# Ishita Foundation Metro City v. State of U.P

- **Citation:** (2022) 11 ILRA 308
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2022-11-10
- **Case number:** PIL(Civil) No. 115 of 2022
- **Bench:** Devendra Kumar Upadhyaya, Saurabh Srivastava
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/ishita-foundation-metro-city-v-state-of-u-p-47818
- **Pages:** 21

## Headnote

A. PIL-Constitution of India, 1950-Article
226-Electricity Act, 2003-Sections 62(1)
r/w 86(1)(a) read with Regulation 6 of
U.P. Electricity Regulatory Commission
(Conduct of Business) Regulations, 2004-
no evidence to show proceedings relating
to determination of power tariff are
vitiated-petitioner has nowhere stated as
to what according to it should be the
capital cost of the projects of respondent
no. 4 for the purpose of determination of
tariff-the representation made by the
petitioner to the Regulatory Commission
nowhere has it been stated or disclosed as
to what should be taken to be the capital
cost of the projects-if the petitioner had
any objection, he must have participated
in
the
public
hearing
before
the
Regulatory
Commission
and
filed
its
objection-Instead of participating in the
11 All. Ishita Foundation Metro City Vs. State of U.P.
309
public hearing and making its objections,
the petitioner straightaway filed the PILMr. Mohit Goyal was neither appointed by
the Power Corporation as consultant to
present
its
objection
before
the
Commission nor was he ever engaged by
the
Power
Corporation
for
the
said
purpose- the petitioner failed to establish
the allegations made in this PIL in respect
of the process of determination of tariff
being vitiated on account of the vice of
conflict of interest as as alleged against
Mr. Mohit Goyal.(Para 1 to 68)

The writ petition is dismissed. (E-6)

List of Cases cited:

## Text

_Characters 0–39,657 of 72,449. This is a partial read: ask again with offset=39657 for what follows._

308 INDIAN LAW REPORTS ALLAHABAD SERIES
present petition), no steps were taken at the
relevant point of time to stop them; the
petitioner secured 49 votes as against 59
votes secured by the elected candidate while
7 were declared invalid because of the
malpractices and tactics adopted by the
petitioners, hence, a FIR be lodged against
them and order of the revisional court as well
as the order of the trial court be quashed.

7. If an application moved under
Section 156(3) is studied, it clearly shows
that the applicant is aggrieved by tilting of the
result against him because of alleged unfair
practice adopted during the elections. The
remedy available to the applicant-revisionist
is thus filing of election petition. In may
view, an attempt has been made to give
criminal color, to essentially a civil dispute
which could have been remedied by seeking
appropriate remedy under the provisions of
the U.P. Kshettra Panchayat and Zila
Panchayat Adhiniyam, 1961 read with the
U.P. Kshettra Panchayats (Election of
Pramukhs and Up-Pramukhs and Settlement
of Election Disputes) Rules, 1994.

8. The Apex Court has observed in
number of cases that the power conferred
under Article 227 of the Constitution casts a
duty on the High Court to keep the inferior
Courts and Tribunals within the bounds of
their authority and to see that they do what
their duty requires and that they do it in a
legal manner. It has been observed by the
courts many times that where there is grave
dereliction of duty and flagrant abuse of
fundamental principles of law or justice and
where grave injustice would be done, then, in
such a situation, the Court must interfere in
pursuance to the power conferred under
Articles 226/227 of the Constitution of India.

9. I do not find any ground to
interfere in the impugned orders in exercise
of powers to this Court under Article 227
of the Constitution. The impugned orders
are speaking, reasoned and within the
boundaries of the law.

10. The petition is, accordingly,
dismissed.
----------
(2022) 11 ILRA 308
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 10.11.2022

BEFORE

THE HON'BLE DEVENDRA KUMAR
UPADHYAYA, J.
THE HON'BLE SAURABH SRIVASTAVA, J.

PIL(Civil) No. 115 of 2022

Ishita Foundation Metro City ...Petitioner
Versus
State of U.P. ...Respondent

Counsel for the Petitioner:
Pushpila Bisht

Counsel for the Respondents:
C.S.C., Neerav Chitravanshi, Sanjay Singh

A. PIL-Constitution of India, 1950-Article
226-Electricity Act, 2003-Sections 62(1)
r/w 86(1)(a) read with Regulation 6 of
U.P. Electricity Regulatory Commission
(Conduct of Business) Regulations, 2004-
no evidence to show proceedings relating
to determination of power tariff are
vitiated-petitioner has nowhere stated as
to what according to it should be the
capital cost of the projects of respondent
no. 4 for the purpose of determination of
tariff-the representation made by the
petitioner to the Regulatory Commission
nowhere has it been stated or disclosed as
to what should be taken to be the capital
cost of the projects-if the petitioner had
any objection, he must have participated
in
the
public
hearing
before
the
Regulatory
Commission
and
filed
its
objection-Instead of participating in the
11 All. Ishita Foundation Metro City Vs. State of U.P.
309
public hearing and making its objections,
the petitioner straightaway filed the PILMr. Mohit Goyal was neither appointed by
the Power Corporation as consultant to
present
its
objection
before
the
Commission nor was he ever engaged by
the
Power
Corporation
for
the
said
purpose- the petitioner failed to establish
the allegations made in this PIL in respect
of the process of determination of tariff
being vitiated on account of the vice of
conflict of interest as as alleged against
Mr. Mohit Goyal.(Para 1 to 68)

The writ petition is dismissed. (E-6)

List of Cases cited:
1. Dattaraj Nathuji Thaware Vs St. of Mah. &
ors. (2005) 1 SCC 590

2. R & M Trust Vs Koramangala Residents
Vigilance Group & ors. (2005) 3 SCC 91

3. Shivajirao Nilangekar Patil Vs Mahesh Madhav
Gosavi(Dr.) & ors. (1987) 1 SCC 227

4. Indian Banks' Assn. Bombay & ors. Vs
Devkala Consultancy Service & ors.(2004) 11
SCC 1

5. Akhil Bhartiya Upbhokta Congress Vs St. of
M.P. (2011) 5 SCC 29

6. Vishwanath Chaturvedi (3) Vs UOI & ors.
(2007) 4 SCC 380

7. St. of Uttaranchal Vs Balwant Singh Chaufal &
ors. (2010) 3 SCC 402

(Delivered by Hon'ble Devendra Kumar
Upadhyaya, J. & Hon'ble Saurabh
Srivastava, J.)

1. Heard Sri S.C.Misra, Senior
Advocate assisted by Ms Pushpila Bisht
and Sri Gagan Katyayan, learned for the
petitioner,
learned
Standing Counsel
representing the State-respondent no.1,
Sri J.N.Mathur, Senior Advocate assisted
by Sri Sanjay Singh, learned counsel for
respondent
no.2-U.P.
Electricity
Regulatory
Commission
(hereinafter
referred to as "Regulatory Commission")
and Dr. L.P.Misra with Sri Neerav
Chitravanshi,
learned
counsel
representing respondent no.3-U.P. Power
Corporation Limited (hereinafter referred
to as "Power Corporation"). We have
perused the record available before us on
this petition.

Prayers in the writ petition

2. By instituting proceedings of this
Public Interest Litigation (PIL) under
Article 226 of the Constitution of India,
the
petitioner,
which
is
a
Non
Governmental Organization, has prayed
that an appropriate writ or direction may
be issued to respondent no.2-Regulatory
Commission restraining it from going
ahead with determination of final tariff
for respondent no.4- Lalitpur Power
Generation
Company
Limited
(hereinafter referred to as "Generating
Company") pursuant to public notice
dated 23.11.2021. The other prayer made
by the petitioner is that an appropriate
writ or order or direction may also be
issued
to
institute
an
independent
investigation
into
the
alleged
collusion/conflict of interest in final tariff
fixation of the Generating Company's
1980 MW (3x660MW) Thermal Power
Project at Badagaon, District Lalitpur.
The petitioner-foundation has also prayed
that detail guidelines may also be issued
by this Court to ensure thorough scrutiny
of private/public bodies taking part in
power tariff determination process.

Facts of the case as culled from the
pleadings available on record and the
submissions made by learned counsel
representing the respective parties
310 INDIAN LAW REPORTS ALLAHABAD SERIES

3. (a) A Power Purchase Agreements
were entered into between the Power
Corporation and the Generating Company
for sale of 100% saleble power generated
by the Generating Company to the Power
Corporation at a price to be determined by
the Regulatory Commission on 15.06.2021.

(b) On 25.03.2019 the Generating
Company filed a petition which was
registered as Petition No.1431 of 2019
before the Regulatory Commission under
Section 62 read with Section 86 (1) (a) of
the Electricity Act, 2003 read with
Regulation 6 of U.P. Electricity Regulatory
Commission
(Conduct
of
Business)
Regulations, 2004. The said petition was
filed by the Generating Company with a
prayer to approve the final tariff for the
applicable capacity of the Generating
Company
from
respective
Dates
of
Commercial Operation in relation to three
units of the Power Projects of the
Generating
Company
till
31.03.2019.
Another relief sought was for ceiling
capital cost of Rs.17,760.95 crores. The
Generating Company also made certain
prayers
regarding
additional
capital
expenditure
beyond
the
Dates
of
Commercial Operation, recovery of taxes,
duties, cess, levies and other charges and
costs and expenses and also in relation to
reimbursement of certain bank charges
towards bank guarantees for availing
certain benefits under the power policy.
(c) For the purposes of appointment of
Designated
Independent
Agency
(hereinafter referred to as "DIA") for
conducting
the
prudence
check
and
verification of capital cost of the Power
Project of the Generating Company, after
inviting bids, the respondent no.5-M/s
Aquagreen
Engineering
Management
Private
Limited
in
consortium
with
respondent no.6-Bhushan
Rastogi
and
Associates was appointed the DIA by the
Regulatory Commission. The respondent
no.5 in consortium with respondent no.6
functioning as DIA submitted its report
regarding prudence check and verification
of capital cost of the Power Project of the
Generating Company on 29.10.2021 and
recommended disallowance of Rs.592
crores as capital cost.

(d) On 23.11.2021 a notice was
published by the Regulatory Commission
intimating the general public that DIA had
submitted its report to the Regulatory
Commission on 29.10.2021 and that public
hearing in this regard is scheduled on
17.01.2022. By the said notice, the
Regulatory Commission required all the
stakeholders
to
submit
their
comments/objections by 15.01.2022. On
17.01.2022 public hearing was held in
which Power Corporation submitted its
objections claiming dis-allowance of Rs.
5316.55 crores towards the capital cost as
claimed by the Generating Company.

(e) It is said that on the basis of public
hearing held on 17.01.2022, an order was
passed by the Regulatory Commission on
24.01.2022 and according to the petitioner
one Mr. Mohit Goyal is shown in the said
order to have participated as Consultant of
the
Power
Corporation,
though
participation of Mr Goyal as Consultant of
the Power Corporation in the public
hearing held on 17.01.2022 has been
denied by the Regulatory Commission as
also by the Power Corporation in their
respective affidavits filed in reply to the
writ petition. The order dated 24.01.2022
passed by the Regulatory Commission
makes
a
mention
that
the
Power
Corporation, one Mr Awdhesh Verma,
Adhyaksh, U.P. Rajya Vidyut Upbhokta
Parishad and Sri Rama Shanker Awasthi, a
consumer representative have submitted
their comments and further that the Power
Corporation submitted dis-allowance to the
11 All. Ishita Foundation Metro City Vs. State of U.P.
311
tune of Rs.4,643 crores to the capital cost.
On
10.03.2022,
the
Regulatory
Commission made the final determination
of
capital
cost.
Vide
order
dated
10.03.2022, the Commission thus finally
approved the capital cost of Rs.12,727.45
crores as against the capital cost of
Rs.16,574.73 crores as was claimed by the
Generating Company. The Regulatory
Commission thus determined the final
capital cost of Rs.12,727.45 crores after
prudence check and verification and also
considering the comments/objections raised
by the various stakeholders including the
Power Corporation. The final approval of
the capital cost of Rs.12,727.45 crores as
against the amount of Rs.16,574.73 crores
as claimed by the Generating Company has
resulted in dis-allowance of an amount of
Rs.3,847.28 crores. It is to be further
noticed that approval of the final capital
cost of the Power Projects of the
Generating
Company
at
Lalitpur
as
Rs.12727.45 crores is said to be less than
the provisionally approved capital cost of
Rs.14,269 crores which was determined by
means of the order dated 07.03.2018 passed
by the Regulatory Commission.

(f) The Regulatory Commission after
fixing the final capital cost of the Projects
of the Generating Company has directed
the Generating Company to file amended
tariff petition for fixation of final tariff.
Thus, final tariff is to be fixed which, as
asserted by the Regulatory Commission, is
bound to be at lower rate as compared to
the provisional tariff for the reason that the
final
capital
cost
approved
by
the
Regulatory Commission by means of the
order dated 10.03.2022 is less than the
capital cost which was taken into account
for approving the provisional tariff. The
capital cost considered by the Regulatory
Commission for approving the provisional
tariff was Rs.13,555 crores whereas the
final
capital
cost
approved
by
the
Regulatory Commission is Rs.12,727.45
crores.

(g) It is also on record that the
Generating Company has not filed the
amended tariff petition as directed by the
Regulatory Commission by means of its
order dated 10.03.2022; rather against the
said order an appeal under Section 111 of
Electricity Act 2003 has been prepared
which is said to be pending consideration
before the appellate authority.

(h) It is this process of approval of the
final capital cost of the Power Projects of
the Generating Company which has been
assailed in the writ petition by stating that
the process is sham and farce for the reason
that it is vitiated by and suffers from
conflict of interest inasmuch as Mr Mohit
Goyal is a Managing partner of respondent
no.6-Bhushan
Rastogi
and
Associates
which is the part of consortium led by
respondent
no.5-M/s
Aquagreen
Engineering Management Private Limited
which was appointed as DIA and it is the
same Mr. Mohit Goyal who participated as
Consultant of the Power Corporation in the
public hearing held on 17.01.2022 wherein
objections were filed by the Power
Corporation against not only the capital
cost
as
claimed
by
the
Generating
Company
but
also
against
the
recommendations made by the DIA. It is
thus the case of the petitioner that Mr
Mohit Goyal having participated in the
submission
and
preparation
of
the
recommendations made by the DIA could
not be part of the team of Consultants of
the Power Corporation which participated
in the public hearing and submitted his
objections in respect of dis-allowance of
capital cost as recommended by the DIA.

Case as set up by the petitionerFoundation
312 INDIAN LAW REPORTS ALLAHABAD SERIES

4. The petitioner-foundation has
asserted that the instant petition has been
filed in larger public interest as the serious
conflict of interest, as narrated above, in
relation to participation of Mr. Mohit Goyal
in the public hearing as Consultant of the
Power Corporation renders the entire
process of determination of capital cost of
the Project of the Generating Company a
sham and in fact it will ultimately result in
increase of the electricity tariff which will
have to be borne by the consumers at large.
The petitioner has stated that it is a Non
Governmental Organization and has been
taking up various social welfare causes like
providing basic health in rural areas and is
concerned about current state of affairs in
the power industry, hence the instant public
interest petition has been filed by it. The
petitioner has also asserted and declared in
the writ petition that the petition has been
preferred purely in public interest and that
the petitioner does not have any personal
interest direct and indirect. The petitioner
further states that it is not guided by any
self gain or for a gain of any other person
or institution or body and further that in
filing the petition, there is no motive other
than the public interest. It has also been
asserted and declared that outcome of the
instant petition will not lead to any undue
gain either to the petitioner or to anyone
else associated with it and also that it will
not result of any undue loss to any person
or body of the persons or even to the State.

5. It has been submitted by the
petitioner that in the public hearing held by
the Regulatory Commission on 17.01.2022,
the
Power
Corporation
presented
its
objection to the DIA's report. Further
assertion is that Mr. Mohit Goyal is the
Managing partner of M/s Bhushan Rastogi
and Associates which is involved in
preparation of DIA's report. The petitioner
further asserts that Mr. Mohit Goyal was
present as Consultant of the Power
Corporation to submit objections on behalf
of the Power Corporation to the report
prepared by his own firm, namely, M/s
Bhushan Rastogi and Associates. It has
been
stated
that
the
respondent
no.5,namely,
Aquagreen
Engineering
Management Pvt Ltd in consortium with
M/s Bhushan Rastogi and Associates was
appointed by the Regulatory Commission
as DIA for submitting its report on the
basis of prudence check and verification of
the capital cost of the Projects of the
Generating Company. The petitioner has
further stated that it is the same Mr. Mohit
Goyal, who after being part of the process
of preparation of the DIA' s report
participated in the public hearing as
Consultant of the Power Corporation which
submitted its objections to the report
prepared by the DIA.

6. The apprehension expressed in the
writ
petition
is
that
DIA's
report
recommended dis-allowance of Rs.592
crores for the capital cost of the project
whereas the Power Corporation in its
objection allegedly prepared with the
assistance of Mr. Mohit Goyal has
recommended
dis-allowance
of
Rs.5,316.55
crores
which
in
the
understanding of the petitioner in all
probability is likely to be rejected.
Submission, thus, is that such rejection
consequently would lead to higher public
tariff undue burden of which is to be thus
borne by the general public.

7. In support of his submissions that
Mr Mohit Goyal participated as Consultant
of the Power Corporation in public hearing
held on 17.01.2022, reliance has been
placed on the order dated 24.01.2022
passed by the Regulatory Commission
11 All. Ishita Foundation Metro City Vs. State of U.P.
313
which is based on the public hearing held
on 17.01.2022 wherein Mr Mohit Goyal
has been shown to be present as Consultant
of the Power Corporation.

8. Reliance has also been placed by
the petitioner on the Linkedin profile
wherein Mr. Mohit Goyal has been shown
to be the Managing partner of the
respondent no.6- M/s Bhushan Rastogi and
Associates. He is also shown as a partner of
another entity namely, M/s Mercados EMI.

9. It has thus been argued by Sri
S.C.Misra, learned Senior Advocate that on
account of involvement of Mr Mohit Goyal
both with the DIA and the Power
Corporation makes the entire exercise of
determination of power tariff farcical on
account of serious conflict of interest. It has
been argued further that tariff fixation
exercise undertaken by the Regulatory
Commission is thus sham for the reason
that the same party is involved on behalf of
the DIA as also on behalf of the Power
Corporation. The conflict of interest
argument has, thus, been raised by the
petitioner stating that once the Power
Corporation has to file objection to the
DIA's report, any involvement of any
person connected or concerned with DIA
with the Power Corporation leads to
conflict of interest which ultimately affects
the transparency in the process resulting in
ultimate loss to the public at large who
would be required to consume electricity
on higher rates of the power tariff.

10. In an affidavit filed by the
petitioner in support of the miscellaneous
application dated 10.03.2022, it has also
been asserted that Mr. Bhushan Rastogi is a
Chartered Accountant and was working
with Mr Mohit Goyal as Vice President
(Operations) in Mohit Goyal's Company,
namely, Percept 360 Degrees Consulting
Limited and that M/s Bhushan Rastogi and
Associates
was
blacklisting
by
the
Regulatory Commission in respect of some
proceedings for determination of power
tariff in the year 2013-2014. It has also
been stated that Mr Mohit Goyal and M/s
Bhushan Rastogi and Associates have made
deep and pervasive inroads in the Power
Corporation and in fact they have been
working and acting for the benefit of
Generating
Companies
such
as
the
respondent no.4- M/s Lalitpur Power
Generation Company Limited.

11. The case thus put forth by the
petitioner is based on argument relating to
conflict of interest, as observed above, and
also based on the alleged fact that the
Company with which Mr. Mohit Goyal has
been associated, was blacklisted by the
Regulatory Commission.

12. In the light of assertion of these
facts, it has thus been argued by learned
Senior
Advocate,
Sri
S.C.Misra
representing the petitioner that the process
of fixation of tariff, especially, the process
relating to approval of final capital cost of
the projects of the Generating Company as
against what was projected and claimed by
it is vitiated and if this process is allowed to
continue, it will lead to harm the public
interest inasmuch as ultimately such
process would result in fixation of higher
power tariff to be borne by the consumers
in general. In this view, the prayer is that
the Regulatory Commission be directed not
to go ahead with determination of final
tariff for the Generating Company and
further
to
direct
an
independent
investigation
into
the
alleged
collusion/conflict of interest in respect of
final tariff fixation of Thermal Power
Project in question.
314 INDIAN LAW REPORTS ALLAHABAD SERIES

Case put forth by the respondent
no.2-Regulatory Commission in reply to
the petitioner's case.

13. Sri Jaideep Narain Mathur,
learned Senior Advocate representing the
respondent no.2- Regulatory Commission
has questioned the very maintainability of
the writ petition by stating that the petition
does not espouse any cause of the general
public; rather it has been filed, in the garb
of public interest litigation, to stall the
proceedings
before
the
Regulatory
Commission for approval of final tariff of
the
Thermal
Power
Project
of
the
Generating Company. It has further been
stated by Sri Jaideep Narain Mathur, as
stated in the affidavit filed in reply by the
Regulatory Commission, that by means of
the order passed on 05.07.2019 in the
Petition No.1431 of 2019, the Regulatory
Commission
decided
to
appoint
a
Designated Independent Agency (DIA) on
Quality and Cost based Selection (QCBS)
basis. In the said process, the respondent
no.5 was selected and appointed as Lead
Partner in consortium with respondent no.6
as DIA for carrying out the prudence check
and verification of capital cost of the
project in question. It has also been stated
that draft report was submitted by the DIA
in the month of June, 2021 and during this
presentation of the draft report several
queries were raised by the Commission and
certain information/clarifications were also
sought from the DIA. It has further been
submitted on behalf of the respondent no.2Regulatory Commission that the DIA
submitted its final report on 29.10.2021
which included reply to the queries made
by the Commission on 13.08.2021. The
Commission further states in the affidavit
filed in reply that DIA recommended the
final capital cost of the project as Rs.
15,982.52 crores and accordingly final
report was made public and public notice
was issued inviting comments of all the
stakeholders in the public hearing which
was
scheduled
on
17.01.2022.
The
Regulatory Commission in its reply has
submitted that in the public hearing held on
17.01.2022 counsel and officials of the
Generating Company, counsel and officials
of the Power Corporation, Sri Rama
Shanker
Awasthi,
Consumer
Representative,
Sri
Avdhesh
Verma,
Adhyaksh, U.P. Rajya Vidyut Upbhokta
Parishad and Sri Navin Singh from
Aquagreen Projects were present. It is also
stated in the affidavit filed by the
Regulatory Commission that the public
hearing
was
held
through
Video
Conferencing and that in the said public
hearing, Mr Mohit Goyal had also joined
on Video Conferencing for the reason that
it was an open public hearing. The affidavit
further states that Mr. Mohit Goyal did not
participate in the public hearing and further
that the affidavit filed by the Power
Corporation
adequately
explains
the
presence of Mr Goyal on its behalf. It has
also been asserted in the affidavit that Mr.
Mohit Goyal had not been involved on
behalf of the Power Corporation in the
whole process of approval of tariff for the
Generating Company.

14. Sri J.N.Mathur, learned Senior
Advocate has also pointed out that the
petitioner though has filed this petition,
however it was not present during the
course of public hearing. The assertion is
that if the petitioner had any genuine
concerns, it was always open to it to have
participated in public hearing and file
objections which it desired to raise. Sri
Mathur has, thus, argued that the petitioner
having not participated in the public
hearing and having not raised any objection
before the Regulatory Commission cannot
11 All. Ishita Foundation Metro City Vs. State of U.P.
315
be said to have filed this petition with
bonafide intentions. It has also been stated
that the only intention of the petitioner is to
stall the process of approval of tariff and
such an attempt by the petitioner cannot be
said to be in public interest for the reason
that any delay if caused in approval of tariff
by the Regulatory Commission may result
in burdening the electricity consumers of
the State with higher cost of electricity.

15. On behalf of the Regulatory
Commission, it has also been stated and
argued that the capital cost as claimed and
projected by the Generating Company was
16,574.73 crores whereas the DIA had
recommended dis-allowance of Rs.581.40
crores. Further submissions in this regard is
that the Power Corporation submitted its
objection to the capital cost claiming disallowance of Rs.5,316.55 crores.

16. It has further been pointed out by
the Regulatory Commission
that the
petitioner did not place any objection on
record of this petition as to what should be
the quantum of dis-allowance. It has also
been stated that the petitioner has not made
any objections as to the quantum of disallowance or what exactly should be the
capital cost of the project in question even
in its representation dated 26.02.2022,
which has been sent to the Regulatory
Commission
by
registered
post
on
28.02.2022 and was received in the
Commission
on
03.03.2022.
Further
submission
made
on
behalf
of
the
Commission that the case put forth by the
petitioner is based on an assumption that
Power Corporation has recommended disallowance of Rs.5,316.55 crores as against
the capital cost of Rs.16,574.73 crores
claimed by the Generating Company,
which is likely to be rejected and hence
such rejection will result in higher power
tariff.

17. Pointing out to the fact as
recorded in the order dated 10.03.2022
passed by the Regulatory Commission
whereby the Commission has finally
approved capital cost to the tune of
Rs.12,727.45 crores after prudence check
and considering the objections made by
various stakeholders, it has been argued
that
dis-allowance
to
the
tune
of
Rs.3,847.28 crores has been approved by
the Commission. In these facts, submission
is that the very assumption on the basis of
which the writ petition has been filed falls
to ground and accordingly the writ petition
is liable to be dismissed for the reason that
final capital cost as determined by the
Regulatory Commission of Rs.12727.45 is
even less than the provisionally approved
capital cost of Rs.14,269 crores.

18. Sri Mathur, learned counsel
representing the Regulatory Commission
has also stated that in the facts and the
circumstances of the present case, it cannot
be ruled out that the present petition has
been filed as a camouflage describing itself
to be public interest litigation to linger on
the proceedings of approval of the final
power tariff with a view to extend undue
benefit to the Generating Company as
against the public interest.

19. It has also been urged by the
Regulatory Commission that against the
order dated 10.03.2022, the Generating
Company did not file amended tariff
petition; rather it has challenged the said
order by filing an appeal under Section 111
of the Electricity Act and since the
Generating Company itself has availed the
remedy of appeal before the appellate
316 INDIAN LAW REPORTS ALLAHABAD SERIES
authority, present petition is nothing but an
abuse of the process of the Court.

20. Regarding blacklisting, it has been
stated
on
behalf
of
the
Regulatory
Commission that in relation to M/s
Bhushan Rastogi and Associates and in
respect of tariff determination for the
financial year 2012-13, the Regulatory
Commission had passed an order on
03.11.2015
whereby
monetary
compensation was directed to be paid by
the firm to the tune of Rs.2,50,000/- which
was deducted from its balance payment. It
has also been stated that by means of the
order dated 4/5.12.2014, respondent no.6-
M/s Bhushan Rastogi and Associates was
barred from participating in any future
activity with the Regulatory Commission
for a period of two years and as such
blacklisting was for two years from the date
of the said order. Further submission in this
regard is that the respondent no.6 filed Writ
Petition No.12395 (M/B) of 2014 before
this Court which was disposed of by means
of the order dated 16.12.2014 with the
direction to the Regulatory Commission to
treat the order dated 04/05.12.2014 as a
show cause notice requiring the respondent
no.6 to file response and thereafter the
Commission was required to pass fresh
order after affording opportunity of hearing
to the respondent no.6. Submission further
is that in deference to the said order dated
16.12.2014 passed by this Court and after
considering the reply of respondent no.6,
the Regulatory Commission recalled the
order of blacklisting, however, maintained
the order of monetary compensation of
Rs.2,50,000/-.

21. Stating the aforesaid facts, it has
been
submitted
by
learned
counsel
representing the Regulatory Commission
that the writ petition deserves to be
dismissed as there is nothing on record
which establishes participation of Mr Mohit
Goyal in preparation and submission of the
objections
on
behalf
of
the
Power
Corporation to the capital cost of the
project in question as claimed by the
Generating Company during the process of
determination of capital cost. Submitting
that the ground based on the alleged
blacklisting of respondent no.6 is also not
available to the petitioner in the facts as
narrated above, Sri Mathur has thus prayed
that the instant petition may be dismissed.

Case as submitted in reply to the
petitioner by the respondent no.3-Power
Corporation

22. In reply to the submissions made
by
learned
counsel
for
petitionerfoundation, it has been stated on behalf of
Power Corporation that the very basic
premise of the writ petition regarding
process of determination of tariff is based
on assumptions and unfounded facts. It has
also been argued by Dr. L.P. Misra
representing the Power Corporation that the
correct facts of the case would reveal that
Mr Mohit Goyal was not engaged neither
was he involved in the process of either
preparation or presentation of objection on
behalf of the Power Corporation to the
capital cost claimed by the Generating
Company and also to the report submitted
by the DIA. He has further stated that the
petitioner does not have any locus standi to
file the present petition in the nature of
public interest litigation for the reason that
even as per its own averment the petitonerfoundation does not have any concern with
the issue relating to electricity generation
or its transmission or other functions
related to electricity. It has also been stated
that such functions are not within the
domain of the objects and purpose of the
11 All. Ishita Foundation Metro City Vs. State of U.P.
317
petitioner-NGO. Dr. Misra has further
argued that the instant petition appears to
be a proxy petition on behalf of respondent
no.4 and against the interest of public
whereby an attempt has been made to stall
the process of determination of final tariff
of electricity so that the objections filed by
the Power Corporation against the report of
DIA in respect of capital cost as claimed by
the respondent no.4 may not be considered.
In the submission of learned counsel
representing the Power Corporation the
instant petition is vexatious and is thus
liable to be dismissed with exemplary cost.

23. In reply to the merit of assertions
made on behalf of the petitioner, it has been
submitted by the Power Corporation that on
issuance of public notice dated 23.11.2021
scheduling
the
public
hearing
on
17.01.2022
the
Power
Corporation
constituted a Committee on 30.12.2021 for
the purposes of going through the report
submitted by the DIA and then to finalize
the comments to be presented before the
Regulatory Commission and submitted its
objection on the DIA prudence check and
verification report regarding capital cost as
claimed by the Generating Company. The
Committee constituted for the said purpose
comprised of (i) Director (Corporate
Planning) UPPCL, (ii) Senior Adviser to
Chairman of the Power Corporation, (iii)
Senior Adviser to Managing Director, U.P.
Rajya Vidyut Utpadan Nigam Limited and
(iv) Chief Engineer (PPA) of the Power
Corporation.

24. Learned counsel for Power
Corporation has taken us to the order dated
30.12.2021 constituting the Committee of
five members wherein it has clearly been
stated that the Committee constituted in
reference to the public hearing notice dated
23.11.2021 shall go through the DIA's
report and then finalize the comments
given to the Regulatory Commission.

25. Further submission made on
behalf of the Power Corporation is that the
comments/report provided by the aforesaid
Committee was shared and discussed with
the counsel of Power Corporation, namely,
M/s Shardul Amarchand Mangaldas &
Company to prepare the reply on affidavit.
It is
also stated that M/s Shardul
Amarchand Mangaldas & Company was
engaged by the Power Corporation by
means of the order dated 17.06.2019 as
counsel for Corporation for preparation of
application/reply/counter affidavit/counter
reply/rejoinder etc. and for appearance
before the Regulatory Commission for
effective pleadings on behalf of the Power
Corporation in respect of the petition filed
by
the
Generating
Company
for
determination of tariff. It is also stated by
the Power Corporation that with the help of
M/s Shardul Amarchand Mangaldas &
Company the Power Corporation filed its
comments/objections before the Regulatory
Commission on 13.01.2022 on affidavit
against the DIA report and in its objections
the Power Corporation proposed deduction
of Rs.4,642.32 crores from the capital cost
as claimed by the Generating Company.
Further submission is that hearing was
conducted by the Regulatory Commission
through Video Conferencing on 17.01.2022
and a team of legal counsel of Power
Corporation,
namely,
M/s
Shardul
Amarchand
Mangaldas
&
Company
participated in the hearing on behalf of the
Power Corporation and presented its
objections. The team of counsel which
represented the Power Corporation in the
public hearing comprised of Sri Ashish
Gupta, counsel UPPCL, Sri Shashwat
Kumar,
counsel
UPPCL,
Sri
Rahul
Chouhan, counsel UPPCL, Sri Satya Jha,
318 INDIAN LAW REPORTS ALLAHABAD SERIES
counsel UPPCL and Sri Amitanshu Saxena,
counsel UPPCL.

26. It has also been stated that the
Committee constituted by means of the
order dated 30.12.2021 further analyzed the
DIA report and recommended the total disallowance of Rs.5,316.55 crores as against
the capital cost claimed by the Generating
Company and accordingly, this additional
report was shared and discussed with the
counsel of the Power Corporation and
thereafter the additional report was also
submitted in consultation/help of the M/s
Shardul
Amarchand
Mangaldas
&
Company
before
the
Regulatory
Commission on 25.01.2022.

27. On behalf of the Power
Corporation the submission thus is that the
apprehension of the petitioner regarding
conflict of interest referring to involvement
of Mr Mohit Goyal as Consultant of the
Power Corporation is misconceived and
without any basis. It has further been stated
that the Company known as ''M/s Mercados
Energy Markets India Private Limited' was
appointed for providing regulatory support
services in various public sector companies
in the State of U.P. working in the field of
energy by means of the order dated
17.04.2021.

28. It has been contended that one of
the works under the regulatory support
services is to attend public hearing on the
petitions
of
the
Generating
Companies/stakeholders for determination of
tariff. Sri Misra has further stated that merely
because Mr Mohit Goyal, who is a Chartered
Accountant and a Managing Partner of
respondent no.6-M/s Bhushan Rastogi and
Associates, there cannot be any legal
presumption that the consortium as chosen by
the Regulatory Commission through tender
process shall not be working honestly, with
integrity and transparently in discharge of its
professional obligations. It has also been
argued that scope of work assigned to M/s
Mercados Energy Markets India Private
Limited is to attend the public hearings
before the Power Corporation and Mr Mohit
Goyal is a team member of said Company
and as such he might be present during the
hearing before the Regulatory Commission
on 17.01.2022 through Video Conferencing
not particularly in respect of the present
matter but in general as part of assignment to
the Company appointed as Consultant. It has
categorically been stated by the Power
Corporation in the reply filed to the writ
petition that Mr Mohit Goyal was neither
consulted in the matter of preparation of
objections filed before the Regulatory
Commission against the report of the DIA on
behalf of the Power Corporation nor has he
ever represented the Power Corporation in
respect of the matter in issue before any
authority
including
the
Regulatory
Commission.

29.

Contention
of
the
Power
Corporation further is that it is on the
objections of the Power Corporation that a
huge deduction of more than Rs.3000 crores
towards the capital cost of the project as
claimed by the Generating Company was
allowed by the Regulatory Commission.

30. It has thus been argued that since
final determination of the capital cost has
already been made by the Regulatory
Commission by means of the order dated
10.03.2022, hence the apprehension of the
petitioner is incorrect and further that the writ
petition itself has been rendered infructuous.

31. Submission further is that the
apprehension in the mind of the petitioner also
falls to ground for the reason that the DIA had
11 All. Ishita Foundation Metro City Vs. State of U.P.
319
recommended dis-allowance of an amount of
only Rs.592 crores whereas the dis-allowance
as claimed by the Power Corporation was to the
tune of Rs.5,316.55 crores as a result of which,
the Regulatory Commission has determined the
capital cost as Rs.12,727.45 crores which is less
by an amount of Rs.3,022.30 crores as against
the amount claimed by the Generating
Company. This fact, according to the
submission made on behalf of the Power
Corporation, is indicative of the fact that the
present petition has not been filed with bonafide
intentions; rather it is a proxy petition on behalf
of the Generating Company.

32. Another issue raised by learned
counsel for the Power Corporation is that
against the order of final determination of
capital cost of the project in question made by
the Regulatory Commission by means of the
order dated 10.03.2022, a remedy under Section
111 of the Electricity Act, 2003 before the
appellate tribunal is available and hence this
petition need not be entertained.

33. Emphasizing on these submissions, it
has been urged by learned counsel representing
the Power Corporation that the instant petition
is neither maintainable at the behest of the
petitioner-foundation nor does it stand on merits
and hence is liable to be dismissed.

Issues which fall for consideration of
the Court

34. On the basis of the pleadings available
on record as also the submission made by
learned counsel representing the parties, the
following issues emerge for our consideration.

(a) As to whether the instant petition
as public interest litigation is maintainable
at the behest of the petitioner-foundation,