TMI Blog2007 (4) TMI 746X X X X Extracts X X X X X X X X Extracts X X X X ..... l allowing the appeals filed by the respondents therein. The following factual matrix would be necessary for the proper understanding of the controversy involved in these appeals. 2. Before the present Act came in the anvil, the Electricity Supply Act, 1948 was occupying the field and the Central Government norms for fixing tariff for the period 1.11.1992 to 31.10.1997 were notified under Section 43A of the said Act. The Legislature then brought in Electricity Regulatory Commissions Ordinance which was ultimately converted into an Act in the year 1998. Section 3 of the Act provides for the establishment and incorporation of Central Electricity Regulatory Commission (hereinafter called the CERC for short). Section 13 provides power to regulate the tariff of generating companies, owned and controlled by the Central Government, sub- section (b) thereof provides power to regulate the tariff of the other companies amongst the other powers which are to be found upto clauses (i) of that Section. Section 28 of the 1998 Act reads as under: 28. The Central Commission shall determine by regulations the terms and conditions for fixation of tariff under clauses (a), (b) and (c) of Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O M Expenses In relation to a period means the expenditure incurred in operation and maintenance of the generating station including manpower, spares, consumables, insurance and overheads. Regulation 2.2 in the same Chapter provides as under: 2.2 The tariff for sale of electricity from Thermal Generating Stations (including Gas and Naphtha based stations) shall comprise of two parts, namely, the recovery of annual capacity (fixed) charges and Energy (variable) charges. The annual capacity (fixed) charges shall consist of interest on loan capital, depreciation, return on equity, advance against depreciation, operation and maintenance expenses, and interest on working capital. The Energy (Variable) charges shall cover fuel cost. (Emphasis Supplied) Then comes Regulation 2.7 which under sub-clause (d) provides for Operation and Maintenance expenses including insurance. We are not concerned with sub-clauses (i), (ii) (iii) thereof. However, the relevant clause which has fallen for our consideration is clause (iv) which reads as under: 2.7 Payment of Capacity (Fixed) Charges: The Capacity Charges shall be computed on the following basis and its recovery shall be rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was considered to normal deviation. Its further stand was that in case the deviation goes below 4.8 or beyond 7.2, as the case may be, it would be required to be adjusted on the basis of the actual escalation factor meaning thereby it would be only the deviation of the two points, namely, below 4.8% and beyond 7.2% which would be taken into consideration whereas the stand of the Utilities was that the said escalation factor should be related to the standard 6%. For example, according to the NPTC, if the escalation went to 4% which was below 4.8% then only .8% should be taken as an escalation factor so also if the escalation went beyond 7.2, i.e., 8%, then it would be only .8% which would be taken as an escalation factor. On the other hand as per the Utilities the said escalation factor should not be limited to the deviation but it should be 2% in the first and the second case because it was actually the deviation of 2% from the standard 6%. 5. By its order dated 28.2.2005, the CERC held that where the escalation factor is not in the prescribed norm, O M expenses should be calculated by working out the actual escalation factor and not the marginal adjusted escalated factor as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... General addressed us on behalf of respondents. The contentions raised by Shri Sunil Gupta and Shri Aruneshwar Gupta were as under. 10. The Appellate Authority has clearly erred in giving a literal interpretation to the said provision, namely, Clause 2.7(d)(iv). Learned counsel urged that the Appellate Authority was bound to discern the true intendment of the provision and should have given it a meaningful interpretation, in that, the escalation factor should have been calculated keeping 6% as the base and it should not have been limited to the difference alone. Learned counsel Shri Sunil Gupta further argued that the rule was manifestly neutral rule founded on purely neutral considerations and while interpreting the same, the Appellate Court has divested itself with the logic thereof. Learned counsel buttressed his arguments by suggesting that the rule was meant for the convenience of all concerned which included both administrative as well as financial convenience. According to both the counsel the intention behind the rule was that the CERC should not be exposed to the tedious exercise of review and re-adjustment of tariff already fixed so long as the deviation was within 20% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e interest of the consumers to be safeguarded and, therefore, when the O M factor dipped beyond 20% limit, the full advantage should have been given to the beneficiaries, i.e., consumers because the dipping of the O M factor would certainly bring down the price required to be paid by the consumers for the electricity. 14. Shri Aruneshwar Gupta, learned counsel also argued the matter more or less on the same lines explaining the actual effect of the judgment by the Appellate Authority on the price of the electricity payable by the consumers. 15. As against this, the learned Solicitor General urged that as per the established legal principles no unnatural interpretation could be given to the concerned legal provisions particularly when its plain meaning was crystal clear. Learned counsel analysed the whole provision taking each line of the same and urged that there was no necessity of any interpretation to be given when provision was crystal clear. It was urged that where the plain meaning of the provision did not, in any manner, do harm to the objective nor could bring out any absurdity, the golden rule of literal interpretation was the only course to be adopted by the courts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 7.2% on the upper side and 4.8% on the lower side, i.e., if the deviation goes below 4.8%, say, upto 4% then the O M factor would be considered in respect of .8% deviation because that is the deviation contemplated by the clause. If the meaning contemplated by the appellants is to be given, it would do harm to the unambiguous language of the clause. Plain and simple meaning of the provision, in our opinion, admits of, no doubt, in the sense that it would be only the deviation beyond the limit of 1.2% which would be available for adjustment. In that sense there would a cushion between the two points, namely, 7.2% on the upper side and 4.8% on the lower side. That is precisely provided by the words any deviation beyond this limit . The words beyond this limit would, in our opinion, signify the extent of deviation that is to be taken into consideration and that is required to be adjusted. 18. The Rule of literal interpretation has been explained by this Court time and again. In Ombalika Das Anr. Vs. Hulisa Shaw [(2002) 4 SCC 539], this Court unequivocally declared as under: Resort can be had to the legislative intent for the purpose of interpreting a provision of law, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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