TaxTMI 
TaxTMI 
TaxTMI 
2009 (4) TMI 1060
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....ased from other sources in order to meet the requirements of power supply to its consumers. The sources from which the Board purchases power are Damodar Valley Corporation, National Thermal Power Corporation, Tenughat Vidyut Nigam Ltd., Uttar Pradesh Electricity Board, Orissa State Electricity Board, Power Grid Corporation of India Ltd. According to the Board, the power purchased from outside sources forms the bulk of the total power supplied by the Board. In other words, power generated by the generating units of the Board is much less in comparison to the purchased power from outside sources. 4. The Tariff framed by the Board in exercise of its powers conferred upon it under the provisions of Section 49 of the Electricity (Supply) Act, 1948 (in short the `Act') vide Tariff Notification dated 21.6.1993 published in the Bihar Gazette on 23.6.1993 which came into effect from 1.7.1993 prescribes rates for supply of power to the consumers of the Board. Because of infrequent revision of tariffs and in order to neutralize increase in the cost of generation and purchase of power, the 1993 Tariff provides for levy and collection of fuel surcharge from the consumers of the Board. 5. ....
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....sting-44/92-93/397 dated 29.3.1993 amounting to 32 paise per unit has been merged in the tariff. Any increase in the operational surcharge thereafter only shall be levied. 8. In order to appreciate the facts to be stated hereinafter it would be appropriate to notice the formula for computation of the fuel surcharge laid down in Clause 16.10.3 as under: S1 = A1xA3+B1xB3+C1xC3+D1xD3+E1xE3xF1xF3+G1xG3+H1xH3 (A2+B2+C2+D2+E2+F2+G2+H2)... Whereas, S1 = Average Fuel Surcharge per unit in paise applicable during the financial year. A1 , B1 ,C1 =. Unit generated from PTPS, BTPS & MTPS respectively. D1,E1,F1,G1,H1 = Unit purchased from DVC, UPSEB,OSEB,NTPS,PGCL and any other source respectively. A2,B2,C2 = Unit sold out of sent out from PTPS, BTPS & MTPS on which fuel surcharge is leviable. D2,E2,F2,G2,H2 = Unit sold, out of purchased from DVC, UPSEB, OSEB, NTPC, PGCL and any other source respectively during the year on which Fuel Surcharge is leviable. A3,B3,C3 = Increase in average cost of Fuel Surcharge in paise per unit computed for Board's Generation at PTPS, BTPS and MTPS D3, E3,F3,G3,H3 = Increase in average unit rate of purchase of energy from DVC, UPSEB, OSE....
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.... 18166.04 paise per 10,00,000 K.Cal. of fuel delivered at: the bunkers of the Board's generating station at Muzaffarpur. In the event of rise or fall in the aforesaid cost , at airy time, the rate per unit will be increased or decreased, as the case may be by 0.7368 paise for each one percent variation in the cost of fuel per 10,00,000 K.Cal. In calculating the above variation, percentage variation of 0.5 and above, will be treated as next higher percentage and percentage variation below 0.5 will be ignored. As, regards the latter :i.e. electricity purchased from external sources the clause says that the actual increase in the average unit rate of purchase will apply, that is to say, will be the basis. 10. On 4.4.1994 the Board issued circular stating that on final calculation the fuel surcharge for the period 1992-1993 had been determined as 26.14 paise per Kwh. On 5.1.95 the Board issued another circular calculating the fuel surcharge for the period July 1993 ( i.e. after coming into force of the new tariff) to March 1994 to be 25.98 paise per Kwh. I am not referring to the rate of other operational surcharge under Clause 16.10.4 which was also notified by the same circular....
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....nd analogous cases. On 12.3.1997 when the cases came up for preliminary hearing dispute again arose as to circumstances in which the aforesaid Committee had not finalised the report. After hearing counsel for the parties, however, a consent order was passed to the effect that the Committee shall finalise its report on 14.3.1997 when it was scheduled to meet next, on the basis of documents already on record and submit the report to the High Court on 17.3.1997. On 16.3.1997 the Committee submitted its report. On 21.3.1997 when the matter came up for further hearing the High Court noted that the findings reached by the members of the committee were not unanimous. While four members of the Committee had worked out the fuel surcharge @ 12.38 paise/Kwh for the period from July 1993 to March 1994, 21.33 Paise/Kwh for the period 1994-95 and 44.00 paise/Kwh (provisional) for the period 1995-96, the other two members who were Board's nominees, had worked out the same @ 25.98 paise, 43.98 paise and 72.12 (provisional) paise per Kwh for the aforesaid periods respectively. As an interim measure the High Court directed the petitioners to pay fuel surcharge for the periods July 1993 to March ....
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....h Court noted that the objections of the petitioners were in consonance with the Board's own decision vide letter dated 28.12.1995 (supra) by which the Board had suggested certain amendments in the relevant clauses of the tariff to the State Government. The High Court, however, took the view that in terms of the order dated 17.10.1996 passed in CWJC No. 2771 of 1995(R) the Committee was required to submit its report to the Chairman of the Board and not to the High Court. Observing that the report of the committee would assist the Board in coming to fair and just decision, and if the Board was satisfied that the tariff modification requires any modification it was open to it to modify the tariff in accordance with law, the High Court instead of finally deciding the issues itself directed the Board to consider the report of the committee submitted before the High Court on 16.3.1997, and in consultation with the State Government, take a final decision, by reasoned order, on the points: (i) Whether any modification of Clause 16.10.3 of the tariff notification published on 23.6.93 is required so that the increase in the average unit rate of purchase of energy from DVC, NTPC etc. s....
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.... decision on the basis of the facts and figures furnished to it in the agenda notes supported by materials. It is apparent that after the decision of the High Court the matter was examined at different levels and finally the said agenda notes dated 26.11.1998 and 6.1.1999 were put up for consideration which were approved respectively on 14.12.1998 and 21.1.1999. High Court did not find any substance whatsoever in the contention that the Board failed to implement the direction of the High Court, by not passing a reasoned order or otherwise. 17. The submission that the dispute should be referred to a Committee of experts was rejected by the High Court considering the nature of the dispute. It was of the view that such a course should be taken only when the Court cannot decide the dispute. There may be justification to constitute a committee and refer the dispute to it when the relevant data have to be gathered or facts have to be ascertained without which the dispute cannot be resolved. This normally is done in public interest litigation. In adversary litigation it is for the parties to produce materials in support of their respective claim. The Court is not supposed to make a rovin....
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....rge (in P/Kwh) 36.04 47.49 74.37 139.24 4 Less (20 P/Kwh) As per the Hon'ble High Court's Order dated 30.6.98 Passed in CWJC No.1632 of 99 20.00 20.00 20.00 20.00 5 Net rate (P/Kwh)If T&D losses as Per serial No.6 Of table at para 3.7 Of CAG report at page 80 is taken into account (3-4) 16.04 27.49 54.37 119.24 6 Present rates of fuel Surcharge as per the Impugned notification Dated 31.5.1999 23.38 21.33 48.54 99.34 20. The above calculation has been explained by pointing out that while A1, B1, C1 etc. and A3, B3, C3 etc. components of the Formula indicating the power pumped into the Board's system for transmission or distribution to different points in the State and the incremental rise in the average cost of fuel at the Board's Thermal Power Stations or power purchased from NTPC, DVC etc. are not affected by the T&D losses, A2, B2, C2 etc. component of the Formula representing the quantum of power sold to categories from whom fuel surcharge is leviable would be reduced if power supplied to the consumers having defective meters etc. is excluded from the total quantum of power sold. Thus, while the numerators would remain unchanged, the denominators w....
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....lar statute or order, price fixation is made a quasi judicial function for specified purposes or cases it is really legislative in character ...the legislative measure does not concern itself to the facts of an individual case. It is meant to lay down a general rule applicable to all persons or objects or transactions of a particular kind of class. 24. In Union of India v. Cynamide India Ltd. [1987]2SCR841 this Court held that except in cases where it becomes necessary to fix the price separately in relation to individuals, price fixation is generally a legislative act, the performance of which does not require giving opportunity of hearing. Following passage from the judgment may usefully be noticed: Legislative action, plenary or subordinate, is not subject to rules of natural justice. In the case of Parliamentary legislation the proposition is self-evident. In the case of subordinate legislation, it may happen that Parliament may itself provide for a notice and for a hearing - there are several instance of the legislature requiring the subordinate legislating authority to give public notice and a public hearing before say, for example, levying a municipal rate - in which case....
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.... cost of PTPS (Paise/Kwh) = 17.33 = 1934.96 A1 x A3 (Rs. in lakhs) 2. B1 = Generation of BTPS (MKWH) = 387.37 B3 = Increase in Average cost of BTPS (Paise/kwh) = 69.17 B1xB3 (Rs. In lakhs) = 2679.44 3. C1 = Generation of MTPS (MKWH) = 213.52 C3 = Increase in Average cost of MTPS (Paise/Kwh) = 53.05 C1xC3 = 1132.72 4. D1 = Power purchase from DVC (MKWH) = 2153.00 D3 = Increase in Average rate of DVC (Paise/Kwh) = 57.87 D1xD3 = 12459.41 5. E1 = Power purchase from NTPC(MKwh) = 4047.70 E3 = Increase in Average rate of NTPC (paise/kwh) = 69.50 E1xE3 (Rs. In lakhs) =28131.52 6. F1 = Power purchase from PGCIL(MKwh) = 507.22 F3 = Increase in Average rate of PGCIL (Paise/kwh) = 18.12 F1xF3 (Rs.in lakhs) = 919.08 7. G1 = Power purchase from others(MKwh) = 737.82 G3 = Increase in Average rate of others (Paise/kwh) = 60.57 G1xG3 (Rs. In lakhs) =4468.98 Excluding prior period expenditure 8. Admissible prior period expenditure (Rs. In lakhs) =1659.11 (This is on the basis of recommendation made by the Committee constituted by the Hon'ble High Court) (I) Incremental cost of the year (A1xA3)+(B1xB3)+……(G1xG3)(Rs....
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....e particular provision, the ordinary rule is that punctuation mark is a minor element in the interpretation of Statute (See Aswini Kumar Ghose v. Arbinda Bose [1953]4SCR1). More so, in the case of subordinate legislation. The words "out of" according to the High Court have to be understood in the sense of "to the extent of", and so read; the formula postulates that so much of units out of, the units generated or purchased on which fuel surcharge is leviable only is to be taken into account for determining the value of A2 to C2 or D2 to H2. Omitting the part "out of...." the formula would read as follows, "units sold .... on which fuel surcharge is leviable". In terms of Clause 16.10.1, fuel surcharge is leviable only on consumers in CS II and III, L.T. Industrial Service, High Tension Service, Extra High Tension (EHT) and Railways Traction Service categories, the units sold to other categories, of consumers cannot, therefore, be taken into account for determining the value of either A2 to C2 or D2 to H2. The validity of the formula had been upheld earlier. High Court noted that though by the impugned circular dated 31.5.1999 the rates of fuel....
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....ount should after meeting expenses "leave such surplus as State Government may, from time to time, specify". The section was amended again in 1983 and as per the 1983 amendment the Board is supposed to adjust its tariff in a manner so as to ensure that the total revenues in any year of account after meeting all expenses shall leave such surplus as is "not less than three per cent or such higher percentage as State Government may by notification specify". After noticing the said amendments this Court observed: The original negative approach of functioning so as not to suffer a loss is replaced by the positive approach of requiring a surplus to be created. The quantum of surplus is to be specified by the State Government. What the State Government is to specify is the minimum surplus. This is made clear by the 1983 amendment which stipulates a minimum of 3 per cent surplus in the absence of specification by the State Government which has the liberty "to specify a higher percentage than three. The failure of the government to specify the surplus which may be generated by the Board cannot prevent the Board from generating a surplus after meeting the expenses ....
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....be necessary to go behind the veil of the separate legal character of the TVNL. The fact that TVNL did not exist in the year 1991-92 and came into existence only in the year 1996-97 is sufficient to justify its deletion as component of H3. Counsel for the Board accepted that if TVNL is to be treated as a source, some mechanism has to be worked out, and the Court has then to see whether it is rational. The Board submitted that if the High Court comes to the conclusion that the supply from TVNL, cannot be included, the consequence will be that the units purchased from TVNL would have to be kept out, which is not the intention underlying levy of fuel surcharge. It is like `escalation' clause, and the additional cost has to be reimbursed. The High Court did not accept the same submissions as it will result in creating a different base year. The relevant clause of the formula, after amendment, reads, "the said increase to be calculated with respect to the year 1991-92" (vide last para of Clause 16.10.3). The amendment has been made in the light of the decision of the High Court. In the rejoinder affidavit the Board had taken the stand that the incremental rise in 1996-97 o....
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....al sources including DVC. Clause 16.10.3.1 provides for computation of the cost of generation at the Board's own generating station; as regards purchase of energy from other sources, the said clause lays down that the actual increase in average unit rate of purchase will apply. If the Board is purchasing electricity from different sources for the purpose of D3, E3, F3 etc. the actual increase in the average unit rate of purchase so far as the particular source is concerned, is to be taken into consideration. DVC has thus to be treated as one source. The source being one there cannot be two rates of purchase or increase in the average unit rate of purchase. It may be mentioned here that NTPC sells electricity generated different power stations, namely, Farakka, Kahalgaon Talchar or Anta and though the increase in the average unit rate is not the same, it charges the Board at a uniform rate. It is an admitted position that though the DVC has revised its tariff from year to year the Board so far has not recognised the revision and has been paying it at the rates applicable in the year 1991-92. In the agenda note dated 26.11.98 it has been clearly mentioned "that during the 19....
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....sulting in higher fuel surcharge and causing thus additional burden on the consumers. The fact that the Board has had to pay large amounts as DPS to the external agencies from which it has been purchasing electricity is more or less an admitted position. The case of the Board, however, is that the default in payment was mainly on account of defaults committed by the consumers themselves. It is said that as much as 3,200 crores of rupees are due from the consumers as a result of which the Board is not in a position to pay to the agencies resulting in additional burden by way of DPS. High Court found substance in the stand of the Board. The fact that the consumers at large have not been paying the dues on time and many of them have been making only part payment on the strength of interim orders of Courts are facts which are not disputed. If the consumers do not pay the dues to the Board, they cannot be heard to make any complaint against payment of DPS by the Board to the external agencies. 38. We have referred in extenso reasonings of the High Court. 39. It is stand of Board that while arriving at the average cost of purchase where the purchase prices vary weighted average is take....
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....accordance with the formula. The stand of the writ petitioners was accepted by the High Court. So far as TVNL and deemed supply to TISCO are concerned, the High Court held that there is no infirmity in the fixing of rates of fuel surcharge except on the aforesaid two grounds. All other stands taken in the writ petition was rejected. 43. Judgment of the High Court is under challenge in these appeals by the Board. An appeal has been filed by the private companies so far as the conclusions of the High Court relating to non accounting of Rupees 100 crores paid by the private companies to the Board. According to the appellant-Board, the High Court was not right in directing to re-work out the rates of fuel surcharge for the years 1996-97 onwards after deleting the purchase of electricity from TVNL as a component of H3 in the formula. It is also submitted that the direction of the High Court to re-work out the rates of fuel for the year 1996-97 onwards after treating the deemed supply i.e. supply of electricity by DVC to TISCO as supplied by DVS to the Board as an element of D3 in the formula was erroneous. 44. Though learned Counsel for the appellant Board questioned correctness of Hi....