{"id":127419,"date":"2007-11-30T00:00:00","date_gmt":"2007-11-29T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/national-thermal-power-vs-uttar-pradesh-power-corporation-on-30-november-2007"},"modified":"2018-07-15T06:54:59","modified_gmt":"2018-07-15T01:24:59","slug":"national-thermal-power-vs-uttar-pradesh-power-corporation-on-30-november-2007","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/national-thermal-power-vs-uttar-pradesh-power-corporation-on-30-november-2007","title":{"rendered":"National Thermal Power … vs Uttar Pradesh Power Corporation … on 30 November, 2007"},"content":{"rendered":"
Central Electricity Regulatory Commission<\/div>\n
National Thermal Power … vs Uttar Pradesh Power Corporation … on 30 November, 2007<\/div>\n
Bench: B Bhushan, R Krishnamoorthy<\/div>\n<\/p>\n
<\/pre>\n
ORDER<\/p>\n
 1. The petitioner, through this application made under Section 12 of the Electrcity Regulatory Commissions Act, 1998, seeks review of order determining capacity (fixed) charges component of tariff for power sold from Rihand Super Thermal Station  (hereinafter referred to as “Rihand STPS”).\n<\/p>\n
2. The original petition was filed by the petitioner for approval of capacity charges  component of tariff for sale of power from Rihand STPS for the period from 1.4.1997  to 31.3.2001. The capacity charges payable by the respondents were determined by  the Commission vide its order dated 4.10.2002, based on terms and conditions of tariff  contained in Ministry of Power notification dated 2.11.1992, with following basic  elements:\n<\/p>\n
(a) Return on equity, <\/p>\n
(b) Interest on loan, <\/p>\n
(c) Depreciation, <\/p>\n
(d) O and M expenses, and <\/p>\n
(e) Interest on working capital.\n<\/p>\n
3. The petitioner sought clarification and\/or review and\/or modification of the  specific observations and findings\/directions of the order dated 4.10.2002 on  additional capitalisation, O and M expenses and calculation of interest on working capital  on the ground of errors apparent on the face of record. The petition was heard on  admission on 3.1.2003. The Commission by its order dated 23.1.2003, admitted  review on the grounds of alleged error in computation of O and M expenses and interest  on working capital. As regards additional capitalization, for the reasons recorded in the  order dated 23.1.2003, review was not admitted. The methodology adopted by the  Commission while approving capacity charges in respect of the remaining two items,  the grievances of the petitioner as also our decisions thereon are discussed in the  succeeding paras. However, before dealing with the actual grievances of the  petitioner, we consider it appropriate to record the legal position.\n<\/p>\n
LEGAL POSITION <\/p>\n
4. Under Section 12 of the Electricity Regulatory Commissions Act, 1998, the  Commission was conferred the same power of review of its order, decision, direction  as is vested in a civil court under the Code of Civil Procedure (for short “the Code”)  Section 114 read with Order 47 of the Code are the relevant provisions dealing with  review of order\/degree by a civil court. According to Rule 1, Order 47 of the Code,  review of order\/decree is permissible on the following grounds:\n<\/p>\n
(a) Discovery of new and important matter which was not within the knowledge  of the person aggrieved or could not be produced by him after exercise of  due diligence, <\/p>\n
(b) Error apparent on the face of record, and <\/p>\n
(c) Any other sufficient reason  <\/p>\n
5. The settled legal position is that the power of review can be exercised on  discovery of new and important matter or evidence which after the exercise of due  diligence was not within the knowledge of the person concerned or could not be  produced at the time when the order was made. The power can also be exercised on  account of some mistake or error apparent on the face of record or for any other  sufficient reason. A review cannot be sought merely for fresh hearing or argument or  correction of an allegedly erroneous view taken earlier. The power of review can only  be exercised for correction of a patent error of law or fact, which stares in the face  without any elaborate argument being needed for establishing it. As held by the  Hon`ble Supreme Court, the expression “any other sufficient reason” used in Order  47, Rule 1 of the Code means a reason sufficiently analogous to those specified in the  earlier part of the rule. The above legal position emerges out of various judgements of  the Supreme Court, notably, Smt. Meera Bhanja v. Smt. Nirmala Kumari Choudhary<\/a>  , Ajit Kumar Rath v. State of Orissa and Ors.  and Devendra Pal Singh<\/a> v. State and Anr. . The  petitioner’s prayer for review of order is to be considered in the light of above-noted  and well-settled legal position.\n<\/p>\n
 O and M EXPENSES<\/p>\n
6. While notifying tariff for the period from 1.4.1992 to 31.3.1997, vide notification  dated 2.11.1992, Ministry of Power considered the actual O and M expenses for the year  1991-92, that is, one year prior to the beginning of the tariff period, as the base, which  were escalated @ 10% per annum for future years for arriving at O and M expenses for  the respective year. While determining tariff for the period from 1.4.1997 to 31.3.2001,  same methodology was adopted by the Commission and the actual O and M expenses of  Rs. 7388 lakh, which included water and power charges for the year 1996-97, one year  prior to the start of tariff period, as per the audited balance sheet for the Rihand STPS  were taken as the base and an escalation factor of 10% per annum was applied to  work out O and M expenses for the years 1997-98 to 2000-2001.\n<\/p>\n
7. It is stated by the petitioner that abnormal amount of water charges for the  years 1997-98 and 1998-99 to the extent of Rs.  1409 lakh and Rs. 1636 lakh,  respectively, have been overlooked while calculating the base O and M figure. According  to the petitioner, although the order states that the O and M expenses are inclusive of  water charges, in fact, abnormal water and power charges have been kept out of  consideration for calculation of base O and M charges. Accordingly, the petitioner seeks  review of the order.\n<\/p>\n
8. As noticed above, in the tariff notification dated 2.11.1992 issued by Ministry of  Power, while fixing tariff for the period from 1.4.1992 to 31.3.1997, the actual  expenses for the year 1991-92 were taken as the base with escalation factor of 10%  per annum for arriving at O and M expenses for respective year during the tariff period.  The Commission adopted the same methodology while approving tariff by order dated  4.10.2002, according to which, O and M expenses of Rs. 7388 lakh which included water  and power charges, for the year 1996-97 based on the station balance sheet for that  year were taken as the base for determination of O and M expenses for the tariff period  commencing from 1.4.1997. O and M charges payable by the respondents from 1.4.1997  to 31.3.2001 were calculated accordingly by escalating the base O and M expenses for  the year 1996-97 and it is so stated in the order. Ministry of Power notification dated  2.11.1992 did not provide for computation of O and M charges based on actual  expenditure for the year. In fact, the actual O and M expenses of a particular year cannot  be accounted for in tariff as tariff is determined\/notified in advance when actual O and M  expenses are unknown.\n<\/p>\n
  9. The methodology adopted in case of Rihand STPS has been generally followed  by the Commission in the cases involving revision of tariff including O and M expenses,  for the period prior to 1.4.2001 based on Ministry of Power notifications. This position  has been taken note of by the Appellate Tribunal in its judgement dated 14.7.2006 in  Appeal  No. 94\/2005 (NTPC Ltd v. CERC and Ors.). In that case, the Commission  had fixed O and M expenses in respect of Gandhar GPS for the year 2000-01 based on  actual expenses for that year. The Appellate Tribunal in its judgement noted that the  Commission “ought to have applied one yardstick or principle for determining O and M  expenses for all generating stations” of the petitioner since “the principles of justice and fair play require application of a uniform principle”. In other words, the Appellate  Tribunal upheld the methodology adopted by the Commission in cases other than  Gandhar GPS, according to which to arrive at the admissible O and M expenses for a  year, the actual O and M expenses for the preceding year were to be escalated @ 10%.  Under these circumstances, we are unable to accept the petitioner’s contention to  allow O and M expenses for the years 1997-98 to 2000-01 based on actuals.\n<\/p>\n
10. In view of this, we are satisfied that the petitioner has not been able to make  out a case for review of order on this account.\n<\/p>\n
INTEREST ON WORKING CAPITAL <\/p>\n
11. For the purpose of Working capital for the computation of interest, the following  elements were considered by the Commission in the tariff order dated 4.10.2002:\n<\/p>\n
 (a) Fuel cost, coal stock and oil stock, <\/p>\n
  (b) O and M expenses for one month, <\/p>\n
  (c) Spares, and<\/p>\n
  (d) Receivables (for two months) comprising of capacity (fixed) and variable  charges.\n<\/p>\n
  12. For the purpose of calculation of fuel cost and variable charges, it is essential  that information relating to price and calorific value of fuel is made available by the  petitioner in the performa prescribed for the purpose. The petitioner, however, while  submitting proposal for determination of capacity charges, did not furnish the  necessary information relating to price and calorific value of coal\/oil by stating “not  applicable”. In view of this, the Commission, in its order dated 4.10.2002 while  approving capacity charges adopted the same values for calculation of working capital  as were followed by the Central Government in Ministry of Power in its notification  dated 2.11.1992, for the tariff period ending 31.3.1997.\n<\/p>\n
13. The petitioner in the present application has explained that the data on price  and calorific value was not furnished as it was felt that even though there were  variations on month-to-month basis, the average calorific value over a period  remained more or less static. It is further submitted that the petitioner had not claimed  the variable charges separately as these charges had already been billed. However,  according to the petitioner, adoption of the value of calorific value or the variable  charges, etc. as considered by the Central Government for the tariff period ending  31.3.1997, has put it into loss since it has been denied the benefit of escalation in fuel  prices.\n<\/p>\n
  14. On the issue of computation of interest on working capital also, the review  petition is not maintainable. According to the petitioner, it had not furnished  information relating to Calorific Value of coal and oil in the original petition as, in its  opinion, it was not relevant for determining the capacity charge for which it had filed  the petition. The petitioner ought to have realised that it was in no position to decide  whether information sought for in the formats prescribed by the Commission was  relevant or not. In case, it chose to take such a decision the consequences could not  be different. It is in due consideration of this that the Commission in its order recorded  the following:  “The petitioner has not furnished the details of Calorific Value (CV) of Coal\/Oil,  by stating “Not Applicable”. In view of this, the Commission could not assess  the working capital requirement on account of these items. At the same time,  the Commission is conscious of the fact that these items are normally required  in a power station and took a conscious view to provide for these items, on the basis of what was provided for these items in the calculation of tariff in the  previous tariff setting by Govt. of India. Accordingly, the working capital  requirement on account of above items has been provided for in this tariff  period. The Commission was constrained to take this view because the  necessary details were not furnished by the petitioner despite the opportunities  which were available to them”.\n<\/p>\n
15. In view of the above decision taken by the Commission, it cannot be stated that  there is any error apparent on the face of record necessitating review of the order on  account of calculation of interest on working capital either.\n<\/p>\n
CONCLUDING REMARKS<\/p>\n
16. Before closing the matter, it is necessary to take note of certain other facts. The  application for review was listed for hearing on 3.3.2003. During the hearing the  representative of the RRVPNL, Respondent  No. 2 informed that a Civil Miscellaneous  Appeal  No. 133\/2002 was filed by that respondent before the Rajashtan High Court,  Jaipur Bench, against the said order dated 4.10.2002 and that High Court had on  10.1.2003 stayed operation of the said order. He further submitted that another  miscellaneous application was also filed before the High Court for modification of the  order. In view of these developments the application was kept pending till disposal of  the appeal before the Rajasthan High Court.\n<\/p>\n
17. However, on perusal of the order dated 10.1.2003, it is noticed that the stay of  order dated 4.10.2002 was only up to 12.2.2003. We have no record about further  extension of stay of order beyond that date. The contesting parties have not brought  any other order of the High Court, extending the stay beyond 12.2.2003. It is also  noticed that in the appeal filed before the High Court there is no dispute regarding  computation of O and M expenses and interest on working capital by considering the  fuel cost, etc. In view these facts we have decided to consider and dispose of the  application for review.\n<\/p>\n
18. In the light of above discussion, the application for review ( No. 127\/2002) is not  maintainable and is liable to be dismissed. It is ordered accordingly. No order as to  costs.<\/p>\n","protected":false},"excerpt":{"rendered":"
Central Electricity Regulatory Commission National Thermal Power … vs Uttar Pradesh Power Corporation … on 30 November, 2007 Bench: B Bhushan, R Krishnamoorthy ORDER 1. The petitioner, through this application made under Section 12 of the Electrcity Regulatory Commissions Act, 1998, seeks review of order determining capacity (fixed) charges component of tariff for power sold […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-127419","post","type-post","status-publish","format-standard","hentry","category-judgements"],"yoast_head":"\nNational Thermal Power ... vs Uttar Pradesh Power Corporation ... on 30 November, 2007 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/national-thermal-power-vs-uttar-pradesh-power-corporation-on-30-november-2007\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"National Thermal Power ... vs Uttar Pradesh Power Corporation ... on 30 November, 2007 - 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