Normative O&M Expenses Under Tariff Regulations Subsume Employee Pension and Gratuity Fund Liabilities

The Review Petitioner, Damodar Valley Corporation (DVC), sought a review of a common judgment dated 11.09.2025 passed by the Appellate Tribunal for Electricity (APTEL).

The original judgment had affirmed orders from the Central Electricity Regulatory Commission (CERC) for the 2016-2017 period, which rejected DVC’s claim that Pension and Gratuity (P&G) Fund liability should be treated as a distinct tariff element.

DVC contended that its pension liabilities, governed by Section 40 of the DVC Act, 1948, are distinct from Contributory Provident Fund (CPF) and should be recoverable separately from consumers rather than being subsumed within normative Operation and Maintenance (O&M) expenses.

The Tribunal applied Section 114 and Order XLVII Rule 1 of the Code of Civil Procedure (CPC), 1908, which restricts review to the discovery of new evidence, mistakes apparent on the face of the record, or other sufficient reasons.

The court relied on Chhajju Ram v. Neki Ram regarding the scope of "sufficient reason" and Kamlesh Verma v. Mayawati, which established that a review is not an "appeal in disguise" and cannot be used to substitute a view or reopen concluded adjudications.

The court also referenced S. Madhusudhan Reddy v. V. Narayana Reddy and Malleeswari v. K. Suguna to emphasize that an error establishes a ground for review only if it is patent and manifest without a long-drawn process of reasoning.

The Tribunal found that DVC's arguments—concerning the distinction between CPF and pension liabilities, the mandate of Section 40 of the DVC Act, and the applicability of the Bhaskar Shrachi precedent—had already been comprehensively addressed in the original 12-page discussion of the 11.09.2025 judgment.

The Tribunal reasoned that the 2009 Tariff Regulations explicitly included employee-related expenditures (like Gratuity and CPF) within O&M norms to incentivize efficiency and prevent double recovery.

The Tribunal noted that DVC failed to produce evidence that the C&AG had specifically mandated the P&G Fund as a separate tariff element under Section 40 during the original proceedings.

Consequently, the Tribunal determined that DVC was merely seeking a "relook" at a well-reasoned judgment, which does not constitute a "patent mistake" or "error apparent" but rather an attempt to appeal the merits of the decision under the guise of a review.

It concluded that the original judgment’s finding—that P&G liabilities are subsumed within normative O&M expenses—was a considered view that could only be challenged through an appeal to a higher forum, not through review.