TaxTMI 
TaxTMI 
2002 (10) TMI 772
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....a Banerjee,Adv., Ms. Sushmita Kapur, Adv. and M/s. Fox Mandal & Co. JUDGMENT N. Santosh Hegde, J. 1. Leave granted in SLP (SIC) No. CC 6293/02 & SLP (SIC) No. CC 6307/02. In the connected appeals, leave has already been granted. All these matters raised common question of law and facts, hence, have been clubbed together. 2. The West Bengal Electricity Regulatory Commission (the Commission) by an order dated 7.11.2001 determined the tariff for the sale of electricity by the Calcutta Electricity Supply Company Ltd. (the Company) for the year 2000-2001 and 2001-2002. Being aggrieved by the said determination of tariff, the Company preferred an appeal before the High Court of Calcutta under Section 27 of the Electricity Regulatory Commissions Act, (the 1998 Act). The High Court by the impugned judgment has allowed the appeal of the Company by itself re-determining the tariff and enhancing the same. It is against this judgment of the High Court the above civil appeals are preferred. 3. C.A. No. 4037 of 2002 is preferred by the Commission specifically contending that the Commission is not challenging the tariff fixed by the High Court in its appellate jurisdiction. It cont....
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....which arise in these appeals, therefore, we should finally decide these issues, whatever be our findings on the question of bias. 8. In this background, we have decided to consider the question of bias as the last question to be decide, that too, only if need be. 9. For deciding the issues that arise in these appeals, it is necessary to have a look at the various enactments which have direct bearing on these issues. 10. The Indian Electricity Act, 1910 (the 1910 Act), was enacted with a view to make an improvement on the then existing legislation controlling the generation, transmission and supply of electricity in this country. Out of the various provisions of this Act, we need only refer to Clause II of the Schedule to the 1910 Act, which read with Section 3(2)(f) of this Act, makes it obligatory for the licensee to follow the procedure as to the audit of the licensee's accounts which, inter alia, requires the same to be audited by such persons as the State Government may appoint or approve in that behalf. Thus, the 1910 Act has made the auditing of the accounts of a licensee a statutory requirement. This statutory requirement continues to operate inspite of subseque....
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....person. It also provides that the Chairperson and the members of the State Commission, among other things, shall be persons who have adequate knowledge of, and capacity in dealing which problems relating to engineering, finance, commerce, economics, law or management. These members of the State Commission are to be selected by a Selection Committee constituted by the State Government under Section 18 of this Act. The members of the said Selection Committee consists of, a person who has been a Judge of the High Court, the Chief Secretary of the State concerned and the Chairperson or a member of the Central Electricity Regulatory Authority. The said section also fixes a time schedule by which the vacancy in the office of the State Commission should be filed up. Section 19 of this Act provides for term of office and service conditions of the members of the State Commission, while Section 20 provides for a special procedure for the removal of members of the State commission which will have to be done by the Government on the ground of proved misbehavior, after the High Court on reference being made to it by the Governor, has reported that the member concerned ought to be removed on suc....
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....nciples and their applications provided in Sections 46, 57 and 57-A of the Electricity (Supply) Act, 1948 (54 of 1948) and the Sixth Schedule thereto; (b) in the case of the Board or its successor entities, the principles under Section 59 of The Electricity (Supply) Act, 1948 (54 of 1948); (c) that the tariff progressively reflects the cost of supply of electricity at an adequate and improving level of efficiency; (d) the factors which would encourage efficiency, economical use of the resources, good performance, optimum investments, and other matters which the State Commission considers appropriate for the purposes of this Act; (e) the interests of the consumers are safeguarded and at the same time, the consumers pay for the use of electricity in a reasonable manner based on the average cost of supply of energy; (f) the electricity generation, transmission, distribution and supply are conducted on commercial principles; (g) national power plans formulated by the Central Government. (3) The State Commission, while determining the tariff under this Act, shall not show undue preference to any consumer of electricity, but ....
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....Section 58 empowers the Commission to make Regulations, which also have to be notified in the Official Gazette and the Regulations have to be consistent with the Act and the Rules. Sub-section (2) of Section 58 in Clause (d), specifically provides that the Commission is empowered to make Regulations, providing for the manner in which charges for energy may be determined under Sub-section (2) of Section 29. 23.Section 59 obligates that the rules and regulations made under this Act have to be placed before the Houses of the Legislature. It is not in dispute that the rules framed by the State of West Bengal, as also the regulations framed by the State Commission have been placed before the legislature as required under Section 59 of the Act. 24. The State of West Bengal exercising the power under Section 57 of the 1998 Act enacted the West Bengal Electricity Regulatory Commission (Appointment of Chairperson and Members Functions, Budget and Annual Report) Rules, 1999 (hereinafter called the Rules). Rule 4 of the said Rules provides for the procedure to be adopted by the Commission in the proceedings before it. Sub-rule 1(SIC) of the said Rule mandates that before fixing the tari....
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....2002. While so determining the tariff, the Commission followed the provisions of the 1998 Act and the regulations framed by it. 31. Being aggrieved by the said determination of tariff, the Company, as stated above, preferred the statutory appeal before the High Court, making the Commission alone the respondent. The High Court while rejecting the impleadment application of the appellant-organisations, proceeded to re-fix the tariff by only following the principles of Schedule VI to the 1948 Act and to the exclusion of other requirements of Section 29 of the 1998 Act. In the said process it re-fixed the average tariff for the year 2000-01 at Rs. 3.96 per unit and at Rs. 4 per unit for the year 2001-02. In the course of its judgment, the High Court also came to the conclusion that the regulations framed by the Commission, especially the ones pertaining to the right of the consumers to be heard in the proceedings, as also applications of the principles to be followed in determining the tariff, were contrary to law and directed in no uncertain terms that these regulations will have to be modified to bring them in conformity with its observations in the judgment, and further stated th....
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....ections in case they were interested in the proceedings before it. Pursuant to the said publication, it is stated that a number of organisations including some of the appellants herein, representing sections of the consumers, appeared and filed their objections and submitted their arguments which were taken note of by the Commission in the proceedings before it. This was not objected to by the respondent company. As noticed above, the respondent company being aggrieved by the final order of fixation of tariff by the Commission preferred the statutory appeal before the High Court. To the said appeal, may be for reasons of convenience, the respondent company impleaded only the Commission as a party respondent, but the High Court in the initial stage thought it appropriate to issue a public notification of the filing of the appeal and called upon the interested parties to represent themselves before it. Pursuant to the said publication, some of the organisations representing consumers sought impleadment before the High Court. However when the matter camp up for final hearing the applications of these consumer organisations were rejected by the High Court holding that the Commission do....
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....nsumers, the same procedure should be followed even in regard to fixation of tariff under the 1998 Act, which would mean that the consumers have no say whatsoever in the fixation of tariff. The court also held that if at all any representation of the consumers is permissible, the same should be done only in accordance with Section 26, by the Commission recognising a particular consumer association to represent them. Even in this regard, the High Court expressed some doubt because an organisation chosen to represent the consumers by the Commission may not be acceptable to another section of the consumers and, therefore, in reality, such recognition of a particular organisation by the Commission would also be futile. 38. Learned counsel appearing for the appellants have very strenuously contended that this view of the High Court is wholly unsustainable. They contend that under the various provisions of the Act, rules and regulations, the Parliament either directly or by subordinate legislation has conferred the right of representation on the consumers and it is not open to the High Court to negative such statutory right. Though, learned counsel representing the respondent company ....
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....exercising its powers and discharging its functions which also indicates that the proceedings of the Commission should be public which, in itself, shows participation by interested persons. That apart, the State of West Bengal in exercise of its power under Section 57 of the Act has enacted the West Bengal Electricity Regulatory Commission (Appointment of Chairperson and Members Functions, Budget and Annual Report) Rules, 1999. In the said rule under Rule 4(SIC) the State Government has provided that the Commission before taking any decision on the rates of tariff must notify its intention in this behalf, in leading newspapers of West Bengal and hold public hearing for the said purpose (emphasis supplied). Even the Commission under the power conferred on it in Section 58 of the Act, has framed the West Bengal Electricity Regulatory Commission (Conduct of Business) Regulations, 2000 as amended by Regulations dated 3.2.2000, wherein, under Regulation 18 the Commission, can permit an association or other body corporate or any group of consumers to participate in any proceedings before the Commission, on such terms and conditions, including, in regard to be nature and extent of partici....
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.... to the consumers. Consequently, the right of the consumer of prefer an appeal under Section 27 of the 1998 Act to the High Court is similar, if they are in nay manner aggrieved by any order made by the Commission. Alternatively, if the company is an aggrieved party and if it prefers an appeal, then it has to make such of those consumers who have been heard by the Commission, as party respondent, and such consumers will have the right of audience before the appellate court. In the instant case, none of the consumers/consumer organisations were allowed to participate in the proceedings by the Commission have been made parties to the appeal. Therefore, the High Court ought to have impleaded and heard the consumer-appellants herein. Vires of the Regulations: 41. The High Court in the course of its judgments has held that the Commission by framing Regulations 25 and 31(4) has permitted indiscriminate representation of the consumers before it which is not contemplated under the Act. In the said view of that matter, it had directed the Commission to suitably amend these regulations to bring them in conformity with its judgment. There is also a threat to the Commission that if it fa....
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.... Court has suo motu gone into this issue. On the basis of the provisions found in the Regulations framed by the Commission, we are of the opinion that there is no room for any indiscriminate hearing before the Commission. Therefore the finding of the High Court that the Regulations do leave room for such indiscriminate hearing is erroneous. 44. Having held on merits that the Regulations are not arbitrary and are in conformity with the provisions of the Act, we will now consider whether the High Court could have gone into this issue at all in an appeal filed by the respondent Company. First of all, we notice that the High Court has proceeded to declare the regulations contrary to the Act in a proceeding which was initiated before it in its appellate power under Section 27 of the Act. The appellate power of the High Court in the instant case is derived from the 1998 Act. The Regulations framed by the Commission are under the authority of subordinate legislation conferred on the Commission in Section 58 of the 1998 Act. The Regulations so framed have been placed before the West Bengal Legislature, therefore it has become a part of the statute. That being so, in our opinion the High....
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....te cannot exercise the constitutional power under Article 226 or 227 of the Constitution. The position of course would be entirely different if the aggrieved party independently challenges the provision by way of a writ petition in the High Court invoking the High Court's constitutional authority to do so. Therefore we are of the considered opinion that the High Court sitting as an appellate court under a statute could not have exercised its writ jurisdiction for the purpose of declaring a provision of that law as invalid when there was no separate challenge by way of a writ petition. In the instant case we notice that as a matter of fact none of the parties had challenged the validity of the Regulations, therefore the question of the High Court's suo motu exercising the writ power in a statutory appeal did not arise. For the reasons stated above we hold that the High Court could not have gone into the question of validity of the Regulations while entertaining a statutory appeal under the 1998 Act. We also hold that the Commission had the necessary statutory power to frame the Regulations conferring the right of hearing on the consumers. We also hold that the Regulations hav....
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....poor planning and operation, inadequate capacity, neglect of consumer, limited involvement of private sector's skills and resources and the absence of an independent regulatory authority. The view of the Administrative Staff College of India (ASCI) which strongly recommended the creation of an independent electricity regulatory Commission both at the center and the State are also noticed. It is with the above object, an Ordinance was promulgated on 25th April, 1998 which later came to be replaced by the 1998 Act. We also notice that while promulgating the said Ordinance it was mentioned that one of the salient features of establishing the Central and State Electricity Commissions was to determine the tariff for electricity, wholesale, bulk, grid and retail, apart from determining the tariff payable for use of the transmission facilities. Therefore, it is to be seen that in spite of the fact that the 1948 Act was in existence, the Parliament thought that it was necessary to constitute a regulatory authority both at the center an the State, which was to be an autonomous independent body. We have earlier noticed the composition of this body and the statutory provisions made in the....
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....h the provisions of the 1998 Act. Section 30 of the 1998 Act provides that if the Commission wants to depart from the factors specified in Clauses (a) to (d) of Section 28 or (a) to (f) of Sub-section (2) of Section 29, the Commission shall record reasons for such departure in writing. A collective reading of these Sections namely 22, 29 and 30, in our opinion, leaves no room for doubt that under the 1998 Act, it is the Commission and the Commission alone which is authorised to determine the tariff and in our opinion the State Commission in this case rightly understood its statutory obligation. However as noticed above we find that the High Court took a totally contrary view. It proceeded on the basis that in view of the reference made to Schedule VI to the 1948 Act and reference to Sections 46, 57 and 57A of the 1948 Act in Clause (a) of Section 29(2) of the 1998 Act and in view of the language of Section 57 of the 1948 Act, the primary right to determine the tariff lies with the licensee or the utility concerned and it is only when the concerned licensee or the utility has erred on a matter of principle in so fixing the tariff, the role of the Commission comes into play in correc....
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....in the context of the framing of the Regulations. Learned counsel also relied upon Sub-clause (4) of Section 29 which, in their opinion, clearly states that the determination of tariff is to be made by the holder of each licence, though in a manner specified by the State Commission. 55. We have already read Sub-section (4) of Section 29 hereinabove to mean that that sub-section requires a licensee to recover and to collect revenue by following the methodologies and procedures specified by the State Commission. In our opinion, though the language of Sub-section (4) leaves much to be desired, looking into the scheme of the Act, we have no doubt that Sub-section (4) of Section 29 does not contemplate a determination of tariff by the licensee itself. Even Sub-section (6) of Section 29 on which reliance is also placed by learned counsel for the respondent company, in our opinion, odes not in any manner support the contention that it is the licensee which will have to first determine the tariff exclusively. If Section 29 were to be interpreted in a manner as it is presented to us by learned counsel appearing for the respondent company, then we have no doubt that the contention of the ....
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....ct with reference to Schedule VI, or with special reference to Section 57 and 57A of the 1948 Act. It is seen that Sections 22 and 29 of the 1998 Act are special laws and the 1948 Act is only a general law in regard to determination of tariff. Consequently, because of the accepted principle in law that a general law yields to a special law, the provisions of the 1998 Act must prevail. As a matter of fact, this is the view taken by another Division Bench of the Calcutta High Court in regard to this principle in law, as could be seen from the impugned judgment itself, but surprisingly after noticing the same, the impugned judgment proceeds to take a contrary view without either distinguishing the previous judgment of a Coordinate Bench or referring the matter to a larger Bench. Be that as it may, this question is no more res integra. This Court in the case of Allahabad Bank v. Canara Bank and Anr. after following an earlier judgments of this Court held: "40. Alternatively, the Companies Act, 1956 and the RDB Act can both be treated as special laws, and the principle that when there are two special laws, the latter will normally prevail over the former if there is a provision....
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....be some of the principles which are to be borne in mind along with other principles enumerated in Sub-clauses (b) to (g) of the said Section. We have noticed that the Commission in exercise of its power under Section 58 of the 1998 Act has framed the regulations. Regulation 42 in Chapter IV directs that the Commission shall without prejudice to the generality of its powers keep in view the principles enumerated in Sub-clauses (a) to (g) of Section 29(2) of the 1998 Act, which includes all the principles and their application as provided for in Clauses (a) to (g) of Section 29(2) of the 1998 Act. On the said basis the Commission following the said principles has determined the tariff. The High Court, however, found fault with this. The High Court was of the opinion that it is Schedule VI and the said Schedule alone, which has to be applied in the determination of the tariff. In this process, the High Court held: "In so far as the Sixth Schedule permits of interpretation, and in so far as the words of the Sixth Schedule permit of determination of issues within their interstices, the Commission not only can, but should apply the ideas set out under Sub-section 29(2)(e) or 29(....
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....nts contended that this view of the High Court is wholly erroneous. He pointed out that with reference to Section 29 of the 1998, the Parliament has in specific terms laid down more than one guideline to be followed by the Commission while framing the regulations. According to the learned counsel for the appellants, even the guidelines referred to in Clauses (a) to (g) of Section 29(2) were not exhaustive as could be seen from Clause (d) of the said Section which authorities the Commission to bear in mind other matters which the Commission considers appropriate for the purpose of the Act while framing the regulations. Thus according to learned counsel, the guidelines found in Sub-clause (a) of Section 29(2) are not so sacrosanct as has been held by the High Court, to override the other guidelines found in the very same Section. 66. Per contra, learned counsel appearing for the respondent company supported the judgment of the High Court, contending that once the requirements of Section 46, 57 and 57A and Schedule VI to the 1948 Act were bodily incorporated as a guideline in Section 29(2), all other considerations stand excluded because Schedule VI read with Section 57 and 57A is ....
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....y for the Commission to again invoke Section 30 of the 1998 Act because the requirement of invoking Section 30 arises only at the stage of framing of regulations, thereafter, it is for the Commission to consider the various principles which it has incorporated in its regulations and then apply the same, depending upon the facts of the cases with which the Commission is concerned. There is no doubt that in this process if the Commission commits any error either contrary to law or contrary to established facts in applying these principles, then of course it is open to the High Court as an appellate authority under Section 27 to interfere and rectify the same. Thus, on a careful perusal of the various provisions of the 1998 Act, we are of the opinion that the High Court fell in error when it came to the conclusion that in determining the tariff it is Schedule VI alone which has to be applied. Appellate power of the High Court under Section 27 of the 1998 Act: 68. The next question that falls for our consideration is as to the extent of the appellate power of the High Court under Section 27 of the 1998 Act which reads thus: "27. Appeal to the High Court in certain cases:....
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.... and Reliance Silicon (I) Pvt. Ltd. v. Collector, Central Excise, Thane . Learned counsel for the respondent company in support of its contention relied on State of Kerala and Anr. v. A.c.K. Rajah and Anr. (1994 Suppl. 2 SCR 679), Murli Manohar & Co. and Anr. v. State of Haryana and Anr., Ebrahim Aboobakar and Anr. v. Custodian General of Evacuee Property (1952 SCR 696), and Nafar Chandra Jute Mills Ltd. v. United Bank of India and Ors. . 70. We have perused the above judgments as also the arguments of learned counsel, and we have no hesitation in holding that the appellate power of the High Court statutorily is not hedged in by any restriction, but in our opinion, the High Court merely because it has unrestricted appellate power, should not interfere with the considered order of the Commission unless it is satisfied that the order of the Commission is perverse, not based on evidence or on misreading of evidence, keeping in mind the fact that the Commission is an expert body. In the case of Uttar Pradesh Co-operative Federation Ltd. v. Sunder Brothers of Delhi (1966 Supp. SCR 215), while considering the appellate power of the court under Section 34 of the Indian Arbitration A....
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....tions involving determination of the rate of duty of excise or to the value of goods for purposes of assessment. An appeal has bene provided to this Court to oversee that the subordinate tribunals act within the law. Merely because another view might be possible by a competent court of law is no ground for interference under Section 130-E of the Act though in relation to the rate of duty of customs or to the value of goods for purposes of assessment, the amplitude of appeal is unlimited. But because the jurisdiction is unlimited, there is inherent limitation imposed in such appeals. The Tribunal has not deviated from the path of correct principle and has considered all the relevant factors. If the Tribunal has acted bona fide with the natural justice by a speaking order, in our opinion, even if superior court feels that another view is possible, that is no ground for substitution of that view in exercise of power under Clause (b) of Section 130-E of the Act." 72. Similar is the view taken by this Court in the case of Reliance Silicon (I) Pvt. Ltd. (supra), which was in regard to the appellate power of the Supreme Court under Section 35-L of the Central Excises & Salt Act, 1944. ....
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....ission of the West Bengal Electricity Board (the Board) to establish this new generating station. Though, initially the cost of the project was shown as Rs. 1285.70 crores, subsequently the company went on increasing the said cost on the ground of escalation and ultimately the company sought permission for expending a sum of Rs. 2460 crores on this project, on the ground of further escalation. The Board constituted a Committee for determining the quantum as to what would be the reasonable cost of the project and the said Committee arrived at a figure of Rs. 1853 crores. On that basis, the Board approved the said cost. In view of the fact that the entire project cost furnished by the Company had not been approved by the Board, the licensee approached the Central Electricity Authority (CEA) to refer the dispute for arbitration under Section 44(3) of the 1948 Act. The Board, however, opposed this arbitration contending inter alia that the approval of the revised project cost was not contemplated under Section 44(3) of the 1948 Act and, therefore, CEA had no authority to arbitrate on this dispute. However, the CEA determined the project cost at Rs. 2295.97 crores as on 12.1.2000. The B....
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....he CEA was binding on the Commission. They further contend that, at the most, the finding of the CEA would be a piece of evidence before the Commission and it was open to the Commission to consider the same and for good reasons to differ for the said finding. They also state that in the instant case the Commission, for very good reasons, has correctly come to the conclusion that the cost of the Budge-Budge project should be taken as Rs. 2075 crores as against what was determined by the CEA. Per contra, on behalf of the Company, it is contended that the determination of the cost of project by the CEA is done by it under a statutory proceeding after considering all the materials on record. They contend that any decision given under Section 44 of the 1948 Act being final and binding under Section 76(2) of the said Act, the same is also binding on the Commission, more so, when the said finding has been affirmed by the Division Bench of the High Court as also by this Court. 76. We have considered the argument addressed on behalf of the parties on this issue, as also the provisions of the enactments. Under Section 29 of the 1998 Act, we have already noticed that it is the Commission w....
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....mpany as also the consumers. 77. We are not inclined to accept this argument of the appellants. It is true that the figure arrived at by the CEA is not ipso facto or as a matter of rule binding on the Commission, but, as stated above, the Commission will have to take into consideration the finding of the CEA giving due weight to that piece of evidence. The Commission could, of course, disagree with the finding of the CEA for compelling reasons but not on the ground on which the Commission has done in the instant case. The Commission while arriving at the above figure of Rs. 2075 crores took into consideration the project costs of the Budge-Budge as projected by the Company, the Board, the CEA and the consultants, and took an average of all these figures to come to the conclusion that the cost of Budge-Budge project could be Rs. 2075 crores. In this process, we think that the Commission has not rejected the finding of the CEA for any compelling or acceptable reasons. It did not have before it any other material to hold that the estimated cost of the project by the CEA is otherwise erroneous. In the absence of the any such material, in our opinion, the Commission ought to have acc....
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....lay in disposal of these cases. It is in this background that the Commission came to the conclusion that the distribution loss in its entirety cannot be controlled by the Company for some time to come. However, the Commission also came to the conclusion that the steps taken by the Company over the years to bring down this loss are insufficient, and, hence, held it unfair to pass on the whole liability on the consumers. Therefore, it allowed a distribution loss of about 4.8% and directed the Company to reduce this total T&D loss for future years so as to bring it down to 14% in the next 4 years. Thus, it fixed the total T&D loss at 16.8% for the year 2000-2001. 79. The High, Court on the contrary, came to the conclusion that the distribution loss cannot be controlled by the Company as the Company is a victim of theft of electricity and has not gained anything by allowing the theft of electricity, therefore, the Commission ought to have granted the claim of the Company to the extent of the actual T&D loss. It is on this basis that the High Court reversed the finding of the Commission and allowed a total loss of 22.36% (12% T&D and 10.36% distribution loss) as claimed by the Compan....
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....igures to show how at every stage when the theft was detected by them, they had initiated steps to recover the lost revenue or to prosecute the offenders and had also employed vigilance/security staff to prevent thefts. They plead that the law as existing prior to July, 2002 was totally ineffective and complaints ledged by them have not borne any results, and there being no deterring penal law, it is next to impossible to control this menace. They also contend that the social culture of its consumers is such that they do not feel guilty about this misdeed. Per contra, these very persons indulge in violence whenever the Company tried to prevent such mischief of theft of energy. They, however, plead after the coming into force of the new laws and creation of new policing force by the State, thee is every possibility of reducing the distribution loss. They also point out from comparative figures that the distribution loss of the respondent company was far less than most of other similar companies all over the country and, therefore, the allegations of callousness and negligence have no foundation. 82. We notice that the Commission has considered the opinion of the ASCI in this rega....
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....g down the loss under this head, at the same time, we feel that the same cannot be done in its entirety forthwith because of the reasons given by the Commission itself. At the same time, we also take into consideration the fact that this loss be it transmission or distribution is not totally beyond the control of the Company, which fact is established by the admission made by the respondent Company to the Government of West Bengal as far back as in the year 1993 itself, as also the success claimed by the Company before us in bringing down this loss by 1% for the year 2001-02. If only this effort had been put in by the Company ever since the State of West Bengal directed it to do so in a progressive manner in 1993, the situation would have been different today. Therefore, the problem with which the Company is now faced in regard to this loss is very much contributed by the inaction on the part of the Company. Therefore, we are of the opinion that the Company should bear a substantial part of this loss by itself rather than seeking to transfer the entire burden on the consumers. This has also been the finding of the Commission. However, the Commission thought the loss should be pegge....
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....educe the number of employees by proper deployment or Voluntary Retirement Schemes (VRS), particularly, in the context of the proposal for closing down the Mulajore plant. It also observed that the overtime payment made to the employees was a worrying features. It also noticed because of the settlement with the workmen, the Company was paying the workmen overtime irrespective of the need for the same and such payment had no justification especially when the same has to be passed on to the consumers. Therefore, it recommended a drastic cut or alternatively phasing out of this system of overtime payment. The Commission in its report agreed with the views expressed by the consultant. It however did not agree with the consultant as to the closure of Mulajore & New Cossipore plants, unless it was established that the cost of generation of electricity in those plants was higher than the cost of purchase of electricity by the Company from other sources. For the said reason it deferred the finding in regard to closure of the abovementioned two plants. It however agreed with the consultants that the overtime payment that was being made by the company was extremely high and hence for the yea....
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.... as a future guidance, we accept the finding of the High Court on this count. Working capital: 90. In regard to the working capital, the Company in its application had requested the Commission to accept Rs. 23,897 lacs for the year 2000-01. When the issue was referred to the ASCI, it noted that this request was not in conformity with the provisions of Schedule VI to the 1948 Act and in that process, it considered 4 alternatives and after detailed discussion it recommended a positive figure of Rs. 10,247 lacs. The Commission after considering the claim of the Company as also the recommendations of the ASCI, though it came to the conclusion that the recommendation of the consultant was most appropriate, still after taking into account the plea of the Company, held: "We have deliberated on the projection by the CESC in this regard as also on the recommendation of the Consultants. We find that the working capital in accordance with Schedule VI of ES Act, 1948 come to negative Rs. 23191 lakhs. The Schedule - VI provides incentives and restrictions to utility in various paras. It is therefore not fair to isolate and look into one para alone. Positive figure of Rs. 10247 la....
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.... to maintain its tariff structure in regard to different types of supplies as it was prevailing before the Commission fixed the new tariff. It also directed the increase in the average rate of tariff which it had permitted to be distributed pro rate by the Company amongst different consumers, so that the percentage of increase of each rate is the same. In effect, therefore, the High Court has directed the continuance of cross subsidy. One of the reasons given by the High Court in this regard is that the Calcutta Tramways which is otherwise running a cheap transportation system might have to increase its fare and the same cannot be permitted since the Calcutta Tramways were not heard in the matter of fixation of tariff and there is, therefore, a likelihood of wide discontentment if the fares are to be increased. We have noticed the object of the 1998 Act is to prevent discrimination in fixation of tariff by imposing cross subsidy, but at the same time under Section 29(5) of the 1998 Act, if the State Government so chooses to subsidise the supply of energy to any particular class of consumers, the same can be done provided of course the burden of loss suffered by the Company is borne....
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....bound by the same; and (b) There is no challenge as to the genuineness of the accounts of the Company, by the consumers therefore in the absence of any such challenge the Commission cannot go into the correctness of the accounts and the expenditure so reflected should be accepted on the basis of actuals as reflected in the accounts. 95. We notice that for the purpose of the 1948 Act, Clause XVII of Schedule VI defines the various types of expenditures enumerated therein, as expenditure "properly incurred" therefore for the purpose of the 1948 Act it would have been sufficient for a licensee to bring his expenditure under that definition clause and the same was entitled to be counted for the purpose of determining the tariff under the said Act. But we have noticed herein above though the principles of Schedule VI have been adopted by the Commission in its Regulations the same will have to be considered along with other principles enumerated in Regulations which includes the principles encompassed in Clauses (b) to (g) of Section 29(2) of the 1998 Act. We have also held that in the event of there being any conflict, it is the provisions of the 1998 Act which would prevail....
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....d reasons permissible in the 1998 Act. 98. In this view of the matter we are of the opinion that the Commission is not bound by the opinion of the auditors as also the definition of the expenditure properly incurred under Schedule VI to the 1948 Act to the extent held by us hereinabove. Commission's power to issue interim orders: 99. Under Regulation 46 framed by the Commission, the Commission is vested with the power of passing such interim orders including an ex parte interim order as it may consider appropriate to protect the interest of any of the parties to the proceedings. In our opinion, it is open to the Commission to exercise this power in the event of there being any delay in determination of tariff by it. This power of interim directions can also be exercised by the Commission in the event of there being any requirement for making any changes in the existing statutes even pending revision, for any compelling reasons. Therefore, the apprehension of the respondent company as accepted by the High Court that the Schedule fixed by the Commission for determining the tariff is impracticable or is likely to jeopardise the interest of the Company, cannot be accepted.....
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....Commission constituted under Section 17 of the 1998 Act is an expert body and the determination of tariff which has to be made by the Commission involves a very highly technical procedure, requiring working knowledge of law, engineering, finance, commerce, economics and management. A perusal of the report of the ASCI as well as that of the Commission abundantly proves this fact. Therefore, we think it would be more appropriate and effective if a statutory appeal is provided to a similar expert body, so that the various questions which are factual and technical that arise in such an appeal, get appropriate consideration in the first stage also. From Section 4 of the 1998 Act, we notice that the Central Electricity Regulatory Commission which has a Judicial Member as also a number of other Members having varied qualifications, is better equipped to appreciate the technical and factual questions involved in the appeals arising from the orders of the Commission. Without meaning any disrespect to the Judges of the High Court, we think neither the High Court nor the Supreme Court would in reality be appropriate appellate forums in dealing with this type of factual and technical matters. ....