BHASKAR SHRACHI ALLOYS LIMITED vs. DAMODAR VALLEY CORPORATION

1 REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION  CIVIL APPEAL NO(S).971­973 OF 2008 BHASKAR SHRACHI ALLOYS LTD.  ETC.ETC. ….APPELLANT(S) VERSUS DAMODAR VALLEY CORPORATION  & ORS. ETC. ….RESPONDENT(S) WITH CIVIL APPEAL NO(S). 1914 OF 2008 CIVIL APPEAL NO(S).4504­4508 OF 2008 CIVIL APPEAL NO(S).4289 OF 2008 J U D G M E N T RANJAN GOGOI, J 1. This   group   of   appeals   arise   out   of   a   common rd judgment and order dated 23  November, 2007 passed by the learned   Appellate   Tribunal   for   Electricity   at   New   Delhi (hereinafter referred to as “learned Appellate Tribunal”).  The challenge   in   the appeals   before the   learned   Appellate Tribunal    was against   the order of the   Central   Electricity Regulatory   Commission (hereinafter referred to as “CERC”) Signature Not Verified Digitally signed by VINOD LAKHINA Date: 2018.07.23 11:17:29 IST Reason: rd dated      3   October,   2006   determining           the           tariff 2 chargeable       by       the   Damodar     Valley       Corporation (hereinafter   referred       to       as       “Corporation”)   from   the consumers   of  electricity  generated  and   transmitted   by   the Corporation.   The   tariff   has   been   determined   under   the provisions of Section 61 and 62 of the Electricity Act, 2003 (hereinafter referred to as “2003 Act”) read with such other provisions   of   the   Damodar   Valley   Corporation   Act,   1948 (hereinafter referred to as “Act of 1948”) which have been found to be not inconsistent with the provisions of the 2003 Act. The appeals being under Section 125 of the 2003 Act     are   required   to   be   answered   only   on   such   substantial questions  of  law that may arise for determination  by  this Court. 2. First, the facts. The Corporation has been established under the Act of 1948 for the development of the Damodar Valley area falling within the States of West Bengal and Jharkhand.  As evident from the provisions of Section 12 of the Act of 1948, 3 three   (03)   major   areas   of   activity   undertaken   by   the Corporation under the Act of 1948 are: (i) power generation, transmission   and   distribution;   (ii)   flood   control;   and   (iii) irrigation   and   some   connected   activities   like   soil conservation,  afforestation, etc.  3. Under   Section   20   of   the   Act   of   1948,   the Corporation was empowered and authorised to determine the tariff chargeable by it from its consumers.  Part IV of the Act of 1948 under the heading “Finance, Accounts and Audit” though,   superficially,   may   appear   to   be   dealing   with   the indoor   management   of   the   Corporation   contain   provisions which could have a relevant bearing to tariff fixation under Section 20 of the Act of 1948.   Some of the said provisions are to be found in Sections 32, 37, 38, 39 and 40 of the Act of 1948 which deals with facets of expenditure, depreciation, allowances, payment of interest, etc. all of which would have a   reasonable   bearing   on   working   out   the   tariff   that   the Corporation would be entitled to charge from its consumers 4 after taking into account the said items of expenditure or allowances/disallowances, as may be.   4. Acting under the provisions of Section 20 of the Act of 1948, the Corporation had notified its own tariff order on st 1   September, 2000.     The 2003 Act came into force with th effect from 10  June, 2003.  Despite coming into force of the 2003 Act the Corporation had not approached the CERC for determination of the tariff chargeable by it.   Consequently, th the CERC initiated suo motu proceedings by order dated 29 March,   2005   and   directed   the   Corporation   to   submit   an st application for determination of tariff for the period from 1 st April, 2004 to 31  March, 2009.  In terms of the said order passed by the CERC, the Corporation made an application th dated 8  June, 2005 before the CERC (i.e. Petition No.66 of 2005) for determination of tariff for the period in question.  It appears   that   in   view   of   the   “complexity”   of   the   issues involved, the CERC had requested one of its members to go into   the   necessary   fact­finding   exercise   and   to   submit   a report   of   the   detailed   facts   that   would   be   relevant   for 5 determination of tariff by the CERC.   On the basis of the available inputs received from the aforesaid single member rd Bench of the CERC, the CERC issued a tariff order dated 3 October   2006   determining   the   tariff   for   generation   and st st transmission for the period from 1  April, 2006 to 31  March, 2009   by   allowing   a   two­year   transition   period   to   the st st Corporation i.e. from 1  April, 2004 to 31  March, 2006.   5. At this stage, it may be appropriate to take note of rd the contents of the tariff order dated 3  October, 2006 passed by   the   CERC   so   as   to   appreciate   and   understand   the grievances   entertained   by   the   respective   appellants   before this Court who were also the appellants before the learned Appellate Tribunal challenging the order of the CERC dated rd 3  October, 2006. rd 6. The   CERC  by   its  order   dated   3   October,  2006 took   the   view   that   the   matter   of   determination   of   tariff chargeable   by   the   Corporation   would   be   governed   by   the provisions   of   the   2003   Act   and   the   Central   Electricity Regulatory   Commission   (Terms   and   Conditions   of   Tariff) 6 Regulations,   2004   (hereinafter   referred   to   as   “Tariff Regulations”) framed thereunder.     Accordingly, the CERC proceeded to determine the tariff after giving due weightage to the   various   relevant   factors   which   are   required   to   be considered   for   such   determination   as   spelt   out   by   the Regulations in force.   A reading of the order of the CERC would   go   to   show   that   in   determining   the   tariff   due consideration of the following issues was made by the CERC. (i) Choice between GFA and NFA Method; (ii) Capital Cost; (iii) Extra Rupee Liability; (iv)  Additional Capitalisation; (v)  Debt­Equity Ratio; (vi) Return on equity; (vii) Interest on loan; (viii) Depreciation   including   Advance   against Depreciation; (ix) O & M expenses; (x) Pension and gratuity fund; 7 (xi) Interest on working capital; (xii) Operational Norms; (xiii) Energy   charges   and   the   fuel   component   for   the thermal generating stations; (xiv) Fuel Price Adjustment rd 7. Aggrieved by the aforesaid order dated 3  October, 2006, the Corporation, insofar the exclusion of the provisions of the Act of 1948 while determining the tariff and refusal to grant claims of certain expenses thereunder; the consumers, namely, Bhaskar Shrachi Alloys Ltd., Impex Ferro Tech Ltd., Shyam Ferro Alloys Ltd., Maithan Alloys Ltd., Anjaney Ferro Alloys Ltd., Dayal Steel Ltd. and Castrol Technologies Ltd. insofar as transitory period is concerned and the State of Jharkhand   and   West   Bengal   Electricity   Regulatory Commission insofar as the exclusion of the power of the State Regulatory   Commission   to   determine   the   intra­State transmission of electricity is concerned had approached the learned Appellate Tribunal by way of separate appeals.  8 8. The learned Appellate Tribunal by the impugned rd judgment and order dated 23  November, 2007 took the view that by virtue of fourth proviso to Section 14 of the 2003 Act, while the Corporation continued to be a deemed licensee, the provisions of the Act of 1948, which are not inconsistent with the provisions of the 2003 Act, shall continue to apply to the Corporation.     In   other   words,   insofar   as   the   inter­play between the provisions of the Act of 1948 and the 2003 Act is concerned, according to the learned Appellate Tribunal, it is only the provisions of the earlier Act inconsistent with the later Act that will cease to have effect and such provisions of the Act of 1948 that are consistent will continue to hold the field   notwithstanding   the   enactment   of   the   2003   Act. Continuing further, the learned Appellate Tribunal held that while Section  20  of   the   Act  of   1948   which   empowers   the Corporation to fix the tariff is inconsistent with Section 62 of the 2003 Act which authorised the “Appropriate Commission” to determine the tariff in accordance with the provisions of the 2003 Act, the specific provisions contained in Sections 32, 37, 38, 39 and 40 of Part IV of the Act of 1948 will 9 continue to be relevant in the matter of determination of tariff in as much as there are no pari materia/parallel provisions in the   2003   Act.   It   was   further   held   that   though   there   are provisions   in   the   Tariff   Regulations   framed   by   the   CERC covering the same field, the said Regulations, being in the nature   of   subordinate   legislation,   cannot   override   the provisions of a law duly enacted (Act of 1948), particularly, in the absence of any legislative intention to the said effect in any   of   the   provisions   of   the   2003   Act.     Accordingly,   the learned Appellate Tribunal while rejecting the following five claims and upholding the order of the CERC on the aforesaid counts thought it proper to remand the matter, for a  de novo consideration of the remaining five issues by the CERC in the light   of   the   findings   recorded   by   it.   The   tabular   chart, extracted below, would indicate the five issues that have been finalized by the learned Appellate Tribunal by upholding the rd order of the CERC dated 3  October, 2006 and the other five issues which have been remanded for re­determination by the CERC. 10

9. Three substantial questions of law would seem to arise   for   determination   by   this   Court   in   exercise   of   its 11 jurisdiction under Section 125 of the 2003 Act.  The same are enumerated below: (a) Whether the view taken by the learned Appellate Tribunal with regard to the fourth proviso to Section 14 of the 2003 Act and the applicability of the provisions of Sections 32, 37, 38, 39 and 40 contained in Part IV of the Act of 1948 in the matter of tariff determination under the 2003 Act is correct? (b) Whether   it   is   the   provisions   of   the   Tariff Regulations (2004 Regulations) which alone would hold the field in the matter of determination of tariff to the exclusion of the provisions of Sections 32, 37, 38, 39 and 40 contained in Part IV of the Act of 1948? (c) Whether   the   conclusions   and   findings   of   the learned Appellate Tribunal on any one or more of the claims made   by   any   of   the   stakeholders   in   the   matter   of determination   of   tariff   is   vitiated   by   grave   and   apparent errors? 12 10. It will be useful to notice, at this stage, that in rd terms   of   the   impugned   order   dated   23   November,   2007 passed by the learned Appellate Tribunal the matter has been de novo   considered and re­determined by the CERC by its th order dated 6  August, 2009.  This has happened due to the absence of any interim restraint.  The said order of the CERC th dated   6   August,   2009   has   since   been   affirmed   by   the th learned   Appellate   Tribunal   by   a  separate   order  dated   10 May, 2010 which is the subject matter of challenge in Civil Appeal No.4881 of 2010 presently pending before this Court. The   said   appeal   (Civil   Appeal   No.4881   of   2010)   has   been ordered to be heard after disposal of the present appeals.  11. The   arguments   advanced   by   the   respective appellants who are also the respondents in the connected appeals may be noted at this stage.   12. On behalf of the CERC, which is the appellant in Civil Appeal No.4289 of 2008, it has been contended that second part of the fourth proviso to Section 14 of the 2003 13 Act cannot be understood to mean, as has been held by the learned Appellate Tribunal, that the provisions of the Act of 1948 which are not inconsistent with the provisions of the 2003 Act so far as the determination of tariff is concerned would continue to hold the field.   Two principal basis have been urged in support of the above.  The first is that a proviso cannot  be   understood   to   go  beyond   the   main   part  of   the Section which, in the present case, deals only with ‘licensing’ and not ‘tariff determination’.     Reliance in this regard has been   placed   on   the   decisions   of   this   Court   in   Dwaraka 1 vs.    and  Prasad    Dwarka Das Saraf   Union of India & Ors. 2 v s.    Dileep Kumar Singh   . The   second   limb   of   the   argument   is   based   on   the provisions contained in Section 174 of the 2003 Act which gives an overriding effect to the provisions of the 2003 Act notwithstanding any inconsistency with any other law for the time being in force. 1 (1976) 1 SCC 128 [para 18] 2 (2015) 4 SCC 421 [para20] 14 13. Without prejudice to the above, it has been further contended on behalf of the CERC that the learned Appellate Tribunal was clearly in error in holding that in case of a conflict between the Act of 1948 and the Tariff Regulations framed under the 2003 Act the provisions of the Regulations will   require   to   be   ignored.   The   decisions   of   this   Court   in 3   vs.  and Bharathidasan University & Anr.   AICTE & Ors.      Samsthanan Chethu Thozhilali Union  vs.  State of Kerala 4  relied upon,  has been misconstrued by the learned   & Ors.    , Appellate   Tribunal,   it   is   urged   on   behalf   of   CERC.     It   is further contended on behalf of the CERC that Section 61 of the 2003 Act lays down the principles for tariff determination which finds detailed manifestation in the 2004 Regulations. The Regulations, it is contended, embody the principles on which tariff is required to be determined and the provisions thereof cannot be overridden by the provisions of any other statute and, that too, enacted at an anterior point of time i.e. the Act of 1948.  The mandate of Section 174 of the 2003 Act 3 (2001) 8 SCC 676 [para 14] 4 (2006) 4 SCC 327 [Para 17] 15 which is subsequent in point of time will be compromised in the event such an interpretation is accepted.  14. So far as the specific heads of tariff fixation are concerned, it has been urged on behalf of the CERC that Section 40 of the Act of 1948 has been wrongly relied upon by the learned Appellate Tribunal in determining the question of the extent of depreciation allowable.   It is emphasised that Section   40   leaves   the   question   of   the   percentage   of depreciation to be determined by the Central Government.  It is   contended   that   the   purpose   and   intent   behind   the enactment of 2003 Act is to distance the Central Government from the determination of tariff under the 2003 Act which is to be fixed by the Regulatory Commissions on the principles acknowledged in the Tariff Regulations. Regulation 21(1)(ii) of the   Tariff   Regulations,   therefore,   according   to   the   CERC, should   have   been   the   basis   for   the   determination   of   the extent   of   depreciation.     In   this   regard,   reliance   has   been placed on the decision of this Court in   PTC India Ltd.   vs. 5  .     Central Electricity Regulatory Commission   5 (2010) 4 SCC 603 [Para 17] 16 15. It is on the same basis that the findings of the learned Appellate Tribunal so far as the ‘Sinking Fund’ is concerned, which has been held to be recoverable through the   tariff,   has   been   assailed.     It   is   urged   that   the   Tariff Regulations do not make any provision for any ‘Sinking Fund’ and, therefore, the recovery of such fund through tariff is abhorrent to the provisions of Section 61 of the 2003 Act read with the Tariff Regulations.  16. Similarly,   the   finding   of   the   learned   Appellate Tribunal   with   regard   to   the   allowability   of   charging   the expenditure   on   projects   other   than   electricity   from   the common fund as common expenditure has been assailed as being contrary to the spirit of the 2003 Act inasmuch as it is opposed to the principle of allowance of cross­subsidy which the 2003 Act seeks to do away with.   Reference has been made to different provisions of the 2003 Act to contend that recovery   of   expenditure   unrelated   to   electricity   generation from   the   electricity   tariff   is   alien   and   contrary   to   the provisions of the 2003 Act.   17 17. The conclusions of the learned Appellate Tribunal with regard to the debt­equity ratio insofar as the projects completed prior to 1992 (which has been fixed at 50:50) has also been assailed on the ground that the sole basis thereof is the practice followed in the case of another PSU i.e. NTPC ignoring   the   fact   that   the   Regulation   20   of   the   Tariff Regulations provide for a ratio of 70:30. 18. Likewise, the findings with regard to Pension and Gratuity Fund, particularly, the recovery of the entire fund from the consumers (in reversal of the decision of the CERC permitting recovery from consumers to the extent of 60% and contribution by the Corporation of the balance 40%) has been assailed on the ground that no discernible or rational basis is disclosed   for   the   view   taken,   particularly   when   the Corporation has been permitted and, in fact, collected tariff at the rate fixed by the Corporation itself under the Act of 1948 for   the   years   2004­2005   and   2005­2006   which   constitute 40% of the tariff period.  18 19. The allowances of capital investment in respect of Head   Office,   Regional   Offices,   Administrative   &   other Technical Centres have also been assailed as being contrary to the provisions of the Tariff Regulations.  20. The above contentions made on behalf of the CERC has been reiterated on behalf of the consumers who are the appellants in Civil Appeal Nos. 971­973 of 2008.   So far as the interpretation of the provisions contained in the fourth proviso to Section 14 of the 2003 Act is concerned, learned counsel for the said appellants (consumers) has additionally drawn the attention of the Court that in the course of the exercise   leading   to   the   enactment   of   2003   Act,   the Parliamentary Standing Committee on Energy had, in fact, recommended   that   the   Corporation,   having   regard   to   the special responsibility entrusted to it under the Act of 1948, should be exempted from the application of the 2003 Act. Parliament,   however,   decided   not   to   provide   a   blanket exemption in favour of the Corporation. It is pointed out that under Section 173 of the 2003 Act it is only such of the 19 provisions of the 2003 Act which are inconsistent with the provisions   of   the   Consumer   Protection   Act,   1986   or   the Atomic Energy Act, 1962 or the Railways Act, 1989 that will not have any effect.   Instead, insofar as the Corporation is concerned what was provided for is a limited exemption, the extent  of   which  has  been  spelt  out  by   Section  14  (fourth proviso)   of   the   2003   Act,   which,   necessarily,   has   to   be understood to be circumscribed by the provisions of the main part of Section 14 of the 2003 Act which deals with licensing as distinguished from tariff determination.  It is further urged on behalf of the appellants – consumers that the decision to keep in abeyance the tariff for a period of two years is ultra vires the provisions of the 2003 Act, there being no authority in law to order any such relaxation or to postpone the coming into effect of the tariff fixed under the 2003 Act.     The fact that the provisions of the Act of 1948 do not find any mention in the proviso to Section 61 of the 2003 Act has also been stressed upon.   20 21. In   so   far   as   the   pension   and   gratuity   fund   is concerned, in addition to the grounds urged in this regard on behalf of the CERC, it is further urged that almost 99% of the pension and gratuity liability, as assessed by the Actuary, has been permitted to be loaded on to the electricity business without any reference or finding with regard to the percentage of man­power deployed in the electricity business.   Such a decision which has been based on the sole submission of the Corporation is contended to be untenable in law.   The   calculation   and   allowance   of   percentage   of depreciation by following the provisions of Section 40 of the Act of 1948 has also been assailed as being contrary to the provisions   of   the   Regulations   which,   according   to   the appellants – consumers should hold the field.  22. The Corporation which is the respondent  in the appeals   filed   by   the   Regulatory   Commissions   and   the Consumers had filed its cross­objections in the said appeals. Emphasis is laid on the status and peculiar characteristics of the Corporation as envisaged by the statute i.e. the Act of 21 1948 constituting the said body.   Reference has been sought to be made to the various social welfare activities that the Corporation   is   statutorily   mandated   to   perform   over   and above electricity generation and transmission. The aforesaid peculiar   characteristics   of   the   Corporation   and   its multifarious     duties,     according       to       the Corporation, would   justify   continuity   of   the   due   application   of   the provisions of the Act   of  1948  as  are  not   inconsistent with   the   provisions    of    the 2003 Act.      It   is   only such of the provisions of the Act of 1948 which are in clear conflict with the provisions of the 2003 Act that will give way. The provisions of the Act of 1948 that may be in conflict with those of the Tariff Regulations will however not have the same effect inasmuch as the provisions of a subsidiary legislation cannot have an overriding effect over the provisions of the parent or any other statute.  It has been further urged that in a given situation the proviso to a statutory provision may act as a main provision itself going beyond the parameters of the matter of which the proviso may have been enacted as a part. In this regard, reliance has been placed on the decisions of 22 6 this   Court   in     vs.   ,   State   of   Rajasthan   Leela   Jain   S. Sundaram   Pillai   &   Others   vs.   V.R.   Pattabhiraman   & 7 ,     Others   Shah   Bhojraj   Kuvarji   Oil   Mills   &   Ginning 8 Factory   vs.     Subhash   Chandra   Yograj   Sinha   ,   Motiram 9  vs.  .   Ghelabhai   Jagan Nagar   23. Coming   specifically   to   the   rate   of   depreciation, sinking fund, interest on capital, etc., it has been urged that there being no provisions in the 2003 Act in respect of the aforesaid   matters   which   are   dealt   with   only   by   the   Tariff Regulations in contra­distinction to specific provisions of the Act of 1948 covering the issue i.e. Section 40 of the Act of 1948, it is the provisions of Part IV of the Act of 1948 which will govern the matter.   So far as the debt­equity ratio is concerned, it has been urged that the determination of the th ratio at 50:50 for capital assets created prior to 30  March, th 1992 and the ratio of 70:30 for the capital assets after 30 March, 1992 is consistent with the principles adopted for all 6 (1965) 1 SCR 276 7 (1985) 1 SCC 591 [Para 27 to 43] 8 (1962) 2 SCR 159 [Para 9 and 10] 9 (1985) 2 SCC 279 [Para 9] 23 Central   Government   Corporations   like   NTPC   Limited, Powergrid Corporation of India Limited, NHPC etc.   24. Insofar as the pension and gratuity contribution required to be made by the Corporation is concerned, it is contended that the issue has been raised only at the stage of arguments   by   the   HT­consumers   i.e.   appellants   in   Civil Appeal Nos. 971­973 of 2008. The same has not been raised by   the   Regulatory   Commission   at   all   or   even   by   the   HT­ consumers   before   the   forums   below.     That   apart,   it   is contended that the break­up of the details of the percentage of employees called for by the CERC in this regard was made available which fact is borne out by the documents placed before the learned Appellate Tribunal which has also been laid before this Court  (Annexure 18 to the Memo of Appeal before the learned Appellate Tribunal).  25. Similarly,   in   so   far   as   the   Operation   and Maintenance expenditure is concerned, it is contended that the   same   has   been   rightly   allowed   as   per   the   Tariff Regulations in force.  24 26. Before   delving   into   the   issues   arising   in   the appeals,   two   preliminary   questions   need   to   be   answered which we propose to do at the outset.  The first pertains to the   grant   of   a   transitory   period   making   the   tariff   order st st effective from 1  April, 2006 instead of 1  April, 2004. 27. We   have   considered   the   reasons   which   had weighed   with   the   CERC   as   well   as   the   learned   Appellate Tribunal   in   granting   the   aforesaid   transitory   period.     The present dispute, regardless of the way it is resolved, would have relevance to the quantum of the tariff, depending on whether   the   determination   is   made   on   the   basis   of   the provisions of Part IV of the Act of 1948 or the provisions of the Tariff Regulations, as may be.  So far as the grant of the transitory period is concerned, the same, we have noticed, has   been   so   granted   having   due   regard   to   the   statutory functions/social   responsibilities   that   the   Corporation   is mandated to undertake in terms of the Act of 1948.     The tariff fixed is also lower than the tariff that has been fixed by the   Jharkhand   and   West   Bengal   Electricity   Regulatory 25 Commission for the general/domestic classes of consumers. While it is correct that the classes of consumers served by the Corporation   are   HT­Industrial   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. 28. 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 26 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. 29. We may now turn to the other/larger issues arising in the appeals. 30. The   Damodar   Valley   Corporation   had   been incorporated under the provisions of the Act of 1948.   The facts   antecedent   to   the   incorporation   of   this   entity   would throw considerable light on the objects and reasons for its incorporation.     Sometime   in   the   year   1943,   the   Damodar River Valley had been affected by severe floods leading to   wide­scale   destruction   of   life   and   property.   The   Provincial Government of Bengal had constituted an Enquiry Committee to suggest ways and means to avoid such catastrophes in the 27 future.  The Enquiry Committee had, inter alia, recommended that a statutory corporation, on the lines of the Tennessee Valley Authority of the USA, be incorporated to command and control the Damodar River.   The then British Government accepted this proposal of the Committee and had called one Mr.   W.L.   Voorduin,   a   senior   Engineer   working   for   the Tennessee Valley Authority to make recommendations and suggestions in this regard. 31. The   preamble   to   the   Tennessee   Valley   Authority 10 Act , 1933, reads that the statute has been enacted by the Congress “ to improve the navigability and to provide for the flood control of the Tennessee River; to provide for reforestation and the proper use of marginal lands in the Tennessee   Valley;   to   provide   for   the   agricultural   and industrial development of said valley; to provide for the national defence by the creation of a corporation for the operation of Government properties at and near Muscle Shoals in the State of Alabama, and for other purposes. ” 10 16 U.S. Code § 831 28 As can be observed, the primary objective of the Tennessee Valley Authority Act is to prevent floods across the Tennessee River Valley and the generation of electricity is incidental to this activity of flood­control.   32.  The objects and reasons behind the incorporation of the Act of 1948 may now be noticed: “The Damodar River rises in Western Bihar and flows generally in a south-easterly direction into Bengal. It is a seasonal river having a large flow of water during the rains which, apart from being generally wasted, at times causes great damage to life and property. It is now proposed to harness the water of this river and some of its tributaries and utilize it in multiple development of the Damodar Valley and the adjoining area. This Bill seeks to set up a Corporation, called the Damodar Valley Corporation on the lines of the Tennessee Valley Authority in the USA. It will be an autonomous body within the framework of the enactment. Its objects, constitution and powers are laid down in the Bill. Briefly, its main function will be to control flood in the Damodar, generate electric power for distribution and provide water for irrigation and other purposes. In addition, the Corporation will, endeavour to promote economic development of the Damodar Valley and the adjoining areas. It will consist of three members including the Chairman. These three members and the Secretary and the treasurer will be appointed by the Central Government. The Corporation will have the power to acquire land and construct or cause to be constructed such dams, barrages, reservoirs, power-houses and power structures, electrical transmission 29 line, irrigation and navigation works as may be necessary. The capital required by the Corporation will be provided by the Central Government and the Government of Bihar and West Bengal. The profits and losses will be distributed between these three Governments in certain agreed proportions. The provisions of this Bill are designed to give effect to the broad outlines of the agreement reached between the three Governments concerned.” 33. Having noticed the objects and reasons behind the creation  of  the   incorporated  body  and   the   main  functions assigned to it by Parliament, we may now specifically revert to the issue of determination of tariff for supply/distribution of the electricity generated by the Corporation.  34. Insofar   as   the   issue   as   to   whether   the   Tariff Regulations   would  have   an  overriding   effect  to  render  the parallel provisions in the Act of 1948 ineffective, the reliance placed   on   behalf   of   the   appellants   on   the   decision   of   a Constitution   Bench   of   this   Court   in   PTC   India   Limited (supra)  may now be considered. The primary issue that was considered by the Constitution Bench of this Court in   PTC 30   (supra)   was   “ India   Limited whether   the   Appellate Tribunal constituted under the Electricity Act, 2003 has jurisdiction under Section 111 of the Act to examine the validity   of   the   Central   Electricity   Regulatory Commission   (Fixation   of   Trading   Margin)   Regulations, 2006   framed   in   exercise   of   power   conferred   under Section 178 of the Electricity Act ?” 35. The   observations   of   this   Court   in   PTC   India Limited   (supra)   with   regard   to   the   efficacy   of   the   Tariff Regulations   in   the   light   of   its   statutory   character   must necessarily be understood in the above context.  The opinion rendered in     (supra)   itself makes it clear PTC India Limited that the Tariff Regulations though statutory in character are a species of subordinate delegated legislation, the purport of which has been described and dealt with in the following manner: “52. In Indian Express Newspapers (Bombay) (P) Ltd. v. Union of India this Court* held that subordinate legislation is outside the purview of administrative 31 action i.e. on the grounds of violation of rules of natural justice or that it has not taken into account relevant circumstances or that it is not reasonable. However, a distinction must be made between delegation of legislative function and investment of discretion to exercise a particular discretionary power by a statute. In the latter case, the impugned exercise of discretion may be considered on all grounds on which administrative action may be questioned such as non-application of mind, taking irrelevant matters into consideration, etc. The subordinate legislation is, however, beyond the reach of administrative law. Thus, ___________ *(1985) 1 SCC 641 delegated legislation - otherwise known as secondary, subordinate or administrative legislation - is enacted by the administrative branch of the government, usually under the powers conferred upon it by the primary legislation. Delegated legislation takes a number of forms and a number of terms - rules, regulations, by-laws etc; however, instead of the said labels what is of significance is the provisions in the primary legislation which, in the first place, confer the power to enact administrative legislation. Such provisions are also called as “enabling provisions”. They demarcate the extent of the administrator’s legislative power, the decision-making power and the policy making power. However, any legislation enacted outside the terms of the enabling provision will be vulnerable to judicial review and ultra vires.” 36. The opinion of a seven Judge Bench of this Court, though of considerable vintage, in The Presidential Reference, 32 11 The Delhi Laws Act, 1912   may usefully be recalled at this stage: “(In delegated legislation), a portion of the law- making power of the legislature is conferred or bestowed upon a subordinate authority and the rules and regulations which are to be framed by the latter constitute an integral portion of the statute itself. As said already, it is within powers of Parliament or any competent legislative body, when legislating within its legislative field, to confer subordinate administrative and legislative powers upon some other authority. The question is: What are the limits within which such conferment of bestowing of powers could be properly made? It is conceded by the learned Attorney-General that the legislature cannot totally abdicate its functions and invest another authority with all the powers of legislation which it possesses. Subordinate legislation, it is not disputed, must operate under the control of the legislature from which it derives its authority, and on the continuing operation of which, its capacity to function rests. As was said by Dixton, J., (vide, Victoria Stevedoring and General Contracting Company v. Dignan , 46 C.L.R. 73) “a subordinate legislation cannot have the independent and unqualified authority which is an attribute of true legislative power”. It is pointed out by this learned Judge that several legal consequences flow from this doctrine of subordinate legislation. An offence against subordinate legislation is regarded as an offence against the statute and on the repeal of the statute the regulations automatically collapse. So far, the propositions cannot, and need not, be disputed. But, according to the learned Attorney-General, all that is necessary in subordinate legislation is that the legislature should not totally abdicate its powers and that it should retain its

33 control over the subordinate agency which it can destroy later at any time it likes. If this is proved to exist in a particular case, then the character or extent of the powers delegated to or conferred upon such subordinate agent is quite immaterial and into that question the courts have no jurisdiction to enter. This argument seems plausible at first sight, but on closer examination, I find myself unable to accept it as sound. In my opinion, it is not enough that the legislature retains control over the subordinate agent and could recall him at any time it likes, to justify its arming the delegate with the legislative powers in regard to a particular subject. Subordinate legislation not only connotes the subordinate or dependent character of the agency which is entrusted with the power to legislate, but also implies to subordinate or ancillary character of the legislation itself, the making of which such agent is entrusted with. If the legislature hands over its essential legislative powers to an outside authority, that would, in my opinion, amount to a virtual abdication of its powers and such an act would be in excess of the limits of permissible delegation. ... On a consideration of all these decisions I have no hesitation in holding that as regards constitution of the delegation of legislative powers the Indian Legislature cannot be in the same position as the prominent British Parliament and how far delegation is permissible has got to be ascertained in India as a matter of construction from the express provisions of the Indian Constitution. It cannot be said that an unlimited right of delegation is inherent in the legislature power itself. This is not warranted by the provisions of the Constitution and the legitimacy of delegation depends entirely upon its being used as an ancillary measure which the legislature considers to be necessary for the purpose of exercising its legislative powers effectively and completely. The legislature must retain in its own hands the essential legislative functions which consist in declaring the legislative policy and laying down the standard which is to be enacted into a rule of law, and what can be delegated in the task of subordinate legislation which by its very nature 34 is ancillary to the statute which delegates the power to make it. ” 37. It may be wholly unnecessary to detract from the fundamental principles of law laid down in The Presidential Reference  (supra),  which would be an inevitable consequence, if the contentions advanced on behalf of the appellants to the effect that the Tariff Regulations must override the provisions of the Act of 1948 as the said regulations are statutory in character   is   to  be   accepted.     This   is   also   what   has   been subsequently emphasised by this Court in   Bharathidasan (supra)   and University   &   Anr.     Samsthanan   Chethu Thozhilali Union   (supra).   No error, therefore, can also be found in the implicit reliance placed on the ratio of the above decisions by the learned Appellate Tribunal in its order dated rd 23  November, 2007. 38. This will bring us to a consideration of the purport and effect of the fourth proviso to Section 14 of the 2003 Act on which much debate and discussion have been generated in the course of prolonged hearing of the case that had taken 35 place.  Section 14 of the Act may usefully be extracted below at this stage:  “14. Grant of Licence : “The appropriate Commission may, on an application made to it under Section 15, grant a licence to any person (a) to transmit electricity as a transmission licensee; or (b) to distribute electricity as a distribution licensee; or Provided that the Developer of a Special Economic Zone notified under sub-section (1) of Section 4 of the Special Economic Zones Act, 2005, shall be deemed to be a licensee for the purpose of this clause, with effect from the date of notification of such Special Economic Zone. (c) to undertake trading in electricity as an electricity trader, In any area as may be specified in the licence: PROVIDED that any person engaged in the business of transmission or supply of electricity under the provisions of the repealed laws or any Act specified in the Schedule on or before the appointed date shall be deemed to be a licensee under this Act for such period as may be stipulated in the licence, clearance or approval granted to him under the repealed laws or such Act specified in the Schedule, and the provisions of the repealed laws or such Act specified in the Schedule in respect of such licence shall apply for a period of one year from the date of commencement of this Act or such earlier period as may be specified, at the request of the licensee, by the Appropriate Commission and thereafter the provisions of this Act shall apply to such business: PROVIDED FURTHER that the Central Transmission Utility or the State Transmission Utility shall be deemed to be a transmission licensee under this Act: PROVIDED also that in case an Appropriate Government transmits electricity or distributes 36 electricity or undertakes trading in electricity, whether before or after the commencement of this Act, such Government shall be deemed to be a licensee under this Act, but shall not be required to obtain a licence under this Act: PROVIDED also that the Damodar Valley Corporation, established under sub-section (1) of Section 3 of the Damodar Valley Corporation Act, 1948, shall be deemed to be a licensee under this Act but shall not be required to obtain a licence under this Act and the provisions of the Damodar Valley Corporation Act, 1948, insofar as they are not inconsistent with the provisions of this Act, shall continue to apply to that Corporation : PROVIDED also that the Government company or the company referred to in sub-section (2) of section 131 of this Act and the company or companies created in pursuance of the Acts specified in the Schedule, shall be deemed to be a licensee under this Act: PROVIDED also that the Appropriate Commission may grant a licence to two or more persons for distribution of electricity through their own distribution system within the same area, subject to the conditions that the applicant for grant of licence within the same area shall, without prejudice to the other conditions or requirements under this Act, comply with the additional requirements 1 (relating to the capital adequacy, Credit worthiness or code of conduct) as may be prescribed by the Central Government, and no such applicant, who complies with all the requirements for grant of licence, shall be refused grant of licence on the ground that there already exists a licensee in the same area for the same purpose: PROVIDED also that in a case where a distribution licensee proposes to undertake distribution of electricity for a specified area within his area of supply through another person, that person shall not be required to obtain any separate licence from the concerned State Commission and such distribution licensee shall be responsible for distribution of electricity in his area of supply: 37 PROVIDED also that where a person intends to generate and distribute electricity in a rural area to be notified by the State Government, such person shall not require any licence for such generation and distribution of electricity, but he shall comply with the measures which may be specified by the Authority under section 53: PROVIDED also that a distribution licensee shall not require a licence to undertake trading in electricity.” 39. It is contended on behalf of the appellants that the application   of   a   proviso   must   always   be   confined   and understood within the parameters of the provisions of the main section     of which the proviso is a part and that a proviso, in no case, can be construed to have any general application.  This argument would require some examination. In   this   regard   the   decision   of   this   Court   Shah   Bhojraj Kuvarji Oil Mills   (supra)  may be usefully recapitulated and the following observations may be specifically taken note of: “It is contended by the learned Attorney-General that the construction placed by the High Court upon the first proviso to Section 50 (of Bombay Rents, Hotel and Lodging House Rates Control Act of 1947) is erroneous. Though he concedes that the proviso must be read as qualifying what the substantive part of Section 50 enacts, he urges that the proviso goes beyond that purpose and enacts a substantive law of its own. He relies upon the following observations of Lord Loreburn, L.C., in Rhondda Urban Council v. Taff Vale Railway, (1909) A.C. 253, where a proviso to Section 51 of the 38 Railway Clauses Consolidation Act, 1845, was under consideration: “It is true that Section 51 is framed as a proviso upon preceding sections. But it is also true that the latter half of it, though in form a proviso, is in substance a fresh enactment, adding to and not merely qualifying that which goes before.”, and contends that the latter portion of the proviso, in question, being a substantive enactment, comprehends not only those suits which were pending on the date of repeal but also those cases, which came within the language of the latter part of the proviso, whenever the Act was extended to new areas………….. …..… As a general rule, a proviso is added to an enactment to qualify or create an exception to what is in the enactment, and ordinarily, a proviso is not interpreted as stating a general rule. But, provisos are often added not as exceptions or qualifications to the main enactment but as savings clauses, in which cases they will not be construed as controlled by the section. ” 40. Similarly in  S. Sundaram Pillai   (supra)  this Court has observed: “A very apt description and extent of a proviso was given by Lord Oreburn in Rhondda Urban District Council v. Taff Vale Railway Co., (1909) A.C. 253, where it was pointed out that insertion of a proviso by the draftsman is not always strictly adhered to its legitimate use and at times a section worded as a proviso may wholly or partly be in substance a fresh enactment adding to and not merely excepting something out of or qualifying what goes before.” 39 41. The fourth proviso to Section 14 of 2003 uses the expression   “….and   the   provisions   of   the   Damodar   Valley Corporation Act, 1948 in so far as they are not inconsistent with the provisions of the Act, shall continue to apply to that Corporation…”. On a careful reading of the aforesaid later part of the fourth proviso to Section 14 of the Act of 2003, it is seen that it is clearly a substantive provision to lay down something more than what a proviso generally deals with. If the intention of the proviso was to exclude DVC only from the main part of Section 14 of the Act of 2003 dealing with the requirement   of   obtaining   licence   for transmission/distribution/trade in electricity, the purpose is fully achieved by the first part recognising DVC as a ‘deemed licensee’ and not requiring to apply for and obtain licence. The Legislature could have simply stopped there. There was no necessity to incorporate the second part. The second part of the fourth proviso is to bring in the continued application of some of the provisions of the Act of 1948 which are not inconsistent   with   the   provisions   of   the   Act   of   2003.   To elaborate it further, let us take the case of the third proviso to 40 Section 14 of the Act of 2003 which provides “that in case an appropriate Government transmits electricity or distributes electricity or undertakes trading in electricity whether before or   after   the   commencement   of   the   Act,   such   Government shall be deemed to be a licensee under the Act but shall not be required to obtain licence under the Act”. In so far as DVC is concerned, if the fourth proviso is to be confined only to licensing as in the case of third proviso, the fourth proviso also would have stopped with the first part of the proviso. There would have been no necessity to incorporate the second part of the proviso. The legislature does not incorporate any words   which   are   irrelevant   or   redundant   and   every expression used in a statutory provision has some purpose. 42. A careful comparative reading of the third and the fourth   provisos   to   Section   14   of   the   Act   of   2003   clearly indicates the intention of the legislature that the second part of the fourth proviso is to bring in the continued application of some of the provisions of the Act of 1948 which are not inconsistent with the provisions of the Act of 2003. There are 41 no licensing provisions in the Act of 1948 to be saved. The obvious reference in the second part of proviso is to provide for the continued application of the provisions of the Act of 1948 insofar as they are not inconsistent with the provisions of the Act of 2003. 43. In the course of arguments, the appellants made reference to Sections 18 and 19 of the Act of 1948 as being the provisions relating to licensing which could be said to be considered as saved by virtue of second part of the fourth proviso to Section 14 of the Act of 2003. A perusal of Sections 18 and 19 of the Act of 1948 show that they deal with the supply and generation of electrical energy and distribution of electricity within the Damodar Valley area.  The provisions of the Act of 2003 which authorise the Regulatory Commissions to grant licence to persons (other than DVC) fully govern the field and there is no question of continued application of the Act of 1948 in that respect. Sections 18 and 19 of the Act of 1948 do not deal with licence to DVC. These provisions only deal with activities of other entities to distribute electricity 42 within the Damodar Valley area. Further, the provisions of Electricity Act, 2003 authorizes the Regulatory Commissions to grant licence to persons other than DVC. Therefore, there can be no question of continued application of the Act of 1948 over those provisions. 44. The fourth proviso to Section 14 which uses the expression   “….and   the   provisions   of   the   Damodar   Valley Corporation Act, 1948 in so far as they are not inconsistent with the provisions of the Act, shall continue to apply to that Corporation…”, in our view, is a positive provision enabling continued application of certain provisions of the Act of 1948 which   are   not   inconsistent   with   the   provisions   of   the Electricity   Act,   2003.   The   intention   behind   both   the provisions needs to be appreciated and given effect to.   45. There is yet another dimension of the case that has been   urged   and,   therefore,   will   require   our   consideration. While   dealing   with   the   question   as   to   whether   Reports submitted   by   Parliamentary   Standing   Committee,   can   be taken   as   permissible   external   aids   for   interpretation   of   a 43 statute, this Court in a recent decision in  Kalpana Mehta & 12   Ors.      vs.     Union of India & Ors   .    had occasion to observe as follows: “xxxx it clear as day that the Court can take aid of the report of the parliamentary committee for the purpose of appreciating the historical background of the statutory provisions and it can also refer to committee report or the speech of the Minister on the floor of the House of the Parliament if there is any kind of ambiguity or incongruity in a provision of an enactment. Further, it is quite vivid on what occasions and situations the Parliamentary Standing Committee Reports or the reports of other Parliamentary Committees can be taken note of by the Court and for what purpose. Relying on the same for the purpose of interpreting the meaning of the statutory provision where it is ambiguous and unclear or, for that matter, to appreciate the background of the enacted law is quite different from referring to it for the purpose of arriving at a factual finding. That may invite a contest, a challenge, a dispute and, if a contest arises, the Court, in such circumstances, will be called upon to Rule on the same.” 46. The   proceedings   of   the   Parliamentary   Standing th Committee   on   Energy   (13   Lok   Sabha),   insofar   as   the Electricity Bill of 2001 presented before the Lok Sabha on 19­12­2002 is concerned, would go to indicate that various organisations like the Ministry of Railways, the Bhakra Beas 12 2018 (7) SCALE 106 44 Management Board (BBMB)   and also the Corporation had requested for exemption from the operation of the provisions of  2003   Act  citing   the  peculiar,   sensitive   and   specialised nature of task that such bodies have been entrusted by the statutory enactments  constituting and governing the  said bodies/organizations.     Specifically,   in   this   regard,   the peculiar   duties   and   responsibilities   cast   on   the   DVC   by Section 12 of the Act of 1948 had been highlighted before the Parliamentary Standing Committee.  It had been urged before us that it was recommended by the Parliamentary Standing Committee that exemption from the provisions of the proposed 2003 Act should be granted to the Corporation in view of its special statutory status which may get eroded if the exemptions are not to be granted.  The provisions of Section 58 of the Act of 1948 which is in the following terms were   also   placed   before   the   Parliamentary   Standing Committee while seeking exemption from the operation of the proposed 2003 Act: “58. Effect of other laws : The provisions of this Act or any rule made thereunder shall have effect notwithstanding anything contained in any 45 enactment other than this Act or any instrument having effect by virtue of any enactment other than this Act.” 47. On the other hand, it would appear from the record of the proceedings of the Parliamentary Standing Committee that the Industry represented by Chhotanagpur Chamber of Commerce & Industry and The Bengal Chamber of Commerce & Industry  as well as  the  States  of  Jharkhand   and  West Bengal had contested the claims made by the Corporation for exemption   and   had   pleaded   before   the   Parliamentary Standing   Committee   that   the   Act   of   1948   itself   be repealed/amended insofar as all non­power related activities are concerned which constitute only about 10% of the total activities of the Corporation. 48. After considering the respective stands taken, the Parliamentary  Standing   Committee  had   recommended   that the Corporation should be exempted from the operation of the provisions of the proposed 2003 Act in view of the special status and responsibilities of the Corporation as envisaged under the Parliamentary enactment constituting it (i.e the Act 46 of   1948).     However,   it   appears   that   Parliament   was   not inclined to provide a blanket/total exemption in favour of the Corporation and the 2003 Act did not include the Corporation as one of the entities in Section 173 of the 2003 Act which provides   exemption   in   so   far   as   the   provisions   of   the Consumer Protection Act, 1986, the Atomic Energy Act, 1962 and the Railways Act, 1989 clearly excluding the provisions of the Act of 1948 therefrom.   Instead, the fourth proviso to Section   14   of   the   2003   Act   was   specifically   incorporated, details of which have already been noted. Having regard to the legislative history behind the enactment of the provision of Section 173 and the provisions of Section 14 including the fourth proviso thereto, it may be more in consonance with the Parliamentary  intention to  hold  that  the  fourth  proviso to Section 14 need not be understood to be confined only to the question of licensing which is dealt with by the main part of the   Section   14.     Rather,   we   are   inclined   to   hold   that Parliament had intended to provide partial exemption to the Corporation by mandating that such provisions of the Act of 1948   which   are   not   inconsistent   with   the   2003   Act   will 47 continue to hold the field.  Viewed thus, the fourth proviso to Section 14 of the Electricity Act 2003 has to be understood to be   a   legislative   exercise   in   the   nature   of   a   substantial provision   of   law.       Part   IV   of   the   Act   of   1948   not   being inconsistent   with   the   provisions   of   the   2003   Act   can, therefore, be taken into account for determination of tariff. Such   provisions   of   the   Act   of   1948   will   also   have   an overriding effect over the inconsistent provisions of the Tariff Regulations.   Our   view,   as   above,   will   also   effectuate   the provisions of the Act of 1948 in so far as the activities of the Corporation,   other   than   generation   and   transmission   of electricity, is concerned. We, therefore, affirm the above view taken by the Appellate Tribunal for the reasons afore­stated. 49. The   specific   heads   of   tariff   fixation   on   which grievances have been raised by the appellants in the present set of appeals are enumerated as hereunder: (a) Depreciation rate; (b) Sinking Fund; (c) Debt Equity ratio; 48 (d) Pension & Gratuity Contribution; (e) Return on Capital Investment on Head Office etc.; (f) Revenue   relating   to   afforestation   etc.,   which   are not  relatable to power generation; (g) Period of transition (two years) allowed for the tariff fixed by the CERC to come into effect; (h) The treatment of entire transmission as inter­State transmission   lines   thereby   divesting   the Jharkhand   and   West   Bengal   State   Electricity Regulation Commissions of the power to fix tariff insofar as intra­State transmission of electricity is concerned; 50. Insofar as the questions under the last two issues at (g) and (h) above is concerned, the same have already been dealt with in the present order.   Of the remaining heads of tariff fixation, it appears that so far as the ‘depreciation rate’ and ‘sinking fund’ is concerned it is the provisions of Section 40   of   the   Act   of   1948   which   have   been   held   to   be 49 determinative.  We have gone through the reasoning adopted by   the   learned   Appellate   Tribunal   in   this   regard.   Having clarified the manner in which the fourth proviso to Section 14 of the 2003 Act has to be understood, we do not find the reasoning adopted by the learned Appellate Tribunal on the issues   relating   to   ‘depreciation’   and   ‘sinking   fund’   to   be fundamentally flawed in any manner so as to give rise to a substantial   question   of   law   requiring   our intervention/interference under Section 125 of the 2003 Act. 51. Insofar as the debt­equity ratio is concerned, we find that except for the projects which have been completed prior to 1992 in which case the ratio has been worked out at par with other public­sector organisation at 50:50, the ratio of 70:30 has been adopted following the prescription under Regulation 20 of the Tariff Regulations in the absence of any specific rate under the Act of 1948. 52. So   far   as   the   pension   and   gratuity   fund   is concerned, the only issue arising is whether the fund worked out   on   Actuary   basis   at   Rs.1534.49   crores   should   be 50 apportioned between the Corporation and the consumers as held by the CERC in the ratio of 40:60 or the entire fund should be allowed to be recovered by way of tariff from the consumers as held by the learned Appellate Tribunal. The reasoning of the learned Appellate Tribunal in coming to the aforesaid conclusion is as follows: “D.3 As a general rule, once the Commission, after prudence check, has agreed with the need for funding the Pension and Gratuity Contribution funds, DVC should have been allowed to recover entire amount from the consumers through the tariff. Asking DVC to contribute out of its own resources would tantamount to denying it the return on equity as assured in terms of Tariff Regulations. However, if we look at it from the point of view of the consumers, the consumers, particularly the industrial and commercial ones, have now no option to adjust their sale price to take into consideration the need for meeting the accumulated liability. It is, therefore, an accepted fact that due to postponing of the creation of such fund, the consumers were enjoying lesser tariff than the legitimate tariff otherwise applicable to them.” 53. A careful consideration of the reasoning adopted by the learned Appellate Tribunal would not disclose any such error so as to warrant interference of this Court.  No error or fallacy,  ex facie , is disclosed in the reasoning adopted so as to justify interference under Section 125 of the 2003 Act. 51 54. Insofar   as   the   consumers   (appellants   in   Civil Appeal Nos. 971­973 of 2008) are concerned, an additional issue has been struck, as noticed earlier.  This is with regard to the number of employees engaged in the power sector by the Corporation for whom alone proportionate recovery by way of tariff so far as the pension and gratuity is concerned, would be justifiable.  Apart from the fact that the issue was not raised in any of the forums below and had been so raised before this Court for the first time and that too in the course of the arguments advanced, the materials on record do not justify a conclusion to be reached by us which will support the   core   basis   of   the   contention   made,   namely,   that   the Corporation had not laid before the CERC any materials to show   the   extent   of   the   work­force   deployed   in   the   power sector of the Corporation.  In fact, in the counter arguments advanced on behalf of the Corporation this contention has been  refuted   and   it  is   asserted  that  such  materials  were, indeed, laid before the CERC, a fact which we find to be correct.  52 55. Insofar as the issue of allowance of cost relating to other activities of the Corporation to be recovered through tariff on electricity is concerned, we have taken note of the objection(s) raised in this regard which in sum and substance is that Sections 32 and 33 of the Act of 1948 are in direct conflict   with   Sections   41   and   51   of   the   2003   Act   and, therefore,   recovery   of   cost   incurred   in   “other   works” undertaken by the Corporation through power tariff is wholly untenable. Apart from reiterating the basis on which we have thought   it   proper   to   affirm   the   findings   of   the   learned Appellate Tribunal on the purport and scope of the fourth proviso   to   Section  14   of   the   2003   Act   and   the   continued operation of the provisions of the Act of 1948 which are not inconsistent with the provisions of the 2003 Act, we have also taken note of the specific provisions contained in Sections 41 and 51 of the 2003 Act which,  inter alia , require maintenance of separate accounts of the other business undertaken by transmission/distribution licensees so as to ensure that the returns   from   the   transmission/distribution   business   of electricity do not subsidize any other such business.   Not 53 only Sections 41 and 51 of the 2003 Act contemplate prior approval of the Appropriate Commission before a licensee can engage in any other business other than that of a licensee under the 2003 Act, what is contemplated by the aforesaid provisions   of   the   2003   Act   is   some   return   or   earning   of revenue from such business. In the instant case, the “other activities” of the Corporation are not optional as contemplated under Sections 41/51 of the 2003 Act but are mandatorily cast by the statute i.e. Act of 1948 which, being in the nature of socially beneficial measures,  per se,  do not entail earning of any   revenue   so   as   to   require   maintenance   of   separate accounts.   The   allowance   of   recovery   of   cost   incurred   in connection with “other activities” of the Corporation from the common   fund   generated   by   tariff   chargeable   from   the consumers/customers of electricity as contemplated by the provisions of the Act of 1948, therefore, do not collide or is, in any manner, inconsistent with the provisions of the 2003 Act. We   will,   therefore,   have   no   occasion   to   interfere   with   the findings recorded by the learned Appellate Tribunal on the above score. 54 56. Having dealt with all the issues raised/arising in the   appeals   under   consideration   in   the   manner   indicated above, we deem it proper to dismiss all the appeals and affirm rd the judgment and order dated 23  November, 2007 passed by the learned Appellate Tribunal.  We order accordingly.  ……………………., J.  [RANJAN GOGOI] ……………………., J.  [R. BANUMATHI] NEW DELHI JULY 23, 2018