Uttarakhand Power Corporation Limited vs M/s. India Glycols Limited & Ors

IN THE APPELLATE TRIBUNAL FOR ELECTRICITY
(Appellate Jurisdiction)
APPEAL No. 190 of 2018

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Dated : 18 May, 2026
Present: Hon’ble Ms. Seema Gupta, Officiating Chairperson
Hon’ble Mr. Virender Bhat, Judicial Member

In the matter of:



Uttarakhand Power Corporation Limited
Through its Managing Director
“Victoria Cross Vijeta Gabar Singh Urja Bhawan,”
Kanwali Road, Dehradun – 248001, Uttarakhand … Appellant

Versus

1. M/s. India Glycols Limited
Through its Managing Director
A-1, Industrial Area Bazpur Road,
Kashipur, Uttarakhand - 244713

2. M/s. Hindustan National Glass Limited
Through its Managing Director
Malviya Nagar, Virbhadra Rishikesh,
Uttarakhand – 249202

3. M/s. Easter India Limited
Through its Managing Director
Sohan Nagar, Chaubeta, Khatima,
U.S. Nagar, Uttarakhand – 262308

4. Uttarakhand Electricity Regulatory Commission
Through its Secretary
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Appeal No. 190 of 2018 Page 1 of 19

“Vidyut Niyamak Bhawan”,
Near I.S.B.T., P.O. Majra Dehradun
Uttarakhand – 248171 … Respondent (s)


Counsel for the Appellant(s) : Pradeep Misra
for App. 1


Counsel for the Respondent(s) : Anand K. Ganesan
Swapna Seshadri
Neha Garg
for Res. 1 & 3

C. K. Rai
Anuradha Roy
Vinay Kumar Gupta
for Res. 4

J U D G M E N T
PER HON’BLE MR. VIRENDER BHAT, JUDICIAL MEMBER
1. The Appellant, Uttarakhand Power Corporation Ltd. (in short UPCL)
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is aggrieved by the order dated 12 April, 2018 passed by the 4
Respondent – Uttrakhand Electricity Regulatory Commission (hereinafter
referred to as “the Commission”) in suo-moto proceedings initiated by it
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on the representation submitted by 1 Respondent M/s India Glycols Ltd.
Vide the said impugned order, the Commission has held that the long-term
and mid-term open access consumers are not liable to pay cross subsidy
surcharge in terms of Regulation 22 of UERC (Terms and Conditions of
Intra State Open Access) Regulations, 2015 (hereinafter referred to as
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Appeal No. 190 of 2018 Page 2 of 19

2015 Open Access Regulations) and accordingly directed the Appellant to
refund the amount so recovered by it as cross subsidy surcharge to the
Respondent Nos. 1 to 3 as well as other concerned long term/mid-term
open access consumers by adjustments in next three monthly bills starting
from May, 2018.
2. The Appellant is a Distribution Licensee in the State of Uttrakhand
and the Respondent Nos. 1 to 3 are mid-term open access consumers of
the Appellant.
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3. It appears that vide letter dated 29 January, 2018, the Appellant
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informed the 1 Respondent that by mistake cross subsidy surcharge of
the amount of Rs.33,42,186/- has not been levied on the power purchase
by it through open access under Mid-Term Open Access (MTOA). Vide
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reply dated 31 January, 2018, the 1 Respondent explained to the
Appellant that as per Regulation 22 of UERC Open Access Regulations,
2015 cross subsidy surcharge is not payable on the power purchase
through mid-term open access and therefore, no such surcharge can be
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levied on it. However, since the explanation so offered by the 1
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Respondent was not acceptable to the Appellant, the 1 Respondent sent
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Appeal No. 190 of 2018 Page 3 of 19

nd
a representation dated 2 February, 2018 in this regard to the
Commission.
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4. The Commission, upon receipt of the said representation from 1
Respondent, initiated suo-moto proceedings in the matter and sent
notices to the Appellant as well as Respondent Nos. 2 & 3 calling for their
responses. Upon hearing all the parties and after analysing their rival
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contentions, the Commission passed the order dated 12 April, 2018
which has been impugned in this appeal.
5. We have heard Mr. Pradeep Misra, Learned Counsel for the
Appellant, Mr. Anand K. Ganesan, Learned Counsel for Respondent Nos.
1 & 3 and Mr. C.K. Rai, Learned Counsel for Respondent No. 4. We have
also perused the impugned order as well as the written submissions filed
by the Learned Counsels.
6. Following two issues arise for our consideration in this appeal:-
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(i) Whether the representation of the 1 Respondent revealed
only “Billing Dispute” which ought not to have been
entertained by the Commission?
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(ii) Whether, in view of the 2 proviso to Regulation 22 of UERC
Open Access Regulation, 2015, no cross subsidy surcharge
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Appeal No. 190 of 2018 Page 4 of 19

is to be levied from long-term and mid-term open access
consumers?

Our Analysis

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(i) Whether the representation of the 1 Respondent revealed only
“Billing Dispute” which ought not to have been entertained by the
Commission?
7. It was vehemently argued by the Learned Counsel for the Appellant
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that the representation dated 2 February, 2018 sent by 1 Respondent
to the Commission disclosed only “Billing Dispute” and, therefore, it ought
to have approached the Consumer Grievance Redressal Forum (in short
CGRF) for redressal of its grievances and the Commission had no
jurisdiction to entertain the same.
8. We are unable to agree to the submission of the Learned Counsel.
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9. In the above noted representation, the 1 Respondent had
specifically referred to Regulation 22 of UERC Open Access Regulation,
2015 to contend that mid-term open access consumers like it, are not
liable to pay cross-subsidy surcharge and the Appellant is illegally seeking
to levy such surcharge from them. Therefore, clearly, the dispute before
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Appeal No. 190 of 2018 Page 5 of 19

the Commission was not a mere billing dispute but it related to rights and
liabilities of open access consumers and involved explanation as well as
interpretation of the open access Regulations. On this aspect, we may
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profitably refer to the judgement of this Tribunal dated 28 July, 2011 in
Appeal No. 36 of 2011 Maharashtra State Electricity Distribution Company
Ltd. Vs. Maharashtra State Electricity Regulatory Commission and others
in which it was held as under :-
“46. The dispute relating to the Open Access would be dealt
only by the Commission as the Act clearly provides that the
Commission must ensure fulfillment of the mandate to provide
such Open Access which would include issuing directions to
grant Open Access which has rightly been given in the
impugned order. This, jurisdiction vested with the Commission
can not be usurped or taken away by the Consumer Grievance
Redressal Forum. In other words, the Consumer Grievance
Redressal Forum established by the Distribution Licensee will
have no jurisdiction to entertain or decide a dispute where the
statutory mandate to provide Open Access has been violated
by the Distribution Licensee. Therefore, the dispute in question
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Appeal No. 190 of 2018 Page 6 of 19

can be resolved by the State Commission alone and not by the
Consumer Grievance Forum. As such, there is no infirmity in
the impugned order.”
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10. Similarly, in another judgement dated 22 March, 2011 passed in
Appeal No. 181 of 2010 Uttar Gujarat Vij Company Ltd. Vs. Gujarat State
Electricity Regulatory Commission & Ors.
“13. ……… Before answering the question whether the
Commission’s impugned order is justifiable on merit or not it is
necessary to say who is the competent authority under
the statute to clarify, explain, interpret or if need be amend
the tariff order. A consumer grievance redressal forum or
for that matter an Ombudsman cannot possibly give an
interpretation or clarification of what a quasi-judicial or
quasi-legislative authority intended to mean by framing a
tariff order particularly when they do not have the
appellate or revision jurisdiction over the Commission. In
fact, private educational institutions running on commercial
basis or otherwise do not find mention in express words in
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Appeal No. 190 of 2018 Page 7 of 19

either of the three categories. There is word ‘etc’. that can act
as esjusdem generis to include a private educational
institution, if according to the Commission the categorization
of HTP-II(A) would include all such private educational
institutions and that the said HTP-II(A) category is intended to
cover the institutions and entities which are run from
commercial view point or that these entities and institutions as
mentioned in HTP-II(A) serve a common purpose. There is no
word ‘etc’. either in HTP-I or HTP-II(B). To our mind, the
power of clarification or interpretation or amendment of
the order of the Commission lies with the Commission
who is the author of the order and it is only in accordance
with the tariff determination order that an agreement
between a distribution licensee and a consumer follows.
Therefore, if a particular entity is of the opinion that it has
been wrongly categorized or that there has been wrong
application of the tariff order because of
misunderstanding or misinterpretation then it is the
Commission that has to clarify the confusion and make
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Appeal No. 190 of 2018 Page 8 of 19

the position clear. Therefore, in our estimation redressal
forum or the Ombudsman cannot give legal interpretation
of the tariff determination order made by a Commission
and/or entertain a petition of a consumer for change of
one category to another which involves powers of
adjudication of fixation of tariff.”
11. Following observations of the Hon’ble Supreme Court in
Maharashtra Electricity Regulatory Commission vs. Reliance Energy Ltd.
& Ors. (2007) 8 SCC 381 which has been relied upon by the Commission
in the impugned order also, are very apt on this aspect :-
“16. When the Commission received a spate of complaints
from consumers against its licensees/distribution companies
that they are arbitrarily issuing supplementary/amended bills
and charging excess amounts for supply of electricity, it felt
persuaded to invoke its general power to supervise the
licensees/distribution companies and in that connection issued
notice dated 3.8.2004. There can be no manner of doubt
that the Commission has full power to pull up any of its
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Appeal No. 190 of 2018 Page 9 of 19

licensee or distribution company to see that the rules and
regulations laid down by the Commission are properly
complied with. After all, it is the duty of the Commission
under Sections 45(5), 55(2), 57, 62, 86, 128, 129, 181 and
other provisions of the Act to ensure that the public is not
harassed.”
12. Thus, it cannot be gain said that the disputes involving interpretation
as well as clarifications/explanation of Regulations cannot be entertained
by CGRF or ombudsman and can only be adjudicated upon by the State
Regulatory Commission. It is for this reason only that the Commission,
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upon receipt of the representation from 1 Respondent, decided to initiate
a suo-moto petition in which the Appellant as well as other MTOA
consumers were summoned and their responses were called for and
accordingly impugned order was passed. Therefore, we do not find any
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merit in the objections raised by the Appellant that the 1 Respondent had
approached the Commission only with a “billing dispute” which out not to
have been entertained by the Commission.
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Appeal No. 190 of 2018 Page 10 of 19

nd
(ii) Whether, in view of the 2 proviso to Regulation 22 of UERC
Open Access Regulation, 2015, no cross subsidy surcharge is to be
levied from long-term and mid-term open access consumers?
13. The decision on this issue would clearly revolve upon the
interpretation of Regulation 22 of UERC Open Access Regulations, 2015
which are extracted hereinbelow”-
“22. Cross subsidy surcharge
(1) Embedded open access consumer, in addition to
transmission and/or wheeling charges, shall pay cross subsidy
surcharge determined by the Commission. Cross subsidy
surcharge determined on Per Unit basis shall be payable, each
month, by such consumer based on the actual energy drawn
during the month through open access. The amount of
surcharge shall be paid to the distribution licensee.
Provided that no cross subsidy surcharge shall be levied on
energy drawn by such consumers, through open access,
during the period of power cut imposed by the distribution
licensee.
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Provided further that such surcharge shall not be levied
on long term/medium term such open access consumer
and a person who has established a captive generation
plant for carrying the electricity to the destination of his
own use.
Provided also that in case power supply position or the load of
such consumers, seeking open access, changes substantially,
the Commission may review the Cross Subsidy Surcharge as
and when required.
(2) The cross subsidy surcharge for such short term open
access consumers shall be determined in accordance with the
following formula:
Surcharge formula:
S = T – C
Where,
S is the Cross subsidy surcharge;
T is the retail tariff payable by the relevant category of
such consumers;
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Appeal No. 190 of 2018 Page 12 of 19

C is the average cost of supply of distribution licensee.”
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14. The 2 Proviso which has been typed in bold herein above is
material for our discussion. The emphasis is on the word “Such” found in
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2 line of the proviso before the words “Open Access Consumers”.
15. Learned Counsel for the Appellant argued that in order to claim
exemption from payment of cross subsidy surcharge, concerned entity
must fulfill both the conditions i.e. it must be long-term/mid-term open
access consumers and also must have established a captive generation
plant. It is argued that the word “such” is used in the proviso clearly
indicates that the proviso is applicable to the long-term/mid-term open
access consumers who have established a captive generation plant. The
submission is that this proviso providing exemption from payment of cross
subsidy surcharge is not applicable to all long-term/mid-term open access
consumers for the reason that such an interpretation would be in
contravention to the main provision in the Regulation mandating the
embedded open access consumers to pay cross subsidy surcharge in
addition to transmission and /or wheeling charges.
16. Per contra, it is argued on behalf of the respondents that the said
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2 proviso to Regulation 22 specifies two classes of consumers which
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are exempted from payment of cross subsidy surcharge namely (i) long-
term/mid-term open access consumers and (ii) the persons who have
established captive generation plant for carrying the electricity to the
destination of their own use. It is argued that the Commission in the
impugned order has arrived at a correct and justified interpretation of the
said proviso which does not call for any interference from this Tribunal in
this appeal.
17. In order to analyze the rival submissions of the Learned Counsels
on this aspect properly and for the sake of convenience, we reproduce the
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2 proviso to the Regulation 22 of UERC Open Access Regulations, 2015
again hereinbelow :-
“Provided further that such surcharge shall not be levied
on long term/medium term such open access consumer
and a person who has established a captive generation
plant for carrying the electricity to the destination of his
own use.”
18. Even though, it is manifest that the proviso is not happily worded
and is not grammatically correct yet a bare perusal of it, reveals that it
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creates two distinct classes of consumers which are exempted from
payment or cross subsidy surcharge which are :-
(a) Long term and mid-term open access consumers; and
(b) The person who has established a captive generation plant for
carrying the electricity to the destination of his own use.
19. The placing of word “Such” before the words “Open Access
Consumer” in the second line of the proviso is creating difficulty of which
the Appellant is intending to take advantage. This word “Such” clearly
appears to be superfluous and when taken away, a proper grammatical
sense is imparted to the entire proviso and which would read as under :-
“Provided further that such surcharge shall not be levied on long-
term/mid-term open access consumer and a person who has
established a captive generation plant for carrying electricity to
the destination of his own use.”
20. In case the intention of the Commission was to exempt only those
long terms/mid-term open access consumers who have established a
captive generation plant from payment of cross subsidy surcharge, the
proviso should have been worded as under :-
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“Provided further that such surcharge shall not be levied on such
long-term/mid-term open access consumer who have
established a captive generation plant for carrying electricity to
the destination of his own use.”
21. The use of disjunctive “and” between the words “long-term/mid-term
open access consumer” and “a person who has established a captive
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generation plant” in the said 2 proviso is clearly indicative of the fact that
the Commission intended to create two distinct classes of consumers who
would have exemption from payment of cross subsidy surcharge.
22. We may also note that in sub-regulation (2) of Regulation 22,
formula for determination of cross subsidy surcharge payable by short
term open access consumers has been given.
23. The entire Regulation no where mentions the formula for
determination of cross subsidy surcharge payable by long-term/mid-term
open access consumers. This too manifests that long-term/mid-term open
access consumers are exempted from payment of cross subsidy
surcharge. In case the interpretation sought to be given to the said
Regulation by the Appellant is adopted, it would lead to an absurd situation
wherein short term open access consumers having a captive generation
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plant would be liable to pay cross subsidy surcharge which would be in
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contravention to 3 proviso to Section 42 of the Electricity Act, 2003 which
exempts the captive generation plants/users from payment of cross
subsidy surcharge.
24. We are conscious of the fact that Court while interpreting a statutory
provision, ought not to substitute its own words for the words of Statute. In
other words the Court cannot reframe the drafting of the legislation for the
very good reason that it has no power to legislate. The Court being an
interpreter of the statutes, is not entitled to read words into the statute and
cannot add or omit or make up deficiencies which are left there. As on one
hand it is not permissible to add words or fill in a gap or lacuna, on the
other hand efforts should be made to give meaning to each and every
word or expression used by the legislature. However, where the court
finds a statutory provision defective, it is not expected to remain a mute
spectator. In such a situation, the job of the court would be to find the
intention of the maker of the statute in order to make the statute workable.
On this aspect, we may profitably refer to following observations of Lord
Denning in Seaford Court Estates Ltd. Vs. ASHER as quoted with the
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approval by the Hon’ble Supreme Court in (Tirath Singh v. Bachittar Singh)
AIR 1978 SC 548;
“When a defect appears, a Judge cannot simply fold his hands
and blame the draftsman. He must set to work on the
constructive task of finding the intention of Parliament … and
then he must supplement the written words so as to give ‘force
and life’ to the intention of legislature. … A Judge should ask
himself the question how, if the makers of the Act had
themselves come across this ruck in the texture of it, they would
have straightened it out? He must then do as they would
have done. A Judge must not alter the material of which the Act
is woven, but he can and should iron out the creases.’
25. Keeping in mind this golden principle for interpretation of a statute,
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we have embarked upon to give a meaningful interpretation to the 2
proviso to Regulation 22 of UERC Open Access Regulation 2015 in order
to make it workable and in consonance with the intention of its makers i.e.
Commission.
26. It is also important to note here that maker of this Regulation i.e. the
Commission itself has very lucidly explained in the impugned order that its
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Appeal No. 190 of 2018 Page 18 of 19

intention was not to levy cross subsidy surcharge on long-term or mid-
term open access consumers. The Commission has explained that the
intention behind its excluding long-term and mid-term open access
consumers from the levy of cross subsidy surcharge was to promote open
access more so in light of the fact that UPCL was in continuous shortage
of power. Therefore, when the Commission was confronted with the defect
in the Regulation while deciding the suo-moto petition initiated by it vide
the impugned order, it has rectified the defect and clarified its intention
behind engrafting the Regulation in question.
Conclusion
27. Having regard to the above discussion, we are unable to find any
error or infirmity in the impugned order of the Commission. The appeal is
devoid of any merit and is accordingly dismissed.

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Pronounced in the open court on this 18 day of May, 2026.


(Virender Bhat) (Seema Gupta)
Judicial Member Officiating Chairperson

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REPORTABLE / NON REPORTABLE

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