Full Judgment Text
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 3109 OF 2006
M/s. DLF Power Limited …..Appellant
Versus
Central Coalfields ltd. & Anr. ….Respondents
(With Civil Appeal No. 3561 /2006 )
J U D G M E N T
Dr. ARIJIT PASAYAT.
1. These two Civil Appeals are inter related and are, therefore, disposed
of by this common order. Civil Appeal No. 3561 of 2006 has been filed by
Central Coalfields Limited (in short the ‘CCL’) under Section 125 of the
Electricity Act, 2003 (in short the ‘Act’) impugning the judgment and order
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dated 11 May, 2006 passed by the Appellate Tribunal for Electricity, New
Delhi (in short the ‘Appellate Tribunal’) in Appeal No.166 of 2005. The
other appeal i.e. Civil Appeal No. 3109 of 2006 has been filed by DLF
Power Limited (in short the ‘DLF’) challenging part of the judgment dated
11.5.2006 passed by the Appellate Tribunal. By order dated 11.7.2007 this
court directed the Cost Accounts Wing of M/s. Ernst & Young to determine
the actual capital cost based on the formula in the “Power Purchase
Agreement” dated 8.2.1993 between CCL and DLF. This Court further
directed that the copy of the report of the Cost Accounts Wing be given to
the parties and to the Jharkhand State Electricity Regulatory Commission
(in short the ‘State Commission’). It was further directed that the State
Commission on receipt of the report shall determine the tariff as per the
terms of the “Power Purchase Agreement” between the parties for the two
power plants.
2. CCL’s case is that the Cost Accounts Wing of M/s. Ernst & Young
only on the basis of the documents supplied by DLF have carried out the
exercise of determining the actual capital cost of the two power plants
without even asking for any comments or any inputs from CCL while
working out the actual capital cost. Grievance is that the report was based
solely on the basis of the documents supplied by DLF, copies of which were
also not made available to CCL. M/s. Ernst & Young have determined the
capital cost of the two power plants at Giddi at Rs.72.34 crores and for
Rajrappa determined the actual capital cost of Rs.67.45 crores. On receipt
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of the report from the Cost Accounts Wing of M/s. Ernst & Young, State
Commission determined the tariff cost. The Commission consisted of two
members; one was the Chairman and the other was the Member (Technical).
Both of them separately determined the tariff for the subsequent year after
the first year based on the actual capitalization cost supplied by the Cost
Accountants. It is submitted that the two determinations are at great
variance from each other.
3. It is submitted that the international norms for actual capitalization
cost for power has not been kept in view. It is pointed out that the actual
capitalization cost arrived at is apparently highly excessive, purportedly
based on the inflated figures supplied by DLF without supplying copies to
CCL.
4. Learned counsel for the appellant CCL submitted that the basis of
tariff fixation is erroneous and in any event a statutory forum is available to
question correctness of the report, which can be availed.
5. On the other hand learned counsel for the DLF submitted that M/s
Ernst & Young are internationally reputed financial consultants. There is
no substance in the objections raised by CCL.
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6. We are inclined to accept the submissions of learned counsel for the
CCL that the complex process of evaluation is involved in fixing the tariff
and it would be in the interest of parties challenge, if any, to the report is
made before the prescribed authority. That being so, we dispose of the
appeals with the direction that in case CCL files appeal within four weeks
from today the same shall be considered by the Appellate Tribunal in
accordance with law. The Appellate Tribunal is requested to dispose of the
appeal on merits within a period of two months from the date of filing. All
questions are left open to be decided without the question of limitation
relating the filing of appeal. It is stated that CCL is paying Rs.2.07 of KWH
for both Rajrappa and Giddi for the second year after commissioning in
July, 2000 for Rajrappa and in April, 2001 for Giddi. CCL shall continue to
make the payment. We make it clear that by providing interim protection
we have not expressed any opinion on the merits of the case.
………………………………….J.
(Dr. ARIJIT PASAYAT)
……………………………………J.
(LOKESHWAR SINGH PANTA)
New Delhi,
April 01, 2009
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