afforestation navigation promotion of public health etc. we do not see how the grant of transitory period can be faulted with. We therefore decline to interfere with the aforesaid part of the order of the learned Appellate Tribunal. The learned Appellate Tribunal has also taken the view that having regard to the provisions of Section 79 of the 2003 Act it is the CERC which would be the Appropriate Commission for determination of tariff inasmuch as the Damodar Valley Corporation is a Corporation owned and controlled by the Central Government. The detailed inputs to arrive at the aforesaid conclusion have been duly considered by us - On such consideration we are of the view that the above conclusion recorded by the learned Appellate Tribunal is neither unreasonable nor irrelevant so as to warrant our interference particularly in exercise of the limited jurisdiction Under Section 125 of the 2003 Act. Appeal dismissed.
Issues Involved:
1. Interpretation of the fourth proviso to Section 14 of the Electricity Act, 2003. 2. Applicability of the provisions of the Damodar Valley Corporation Act, 1948 in tariff determination. 3. Validity of the Tariff Regulations (2004 Regulations) in the context of the 1948 Act. 4. Specific heads of tariff fixation: Depreciation rate, Sinking Fund, Debt-Equity ratio, Pension & Gratuity Contribution, Return on Capital Investment on Head Office, Revenue from non-power activities, Transition period, and intra-State transmission. Detailed Analysis: 1. Interpretation of the Fourth Proviso to Section 14 of the Electricity Act, 2003: The fourth proviso to Section 14 of the 2003 Act states that the Damodar Valley Corporation (DVC) shall be deemed a licensee under the Act but shall not be required to obtain a license, and the provisions of the Damodar Valley Corporation Act, 1948, insofar as they are not inconsistent with the 2003 Act, shall continue to apply. The Court affirmed that this proviso is a substantive provision, enabling the continued application of certain provisions of the 1948 Act which are not inconsistent with the 2003 Act. This interpretation was supported by the legislative history and the specific responsibilities of the DVC under the 1948 Act. 2. Applicability of the Provisions of the Damodar Valley Corporation Act, 1948 in Tariff Determination: The Court held that the provisions of the 1948 Act, particularly those in Part IV, which are not inconsistent with the 2003 Act, continue to apply to the DVC. This includes provisions related to financial management, expenditure, and depreciation. The Court emphasized that the 2003 Act did not intend to completely override the 1948 Act but to allow certain provisions to coexist, especially given the unique statutory duties of the DVC. 3. Validity of the Tariff Regulations (2004 Regulations) in the Context of the 1948 Act: The Court clarified that while the Tariff Regulations are statutory in character, they are subordinate legislation and cannot override the provisions of the 1948 Act. The Court cited previous judgments to support the view that subordinate legislation must operate within the confines of the enabling statute and cannot contradict primary legislation. 4. Specific Heads of Tariff Fixation: - Depreciation Rate and Sinking Fund: The Court upheld the Appellate Tribunal's reliance on Section 40 of the 1948 Act for determining depreciation rates and the sinking fund, finding no fundamental flaws in the reasoning. - Debt-Equity Ratio: The ratio of 50:50 for projects completed before 1992 and 70:30 for projects thereafter was deemed consistent with practices for other public-sector organizations. - Pension & Gratuity Contribution: The Court found no error in the Appellate Tribunal's decision to allow the full recovery of the pension and gratuity fund from consumers, emphasizing that the consumers had benefited from lower tariffs in the past. - Return on Capital Investment on Head Office: The Court did not find any substantial question of law warranting interference with the Appellate Tribunal's decision. - Revenue from Non-Power Activities: The Court upheld the inclusion of costs related to non-power activities in the tariff, noting that these activities are mandatory under the 1948 Act and do not generate revenue. - Transition Period: The Court declined to interfere with the two-year transition period allowed by the CERC, considering the statutory functions and social responsibilities of the DVC. - Intra-State Transmission: The Court affirmed that the CERC is the appropriate commission for determining tariffs for the DVC, given its central government ownership and control. Conclusion: The Supreme Court dismissed all the appeals and affirmed the judgment and order of the Appellate Tribunal, recognizing the continued relevance of the 1948 Act's provisions in tariff determination under the 2003 Act, and validating the specific tariff decisions made by the Appellate Tribunal.
|
