Full Judgment Text
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CASE NO.:
Appeal (civil) 7082-7084 of 2001
PETITIONER:
PUNJAB STATE ELECTRICITY BOARD
Vs.
RESPONDENT:
NATIONAL THERMAL POWER CORPORATION LIMITED & OTHERS
DATE OF JUDGMENT: 10/10/2001
BENCH:
M.B. SHAH & R.P. SETHI
JUDGMENT:
Shah, J.
Leave granted.
AppellantPunjab State Electricity Board and other States
Electricity Boards have filed these appeals against the impugned
judgment and order dated 7th March, 2001 passed by the High Court
of Delhi in Civil Miscellaneous No. 232 of 2001 in FAO No.131 of
2001, FAO No.159 of 2000 and FAO No.88 of 2001.
The Central Electricity Regulatory Commission (hereinafter
referred to as the Commission), constituted under the Electricity
Regulatory Commissions Act, 1998 (hereinafter referred to as the
Act) by its order dated 21.12.2000 has fixed the norms for tariff for
hydro generation and inter-state transmission. That order was
challenged by the respondentNational Thermal Power Corporation
Limited (hereinafter referred to as the NTPC) by filing FAO
No.159 of 2000 under Section 16 of the Act before the High Court of
Delhi. The High Court by its interim order has virtually stayed the
operation of the impugned order by laying down certain conditions
and by observing that it appears desirable that all the directions
issued by the Commission shall be observed to charge tariff on the
basis of the pre-existing norms. It was also observed that the NTPC
shall continue to charge tariff on the basis of pre-existing norms only
so long as the arrears up to 31st March, 2001 due against different
respondents mainly State Electricity Boards are not adjusted and the
moment the arrears of NTPC stand paid, the concerned State
Electricity Board and all concerned respondents shall be entitled to
move the Court for fresh consideration. The Court also observed
that it was just an interim order and after the group for formulating
the Tariff Policy takes a decision, the Court shall be informed about
the decision taken by the group for formulating the tariff policy and
the party shall be entitled to be heard afresh. These interim
directions are challenged by the Punjab State Electricity Board
(PSEB).
At the time of hearing of these matters, learned counsel for the
PSEB submitted that the interim order passed by the High Court is,
on the face of it, illegal. He also contends that Section 16 only
provides for filing of appeal but it does not empower the High Court
to stay the operation of the order which was passed by the
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Commission after considering the submission as well as evaluating
various norms required for fixing the tariff.
In its report, the Commission has observed as under:
1.4.1. The terms and conditions as will be notified, shall,
apply to all utilities covered under Section 13(a) (b) and
(c) of the ERC Act unless specifically stated otherwise.
However, it should be remembered that these terms and
conditions shall apply wherever cost based tariff is
determined by the Commission. These terms and
conditions shall be in force for a period of 3 years
effective from 1st April, 2001 and reviewable/renewable at
the discretion of the Commission.
1.4.3. If this order creates any unfairness, or hardship,
parties may approach the Commission for redressal,
within 60 days of issue in accordance with the provisions
for review as contained in Regulation 103 of the Conduct
of Business Regulation.
In para 1.5.1 the Commission has kept in view the twin
objectives contained in Section 13(e) according to which tariff shall
be fair to the consumers and facilitate mobilization of adequate
resources for the power sector.
In its operative order, the Commission has observed that the
normal tariff period shall be a period of five years but shall at this
stage be for a period of three years. Finally it has observed that:
Ensuring the financial viability of efficient and
proactive utilities, would be a prime concerned of the
Commission. At the same time, safeguarding the
interests of the consumers is a major responsibility of
the Commission, particularly, when the market structure
and system conditions do not support competition. The
Commission has to play a balancing role and it intends
to discharge this responsibility transparently, through a
consultative mode. It expects that participative decision
making will lighten the burden of transiting to a more
efficient system, for all stakeholders.
It is true that under Section 38(1) of the Act, the Central
Commission has to discharge its functions by taking into
consideration directions issued by the Central Government in matters
of policy involving public interest. Nothing has been pointed out to
indicate that Government has issued such directions. In any case all
these questions are required to be dealt with at the time of final
hearing of the matter and at this stage, it would be difficult to hold
that prima facie, the norms prescribed by the Central Commission
are arbitrary or ex facie unjustifiable, particularly in view of Section
13(e) which inter alia provides that its function is to aid and advise
the Central Government in formulation of tariff policy which shall be
(i) fair to the consumer; and (ii) facilitate mobilization of adequate
resources for the power sector.
Further, the Commission has submitted its Report after
considering all relevant material which was placed before it and after
hearing all objections raised by the concerned parties. In view of the
time frame prescribed by the Commission, if the interim stay order
continues indefinitely, the Report would become totally nugatory. If
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the norms prescribed by the Commission are implemented and
finally if the appeal is allowed or norms are modified, NTPC could
be appropriately compensated.
Lastly, it is true that section 16 only provides that any person
aggrieved by the decision or order of the Central Commission may
file an appeal to the High Court. No further procedure is prescribed
under the Act and no rules are shown to us prescribing any
procedure. Learned counsel for the parties have also not pointed out
any provision in the Act or the Rules indicating that while exercising
the appellate jurisdiction, the High Court has power to grant such
interim relief. It is true that when appellate jurisdiction is conferred
unless there is a specific provision to the contrary, the jurisdiction of
the appellate authority would be of widest amplitude. In proper
cases, such authority may have jurisdiction to grant interim reliefs.
However, this would depend upon the nature of the order passed by
the competent authority in discharge of its functions. In case of
exercise of administrative or advisory jurisdiction by the authority,
there may not be any question of granting interim stay. It is needless
to point out that even if there is power to grant interim stay, it cannot
be exercised in a routine way or as a matter of course in view of the
special nature of jurisdiction conferred upon the Commission.
However, considering the fact that the appeal is pending before the
High Court, in our view, the aforesaid question is not required to be
finally determined at this stage because the High Court itself has
observed that the matter may be placed for further hearing after the
Group for formulating the Tariff Policy takes decision and that the
parties would be entitled to be heard afresh. Similar are the
observations made by the Commission in its Report.
Hence, in our view, this was not a fit case for grant of interim
relief so as to make the Report virtually nugatory. Further, the High
Court in its impugned judgment has observed that this is just an
interim order and after the Group for formulating the Tariff Policy
takes a decision, the High Court should be informed about the
decision taken by the Group for formulating the Tariff Policy and
parties would be entitled to be heard afresh. In this view of the
matter, the impugned order passed by the High Court requires to be
set aside and the Court is requested to decide the appeals on merits
as expeditiously as possible.
In the result, the appeals are allowed, the impugned order
passed by the High Court is set aside. There shall be no order as to
costs.
J.
(M.B. Shah)
J.
October 10, 2001. (R.P. Sethi)