The appeals before the Appellate Tribunal arose out of the orders fixing tariffs passed by the Orissa Electricity Regulatory Commission (for short, ‘the Commission’) (Para 1)
The Commission is required to pass orders determining the annual revenue requirements (ARR) of various licensees. In fact, under Section 26(4) of the Orissa State Electricity Reforms Act, 1995, every licensee is required to provide to the Commission, full details of calculations of aggregate revenue likely to be earned during the ensuing financial year. While deciding the tariff, the Commission has to seek guidance from the principles incorporated in Section 61 of the Electricity Act. (Para 1)
In this group of appeals, Civil Appeal No.414 of 2007 has been preferred by GRIDCO for challenging the order dated 13th December 2006 of the Appellate Tribunal dealing with the order of the Commission dated 23rd March 2006 by which the annual revenue requirement (ARR) and bulk supply tariff (BST) for the financial year 2006-2007 of GRIDCO was finalised. The said order was passed on the application made by GRIDCO to the Commission. (Para 4)
The next category of appeals relates to ARR and Transmission Tariff orders (TT) for the financial years 2006- 2007 and 2007-2008 in respect of OPTCL. Civil Appeal No.417 of 2007 has been preferred by OPTCL, where the challenge is to the order dated 13th December 2006 passed by the Appellate Tribunal arising out of the order dated 23rd March 2006 of the Commission for the financial year 2006-2007 in respect of ARR and TT of OPTCL. WESCO, NESCO and SESCO (DISCOMS) have preferred Civil Appeal Nos.2939-2941 of 2011 for challenging the order dated 8th November 2010 passed by the Appellate Tribunal concerning the order dated 22nd March 2007 of the Commission in respect of ARR and TT of OPTCL for the financial year 2007-2008. (Para 8)
The third category of appeals arises out of the determination of ARR and retail supply tariff orders (RST) of DISCOMS and true-up orders. Civil Appeal No.759 of 2007 has been filed by the Commission for challenging the order dated 13th December 2006 passed by the Appellate Tribunal arising out of the order dated 23rd March 2006 passed by the Commission in respect of ARR and RST of DISCOMS for the financial year 2006-2007. Civil Appeal Nos.3595-3597 of 2011 are again preferred by the Commission for challenging the order dated 8th November 2010 passed by the Appellate Tribunal arising out of the order of the Commission dated 23rd March 2007 in respect of ARR and RST of DISCOMS for the financial year 2007-2008. The Commission passed the orders on the basis of the application made by DISCOMS. (Para 9)
However, in subsequent orders for subsequent years, the Appellate Tribunal held that the interest payable on the loan, being the cost, may be allowed to pass through. We have confirmed the view while dealing with the other impugned orders. The interest cannot be equated with the principal loan amount, as the interest will amount to the cost incurred by GRIDCO. However, the interest burden can be passed on to DISCOMS in proportion of their outstandings. Therefore, while passing a fresh order in terms of the final order, the Commission will have to allow the interest on the loan to pass through, as observed above, but the principal loan amount cannot be allowed to pass through. (Para 29)
We may note here that while passing an order pursuant to the order of remand, all the contentions based on the findings of the Appellate Tribunal and the Commission for subsequent years, as approved by this Court, must be taken into consideration by the Commission. If, in subsequent orders as approved by this Court, different criteria or different principle was applied, submissions based on the same can always be canvassed in the proceedings pursuant to the order of remand. (Para 34)
This appeal is preferred by M/s. Orissa Power Transport Corporation Limited (OPTCL). The issue concerns TT and ARR of OPTCL for the financial year 2006-2007. The three DISCOMS challenged the order of the Commission. The first issue was regarding the Commission allowing the advance against depreciation. The Appellate Tribunal held that the National Tariff Policy published by the Government of India on 16th January 2006 under Section 3 of the Electricity Act does not permit allowing advance against depreciation. Under clause (i) of Section 61 of the Electricity Act, the Commission has to be guided by the National Tariff Policy. Therefore, the Appellate Tribunal rightly held that what is not permissible, per the National Tariff Policy, cannot be allowed by the Commission. However, the finding of the Appellate Tribunal on this issue for the subsequent financial year 2007-2008 is to the contrary, which we have approved while deciding Civil Appeal nos.2339-2341 of 2011. Hence, the said finding requires interference. Hence, we restore the order of the Commission on this aspect. (Para 40)
The net result of the aforesaid discussion is as under:
i. The order impugned in Civil Appeal no.414 of 2007 is modified as stated in paragraphs 29 and 34 above. This appeal, only to that extent, is partly allowed;
ii. The order impugned in Civil Appeal no.417 of 2007 is modified in terms of paragraph 40 above. This appeal is partly allowed only to the above extent;
iii. The rest of the appeals are dismissed;
iv. The Commission shall proceed to implement the impugned orders of the Appellate Tribunal as modified above; and
v. The Commission shall pass consequential and incidental orders in accordance with law.
SUPREME COURT OF INDIA
2023 STPL(Web) 309 SC
[2023 INSC 872]
Gridco Ltd. Vs. Western Electricity Supply Company Of Orissa Ltd. & Ors. Etc.
Civil Appeal No. 414 of 2007 with Civil Appeal Nos.417 of 2007 & 759 of 2007 Civil Appeal Nos. 463 & 572 of 2011 Civil Appeal Nos.2939-41, 2942-43 of 2011 Civil Appeal Nos.3595-97 of 2011 Civil Appeal No.2674 of 2013 Civil Appeal Nos.10251-63 of 2013 Civil Appeal Nos.2625-38 of 2014 Civil Appeal Nos.3858-60 of 2014 Civil Appeal Nos.1380-82 of 2015 Civil Appeal Nos.8037-39 of 2015-Decided on 5-10-2023
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