# U.P. POWER CORPORATION LTD v. NATIONAL THERMAL

- **Citation:** [2009] 3 S.C.R. 1060
- **Court:** Supreme Court of India
- **Decided:** 2009-03-03
- **Case number:** Civil Appeal No. 111 O of 2007
- **Bench:** S.B. Sinha, Lokeshwar Singh Panta, B. Sudershan Reddy
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/u-p-power-corporation-ltd-v-national-thermal-25581
- **Pages:** 36

## Headnote

c
Electricity Regulatory Commission Act, 1998:
s. 13 - Central Electricity Regulatory Commission -
Power to regulate tariff - Factors to be taken into account -
Operation and Maintenance expenses - Increase in salary
D of employees of generating company (NTPC) consequent
upon revision of pay scales - HELO: Central Commission has
exclusive jurisdiction to frame tariff - For this purpose, actual
cost required for payment to employees being part of
Operation and Maintenance cost could fall for determination
E
(Jy Central Commission.
Central Electricity Regulatory Commission (Conduct of
Business) Regulations, 1999:
Regulations 92, 93, 116 and 117 - Revision of tariff -
...
F HELD: In exercising such jurisdiction, Central Commission
must act within reasonable time - Application should have
been filed within the period during which tariff .order was in force
-
Besides, although provisions of s. 11 CPC are not
applicable, but general principles of res judicata may be
G applicable - NTPC was aware of impending revision of pay
scales and had provisionally implemented it in part -
Appellate Tribunal erred in holding that increase in salary with
..
retrospective effect could have been a subject matter for
determination of tariff in another period - Electricity Regulatory
H
1060
U.P. POWER CORPORATION LTD. v. NATIONAL THERMAL
1061
POWER CORPORATION LTD. AND ORS.
~-~ 1
Commission (Terms and Conditions of Tariff) Regulations,
A
2001: Regulation 7. 2( d)(i) and (iv) - Code of Civil Procedure,
1908 - s.11 - Res judicata - Limitation.
The respondent-Corporation (NTPC), pursuant to
revision of salary of its employees w.e.f. 1.7.1997, filed
petition before the Central Electricity Regulatory
B
Commission for revision of tariff for its stations at Korba
~
(Chattisgarh) and Dadri (UP) for.the years 1997-98 to
4
1999-2000, taking into account its liability towards arrears
of salary of its employee from 1.7.1997. The Central c
Commission after taking into consideration the data
provided by NTPC including for the year 2000-2001 and
the provisions made during the years 1997-98 to 19992000 towards anticipated revised costs therefore,
determined the operational and financial norms for the
D
;
generating stations of the Corporation which was
~
inclusive of employees' costs. NTPC filed revision
applications in the year 2005 in respect of Korba and
Dadri power stations claiming allowances of actual
revised costs incurred by it on account of arrears paid
in 2000-2001. The Commission dismissed the revision
E
applications. The appeals of NTPC were allowed by the
Appellate Tribunal holding that amounts of arrears paid
'(
by NTPC on 2000-2001 on account of employees cost be
,,.
considered in tariff fixation for reimbursement, as
admissible by the Regulations, in the forthcoming tariff
F
period. Aggrieved, the U.P. Power Corporation Ltd. filed
the appeals.
Allowing the appeals, the Court
HELD: 1.1. It is well-settled that the Central Electricity
G
->j
Regulatory Commission has the exclusive jurisdiction to
A
frame not only tariff but also to make any amendment,
alterations and additions in. regard thereto. [Para 28)
[1077-D]
H
1062
SUPREME COURT REPORTS
[2009] 3 S.C.R.
A
1.2. Making of a tariff is a continuous process. It can
be amended or altered by the Central Commission, if any
occasion arises therefor. The said power can be
exercised not only on an application filed by the
generating companies but by the Commission also on its
s own motion.Regulations 92 and 94 of the Central
Electricity Regulatory Commission (Conduct of
Business) Regulations, 1999 do not restrict the power of
the Central to make additions or alterations in the tariff.
[Para 36] [1084-C-D]
c
1.3. The Central Commission has a plenary power. Its
inherent jurisdiction is saved. The provisions of the
Electricity Regulatory Commission Act, 1998 do not put
any restriction on the Central Commission in the matter
of exercise of such a jurisdiction. [Para 35] [1083-H; 1084D A-B]
1.4. The concept of r

## Text

_Characters 0–39,929 of 63,046. This is a partial read: ask again with offset=39929 for what follows._

[2009] 3 S.C.R. 1060
A
U.P. POWER CORPORATION LTD.
t~
II.
NATIONAL THERMAL POWER CORPORATION LTD.
AND ORS.
(Civil Appeal No. 111 O of 2007)
B
MARCH 3, 2009
[S.B. SINHA, LOKESHWAR SINGH PANTA AND
B. SUDERSHAN REDDY, JJ.]
c
Electricity Regulatory Commission Act, 1998:
s. 13 - Central Electricity Regulatory Commission -
Power to regulate tariff - Factors to be taken into account -
Operation and Maintenance expenses - Increase in salary
D of employees of generating company (NTPC) consequent
upon revision of pay scales - HELO: Central Commission has
exclusive jurisdiction to frame tariff - For this purpose, actual
cost required for payment to employees being part of
Operation and Maintenance cost could fall for determination
E
(Jy Central Commission.
Central Electricity Regulatory Commission (Conduct of
Business) Regulations, 1999:
Regulations 92, 93, 116 and 117 - Revision of tariff -
...
F HELD: In exercising such jurisdiction, Central Commission
must act within reasonable time - Application should have
been filed within the period during which tariff .order was in force
-
Besides, although provisions of s. 11 CPC are not
applicable, but general principles of res judicata may be
G applicable - NTPC was aware of impending revision of pay
scales and had provisionally implemented it in part -
Appellate Tribunal erred in holding that increase in salary with
..
retrospective effect could have been a subject matter for
determination of tariff in another period - Electricity Regulatory
H
1060
U.P. POWER CORPORATION LTD. v. NATIONAL THERMAL
1061
POWER CORPORATION LTD. AND ORS.
~-~ 1
Commission (Terms and Conditions of Tariff) Regulations,
A
2001: Regulation 7. 2( d)(i) and (iv) - Code of Civil Procedure,
1908 - s.11 - Res judicata - Limitation.
The respondent-Corporation (NTPC), pursuant to
revision of salary of its employees w.e.f. 1.7.1997, filed
petition before the Central Electricity Regulatory
B
Commission for revision of tariff for its stations at Korba
~
(Chattisgarh) and Dadri (UP) for.the years 1997-98 to
4
1999-2000, taking into account its liability towards arrears
of salary of its employee from 1.7.1997. The Central c
Commission after taking into consideration the data
provided by NTPC including for the year 2000-2001 and
the provisions made during the years 1997-98 to 19992000 towards anticipated revised costs therefore,
determined the operational and financial norms for the
D
;
generating stations of the Corporation which was
~
inclusive of employees' costs. NTPC filed revision
applications in the year 2005 in respect of Korba and
Dadri power stations claiming allowances of actual
revised costs incurred by it on account of arrears paid
in 2000-2001. The Commission dismissed the revision
E
applications. The appeals of NTPC were allowed by the
Appellate Tribunal holding that amounts of arrears paid
'(
by NTPC on 2000-2001 on account of employees cost be
,,.
considered in tariff fixation for reimbursement, as
admissible by the Regulations, in the forthcoming tariff
F
period. Aggrieved, the U.P. Power Corporation Ltd. filed
the appeals.
Allowing the appeals, the Court
HELD: 1.1. It is well-settled that the Central Electricity
G
->j
Regulatory Commission has the exclusive jurisdiction to
A
frame not only tariff but also to make any amendment,
alterations and additions in. regard thereto. [Para 28)
[1077-D]
H
1062
SUPREME COURT REPORTS
[2009] 3 S.C.R.
A
1.2. Making of a tariff is a continuous process. It can
be amended or altered by the Central Commission, if any
occasion arises therefor. The said power can be
exercised not only on an application filed by the
generating companies but by the Commission also on its
s own motion.Regulations 92 and 94 of the Central
Electricity Regulatory Commission (Conduct of
Business) Regulations, 1999 do not restrict the power of
the Central to make additions or alterations in the tariff.
[Para 36] [1084-C-D]
c
1.3. The Central Commission has a plenary power. Its
inherent jurisdiction is saved. The provisions of the
Electricity Regulatory Commission Act, 1998 do not put
any restriction on the Central Commission in the matter
of exercise of such a jurisdiction. [Para 35] [1083-H; 1084D A-B]
1.4. The concept of regulatory jurisdiction provides
for revisit of the tariff. It is now a well-settled principle of
law that a subordinate legislation validly made becomes
E a part of the Act and should be read as such. [Para 43]
[1087-G-H]
Bank of New South Wales v. Commonwealth (1948) 76
CLR 1; Oeepak Theatre v. State of Punjab 1992 Supp (1)
SCC 684; State of U.P. v. Maharaja Dharmander Prasad
F Singh (1989) 2 SCC 505; V.S. Rice and Oil Mills v. State of
AP. (1964) 7 SCR 456; T.N. State Electricity Board v. Central
Electricity Regulatory Commission and Others (2007) 7 SCC
636; Hotel & Restaurant Assn. and Another v. Star India (P)
Ltd. and Others (2006) 13 SCC 753; K. Ramanathan v. State
G of Tamil Nadu (1985) 2 SCC 116; Central Power Distribution
Co. and Others v. Central Electricity Regulatory Commission
(2007) 8 SCC 197 and UP. State Electricity Board, Lucknow
v. City Board, Mussoorie and Others (1985) 2 SCC 16,
referred to.
H
U.P. POWER CORPORATION LTD. v. NATIONAL THERMAL
1063
POWER CORPORATION LTD. AND ORS .
.._, 1
2.1. Revision of a tariff must be distinguished from a
A
review of a tariff order. Whereas Regulation 92 of the 1999
Regulations provides for revision of tariff, Regulations
110 to 117 also provide for extensive power to be
exercised by the Central Commission in regard to the
proceedings before it. [Para 33] [1083-A-B]
B
"
2.2. The Commission, apart from entertaining an
~
application for review filed by a party, may exercise its suo
motu jurisdiction. While the Central Commission exercises
a suo motu jurisdiction, the period of limitation prescribed c
in Regulation 103 shall not apply. There cannot, however,
by any doubt whatsoever that while exercising such
jurisdiction, the Central Commission must act within a
reasonable time. Furthermore, the statute does not
\
provide for the manner in which a petition is to be filed
D
before the Central Commission or the manner in which
the tariff order is to be passed or revision or non-revision
thereof. [Para 37] [1084-F-H]
3.1. There cannot be any doubt whatsoever that
while a tribunal or a court exercises adjudicatory .power,
E
,
although provisions of s.11 of the Code of Civil
Procedure, 1908 are not applicable, but the general
,>
principles of res judicata may be applicable. [Para 34]
[1083-C-D]
Sri Bhavanarayanaswamivari Temple v. Vadapalli
F
Venkata Bhavanarayana Charyu/u (1970) 1 SCC 673; Bharat
Barrel and Drum Manufacturing Co. Pvt. Ltd. v. Bharat Barrel
Employees Union (1987) 2 SCC 591; Vijayabai and Others
v. Shriram Tukaram and Others (1999) 1 SCC 693; Forward
G
Construction Co. and Others v. Prabhat Manda/ (Regd.),
·-JI
~
Andheri and Otliers (1986) 1 SCC 100 and K. V. George v.
Secretary to Government, Water and Power Department,
Trivandrum and Another (1989) 4 SCC 595, referred to.
3.2. Respondent-NTPC was already aware of the
H
1064
SUPREME COURT REPORTS
[2009] 3 S.C.R.
A impending revision of scales of pay and had implemented
the same in part, albeit, on a provisional basis. It is not
known as to why it filed applications for tariff
determination for its generating stations at Korba and
Dadri on 28.05.2001 and 8.06.2001, respectively. Not only
B that the amended applications did not contain the details
of the prescribed data, a sheet with data of year 20002001, which was not a part of Form 16, was inserted at a
later stage. Amended applications were filed only on
30.01,.2002 and 7 .02.2002. The year 2000-01 was not the
c relevant year for the said purpose. [Para 46) [1092-F-H;
1093-A]
3.3. There cannot be any doubt whatsoever that for
the purpose of making tariff the acb,1al costs required for
payment to the employees being a part of the operation
D and maintenance cost including a sum of Rs. 55 crores,
which were to be paid by way of extra amount, could fall
for determination by the Central Commission. But, such
an application ordinarily could have been filed within the
period during which the tariff order was in force. [Para 47)
E [1093-A-BJ
3.4. The appellate tribunal erred in holding that
increase in the salary with retrospective effect could have
been a subject matter for determination of tariff in another
F period. The claim of the respondent-Corporation was not
justified as the Central Commission should not have
been asked to revisit the tariff after five years and when
everybody had arranged its affairs. [Para 48) [1093-C, DJ
3.5. Regulation 2.7 (d)(iv) of the 2001 Regulations
G clearly provides that applications must be entertained
only in the event any situation arose within the purview
thereof and not at any point of time. If NTPC were aware
that they were to incur an additional expenditure of Rs.
55/- crores, they could have preferred an appeal before
H the Central Commission. It is stated that appeals were
I
'
U.P. POWER CORPORATION LTD. v. NATIONAL THERMAL
1065
POWER CORPORATION LTD. AND ORS.
preferred on other issues but not on this one. [Para 49]
A
[1093-E-F]
4.1. Framing of tariff is made in several stages. The
generating companies get enough opportunity not only
at the stage of making of tariff but at a later stage also to
8
put forth its case including the amount it has to spend
on operation and maintenance expenses as also
escalation at the rate of 10% in each of the base year. It
cannot be permitted to re-agitate the said question after
passing of many stages. Furthermore, the direction of the
tribunal that the additional costs may be absorbed in the
C
new tariff was not correct. Some persons who are
consumers during the tariff year in question may not
continue to be the consumers of the appellant. Some new
consumers might have come in. There is no reason as
to why they should bear the brunt. Such quick-fix attitude
D
is not contemplated as framing of forthcoming tariff was
subject to fresh regulations and not the old regulations.
[Para 50] [1090-F-H; 1094-A-B]
4.2. It is true that the jurisdiction of the appellate
E
tribunal is wide. It is also an expert tribunal and, thus, it
can interfere with the finding of the Central Commission
both on fact as also on law. But, the instant case was not
one where the appellate tribunal should have interfered
with the order of the Central Commission. [Para 52 and
F
53] [1094-D-E]
Union of India and Another v. Cynamide India Ltd. and
Another (1987) 2 SCC 720; Shri Sitaram Sugar Company·
Limited and Another v. Union of India and Others (1990) 3
SCC 223, held inapplicable.
G
Cellular Operators Association of India and Others v.
Union of India and Others (2004) 8 SCC 524, referred.to.
Case Law Reference:
(1970) 1 sec 673
referred to
para 34
H
1066
SUPREME COURT REPORTS
[2009] 3 S.C.R.
i
'-~
A
(1987) 2 sec 591
referred to
para 34
(1999) 1 sec 693
referred to
para 34
(1986) 1 sec 100
referred to
para 34
B
(1989) 4 sec 595
referred to
para 34
(1948) 76 CLR 1
referred to
para 44
1992 Supp (1) sec 684 referred to
para 45
(1989) 2 sec 505
referred to
para 45
c
(1964) 7 SCR 456
referred to
para 45
(2007) 1 sec 636
referred to
para 45
(2006) 13 sec 753
referred to
para 45
~
D
t
(1985) 2 sec 116
referred to
para 45
(2001) 8 sec 191
referred to
para 45
(1985) 2 sec 16
referred to
para 45
E!
(1987) 2 sec 120
held inapplicable para 52
(1990) 3 sec 223
held inapplicable para 52
(2004) 8 sec 524
referred to
para 52
'
F
CIVIL APPELLATE JURISDICTION: Civil Appeal No.1110
of 2007.
From the Judgment and Order dated 07.09.2006 of the
Appellate Tribunal for Electricity, New Delhi in Appeal No.195
of 2005.
~
"
WITH
Civil Appeal No. 1138 of 2007, 1152 of 2007, 1327 of 2007
and 1112 of 2007.
H
U.P. POWER CORPORATION LTD. v. NATIONAL THERMAL
1067
POWER CORPORATION LTD. AND ORS.
')>
~
Sunil Gupta, Pradeep Misra and Manoj Kumar Sharma for A
the Appellant.
M.G. Ramachandran, K.V. Mohan, K.V. Balakrishana,
Anand K. Ganesan, Swapna Sheshadri, Vivek Kishore, Ruchi
Gour Narula, Sangeeta Bharati, G. Umapathy, Rakesh K.
B
Sharma, Raj Kumar Mehta, Sarvodaya Lakshmi, R. Nedumaran
•
and Suresh Chandra Tripathi for the Respondent.
The Judgment of the Court was delivered by
S.B. SINHA, J. 1. These appeals involving similar c
questions of law and fact were taken up for hearing together
and are being disposed of by this common judgment.
'
2. We may, however, notice the fact of the matter from Civil
~
Appeal No.1110 of 2007.
D
3. The question which arises for consideration herein is as
to whether the amount required to be paid by the first
respondent National Thermal Power Corporation (for short 'the
Corporation') towards revision of scales of pay of its employees
in terms of the recommendations made by the High Level
E
Committee constituted under the Chairmanship of Justice S.
~
Mohan with retrospective effect from 1st January, 1997 can be
;
a subject matter of revision in tariff for the tariff years 1997-1998
; 1998 - 1999 and 1999 - 2000.
4. The Parliament with a view to provide for establishment
F
of a Central Electricity Regulatory Commission and State
Electricity Regulatory Commissions, rationalization of electricity
tariff, transparent policies regarding subsidies, promotion of
efficient and environmentally benign policies and for matters G
.""I •
connected therewith or incidental thereto, enacted the Electricity
Regulation Commissions Act, 1998 (for short 'the 1998 Act').
It came into force with effect from 9th June, 1998.
Pursuant to or in furtherance of the provisions thereof the
H
1068
SUPREME COURT REPORTS
(2009) 3 S.C.R.
A Central Electricity Regulatory Commission (in short the Central
Commission) was established in terms of sub-section (1) of
Section 3 of the 1998 Act. Indisputably the powers and
functions of the Commission are extensive being contained in
Section 13 of 1998 Act i.e. :
B
c
D
"(a) to regulate the tariff of generating companies owned
or controlled by the Central Government;
(b) to regulate the tariff of generating companies, other
than those owned or controlled by the Central Government
specified in clause (a), if such generating companies enter
into or otherwise have a composite scheme for generation
and sale of electricity in more than one State;
(c) to regulate the inter-State transmission of energy
including tariff of the transmission utilities;
(d) to promote competition, efficiency and economy in the
activities of the electricity industry;
(e) to aid and advise the Central Government in the
E
formulation of tariff policy which shall beG
H
(i) fair to the consumers; and
(ii) facilitate mobilisation of adequate resources for the
power sector;
(f) to associate with the environmental regulatory agencies
to develop appropriate policies and procedures for
environmental regulation of the power sector;
(g) to frame guidelines in matters relating to electricity tariff;
(h) to arbitrate or adjudicate upon disputes involving
generating companies or transmission utilities in regard
to matters connected with clauses (a) to (c) above;
'
-
U.P. POWER CORPORATION LTD. v. NATIONAL THERMAL
1069
POWER CORPORATION LTD. AND ORS. [S.B. SINHA, J.]
(i) to aid and advise the Central Government on any other
A
matter referred to the Central Commission by that
Government."
5. A regulatory Commission not only makes Regulations
but in view of its extensive powers BUT ALSO in-charge of
B
implementation thereof. It furthermore in the event of any dispute
or difference arising between several players involved in the
framing of tariff for the consumers of electrical energy has also
an adjudicatory role to play.
6. We are in this batch of appeals are concerned with the
C
power of the Central Commission to make tariff and to revise
the same at the instance of a generating company. Before,
however, adverting to the said questions, we may notice certain
undisputed facts.
7. National Thermal Power Corporation Ltd. is a public
sector undertaking employed in generation of electrical energy
at different parts of India. It has a Thermal Power Station at
Korba in the State of Chhatisgarh and Gas Power Station in
Dadri in the State of Uttar Pradesh.
8, U.P. Power Corporation Ltd. is also a public sector
undertaking constituted upon bifurcation of U.P. Electricity Board
in terms of the provisions of the U.P. Electricity Regulatory
Commission Act, 1998.
9. Indisputably the Central Commission only had, at the
relevant time, jurisdiction to make tariff for the generating
companies.
D
E
F
10. The matter relating to generation, transmission, supply
and distribution of electrical energy in different States used to
G
be governed by the Electricity (Supply) Act, 1948. With a view
to bring reforms in the power sector and to meet shortages in
the power supply, the Central Government as also the various
State Governments, adopted liberalisation policies for industrial
economy so as to enable them to attract investment from
H
1070
SUPREME COURT REPORTS
[2009] 3 S.C.R.
A various parts of the country as also from abroad.
' ..
11. The Parliament, with a view to give effect to the
aforesaid policy decision, as noticed hereinabove, enacted
1998 Act. Parliament, we may place on record, with a view to
B consolidate the laws relating to generation, transmission,
distribution , trading and use of electricity and generally for
taking measures conducive to development of electricity
industry, promoting competition therein, protecting interest of
consumers and supply of electrictty to all areas, rationalization
c of electricity tariff, ensuring transparent polices, regarding
subsidies, promotion of efficient and environmentally benign
polices, constitution of Central Electricity Authority, Regulatory
Commission and establishment of Appellate Tribunal and for
matters connected therewith or incidental thereto, enacted the
Electricity Act, 2003. It came into force with effect from 10th
....
D June, 2003.
~
12. On or about 25th September, 1999 the Government
of India issued guidelines for revision of salary to the
employees of the Public Sector Undertakings with effect from
E 1st July, 1997, wherefor, as noticed earlier, a High Powered
Committee headed by Justice Mohan was constituted.
·'
13. It is stated that the Corporation made provisions in its
budget for the relevant years and paid arrears of revised salary
F with effect from 1st January, 1997 to the Executive in July, 2000
and to the Supervisor and Workmen from April, 2001 and
March, 2001 respectively.
14. The Corporation had asked the Central Commission
to frame tariff in respect of the electricity generated by it
G wherefor it filed Petition Nos.30/2001 and 44/2001 for
determination of tariff for its stations at Korba and Dadri. The
~ -
Central Commission, upon consideration of the factors placed
before it and upon hearing all concerned, including the parties
hereto, determined the operational and financial norms
H applicable, inter alia, for the generating stations of the NTPC
U.P. POWER CORPORATION LTD. v. NATIONAL THERMAL
1071
POWER CORPORATION LTD. AND ORS. [S.B. SINHA, J.)
....-
~
which was inclusive of employee's costs. In the said order the
A
Central Regulatory Commission dealt with all aspects of the
operation and maintenance expenses after setting up the norms
for such determination.
15. As stated earlier the revision of salary of NTPC
B
employees was revised in terms of the recommendations of the
High Level Committee. The said revision was given effect to
•
on and from w.e.f. 1st January, 1997 but was implemented
during·the period 2000-2001.
16. The tariff order was made by Central Regulatory c
Commission for Korba and Dadri on 6th August, 2003 wherefor
the data provided by NTPC were taken into consideration in
terms of Regulation 2.7(d}(i) including the provisions made
during three years 1997-1998 to 1999-2000 towards
~
anticipated revised costs therefor.
D
J.,
17. Indisputably alongwith the said data, datas for1the year
2000-2001 were also produced.
18. It filed a review petition before the Central Regulatory
E
Commission during various periods in respect of its Korba and
Dadra projects on 1st October, 2003. However, it did not lay
any claim in respect of actual revised costs for the years 19971998, 1998-1999 and 1999-2000.
>
19. Central Regulatory Commission in exercise of its suo
F
motu jurisdiction passed an order in proceeding being No.196
of 20045 to inquire into the actual escalation factor which was
found to be less than 6%. Before the Commission certain other
issues were also raised. However, on or about 25th April, 2005
and 26th July, 2005 revision applications were filed in respect
G
of Korba and Dadri Fower Stations claiming allowance of
~
actual revised costs incurred by the Corporation on account of
't
arrears of paid in 2000-2001.
21. The Commission dismissed the said applications by
H
1072
SUPREME COURT REPORTS
(2009] 3 S.C.R.
A orders dated 11th August 2005 and 19th October, 2005 inter
1 .....
alia, opining :
(i)
"It needs to be noted that in terms of the
Commission's order dated 21.12.2000 fresh
B
revision of O&M base charges after determination
of tariff is not warranted based on the actual
expenses".
(ii)
"From the details extracted at Para 10 above, it can
'
be seen that revision of salary of the employee,
c
executives, supervisors and other workmen was
notified during July 2000 to April 2001 and the
arrears on that account were also paid during the
same period. Therefore, the complete employee
cost data on account of revision of pay and
D
allowances was available with the petitioner during
...
April, 2001. When the application for determination
"
of tariff were filed on 8.6.2001, the data in this
regard could be placed before the Commission by
the petitioner. Further, the petitioner had filed
E
amended petitions during January/ February 2002
in all these cases. The Petitioner did not
incorporate the actual data of employee cost in the
amended petitions as well".
(iii)
"Under Order 2 Rule 2 of the Code of Civil
F
Procedure (the Code) every suit is to include the
whole of the claim to which the party is entitled to
make in respect of the cause of action but a party
may relinquish any portion of his claim. However,
where the party omits to sue in respect of any claim
G
or intentionally relinquishes any portion of his claim,
he cannot afterwards sue in respect of the portion
rl
so omitted or relinquished".
~
(iv)
"After deciding the tariff, the Commission cannot
H
U.P. POWER CORPORATION LTD. v. NATIONAL THERMAL
1073
POWER CORPORATION LTD. AND ORS. [S.B. SINHA, J.)
,,.
revisit the matter covered in the tariff orders, which
A
have acquired finality".
(v)
" ... On consideration of this, the employee cost
indicated by the petitioner for the years 1997-98
,.>(
and 1998-99 (excluding incentive and ex-gratia),
B
even though beyond the admissible limit of 20%
was considered for normalization ... "
f
(vi)
" ... the question of exclusion of these expenses
cannot be re-agitated in the present proceedings c
as they are barred by th.e principle of resjudicata ... ".
(vii) " ... the tariff approved is the complete package.
'>
22. It, however, appears that an application of the D
·~
electricity generating station of the Corporation at Rihand was
filed for revision of the tariff being Petition No. 38 of 2001 in
respect of the tariff period 2001-2004 having regard to the fact
that further amount was to be paid by the NTPC to its
employees for the purpose of implementation of the
E
recommendations of Justice Mohan Committee, relying on or
.. on the basis of the leave granted, the Corporation filed I.A. No.
9 of 2006 to place on record the impact of revision of wages
w.e. f. 1st January, 1997 on the employee costs for the
t
generating station and the Corporate office expenses for the
years 1995-1996 to 2000-2001, which was allowed.
F
23. Appellant before us contends that Rihand decision is
not applicable in the instant case as therein the original tariff
order was yet to come into force. And the said application was
filed for revision of tariff and considered in view of the
G
statements made by the Corporation itself in the earlier round
"
of the proceeding ..
.,,
24. The Corporation aggrieved by and dissatisfied with the
orders of the Commission dated 11th August, 2005 and 19th
H
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[2009] 3 S.C.R.
A October, 2005 filed appeals before the Appellate Tribunal. By
reason of the impugned judgment and order dated 7th
.... ,
September, 2006 the said appeals have been allowed,
directing :-
B
"amounts of arrears paid by the appellant in the year
....
2000-2001 on account of employees cost, incurred in the
respective years, be considered in the tariff fixation for reimbursement, as admissible by the Regulations in the
forthcoming tariff period in a manner that tariff shock, if any,
c
to the respondents is minimized."
25. Appellant is, thus, before us.
26. Mr. Sunil Gupta, learned senior counsel appearing on
behalf of the appellant would urge :-
D
(i)
The Central Regulatory Commission had no
" '
jurisdiction in terms of 1998 Act or 2003 Act or the
Regulations made thereunder to entertain and carry
out revision in the tariff order on the basis of
E
purported subsequent events or otherwise.
(ii)
In view of 2001 Regulations framed under Section
28 of 1998 Act even while undertaking the original
tariff determination proceedings the Commissioner
had no jurisdiction to consider any data of 2000F
2001 for narrative operation and maintenance
expenses beyond the statutorily stipulated 5 years,
viz., 1995-1996 to 1999-2000.
(iii)
Keeping in view the fact that the Corporation were
G
supposed to have filed all materials in respect of
its case for framing tarrif and failure, if any, on its
part to bring some materials showing the financial
..
impact arising out of the implementation of the 6th
..
Pay Commission vis-a-vis the recommendation of
H
the High Powered Committee could not have been
U.P. POWER CORPORATION LTD. v. NATIONAL THERMAL
1075
POWER CORPORATION LTD. AND ORS. [S.B. SINHA, J.]
the basis for a review, particularly, having regard to
A
the fact that the claim was barred by limitation.
(iv)
The operational and financial norms fixed in terms
of circular dated 21st December, 2000 are not
relevant or enforceable in the wake of enforcement
of the statutory Regulations, 2001 framed under
8
Section 28 of the Act which had come into force on
26th March, 2001.
(v)
Assuming the Central Regulatory Commission's
order dated 21st December, 2008 i.e. the
C
Operational & Financial Norms, to be relevant and
enforceable, as thereby the said order permitted
that 'more than normal' Operational and
Maintenance expenses should be sought as
compensation on a case by case basis by means
D
of a separate petition and hearing of all concerned,
without reflecting it in the norms founded on the five
years, 1995-1996 to 1999-2000, the impugned
judgment cannot be sustained. Such petition/plea
could be filed before the Tariff order could be
E ·
issued. The permission would not mean that
separate petition could be filed after the passing of
the Tariff Order.
(vi)
In any event the delay caused in filing the
application should have been taken into
consideration by the Tribunal for the purpose of
exercising its discretionary jurisdiction.
F
(vii) Provisional expenses having already been
considered by the Central Commission while
G
framing tariff, no actual expenses for the year 20002001 could have been taken into consideration as
thereby a duplication would be caused, which is not
contemplated in law.
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[2009] 3 S.C.R.
i
'
A
(viii) The Tariff Order being a complete package and
which having not been challenged or appealed
against, any application for review or revision was
not maintainable.
B
(ix)
The Appellate Tribunal had committed a serious
error in so far as it took into consideration the
Rihand case where Interlocutory Application was
entertained in a case of Original Tariff Order itself
and thus could not have been relied upon.
c
(x)
The Tribunal's order providing for relief by way of
reimbursement in the forthcoming tariff period is
contrary to the scheme of the Act.
(xi)
The Appellate Tribunal although has wide
'
jurisdiction but it, without sufficient or cogent
"
D
reasons, should not have interfered with the order
of the Central Regulatory Commission.
27. Mr. Ramachandran, learned counsel appearing on
behalf of respondent No.2, on the other hand, urged :
E
(i)
Central Regulatory Commission had the requisite
jurisdiction to review the tariff, having regard to the
powers contained in the Regulations.
F
(ii)
Sufficient and cogent reasons for revision of the
costs in the first instance, having been assigned and
all material facts having been taken into
consideration by the Appellate Tribunal, no
exception can be taken to the impugned judgment.
G
(iii)
It is incorrect to contend that the Appellate Authority
had made inconsistent observations in the
,,
impugned order.
(iv)
As in the case of Rihand the actual costs paid by
H
respondent No.1 for meeting its obligations was
U.P. POWER CORPORATION LTD. v. NATIONAL THERMAL
1077
POWER CORPORATION LTD. AND ORS. [S.B. SINHA, J.]
. ;
~
granted, there was no reason as to why the same
A
principle should not have been applied in the case
of Korba and Dadri, particularly when it was not
denied or disputed that the Corporation had to incur
a sum of Rs.55 crores towards arrears of salary.
(v)
Some delay might have been caused in filing the
B
application but the same by itself should not have
been a ground for rejecting the application in toto
as the Tribunal had not granted any interest on the
actual amount and merely granted the carrying c
costs.
28. Power and/ or jurisdiction of the Central Commission
to frame tariff and/ or carry out revision thereof is not in dispute.
,,
It is in fact a well-settled that the Central Commission has the
J.,
exclusive jurisdiction to frame not only tariff but also any
D
amendment, alterations and additions in regard thereto.
29. The Central Commission in terms of the 1998 Act as
also the Regulations framed thereunder exercise diverse
powers. It exercises legislative power, power of enforcement
E
of the Regulations as also the adjudicatory power. Each of its
functions although are separate and distinct but may be
i
overlapping. The power of the Central Commission is
. extensive.
30. The Central Commission in exercise of its jurisdiction
F
under Section 55 of the 1998 Act framed regulations known as
the Central Electricity Regulatory Commission (Conduct of
Business) Regulations, 1999 (for short "the 1999 Regulations").
Chapter V of the 1999 Regulations deals with tariff G
,.
regulations. Regulations 92, 93, 94 read as under:
' ...
"92. The Commission on its own on being satisfied that
there is need to review the tariff of any utility shall initiate
the process of revision in accordance with the proaedure
H
as may be prescribed. The proceedings for suo inoto
1078
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(2009] 3 S.C.R.
A
review of the tariff shall be the same as set out in Chapter
II of these Regulations.
93. Review of orders of the Commission on tariff will be
entertained strictly in accordance with the relevant
B
regulations governing review as contained in the relevant
regulation herein.
94. The utilities shall submit periodic returns as may be
prescribed containing operational and cost data to enable
c
the Commission to monitor the implementation of its order
and reassess the bases on which Tariff was approved."
Chapter VII of the 1999 Regulations deals with
Miscellaneous Matters. The 1999 Regulations expressly confer
a power of review on the Central Commission in terms of
~
D Regulation 103 thereof. For the aforementioned purpose, the
•
Central Commission may not only exercise its jurisdiction suo
motu but it may review a decision even if an application is filed
within a period of sixty days of making of any decision, direction
or order.
IE
Regulation 110 empowers the Central Commission to
issue orders and practice directions in regard to the
implementation of the Regulations and procedure to be ·
followed and various matters which the Commission has been
empowered by these regulations to specify or direct.
F Regulations 111 and 112 read as under:
"111. Nothing in these Regulations shall be deemed to limit
or otherwise affect the inherent power of the Commission
to make such orders as may be necessary for ends of
G
justice or to prevent the abuse of the process of the
Commission.
~
#
112. Nothing in these Regulations shall bar the
Commission from adopting in conformity with the
H
provisions of the Act,. a procedure, which is at variance
U.P. POWER CORPORATION LTD. v. NATIONAL THERMAL
1079
POWER CORPORATION LTD. AND ORS. [S.B. SINHA, J.)
,>
with any of the provisions of these Regulations, if the
A
~
Commission, in view of the special circumstances of a
matter or class of matters and for reasons to be recorded
in writing, deems it necessary or expedient for dealing with
such a matter or class of matters."
31. The Central Commission also in exercise of its power
B
conferred upon it by Section 28 of the 1998 Act framed
'
regulations known as the Central Electricity Regulatory
Commission (Terms & Conditions of Tariff) Regulations, 2001
(for short "the 2001 Regulations").
c
-
The 2001 Regulations came into force with effect from
1.04.2001. It was to remain in force for a period of three years,
unless reviewed or extended by the Central Commission.
Regulation 1.11 of the 2001 Regulations was framed for
,..
removal of doubts. It was clarified that the norms prescribed
D
~.
therein were the ceiling norms only and the same shall not
preclude the generating company and other beneficiaries from
agreeing to improved norms.
Regulation 1.4 of the 2001 Regulations reads as under:
E
"1.4. The generation tariff under these Regulations shall
be determined station-wise and transmission tariff
,>
shall be determined line-wise, sub-station-wise, as
the case may be, and aggregated to regional tariff ..
F
Provided that a utility may file a petition for fixation
of tariff in respect of the completed units/systems."
Chapter II of the 2001 Regulations provides for thermal
power generating stations. "Operation and Maintenance
G
Expenses" has been defined as under:
~
•
"'Operation and Maintenance Expenses' or 'O&M' - In
relation to a period means the expenditure incurred in
operation and maintenance of the generating station
including manpower, spares, consumables, insurance and
H
•
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[2009] 3 S.C.R.
A
overheads."
Regulation 2.4 of the 2001 Regulations provides for the
norms of operation. Regulation 2.4(viii) provides for the period
of stabilization and explanations in the following terms:
B
"(viii) Stabilization period
c
D
E
F
G
H
(a)
(b)
(c)
Stabilization period commencing from the date of
commercial operation shall be reckoned as follows
Thermal (coal/lignite) station - 180 days.
Open cycle gas and Naphtha based station - 90
days.
Combined cycle gas and Naphtha based station -
90 days
Explanations:-
1.
For the purpose of calculating the tariff, the
operating parameters, i.e. 'Station Heat Rate',
'Secondary Fuel Oil Consumption' and 'Auxiliary
Consumption' shall be determined on the basis of
actuals or norms, whichever is lower.
Regulation 2.7 of the 2001 Regulations provides for
payment of capacity (fixed) charges; Clause (c) whereof deals
with return on equity in the following terms:
"(c)
Return on Equity :
Return on equity shall be computed on the paid up
and subscribed capital and shall be 16 per cent of
such capital.
Explanation:-
---
~
'
o(
•
~
~
t
U.P. POWER CORPORATION LTD. v. NATIONAL THERMAL
1081
POWER CORPORATION LTD. AND ORS. [S.S. SINHA, J.]
Premium raised by the Generating Company while issuing
A
share capital and investment or internal resources created
out of free reserve of the existing utility, if any, for the
funding of the project, shall also be reckoned as paid up
capital for the purpose of computing the return on equity,
provided such premium amount and internal resources are
B
actually utilized for meeting the capital expenditure of the
generating station and forms part of the approved financial
package as set out in the techno-economic clearance
accorded by the Authority or approved by an appropriate
independent agency, as the case may be."
c
"Operation and Maintenance expenses including
insurance" is dealt with in Clause (d} of Regulation 2,7 of the
2001 Regulations; Clauses (i) and (iv) whereof reads as under:
(d)
Operation and Maintenance expenses including
D
insurance
(i)
Operation and Maintenance expenses including
insurance (hereinafter referred to as O&M
expenses) for the existing stations of NTPC and
E
NLC which have been in operation for 5 years or
more in the base year of 1999-2000, shall be
derived on the basis of actual 0 & M expenses,
excluding abnormal O&M expenses, if any, for the
years 1995-96 to 1999-2000 duly certified by the
F
statutory auditors.
The average of actual O&M expenses for the year
1995-96 to 1999-2000 considered as O&M
expenses for the base year 1997-98 shall be
escalated twice at the rate of 10 percent per annum
G
to arrive at O&M expenses for the base year 19992000 as given below:
BO&Mi2000i = AVO&M x (1.10)2
H
A
B
c
D
E
F
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SUPREME COURT REPORTS
[2009] 3 S.C.R.
Where BO&Mi2000 = Base level O&M expenses
f'or 1999-2000 for 1th generating station.
The Base O&M expenses for the year 1999-2000
shall be further escalated at the rate of 6 per cent
per annum to arrive at permissible O&M expenses
for the relevant year.
xxx
xxx
xxx
(iv) The escalation factor of 6 per cent per annum
shall be used to revise the base figure of O&M
expenses. A deviation of the escalation factor
computed from the actual inflation data that lies
within 20 per cent of the above notified escalation
factor of 6 per cent (which works out to be 1.2
percentage points on either side of 6 per cent)
shall be absorbed by the utilities/beneficiaries. In
other words if the escalation factor computed from
the observed data lies in the range of 4.8 to 7.2 per
cent, this variation should be absorbed by the
utilities. Any deviations beyond this limit shall be
adjusted on the basis of the actual escalation factor
arrived at by applying a weighted price index of CPI
for industrial workers (CPl-IW) and an inde~ of
select components of WPI (WPIOM) as per formula
given in note below clause (v) herein below, for
which the utility shall approach the Commission
with a petition."
32. While exercising its power of review so far as
alterations or amendment of a tariff is concerned, the Central
G Commission stricto sensu does not exercise a power akin to
Section 114 of the Code of Civil Procedure or Order XLVll, Rule
1 thereof. Its jurisdiction, in that sense, as submitted by Mr.
Gupta, for the aforementioned purposes would not be barred
in terms of Order 11, Rule 2 of the Code of Civil Procedure or
H
1
U.P. POWER CORPORATION LTD. v. NATIONAL THERMAL
1083
POWER CORPORATION LTD. AND ORS. [S.B. SINHA, J.]
the principles analogous thereto.
A
33. Revision of a tariff must be distinguished from a review
of a tariff order. Whereas Regulation 92 of the 1999
Regulations provides for revision of tariff, Regulations 110 to
117 also provide for extensive power to be exercised by the
B
Central Commission in regard to the proceedings before it.
33. Having regard to the nature of jurisdiction of the
Central Commission in a case of this nature, we are of the
opinion that even principles of res judicata will have no
application.
c
34. There cannot be any doubt whatsoever that while a
tribunal or a court exercises adjudicatory power, although
provisions of Section 11 of the Code of Civil Procedure are
not applicable but the general principles of res judicata may be
D
r
applicable as has been held by this Court in a consolidation
matter in Sri Bhavanarayanaswamivari Temple v.