TMI Blog2011 (9) TMI 1147X X X X Extracts X X X X X X X X Extracts X X X X ..... s no dispute that thereafter NTPC has duly and immediately adjusted the excess amounts in favour of the purchaser Electricity Boards in their subsequent bills. HELD THAT:- NTPC had filed the tariff petitions duly as required by the Central Commission. The delay in the case of Kawas and Gandhar Power Stations was because of the Commission requiring them to appropriately devise norms and parameters. As far as Rihand Station is concerned, one of the beneficiaries, namely Rajasthan Rajya Vidyut Vitaran Nigam Limited had obtained stay of proceedings before the Commission from the High Court of Rajasthan. NTPC was not in any way responsible for these factors. Ultimately, the tariff was reduced, but the tariff charged by the NTPC in the meanwhile was in accordance with the rates permitted under the notifications issued by the Commission. It cannot, therefore, be said that NTPC had held on to the excess amount in an unjust way to call it unjust enrichment on the part of NTPC, so as to justify the claim of the Electricity Boards for interest on this amount. In the circumstances, it is not possible to accept the submission that the Appellate Tribunal erred in any way in declining to award ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are respondents to this Civil Appeal No.2451/2007. The Punjab State Electricity Board (`PSEB' for short), Delhi Vidyut Board and others are the respondents to the other two appeals being Civil Appeal No.2452/2007 and Civil Appeal No.2493/2007. (b) Civil Appeals Nos. 3972 and 4231 of 2007 are filed by the PSEB and Delhi Vidyut Board. The Central Commission, M/s NTPC Ltd. and others are the respondents to these two appeals. 2. M/s NTPC Ltd. is a power `generating company' within the definition of the concept under Section 2 (28) of the Electricity Act, 2003. The Electricity Boards concerned, receive the power generated from the thermal power plants of NTPC situated at Kawas, Gandhar and Rihand. The Central Commission had determined the tariff payable by the Electricity Boards to NTPC by the above referred orders dated 1.4.2005, 7.4.2005 and 2.6.2006. (i) The orders dated 1.4.2005 and 7.4.2005 were on the Petitions No.33 of 2001 and 31 of 2001 respectively filed by NTPC for determining the tariff with respect to the power supplied by it during the period 1.4.2001 to 31.3.2004 to MPSEB and others from Gandhar and Kawas power stations. (ii) The order dated 2.6.2006 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Electricity Boards under Section 62 (6) of the Electricity Act, 2003, and (b) whether the Appellate Tribunal was justified in allowing interest on the differential amounts on the basis of justice, equity and fair-play. 6. Shri M.G. Ramachandran, learned counsel appeared for NTPC Ltd.. Shri A.K. Ganguli, Senior Advocate and Mr. Pradeep Misra, learned counsel have appeared for the concerned Electricity Boards. 7. Before we deal with these issues which arise with these appeals, we must note that the law concerning the determination of tariff of electricity has undergone changes from time to time. (i) Earlier the Electricity (Supply) Act, 1948 was governing the field. The Central Government was then determining the tariff for the power supplied by NTPC under Section 43 A (2) of the Act, since NTPC is a Government of India enterprise. (ii) The Electricity Regulatory Commissions Act 1998 was enacted for distancing of the Government from determination of tariffs. It created the Central Commission. The act, came into force on 25.4.1998. Tariff determination and other Regulatory functions as far as power generation of NTPC was concerned, no longer remained with the Central Go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espect to power supply agreements concerning Kawas and Gandhar Power Stations. 10. After the Central Commission was constituted with the authority for determining the tariff fixation, the Central Commission published Central Electricity Regulatory Commission (Conduct of Business) Regulation 1999. Second proviso to Regulation 79 (2) thereof provided as follows:- Provided further that the existing tariff being charged by generating companies owned by or controlled by the Central Government shall continue to be charged after the date of the notification as referred to in the above regulation for such period as may be specified in the notification without prejudice to the powers of the Commission to take up any matter relating to tariff falling within the scope of the Section 13 of the Act. Accordingly, the Central Commission issued notifications from time to time on 12.5.1999, 4.4.2001 and 21.10.2003 continuing the existing tariff as on 31.3.2001 until further orders to be passed by the Commission. NTPC raised the monthly invoices as per the existing tariff and the Electricity Boards honoured the same. 11. NTPC duly filed the tariff petitions as required by the Central C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, the Appropriate Commission may, for the promoting competition among distribution licensees, fix only maximum ceiling of tariff for retail sale of electricity. (2) The Appropriate Commission may require a licensee or a generating company to furnish separate details, as may be specified in respect of generation, transmission and distribution for determination of tariff. (3) The Appropriate Commission shall not, while determining the tariff under this Act, show undue preference to any consumer of electricity but may differentiate according to the consumer's load factor, power factor, voltage, total consumption of electricity during any specified period or the time at which the supply is required or the geographical position of any area, the nature of supply and the purpose for which the supply is required. (4) No tariff or part of any tariff may ordinarily be amended, more frequently than once in any financial year, except in respect of any changes expressly permitted under the terms of any fuel surcharge formula as may be specified. (5) The Commission may require a licensee or a generating company to comply with such procedure as may be specified for calculating t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he licensee or a generating company shall not recover a price or charge exceeding the tariff that is determined. The words `tariff determined under this section' indicate that the prohibition from charging excess price is dependent on the determination of the price under the preceding five sub-sections. The counsel for the Electricity Boards submitted that this sub-section should be applied even during the period when the tariff was being determined (as in the present case), and if in the final determination the price fixed is lesser than what was charged during the intervening period, then interest should be read as recoverable for the excess amount collected during the intervening period. In this connection, we must note that this sub-section does not refer to the period during which the tariff is being determined. It also does not state that if the finally determined tariff is less than the provisional tariff or an existing tariff continued by a statutory notification, then interest shall be payable on the differential amount. This sub-section further states that this right to claim interest is without prejudice to any other liability incurred by the licensee. Besides what i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order failing which the defaulting utility/beneficiary shall be liable to pay penal interest on excess/deficit amount at the rate as may be decided by the Commission. It was submitted that the principle contained in this regulation should be applied during the period covered in the present case also. 17. The counsel for NTPC on the other hand pointed out that the price determined in the present case is for the period 1.4.2001 to 31.3.2004 and even the orders passed by the Central Commission are dated 1.4.2005, 7.4.2005 and 2.6.2006, and that this regulation of 1.6.2006 cannot have a retrospective effect. What was prevalent at the relevant time was regulation 79(2), the second proviso of which has been quoted above, and it did not contain any such provision for interest during the intervening period. 18. We have noted the submissions of both the counsel. It is very clear that prior to 1.6.2006 there was no such specific provision for claiming interest for the intervening period. The very fact that such a regulation was required to be issued, indicates the necessity for having such a regulation, but at the same time it is not possible to make it applicable retrospectiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at a party finally found to be entitled to a relief in terms of money, would be entitled to be compensated by the award of interest which would also be payable in equity. In this matter, the appellants were operating coal mines in the State of Madhya Pradesh. The Central Government enhanced the royalty payable on coal, and the State Government was entitled to recover the same from the appellant who would pass on the burden to their purchasers. The appellant, however, challenged the hike in royalty in the High Court of M.P. Initially an interim order was passed and subsequently the notification was quashed. On appeal, the order of the High Court was set-aside. Subsequently, the State Government claimed interest from the appellant at the rate of 24% per annum in regard to the period when the enhanced royalty was delayed. The appellant passed on this claim to their consumers who challenged the same and succeeded in the High Court in reducing the interest from 24% to 12%. While dismissing the appeal filed by the appellant, this Court held that the interest would be payable even in equity and on the basis of the principle of restitution which is recognized in Section 144 of Code of Civi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Union of India for supply of drums made out of iron sheets to be supplied by latter. Though the iron sheets were initially supplied to the plaintiff, subsequently the defendant cancelled the contract and removed the iron sheets in small quantities from time to time for a period of nearly five years. Plaintiff claimed the compensation under various heads, claiming that they had acted as bailee for the defendants. This included (a) godown rent, (b) chowkidar's salary, (c) terminal tax, (d) cartage, (e) unloading charges, (f) cooliage and (g) interest. This Court accepted the claim of the plaintiff with regards to items (a) to (f) but rejected the claim with respect to interest. The Court relied upon the observations of Judicial Committee of the Privy Council in Bengal Nagpur Railway Co. Vs. Ruttanji Ramji (supra) to the following effect :- As observed by Lord Tomlin in Maine and New Brunswick Electrical Power Co. v. Hart (1929) AC 631, at p. 640: (AIR 1929 PC 185 at p. 188), `In order to invoke a rule of equity it is necessary in the first instance to establish the existence of a state of circumstances which attracts the equitable jurisdiction, as, for example, the non-perfo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rds. 27. It is true that there was delay in the process of determination of the tariff. We are informed that the Commission became functional only on 15.5.1999. NTPC had filed the tariff petitions duly as required by the Central Commission. The delay in the case of Kawas and Gandhar Power Stations was because of the Commission requiring them to appropriately devise norms and parameters. As far as Rihand Station is concerned, one of the beneficiaries, namely Rajasthan Rajya Vidyut Vitaran Nigam Limited had obtained stay of proceedings before the Commission from the High Court of Rajasthan. NTPC was not in any way responsible for these factors. Ultimately, the tariff was reduced, but the tariff charged by the NTPC in the meanwhile was in accordance with the rates permitted under the notifications issued by the Commission. It cannot, therefore, be said that NTPC had held on to the excess amount in an unjust way to call it unjust enrichment on the part of NTPC, so as to justify the claim of the Electricity Boards for interest on this amount. 28. Submissions were advanced before us on the question as to whether the tariff determination under Section 62 was in any way legislative o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2003 Act, though Section 61 is an enabling provision for the framing of regulations by CERC. If one takes tariff as a subject-matter, one finds that under Part VII of the 2003 Act actual determination/fixation of tariff is done by the appropriate Commission under Section 62 whereas Section 61 is the enabling provision for framing of regulations containing generic propositions in accordance with which the appropriate Commission has to fix the tariff....... 30. In the facts of the present case, however, this controversy as to whether tariff fixation is legislative or quasi-judicial need not detain us any further. As held by the Constitution Bench, price fixation is really legislative in character, but since an appeal is provided under Section 111 of the Act, it takes a quasi-judicial colour. That by itself cannot justify the claim for interest during the period when the proceedings were pending for the tariff fixation. The tariff that was being charged at the relevant time was as per the previous notifications. Once the tariff was finalized subsequently, NTPC has adjusted the excess amount which it has received. It cannot be said that during this period the NTPC was claiming t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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