Bihar State Power Transmission Company Limited vs Bihar Electricity Regulatory Commission

Judgement in Appeal No. 329 of 2025
IN THE APPELLATE TRIBUNAL FOR ELECTRICITY
(Appellate Jurisdiction)
APPEAL NO. 329 OF 2025 & IA NO.1185 OF 2025
th
Dated: 09 October , 2026
Present: Hon`ble Ms. Seema Gupta, Officiating Chairperson
Hon`ble Mr. Virender Bhat, Judicial Member
IN THE MATTER OF:
Bihar State Power Transmission Company Limited
Through its Resident Engineer Shri Umang Anand,
4th Floor, Vidyut Bhawan, Bailey Road,
Patna-800021. …Appellant
VERSUS
Bihar Electricity Regulatory Commission
Through its Secretary
Ground Floor, Vidyut Bhawan-II,
B.S.E.B. Campus, Jawahar Lal Nehru Marg,
(Bailey Road), Patna-800021,
Bihar (India). …Respondent(s)
Counsel on record for the Appellant(s) : Mr. Shri Venkatesh
Mr. Shryeshth Ramesh Sharma
Mr. Akash Lamba
Ms. Surbhi Kapoor
Ms. Tanishka Khatana
Mr. Vedant Choudhary
Mr. Tarang Saraogi
Mr. Manav Bhatia
Ms. Drishi Rathi
Ms. Kanika Chugh
Mr. Mohit Mansha Ramani
Ms. Indu Uttara
Mr. Shivam Kumar
Mr. Harshvardhan
Mr. Ashutosh Kumar Srivastava
Mr. Bharath Gangadharan
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Judgement in Appeal No. 329 of 2025
Mr. Abhishek Nangia
Mr. Siddharth Nigotia
Mr. Nihal Bhardwaj
Mr. Shivam Kumar
Mr. Kartikay Trivedi
Mr. Mohit Gupta
Mr. Manu Tiwari
Mr. Aashwyn Singh
Mr. Punyam Bhutani
Mr. Harsh Vardhan
Mr. Suhael Buttan
Mr. Himangi Kapoor
Mr. Priya Dhankar
Mr. Anant Singh
Mr. Kunal Veer Chopra
Mr. Vineet Kumar
Mr. Aditya Tiwari
Mr. Nehal Jain
Mr. Nikunj Bhatnagar
Mr. Aniket Kanhaua
Mr. Adarsh Singh
Ms. Ananya Dutta
Mr. R.Jatin Kattyar
Mr. Shourya Vir Das
Ms. Devishi Gupta
Mr. Amol Rana
for Res. 2
Counsel on record for the Respondent(s) : Mr. Ravi Kishore for R-1
JUDGEMENT
PER HON’BLE MRS. SEEMA GUPTA, OFFICIATING CHAIRPERSON
1. The present appeal has been preferred by Bihar State Power
Transmission Company Limited (“BSPTCL”), an intra-State transmission
licensee against the Order dated 28.03.2025 (“Impugned Order”) passed
by the Bihar Electricity Regulatory Commission ( hereinafter referred as
“BERC”/“State Commission”) in Case No. 27 of 2024, whereby the
State Commission, while approving the truing-up of tariff for FY 2023-24,
the Annual Performance Review (“APR”) for FY 2024-25, and the Multi
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Judgement in Appeal No. 329 of 2025
Year Aggregate Revenue Requirement (“ARR”) for the Control Period FY
2025-26 to FY 2027-28, disallowed 25% of the allowable depreciation on
the ground that the Appellant had not submitted a certified Fixed Asset
Register (“FAR”) along with its tariff petition.
Factual matrix of the Case:
2. In 2021, the Commission notified the BERC (Multi Year Transmission
Tariff and SLDC Charges) Regulations, 2021 (“MYT Regulations, 2021”),
applicable up to FY 2024-25, and on 30.10.2024 notified the BERC (Multi
Year Transmission Tariff and SLDC Charges) Regulations 2024 (“MYT
Regulations, 2024”), applicable from 01.04.2025 to FY 2027-28.
Regulation 23, which governs depreciation, is, in material part, identically
worded in both sets of Regulations.
3. The issue relating to preparation and submission of the FAR had
arisen in the earlier tariff proceedings of the Appellant. In Case (Tariff) No.
20 of 2022, pertaining to FY 2021-22, the State Commission allowed
depreciation of Rs. 322.14 crore, as against Rs. 364.78 crore claimed by
the Appellant. Similarly, in the proceedings for FY 2022-23 (Case (Tariff)
No. 25 of 2023, order dated 01.03.2024), the State Commission allowed
depreciation of Rs. 403.03 crore as against Rs. 410.65 crore claimed,
without any disallowance on account of the FAR, taking note of the
Appellant's continuing efforts in preparation of FAR and directing that the
FAR be submitted along with the petition for FY 2023-24.
4. On 15.11.2024, the Appellant filed the Subject Petition, being Case
No. 27 of 2024, seeking, inter alia, (a) truing-up of tariff for FY 2023-24
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Judgement in Appeal No. 329 of 2025
under the MYT Regulations, 2021; (b) APR for FY 2024-25 under the MYT
Regulations, 2021; and (c) approval of the Business Plan and MYT ARR
for the Control Period FY 2025-26 to FY 2027-28 under the MYT
Regulations, 2024.
5. By the Impugned Order dated 28.03.2025, the State Commission
approved a computed depreciation of Rs. 475.90 crore for FY 2023-24 in
truing-up, but held that, in the absence of the FAR despite repeated
directions in earlier tariff orders, it was unable to ascertain whether
depreciation claimed on an estimated asset value would be consistent with
the applicable Regulations or with consumer interest, and accordingly
allowed only 75% of the computed depreciation, i.e., Rs. 356.92 Crore,
while directing that the normative repayment of loan continue to be
reckoned with reference to the full computed figure of Rs. 475.90 Crore.
6. Aggrieved by the aforesaid order, the Appellant filed a Review
Petition, being Case No. 17 of 2025, which was dismissed by the State
Commission by its Order dated 17.06.2025. The Appellant has thereafter
preferred the present Appeal on the issue of disallowance of depreciation
for non-submission of FAR.
SUBMISSIONS URGED ON BEHALF OF THE APPELLANT
7. The Appellant submits that the Regulation 23 of the MYT Regulations,
nowhere authorizes the State Commission to reduce depreciation for want
of the FAR. Further, the disallowance, i.e. 25% of the depreciation claim
for FY 2023-24, APR of 2024-25 and ARR for 2025-26 to 2027-2028, in
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Judgement in Appeal No. 329 of 2025
substance, a penalty for non-submission of the FAR, imposed in a tariff-
determination proceeding is ultra vires.
8. The Appellant placed reliance on this Tribunal’s judgement in Appeal
No. 364 of 2024, “ JBVNL vs JSERC” dated 02.01.2025, wherein it was
held that a Commission cannot reduce the ARR for non-compliance of
regulations, such action being in excess of jurisdiction and tantamount to
an impermissible penalty. Appellant also relied upon the Judgment dated
04.05.2009 passed by this Tribunal in Appeal No. 71 of 2007, “ MSEDCL
vs MERC” wherein it was held that while Section 142 of the Act empowers
the Commission to punish disobedience however such power cannot be
exercised to convert the its tariff-fixation power into a penalty proceeding.
9. Regarding the reliance placed by State Commission on the
Regulations 42 and 43 of the MYT Regulations, in its Reply dated
15.12.2025 to justify its power to deduct, learned counsel for the Appellant
submits that Hon'ble Supreme Court judgment in “ GUVNL v. Solar
Semiconductor Power Company (India) Pvt. Ltd. & Anr., (2017) 16
SCC 498 has held that Commission cannot take recourse to exercise of a
power, procedure for which is otherwise specifically provided under the
Act. Accordingly, in the absence of any express powers, the State
Commission cannot resort to inherent powers to deduct depreciation while
determining Tariff.
10. It is further submitted that the Appellant has made bona fide and
continuous efforts to complete the FAR. Preparation of FAR is being
carried out under a centralization imitative of the Holding Company, Bihar
State Power Holding Company pursuant to a tender inviting submission of
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Judgement in Appeal No. 329 of 2025
FAR under a project timeline ending 13.09.2027, of which 6 milestones
already stand completed and 04 milestones are within their multi-month
timelines running to September 2027 as per the Status Update dated
27.07.2026.
11. The Appellant further relied on the Commission's own orders dated
18.03.2026 in Case No. 52 of 2025, whereby it has not made deduction in
the depreciation for FY 2024-25 true-up, expressly recording the progress
made towards the FAR and approving full depreciation of Rs. 567.19 crore.
Accordingly, Appellant has prayed that the deduction of Rs.119.98 crore
towards depreciation for FY 2023-24 to be set aside and Appellant’s claim
for full depreciation be allowed in terms of Regulation 23.
SUBMISSIONS URGED ON BEHALF OF THE RESPONDENT
12. The Respondent submits that the Regulation 23(vii) of the MYT
Regulations mandates that the licensee submit a certified copy of the Asset
Register, with details of fully depreciated transmission lines, substation,
transformers, disposed-of assets and amount received thereof in the tariff
petition every year. The State Commission has been directing the
Appellant to prepare and submit such Asset Register along with the tariff
petitions filed every year however, the Appellant has failed to comply with
these directions. In the absence of the Asset Register, the State
Commission has no means of ascertaining the exact life of an asset post-
capitalisation, correct computation of depreciation, Return on Equity, and
interest and finance charges cannot otherwise be arrived at.
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Judgement in Appeal No. 329 of 2025
13. Learned Counsel for Respondent submits that during the hearing of
the tariff petition for FY 2022-23, on a query, Appellant submitted that a
tender had been floated for engagement of an agency for physical
verification, identification, valuation and preparation of the Asset Register,
but failed to provide any concrete answer regarding the steps being taken
and, during the proceedings on the tariff petition for FY 2025-26, the
Commission again observed that the Appellant had still not prepared or
submitted the Asset Register despite repeated directions.
14. Accordingly, rather than to initiate proceedings under Section 142 of
the Electricity Act, 2003 for imposition of penalty for continued non-
compliance, the Commission took a lenient view, having regard to the fact
that the defaulting entity is a public utility, preferred to only deduct a token
amount of only 25% of the allowable depreciation. The disallowance is also
supported by the Independent Auditor's Report on the Appellant's Annual
Accounts for FY 2023-24, which records instances of non-compliance with
Indian Accounting Standard (Ind AS) 16 on account of non-
componentisation of fixed assets pending maintenance of the fixed Asset
Register.
15. It is contended that in terms of Regulation 42 of the MYT Regulations
(Right to vary terms and conditions) and Regulation 43 (Limitation of Power
of Commission), State commission is empowered to take such steps as
the commission deems fit and proper in given circumstances and interest
of justice.
16. It is further submitted that in the event, the Appellant furnishes the
Asset Register, the depreciation may be claimed on an actual basis and
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Judgement in Appeal No. 329 of 2025
any consequential adjustment can be undertaken by the State Commission
at the time of true-up; the disallowance is accordingly not final in nature,
and the present Appeal is misconceived and liable to be dismissed.
DISCUSSION AND ANALYSIS
17. Heard Mr. Shri Venkatesh, learned senior counsel for the Appellant,
Mr. Ravi Kishore learned Counsel for the Respondent, perused the written
submissions filed by the parties, Impugned Order and other documents on
record. The main issue in the present Appeal pertains to deduction of 25
% of the depreciation claim in the True up for FY 2023-24 because Fixed
Asset Register is not submitted by the Appellant.
18. The methodology for calculation of Depreciation is specified in
Regulation 23 and admittedly under point no vii of this Regulation, the
licensee is required to submit the certified copy of the Asset Register with
the list of fully depreciated transmission lines, substation, transformers etc.
along with details of disposed off assets and amount received therefore
with the Tariff Petitions.
19. There is no doubt that the fixed Asset register provides a detailed
record of each asset, its description, cost, date of capitalization, location,
and useful life and therefore FAR ensures that only genuine, in-service
assets are considered for tariff computation and accordingly Depreciation
is allowed only on capitalized assets forming part of the regulated
business. It is an admitted position that Appellant has not prepared fixed
Asset Register till date. It has been stated on behalf of the Appellant that
Appellant came into existence as a distinct legal entity only with effect from
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Judgement in Appeal No. 329 of 2025
01.11.2012, pursuant to the Bihar State Electricity Reforms Transfer
Scheme 2012, and in compliance of regulatory requirements Appellant has
initiated action for preparation of Fixed asset Register, however earlier
attempts of engaging an agency for the purpose were not successful on
various counts. Upon a query from this Tribunal, Appellant vide its affidavit
dated 13.03.2026, submitted that under a centralized initiative undertaken
by Holding Company, i.e. Bihar State Power Holding Company, an agency
has been appointed for preparing the FAR for which agreement was signed
on 13.01.2026 with completion time line of 13.09.2027.
20. We take note that State Commission in its order dated 18.03.2026 in
Case No 52 of 2025 for True up of FY 2024-25, acknowledging the
progress made by Appellant towards preparation of Fixed Asset Register
has not made any deductions in the approved depreciation. We also take
note that though Regulation 23 vii requires a licensee to submit a certified
copy of Asset Register, the Regulations do not provide that non-submission
of FAR shall result in reduction of Depreciation. State Commission has
contended that it has directed the Appellant to prepare and submit the FAR
on several occasions, and Appellant failed to comply with these directions
and therefore instead of initiating proceedings under Section 142
considering it to be public entity, it took a lenient view in imposing 25 %
deduction from the approved depreciation.
21. Under Section 142 of Electricity Act, as extracted hereunder, there is
provision for punishment for noncompliance of directions by the
Appropriate Commission, a position also acknowledged by State
Commission.
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Judgement in Appeal No. 329 of 2025
142. Punishment for non-compliance of directions by Appropriate
Commission:–
In case any complaint is filed before the Appropriate Commission by any
person or if that Commission is satisfied that any person has contravened
any of the provisions of this Act or the rules or regulations made
thereunder, or any direction issued by the Commission, the Appropriate
Commission may after giving such person an opportunity of being heard
in the matter, by order in writing, direct that, without prejudice to any other
penalty to which he may be liable under this Act, such person shall pay,
by way of penalty, which shall not exceed one lakh rupees for each
contravention and in case of a continuing failure with an additional penalty
which may extend to six thousand rupees for every day during which the
failure continues after contravention of the first such direction.
22. Section 142 of the Electricity Act, 2003 is designed to secure
obedience to the lawful orders and directions of the Commission. The
language employed therein is general and admits of no distinction between
government-owned utilities and privately held licensees or generating
companies. The obligation to comply is universal, and the consequence of
non-compliance is uniform. The provision thus operates without
demarcation, ensuring that all regulated entities, whether public or private,
are equally amenable to the jurisdiction of the Commission and liable to
penalty for breach of its orders.
23. Hon'ble Supreme Court in its judgment in “ GUVNL v. Solar
Semiconductor Power Company (India) Pvt. Ltd. & Anr., (2017) 16
SCC 498 has categorically held that commission, being a creature of
statute cannot assume to itself any powers which are otherwise not
conferred to it. Relevant paragraph is extracted hereunder:
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Judgement in Appeal No. 329 of 2025
“39. The Commission being a creature of statute cannot assume
to itself any powers which are not otherwise conferred on it. In other
words, under the guise of exercising its inherent power, as we have
already noticed above, the Commission cannot take recourse to
exercise of a power, procedure for which is otherwise specifically
provided under the Act.”
24. The ratio decidendi is therefore that the Commission must act strictly
within the four corners of the statute and regulations, and any assumption
of powers not conferred would be contrary to the statute. In the present
case, as already observed, the applicable Regulations do not specify
consequences for non-submission of the FAR. The State Commission,
instead of invoking the penal provision available under the Electricity Act,
chose to make an ad hoc deduction of 25% from the approved depreciation
on account of non-submission of FAR. Such deduction is not legally
sustainable, being dehors the statutory framework, and stands vitiated as
being arbitrary.
25. The State Commission has sought to justify the deduction in
depreciation by placing reliance upon Regulation 42 (Right to Vary Terms
and Conditions) and Regulation 43 (Limitation of Power of Commission) of
the Bihar Electricity Regulatory Commission (Multi Year Transmission Tariff
and SLDC Charges) Regulations. The relevant provisions are extracted
hereunder for ready reference:
42. Right to vary terms and conditions---- The terms and conditions for
determination of tariff specified in these regulations are in the nature of
general framework on the basis of which the tariff shall be determined.
The Commission reserves its right to vary these terms and conditions,
as and when deems fit.
43. Limitation of Power of Commission--- Nothing in these regulations
shall be deemed to limit the powers of the Commission to deal with any
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Judgement in Appeal No. 329 of 2025
manner or exercise any power under the relevant Acts for which no
regulons have been made/framed and to make such orders as it may
consider appropriate to meet the ends of justice in any case.
26. Regulation 42 clarifies that the tariff regulations are a general
framework and that the Commission retains discretion to vary or adapt
them. However, such variation must be exercised judicially and with
recorded reasons , not arbitrarily. It is essentially a saving clause to allow
flexibility in unforeseen circumstances. Regulations 43 preserves the
plenary statutory powers of the Commission under the parent Act. In our
view, saving clauses embodied in Regulations 42 and 43 are enabling
provisions, intended to preserve flexibility and inherent jurisdiction of the
Commission. They do not, however, confer authority to alter substantive
tariff elements in disregard of the methodology prescribed under the
Regulations. Deduction of 25% depreciation for want of a Fixed Asset
Register, in absence of any express stipulation in the tariff framework,
would amount to an arbitrary variation and cannot be justified under these
Regulations. The State Commission can insist on proper asset verification,
but any disallowance must be anchored in the governing norms.
27. It is apposite to refer to the judgements of this Tribunal, as also relied
upon by the Appellant. This Tribunal in its Judgment dated 04.05.2009 in
Appeal No. 71 of 2007, “ MSEDCL vs MERC” has held that the
disallowance of some cost on account of non adherence of load shedding
protocol and violation of commissions order to be legally unsustainable. It
was held that while Section 142 of the Act empowers the Commission to
punish disobedience however such power cannot be exercised to convert
the its tariff-fixation power into a penalty proceeding. It has been observed
that:
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Judgement in Appeal No. 329 of 2025
“ The Electricity Act has sufficient provision for handling the situation of
disobedience. As already mentioned above, section 142, gives the
Commission, power for punishment in such a situation. The
Commission is a creation of the statute. Even if such power given is
considered by the Commission to be insufficient, the Commission
cannot convert its power of tariff fixation given by section 61 and 62 of
the Electricity Act 2003 into a proceeding for imposing penalty.”
28. Similarly, this Tribunal dated 02.01.2025, in Appeal No. 364 of 2024,
(“JBVNL vs JSERC”), referring to the above judgement held that
Respondent commission has exceeded its jurisdiction in imposing a
penalty of reduction of 2 % of ARR for the failure of Appellant to comply
with their Solar Power RP obligations. Further, this Tribunal in its
judgement in APPEAL No. 98 OF 2021 & batch dated 28.11.2025 has set
aside the 25 % disallowance in opening Gross Block as penalty for non –
compliance of Regulations, by referring to earlier judgements of this
Tribunal, being arbitrary.
29. Accordingly, in light of the law declared in the aforesaid judgments
and the deliberations held above, it is evident that the State Commission
has exceeded its jurisdiction in imposing a penalty by way of reduction in
the approved depreciation in the true-up of FY 2022-23 for the Appellant,
solely on account of failure to submit the Fixed Asset Register. Such action,
being dehors the statutory framework, cannot be sustained.
30. In view of the above deliberations, we set aside the impugned order
to the extent that it disallows 25% of the depreciation in the true-up for FY
2022-23. The matter is remanded to the State Commission to pass an
order afresh, restoring the deductions made in depreciation for FY
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Judgement in Appeal No. 329 of 2025
2022-23, and to ensure that the consequential adjustments are duly carried
out. The State Commission is directed to pass the consequential order
expeditiously, preferably within two months of receipt of this judgment, so
that regulatory certainty is maintained and the Appellant is not prejudiced
by undue delay.
31. The present Appeal, along with pending interlocutory applications, if
any, stands disposed of in the above terms.
th
PRONOUNCED IN THE OPEN COURT ON THIS 09 DAY OF
OCTOBER, 2026.
(Virender Bhat)
Judicial Member
(Seema Gupta)
Officiating Chairperson
REPORTABLE / NON-REPORTABLE
_________________________________________________
pr/ak
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