Damodar Valley Corporation vs Maithan Alloys Limited
- Court
- Supreme Court
2026 INSC 1178
Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
Civil Appeal No.11106 of 2024
Damodar Valley Corporation
…. Appellant
Versus
Maithan Alloys Limited & Ors.
…. Respondents
J U D G M E N T
K. VINOD CHANDRAN, J.
It is not often, but we do come across orders akin to the one
impugned, which is in blatant breach of judicial discipline and in
clear violation of Article 141 of the Constitution of India. It raises
serious doubts in our minds about independence vis-à-vis
accountability. We cannot but recall the sagacious words of
Justice Benjamin Cordozo that a judge “… (He) is not a knight-
errant roaming at will in pursuit of his own ideal of beauty or of
goodness. He is to draw his inspiration from consecrated principles”
Signature Not Verified
(sic-The Nature of the Judicial Process)”. However, here we have a
Digitally signed by
VISHAL ANAND
Date: 2026.10.30
14:57:33 IST
Reason:
Tribunal ‘innovating at pleasure’ (sic-supra) . The impugned order
Civil Appeal No.11106 of 2024 Page 1 of 27
was passed in a petition seeking review of an order of the year
2019, which was allowed in 2024, after more than five years. That
too, against established orders of tariff fixation under the
Electricity Act, 2003, also on the strength of a decision of this
Court in Bhaskar Shrachi Alloys Limited & Ors. v. Damodar
1
Valley Corporation & Ors. , a binding precedent under Article
141 of the Constitution of India.
2. The respondent herein was also a party in the earlier
proceedings, which determined the tariff between 01.04.2006 to
31.06.2009, by allowing a two-year transition period to the
Damodar Valley Corporation (DVC), the appellant herein, from
01.04.2004 to 31.03.2006. In the instant case, we are concerned
with the period 2009 to 2014, for which the Central Electricity
Regulatory Commission (CERC) fixed the tariff of DVC based on
the statutory provisions of the Electricity Act, 2003 (the Act of
2003), the Damodar Valley Corporation Act, 1948 (the DVC Act)
and the Central Electricity Regulatory Commission (Terms and
Conditions of Tariff) Regulations, 2009 (the Tariff Regulations of
2009). The very same issue of whether the ‘Sinking Fund’ which
1
(2018) 8 SCC 281
Civil Appeal No.11106 of 2024 Page 2 of 27
refers to a portion of the profits appropriated for the purpose of
redeeming the bonds issued by the DVC, was entitled to be
factored in the tariff of the power generated and supplied by the
DVC was considered and upheld in the cited decision of this
Court, which considered the issue on the basis of the enactments
above referred and the Tariff Regulations of 2004.
3. The CERC, for the subsequent period, passed an order in
the year 2013, which is produced as Annexure A7 when the matter
was pending before this Court. When the orders were passed by
the Appellate Tribunal for Electricity at New Delhi, in the appeal
filed by the consumers, the above cited decision had been
delivered. The Tribunal by Annexure A12 judgment upheld the
order of the CERC on its own reasoning and based on the binding
precedent of the cited decision of this Court. None challenged the
appellate order, and a review was filed by one of the appellants,
which was pending before the Tribunal for 5 years, disposed of
by the impugned order. The DVC has filed the above appeal in
which a Public Sector Undertaking, Steel Authority of India
Limited has intervened to add fuel to the fire.
4. We heard Sri Vikas Singh and Dr. Abhishek Manu Singhvi,
learned Senior Counsel appearing for the appellant, Sri Rajiv
Civil Appeal No.11106 of 2024 Page 3 of 27
Shakdher, learned Senior Counsel appearing for the Steel
Authority of India Limited and Sri Rajiv Yadav, learned AoR
appearing for the first respondent, who was the review petitioner
before the Tribunal.
5. The appellants first took umbrage at the review of an order
passed five years back that too after noticing the binding
precedent, but finding an error apparent on the record, in the
order in review, which was based also on the decision of this
Court. It was also pointed out that apart from accounting
principles ‘Sinking Fund’ is an expense permissible for tariff
determination as enabled by the statutory provisions. We were
taken through the specific provisions of the Act of 2003, the DV
Act as also the Tariff Regulations of 2009. In addition to power
generation, the DVC is statutorily enjoined to ensure flood
control, irrigation and development of the area.
6. On the other hand, the respondents would assert that there is
clearly a double benefit conferred by permitting depreciation of
the assets and then permitting the Sinking Fund to be factored in
the tariff as an expense, which puts an undue burden on the
consumer and enables an illegal enrichment to the DVC. The
provisions of the Companies Act are pointed out to urge the
Civil Appeal No.11106 of 2024 Page 4 of 27
contention that depreciation is in the nature of a charge on the
profits of the company, categorized as expenses, reckoning the
wear and tear of the capital assets; ensuring that within a period,
the company gets back the same so as to refurbish the worn out
assets. The Bonds issued by the DVC is also for the purpose of
building infrastructure, which are capital assets and a reserve
fund created for the purpose of redemption of such bonds can
only be appropriated from profits, which cannot be factored as
expenses for the purposes of tariff determination, especially
when the capital assets procured on the strength of the amounts
derived from the bonds is also granted depreciation.
7. We see that the impugned order has proceeded on the
premise that at the earlier stage the Appellate Tribunal had not
considered the issue of a double benefit having been conferred
by allowing depreciation, while also factoring the Sinking Fund
for the purpose of tariff determination. The impugned order,
hence, ruled that the DVC can claim only one of the two elements;
either the contribution to the Sinking Fund to be factored in the
tariff determination or depreciation of capital assets created by
utilizing the bond amount, as passthrough in tariff. The Tribunal,
in the impugned order, has also noticed the judgment of this Court
Civil Appeal No.11106 of 2024 Page 5 of 27
and has found the specific issue having escaped the notice of this
Court also; which in any event, we would think had to be agitated
before this Court in a properly constituted appeal, if at all.
8. However, the contention being that, the earlier decision had
not considered the issue of double benefit we looked at the cited
decision only for our satisfaction, since, if the Coordinate Bench
had actually committed an error, we could refer it to a Larger
1
Bench. This Court in Bhaskar Shrachi Alloys Limited was
concerned with two sets of appeals. One, from the initial common
order of the CERC in the appeals filed by the DVC; insofar as
exclusion of the provisions of the DVC Act while determining the
tariff and refusal to grant the claims of certain expenses
thereunder, the appeals of the consumers; one of whom was the
first respondent herein, insofar as the transitory period of two
years granted to the DVC for bringing in the rigor of the
Electricity Act and the appeals filed by the State of Jharkhand and
West Bengal Electricity Regulatory Commission against
excluding the State Regulatory Commission to determine the
Intra-State Transmission of electricity, which common order was
challenged before this Court as against the five counts, finalised
by the CERC. The second; from the order after remand made by
Civil Appeal No.11106 of 2024 Page 6 of 27
the very same common order, which directed de novo
consideration of five other aspects which order on remand was
passed when the appeal from the common order was pending
here.
9. We are only concerned with the ‘Sinking Fund’, which even
at that point was allowed by the CERC and affirmed by the
Appellate Tribunal. On going through the judgment, we find that
this Court had laid emphasis, as had the CERC on the fourth
proviso to Section 14 of the Act of 2003, which preserved the
continued application of the provisions of the DVC Act, which
were not inconsistent with the provisions of the Electricity Act. It
was held that the positive provision enabling the continued
application of the DVC Act, had overriding effect over the
inconsistent provisions of the Tariff Regulations of 2004, therein.
One of the contentions urged by the consumers was that the Tariff
Regulations of 2004 being statutory, as empowered under the
Electricity Act, should override the provisions of the DVC Act,
which was not accepted. Immediately, we should notice that the
aspect of depreciation and the eligibility of the Sinking Fund to be
factored in the expenses have been clearly specified as a special
Civil Appeal No.11106 of 2024 Page 7 of 27
provision under the Regulations of 2009; while the Tarriff
Regulations of 2004 makes no special reference to DVC.
1
10. In Bhaskar Shrachi Alloys Limited , this Court laid emphasis
th
on the 4 proviso to Section 14 of the Electricity Act, which we
agree with fully. In this context, we have to extract Section 173 and
174 of the Electricity Act, 2003, which are as under :-
“173. Inconsistency in laws. – Nothing contained in
this Act or any rule or regulation made thereunder or
any instrument having effect by virtue of this Act, rule or
regulation shall have effect in so far as it is inconsistent
with any other provisions of the Consumer Protection
Act, 1986 (68 of 1986) or the Atomic Energy Act, 1962
(33 of 1962) or the Railways Act, 1989 (24 of 1989).
174. Act to have overriding effect. – Save as
otherwise provided in section 173, the provisions of this
Act shall have effect notwithstanding anything
inconsistent therewith contained in any other law for the
time being in force or in any instrument having effect by
virtue of any law other than this Act.”
11. We have to also extract Section 58 of the DVC Act, which is as
under:
“58. Effect of other laws. – The provisions of this
Act or any rule made thereunder shall have effect
notwithstanding anything contained in any enactment
other than this Act or any instrument having effect by
virtue of any enactment other than this Act.”
12. Section 173 of the Electricity Act of 2003 gives overriding
effect to the provisions of the Consumer Protection Act, 1986,
Civil Appeal No.11106 of 2024 Page 8 of 27
Atomic Energy, 1962 or the Railways Act 1989 as against the
provisions of the Electricity Act, 2003 and any rule or regulation
made thereunder or any instrument by virtue of the Act of 2003. It
was argued by the consumers that the DVC Act not having been
included therein, despite recommendations of the Parliamentary
Standing Committee for such inclusion, Section 174 gives
overriding effect to the Tariff Regulations of 2004 framed under
the Act of 2003. Section 174 clearly provides that the provisions
of the Electricity Act of 2003 will have effect notwithstanding
anything inconsistent in any other law for the time being in force;
which we would think would normally include the DV Act of 1948,
which was enacted long before the Act of 2003 came into force.
Despite Section 58 of the DV Act, in which the absence of the
words ‘ any other law for the time being in force ’ is striking and
patently obvious, Section 174 would nullify the provisions in the
DVC Act which are inconsistent with the Act of 2003, but it would
not repeal the DVC Act and those provisions which are not
inconsistent with the Act of 2003 remains in force.
13. However, the legislature, presumably as abundant caution,
th
brought in the 4 proviso, which though is a proviso to the
provision providing for licences emphasises that the provisions of
Civil Appeal No.11106 of 2024 Page 9 of 27
the DV Act prevail, which are not inconsistent with the provisions
of the Electricity Act. We extract hereunder the fourth proviso to
Section 14:
‘Provided also that the Damodar Valley Corporation,
established under sub-section (1) of section 3 of the
Damodar Valley Corporation Act, 1948 (14 of 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, in so far as they are not inconsistent with the
provisions of this Act, shall continue to apply to that
Corporation:’
It is to ensure that the DVC Act prevails, that the proviso was
brought under the provision with the nominal heading ‘Grant of
Licence’ ; which proviso by the first limb, exempted DVC from
obtaining a licence under the Act of 2003 and deemed it to be a
licensee under the Act and in the second limb, declared the
continued application of the DVC Act, to that Corporation to the
extent they are not inconsistent with the Act of 2003; which Section
174 also does not detract from.
14. There was also a contention raised in the earlier round that
the proviso giving effect to the provisions of the DVC Act, which
are not inconsistent with the Electricity Act, having been
introduced under Section 14, specifically referring to grant of
Civil Appeal No.11106 of 2024 Page 10 of 27
licences, is restrained or confined in this effect to licenses. We
cannot accept the said argument since the grant of licence is the
first step in transmitting, distributing and undertaking trading in
electricity as distinguished from generation of electricity in Part
III. The proviso, hence, while deeming the DVC to be a deemed
licensee under the Electricity Act, not requiring to obtain a
licence under the Act by the very same proviso, set at naught the
provisions in the DV Act, which were inconsistent with the Act of
2003 and enabled the other provisions to continue in its
application to the DVC. Thus, making the Electricity Act
applicable to the DVC on all other aspects including tariff
determination, despite DVC not being required to specifically
obtain a licence. The licence is the sine qua non for engaging in
transmitting, distributing or trading in electricity, which alone can
enable inter alia a generator who carries on any of these functions
to approach the appropriate Electricity Regulatory Commission
for tariff determination. It is hence that Sections 61, 62 & 64 and
Section 79 have overriding effect and the DVC could not have
determined its own tariff under Section 20 of the DVC Act.
However, our reasoning does not enable a different conclusion
from the earlier judgment on the provisions of the DVC Act having
Civil Appeal No.11106 of 2024 Page 11 of 27
effect even after the Electricity Act came into force, to the extent
they are not inconsistent with the provisions of the Electricity Act
and hence, we find absolutely no reason to doubt the earlier
decision.
15. Our finding insofar as the effect of fourth proviso to Section
14, is in tandem with the decision of this Court in Bhaskar Shrachi
1
Alloys Limited . We also concur with Bhaskar Shrachi Alloys
1
Limited , insofar as finding the proviso to Section 14, in its second
limb, to be a substantive provision, especially considering the
background of the constitution of the DVC. This Court had already
noticed that the DVC was constituted, on the lines of Tennessee
Valley Authority in the USA, so as to control the floods of the
Damodar River and by channelising the potential of the river, to
develop the lands in the Valley. The Tennessee Valley Authority
Act had been enacted to improve the navigability and to provide
for flood control of the Tennessee River, for reforestation and
proper use of marginal lands in the Tennessee Valley, to enable
agricultural and industrial development of the valley and to
provide for the national defence by creation of a corporation for
the operation of the government properties near the Muscle
Shoals in the State of Alabama and for other purposes. The objects
Civil Appeal No.11106 of 2024 Page 12 of 27
and reasons of the DVC Act specifically refer to the Tennessee
Valley Authority and constitute the Corporation as an autonomous
body to carry out the functions of flood control in the Damodar
River, generate electric power, provide water for irrigation and
other purposes. In addition, the Corporation was also constituted
to endeavour promotion of economic development of the
Damodar Valley and the adjoining areas, as was argued before us
by the appellants. So was it argued at the earlier point that the
major areas of activity undertaken by the Corporation were
power generation, transmission and distribution, flood control,
irrigation and some connected activities like soil conservation,
afforestation etc.
16. Presently, it was argued that the other purposes also take in
the establishment of a township and ancillary activities connected
with the development of Damodar Valley. The Corporation is
statutorily mandated to perform the social welfare activities,
which are over and above the electricity generation and
transmission, which has led to the DVC being given a special
status, even insofar as the tariff determination, since electricity
generation is the income earning operation of the Corporation,
whose profits are to be used for other activities too, required in
Civil Appeal No.11106 of 2024 Page 13 of 27
addition to the grants made by the State Governments, the
resultant profits from which are to be apportioned to the State
Governments, in proportion to their contribution.
17. We have to specifically notice the relevant provisions of the
DVC Act, which provides for the expenditure, apportionment of
profits, payment of interest, reduction of capital cost and
provision for depreciation and for reserve and other funds, We
extract the same as hereunder:
32. Expenditure on objects other than irrigation,
power and flood control : - The Corporation shall
have power to spend such sums as it thinks fit on
objects authorized under this Act other than
irrigation, power and flood control and such sums
shall be treated as common expenditure payable out
of the fund of the Corporation before allocation under
section 32.
37. Disposal of profits and deficits : - (1) Subject to
the provisions of sub-section (2) of section 40, the net
profit, if any, attributable to each of the three main
objects, namely, irrigation, power and flood control,
shall be credited to the participating Governments in
proportion to their respective shares in the total
capital cost attributed to that object.
(2) The net deficit, if any, in respect of any of the
objects shall be made good by the Governments
concerned in the proportion specified in sub-section
(1):
Civil Appeal No.11106 of 2024 Page 14 of 27
Provided that the net deficit in respect of flood control
shall be made good entirely by the Government of
West Bengal and the Central Government shall have
no share in such deficit.
38. Payment of interest : - The Corporation shall pay
interest on the amount of capital provided by each
participating Government at such rate as may, from
time to time, be fixed by the Central Government and
such interest shall be deemed to be part of the
expenditure of the Corporation.
39. Interest charge and other expenses to be
added to and receipts taken for reduction of
capital cost : - For a period, not exceeding fifteen
years, from the establishment of the Corporation, if
the Corporation runs in deficit, the interest charges
and all other expenditure shall be added to the
capital cost and all receipts shall be taken in
reduction of such capital cost.
40. Provisions for depreciation and reserve and
other funds : - (1) The Corporation shall make
provision for depreciation and for reserve and other
funds at such rates and on such terms as may be
specified by the Auditor-General of India in
consultation with the Central Government.
(2) The net profit for the purposes of section 37 shall
be determined after such provision has been made.
18. Sub-section (2) of Section 40 requires the net profit, for the
purpose of Section 37, to be determined after provision has been
made under sub-section (1), which includes depreciation,
Civil Appeal No.11106 of 2024 Page 15 of 27
reserve and other funds as specified by the Auditor-General of
India. Section 37 is subject to the provisions of sub-section (2) of
Section 40, which requires the net profit, if any attributable to each
of the main objects namely, irrigation, power and flood control; to
be credited to the participating Governments in proportion to
their respective shares in the total capital cost attributed to that
object. The net deficit is made good by the Governments in the
proportion specified in sub-section (1), except insofar as the flood
control is concerned, where the deficit has to be made good
entirely by the Government of West Bengal. The statutory
provision is a clear departure from the general accounting
principles. Insofar as depreciation is concerned as per normal
accounting principles, it is a charge on the profits, which permits
the depreciation to be deducted, before the net profit is arrived
at, as expenses. Whereas, a reserve fund, herein for redemption
of bonds, as pointed out by the respondents, would be a capital
expenditure, which cannot be deducted to arrive at the net profit
and the amounts kept apart for reserve, normally has to be
appropriated from the net profit; in accounting parlance. Insofar
as the capital assets brought in, expending the money raised on
such bonds, the DVC Act, as per Section 42, enables the net profit
Civil Appeal No.11106 of 2024 Page 16 of 27
to be determined after making provision for not only
depreciation, but also after deducting reserve funds and any
other fund at such rate and on such terms as specified by the
Auditor General of India in consultation with the Central
Government.
19. Section 40 is not inconsistent with the Electricity Act, since
Section 61, which speaks of tariff regulations, empowers the
appropriate commission to specify the terms and conditions for
determination of tariff by taking into account, inter alia, the
factors, which would encourage efficiency, economical use of
resources, good performance and optimum investments (clause
c); safeguarding of consumers’ interests, and at the same time,
recovery of the cost of electricity in a reasonable manner (clause
d); the tariff progressively reflecting the cost of supply of
electricity and reduces cross-subsidies in the manner specified
by the Appropriate Commission (clause g).
20. The Electricity Regulatory Commission has specified
Regulation 43 by Regulations of 2009, which is extracted
hereunder:
‘ 43. Special Provisions relating to Damodar Valley
Corporation.
Civil Appeal No.11106 of 2024 Page 17 of 27
(1) Subject to clause (2), these regulations shall apply
to determination of tariff of the projects owned by
Damodar Valley Corporation (DVC).
(2) The following special provisions shall apply for
determination of tariff of the projects owned by DVC:
(i) Capital Cost: The expenditure allocated to the object
'power', in terms of sections 32 and 33 of the Damodar
Valley Corporation Act, 1948, to the extent of its
apportionment to generation and inter-state
transmission, shall form the basis of capital cost for the
purpose of determination of tariff:
Provided that the capital expenditure incurred on head
office, regional offices, administrative and technical
centers of DVC, after due prudence check, shall also
form part of the capital cost.
(ii) Debt Equity Ratio: The debt equity ratio of all
projects of DVC commissioned prior to 01.01.1992 shall
be 50:50 and that of the projects commissioned
thereafter shall be 70:30.
(iii) Depreciation: The depreciation rate stipulated by
the Comptroller and Auditor General of India in terms
of section 40 of the Damodar Valley Corporation Act,
1948 shall be applied for computation of depreciation
of projects of DVC.
(iv) Funds under section 40 of the Damodar Valley
Corporation Act, 1948: The Fund(s) established in terms
of section 40 of the Damodar Valley Corporation Act,
1948 shall be considered as items of expenditure to be
recovered through tariff.
xxx xxx xxx’
21. The regulation specifically enables depreciation, at the rate
stipulated by the Comptroller and Auditor General of India, in
Civil Appeal No.11106 of 2024 Page 18 of 27
terms of Section 40 of the DVC Act and permits the funds
established in terms of Section 40 of the DVC Act to be considered
as items of expenditure to be recovered through tariff. Annexure
A1 produced along with the appeal, allows appropriation of the
Corporation power surplus insofar as an allotment of Sinking Fund
as a first charge, which is before any allocation for the Investment
Allowance Reserve, categorized as General Reserve. Hence, in a
departure from the accounting principles of allowing
depreciation as a first charge on the gross profits and
appropriation from the net profits towards general reserves; the
‘Sinking Fund’, which is also in the nature of a reserve fund,
constituted only to redeem the bonds, is allowed to be treated as
a first charge, thus, making it an expense deductible from the
gross profits before arriving at the net profit and consequently
enabled to be factored in the tariff as an expenditure for the
purposes of generation, transmission and supply of power.
22. Now, we come to the disturbing issue of the review and we
1
extract paragraph 57 from Bhaskar Shrachi Alloys Limited as
under:
‘ 57. Insofar as the questions under the last two issues at
(g) and (h) above are concerned, the same have
already been dealt with in the present order. Of the
Civil Appeal No.11106 of 2024 Page 19 of 27
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 1948
Act which have been held to be 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.’
st
23. In the review filed by the 1 respondent, paragraph 7
categorically states that they did not impugn the allowance of
contribution to Sinking Fund as a pass through in tariff since the
issue is no more res integra after the decision in Bhaskar Shrachi
1
Alloys Limited . They also put forth the contention that they were
only aggrieved by the double allowance of the principal
component of Sinking Fund contribution by not reducing a
corresponding amount from the capital cost for the purpose of
allowance of depreciation amount, which is accounted for towards
loan repayments as per the Tariff Regulations of 2009. In the
written submissions, however the emphasis is on Sinking Fund not
being a cost but only appropriation of the net profit; which we
have answered. The SAIL also in their written submissions
Civil Appeal No.11106 of 2024 Page 20 of 27
emphasized the said aspect. The above extract clearly indicates
that the Appellate Tribunal’s findings on the issue relating to
depreciation and Sinking Fund, are perfectly in order and there
was no scope for a review from the order which relied on Bhaskar
1
Shrachi Alloys Limited .
24. There is no room for any doubt that the allowance of
depreciation, as juxtaposed with the Sinking Fund also being
factored as an item of expenditure, to be recovered through tariff
as enabled by Section 40, was specifically considered and
upheld. We also notice from the original decision of the Tribunal
which is reviewed, that it had dealt specifically with the contention
of double allowance; allowance one, being on interest on
normative loan of at least 70% or more of actual capital cost,
depreciation for payment of principal and allowance, two; being
contribution to Sinking Fund created for redemption of bonds,
which factors both the interest on relevant bonds and the
principal amount realized through the bonds issued. It was held
that Section 40 of the DVC Act, referred to in Regulation 43, is
consistent with the Electricity Act insofar as the capital cost
incurred by utilizing the amount received from bonds, is
recovered from Sinking Fund contribution, without any allowance
Civil Appeal No.11106 of 2024 Page 21 of 27
thereof as part of interest on loan and depreciation allowed. The
assets acquired by virtue of the amounts generated by the Bonds,
to redeem which a Sinking Fund is constituted, enables benefit of
depreciation on the assets so acquired and the amounts
appropriated from profits for the Sinking Fund being factored as
expenses to be included in the tariff.
25. The impugned judgment of the Tribunal in the Review
Petition refers to a number of decisions on the contours of review
and finds that allowing depreciation on capital assets created by
utilizing bond amounts clearly makes out a case of duplication or
double allowance, which cannot be permitted and the Tribunal at
the first instance having fallen into a patent error in not
recognizing the same. The Tribunal, in review, sought to draw a
distinction between capital assets created with the use of bond
funds and those from other sources; depreciation being
permissible only insofar the latter one and not with respect to the
former. The impugned decision also refers to Bhaskar Shrachi
1
Alloys Limited and expressed, according to us, vehemently, but
erroneously that the concept of duplication or double allowance
was not brought before the Tribunal and before this Court, and
Civil Appeal No.11106 of 2024 Page 22 of 27
therefore, the same is alive for consideration in review; definitely
overstepping the contours of review.
26. As we noticed from the above extract, though, the words
‘duplication’ or ‘double allowance’ has not been used, this Court
had found the provision for Sinking Fund to be permissible to be
considered as an item of expenditure, and hence, possible of
recovery through tariff, while accepting the allowance on
depreciation; both under the statutory imprimatur of Section 40 of
the DVC Act.
27. We cannot but observe that the Tribunal has gone haywire;
we are apologetic for the expression but we find no substitute to
express our angst in allowing the review, that too, when the very
same issue, for the earlier years, was settled by this Court in
1
Bhaskar Shrachi Alloys Limited , based on which, the original
order was passed by the Tribunal. In this context, we only notice
the decision of this Court in State of West Bengal and Others v.
2
Kamal Sengupta and Another , which specifically considered the
power of review conferred under the Administrative Tribunals
Act, 1985, by Section 22(3)(f), which is in pari materia with Section
2
(2008) 8 SCC 612
Civil Appeal No.11106 of 2024 Page 23 of 27
122(f) of the Electricity Act. We specifically extract paragraph 22
from the said decision as under:
‘ 22. The term “mistake or error apparent” by its very
connotation signifies an error which is evident per se
from the record of the case and does not require
detailed examination, scrutiny and elucidation either of
the facts or the legal position. If an error is not self-
evident and detection thereof requires long debate and
process of reasoning, it cannot be treated as an error
apparent on the face of the record for the purpose of
Order 47 Rule 1 CPC or Section 22(3)(f) of the Act. To
put it differently an order or decision or judgment
cannot be corrected merely because it is erroneous in
law or on the ground that a different view could have
been taken by the court/tribunal on a point of fact or
law. In any case, while exercising the power of review,
the court/tribunal concerned cannot sit in appeal over
its judgment/decision.’
(underlining supplied by us for emphasis)
28. Noticing numerous decisions of this Court on the contours of
review, the principles culled out, are available in paragraph 35,
which is also extracted hereunder:
‘ 35. The principles which can be culled out from the
above noted judgments are:
(i) The power of the Tribunal to review its
order/decision under Section 22(3)(f) of the Act is
akin/analogous to the power of a civil court under
Section 114 read with Order 47 Rule 1 CPC.
(ii) The Tribunal can review its decision on either of the
grounds enumerated in Order 47 Rule 1 and not
otherwise.
Civil Appeal No.11106 of 2024 Page 24 of 27
(iii) The expression “any other sufficient reason”
appearing in Order 47 Rule 1 has to be interpreted in
the light of other specified grounds.
(iv) An error which is not self-evident and which can be
discovered by a long process of reasoning, cannot be
treated as an error apparent on the face of record
justifying exercise of power under Section 22(3)(f).
(v) An erroneous order/decision cannot be corrected in
the guise of exercise of power of review.
(vi) A decision/order cannot be reviewed under Section
22(3)(f) on the basis of subsequent decision/judgment
of a coordinate or larger Bench of the tribunal or of a
superior court.
(vii) While considering an application for review, the
tribunal must confine its adjudication with reference to
material which was available at the time of initial
decision. The happening of some subsequent event or
development cannot be taken note of for declaring the
initial order/decision as vitiated by an error apparent.
(viii) Mere discovery of new or important matter or
evidence is not sufficient ground for review. The party
seeking review has also to show that such matter or
evidence was not within its knowledge and even after
the exercise of due diligence, the same could not be
produced before the court/tribunal earlier.’
The impugned decision of the Tribunal in the present case does
not fall under any of the principles as culled out hereinabove.
29. We find the review to be clearly illegal, totally misplaced and
blatantly in breach of the principles of judicial discipline. We also
have to emphasize the travesty insofar as violation of Article 141
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of the Constitution of India. Our judicial system with the hierarchy
of Courts thrives on the sanctity of the decisions of the appellate,
revisional and supervisory jurisdictions to be given due
weightage. As far as Article 141 is concerned it’s a Constitutional
imprimatur which ensures the decisions of the highest court of the
land to be followed, without which there will be mayhem. We are
conscious of the criticism that the Supreme Court’s decisions are
supreme not because it is infallible but only because it is the final
Court. However, finality and closure is the expedient need in
litigation.
30. We set aside the impugned decision and restore the order of
the Appellate Tribunal at the first instance dated 17.05.2019. We
also observe with some consternation that there were no appeals
filed from the earlier order to this Court and one of the appellants
before the Appellate Tribunal had filed for a review and waited
for five years to get it heard. We find the said action to be clearly
an abuse of process of law and impose a cost of Rs.2,00,000/-
st
(Rupees Two Lakh) on the 1 respondent. We cannot also ignore
that a Public Sector Undertaking, who claims to be a Maharatna
Company, has willingly participated in the attempt to canvas for
upholding an order passed clearly in breach of judicial discipline
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and violating Article 141 of the Constitution of India and sought
intervention in the matter. The Public Sector Undertaking has
been ill-advised, and in that circumstance, we impose a cost of
Rs.1,50,000/- (Rupees One Lakh and Fifty Thousand) on the Steel
Authority of India Limited. The cost shall be paid to the Damodar
Valley Corporation within a period of one month from today,
failing which, interest @18% per annum shall be applied.
31. The appeal is allowed with costs, in addition to the exemplary
costs awarded hereinabove.
32. Pending application(s), if any, shall stand rejected.
.……………………………... J.
(J. B. PARDIWALA)
..………….…………………. J.
(K. VINOD CHANDRAN)
NEW DELHI;
OCTOBER 30, 2026.
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