Calcutta High Court (Appellete Side)
H.P. Ispat Private Limited & Anr vs West Bengal Electricity ... on 17 February, 2023
In the High Court at Calcutta
Constitutional Writ Jurisdiction
Appellate Side
The Hon'ble Justice Sabyasachi Bhattacharyya
W.P.A. No. 9857 of 2022
H.P. Ispat Private Limited & Anr.
Vs.
West Bengal Electricity Regulatory
Commission & Ors.
With
W.P.A. No. 10069 of 2022
H.R. Ispat Pvt. Ltd. & Anr.
Vs.
West Bengal Electricity Regulatory Commission & Ors.
With
W.P.A. No. 10107 of 2022
Sumangal Ispat Private Limited and another
Vs.
West Bengal Electricity Regulatory Commission & Ors.
With
W. P. A. No. 10315 of 2022
Ruhr Ispat Private Limited and another
Vs.
West Bengal Electricity Regulatory Commission & Ors.
with
W.P.A. No. 10654 of 2022
Purulia Metal Casting Private Limited & Anr.
Vs.
West Bengal Electricity Regulatory Commission & Ors.
With
W.P.A. No. 10700 of 2022
IA No: CAN 1 of 2022
East India Holdings Private Limited & Anr.
Vs.
Damodar Valley Corporation & Ors.
2
With
W.P.A. No. 10962 of 2022
IA No: CAN 1 of 2022
Supersmelt Industries Private Limited & Anr.
Vs.
West Bengal Electricity Regulatory Commission & Ors.
with
W.P.A. No. 10963 of 2022
Surya Alloy Industries Limited & Anr.
Vs.
West Bengal Electricity Regulatory Commission & Ors.
With
W.P.A. No. 10967 of 2022
Metsil Exports Private Limited & Anr.
Vs.
West Bengal Electricity Regulatory Commission & Ors.
With
W.P.A. No. 11196 of 2022
M/s. Sonic Thermal Private Limited & Anr.
Vs.
Damodar Valley Corporation & Ors.
With
W.P.A. No. 11200 of 2022
M/s. Ispat Damodar Private Limited
Vs.
DVC & Ors.
With
W.P.A. No. 11268 of 2022
M/s. SBIW Steels Private Limited & Anr.
Vs.
Damodar Valley Corporation & Ors.
With
W. P. A. No. 11691 of 2022
Haldia Steels Private Limited and another
Vs.
West Bengal Electricity Regulatory Commission & Ors.
3
With
W.P.A. No. 11913 of 2022
Jaishree Steels Private Limited & Anr.
Vs.
Damodar Valley Corporation & Ors.
With
W. P. A. No. 12060 of 2022
Jai Venktesh Concast Private Limited and another
Vs.
West Bengal Electricity Regulatory Commission & Ors.
With
W.P.A. No. 16133 of 2022
Calstar Sponge Limited & Anr.
Vs.
West Bengal Electricity Regulatory
Commission & Ors.
With
W.P.A. No. 16136 of 2022
XPRO India Limited & Anr.
Vs.
West Bengal Electricity Regulatory
Commission & Ors.
With
W.P.A. No. 16834 of 2022
Maha Gauri Strips Private Limited & Anr.
Vs.
West Bengal Electricity Regulatory
Commission & Ors.
With
W. P. A. No. 17227 of 2022
Arjan Dass and Sons Private Limited and another
Vs.
West Bengal Electricity Regulatory Commission & Ors.
4
With
W. P. A. No. 17234 of 2022
Amit Ferro Alloys and Steel Private Limited and another
Vs.
West Bengal Electricity Regulatory Commission & Ors.
With
WPA No. 22993 of 2022
Shreevardhana Metaliks Pvt. Ltd and another
Vs.
West Bengal Electricity Regulatory Commission and others
with
W.P.A. No. 9861 of 2022
HMB Ispat Private Limited & Anr.
Vs.
West Bengal Electricity Regulatory Commission & Ors.
with
W.P.A. No. 9869 of 2022
Expandable Enterprise Private Limited & Anr.
Vs.
West Bengal Electricity Regulatory Commission & Ors.
with
W.P.A. No. 9872 of 2022
Shreesatya Steel and Power Private Limited & Anr.
Vs.
West Bengal Electricity Regulatory Commission & Ors.
with
W.P.A. No. 9892 of 2022
Shree Waris Piya Steel Company Private Limited & Anr.
Vs.
West Bengal Electricity Regulatory Commission & Ors.
With
W.P.A. No. 9897 of 2022
Shree Ramdoot Rollers Private Limited & Anr.
Vs.
West Bengal Electricity Regulatory Commission & Ors.
5
with
W.P.A. No. 9902 of 2022
Debeanjana Hard Coke Private Limited & Anr.
Vs.
West Bengal Electricity Regulatory Commission & Ors.
With
W.P.A. No. 9933 of 2022
Jai Ambey Metals Private Limited & Anr.
Vs.
West Bengal Electricity Regulatory Commission & Ors.
with
W.P.A. No. 9938 of 2022
Venky Hi-Tech Ispat Private Limited & Anr.
Vs.
West Bengal Electricity Regulatory Commission & Ors.
With
W.P.A. No. 9942 of 2022
Alishan Steels Private Limited & Anr.
Vs.
West Bengal Electricity Regulatory Commission & Ors.
With
W.P.A. No. 9947 of 2022
Arjan Dass and Sons Private Limited & Anr.
Vs.
West Bengal Electricity Regulatory Commission & Ors.
With
W.P.A. No. 15255 of 2022
IA No: CAN 2 of 2022
CAN 3 of 2022
Nilkanth Ferro Limited & Anr.
Vs.
West Bengal State Electricity Regulatory Commission & Ors.
With
W.P.A. No. 17114 of 2022
Srinivasa Ferro Alloys Limited & Anr.
Vs.
West Bengal Electricity Regulatory Commission & Ors.
6
For the petitioners in
W.P.A. No.9857 of 2022 : Mr. Partha Sarathi Sengupta,
Mr. Tanoy Chakraborty,
Mr. Gautam Shroff,
Mr. Shayak Mitra
Mr. Siddharth Shroff,
For the petitioners in
W.P.A. No. 9861 of 2022 : Mr. Surajit Nath Mitra,
Mr. Tanay Chakraborty,
Mr. Gautam Shroff,
Mr. Siddharth Shroff,
Mr. Shayak Mitra,
For the petitioners in
WPA 10107 of 2022
WPA 10315 of 2022
WPA 10963 of 2022
WPA 10967 of 2022
WPA 12060 of 2022
WPA 16133 of 2022
WPA 16136 of 2022
WPA 9861 of 2022
WPA 9869 of 2022
WPA 9872 of 2022
WPA 9892 of 2022
WPA 9897 of 2022
WPA 9902 of 2022
WPA 9933 of 2022
WPA 9938 of 2022
WPA 9942 of 2022
WPA 9947 of 2022 : Mr. Tanoy Chakraborty,
Mr. Gautam Shroff,
Mr. Shayak Mitra,
Mr. Siddhartha Shroff
For the petitioners in
WPA 11196 of 2022 and
WPA 11200 of 2022 : Mr. Sagar Bandopadhyay,
Mr. Kausik Chatterjee,
Ms. Sofia Nesar
For the petitioners in
WPA 11268 of 2022 : Mr. Sagar Bandopadhyay,
Mr. Tapas Saha,
Mr. Subhamay Dewanji
7
For the petitioners in
WPA 10700 of 2022 : Ms. Sanchari Chakraborty,
Mr. Deepan Sarkar,
Ms. Akanksha Chowdhury
For the petitioners in
WPA 17227 of 2022,
WPA 17234 of 2022 : Mr. Kumarjit Banerjee,
Ms. Sanchari chakraborty,
Mr. Sourojit Dasgupta,
Ms. Akanksha Chowdhury
For the petitioners in
WPA 10069 of 2022
WPA 16834 of 2022 : Mr. Tanay Chakraborty,
Mr. Shayak Mitra,
Mr. Abhijit Sarkar
For the petitioners in
WPA 11691 of 2022,
WPA 22993 of 2022
WPA 17114 of 2022 : Mr. Tanay chakraborty,
Mr. Debsoumya Basak
For the petitioners in
WPA 10962 of 2022 : Mr. Srijan Nayak,
Mr. Palash Mukherjee,
Ms. Monideepa Banerjee
For the petitioners in
WPA 10654 of 2022 Mr. Abhrajit Mitra,
Mr. Suchayan Banerjee,
Ms. Sanjana Sinha,
Mr. S.K. Banerjee,
Mr. Souradeep Banerjee
For the
Damodar Valley Corporation : Mr. M.G. Ramachandran,
Mr. Prasun Mukherjee,
Mr. Deepak Agarwal,
Ms. Anushree Bardhan
For the WBERC in
WPA 9857 of 2022
WPA 9861 of 2022 : Mr. Pratik Dhar,
Ms. Sharmistha Shosh,
Mr. Amit Ghosh
8
For the WBERC in
WPA 10069 of 2022,
WPA 10107 of 2022,
WPA 10315 of 2022,
WPA 10654 of 2022,
WPA 10700 of 2022,
WPA 10962 of 2022,
WPA 10963 of 2022,
WPA 10967 of 2022,
WPA 11196 of 2022,
WPA 11200 of 2022,
WPA 11268 of 2022,
WPA 11691 of 2022,
WPA 11913 of 2022,
WPA 12060 of 2022,
WPA 16133 of 2022,
WPA 16834 of 2022,
WPA 17227 of 2022,
WPA 17234 of 2022,
WPA 9869 of 2022,
WPA 9872 of 2022,
WPA 9892 of 2022,
WPA 9897 of 2022,
WPA 9902 of 2022,
WPA 9933 of 2022,
WPA 9938 of 2022,
WPA 9942 of 2022,
WPA 9947 of 2022 : Mr. Victor Chatterjee,
Ms. Sharmistha Ghosh,
Mr. Amit Ghosh
For the WBERC in
WPA 22993 of 2022 : Mr. Raja Saha,
Mrs. Arpita Saha,
Mr. Sanjay Mukherjee
Hearing concluded on : 13.01.2023
Judgment on : 17.02.2023
9
Sabyasachi Bhattacharyya, J:-
1.
This batch of writ petitions has been filed by electricity consumers of the
Damodar Valley Corporation (DVC), challenging the tariff order for the
financial year 2017-18, published on May 5, 2022.
2. Consequently, the subsequent 2-year tariff order for 2018-19 and 2019-20,
published on June 17, 2022 has also been challenged since, according to
the petitioners, the tariff order for 2017-18, in view of being in a Single Year
Tariff (SYT) framework, is violative of the Multi Year Tariff (MYT) structure
contemplated by the Electricity Act, 2003 (for short, "the 2003 Act") and the
West Bengal Electricity Regulatory Commission Tariff Regulation No. 48
dated April 25, 2011.
3. Learned counsel for the petitioners primarily place reliance on Sections 3,
61 and 181 of the 2003 Act. It is argued that the National Electricity Policy
(NEP) and National Tariff Policy (NTP), as per Section 3(5) of the said Act,
are formulated once every five years.
4. Again, Section 61 provides that the Appropriate Commission (here the
WBERC) shall specify the terms and conditions for determination of tariff
and, in doing so, shall be guided by certain factors. Clause (f) of Section 61
stipulates MYT principles as one of the factors which shall guide such tariff
determination. The expression "shall be guided", it is argued, signifies that
the Commission is bound to take into consideration all the said factors
and, at best, can decide the weight which should be placed on each, but
cannot altogether overlook one of the said components. In the present
case, since the WBERC framed SYT for the financial year 2017-18, the
same is violative of Section 61(f) of the 2003 Act.
5. Learned counsel for the petitioners cite Section 181 of the 2003 Act, which
confers powers on State Commissions to make Regulations, which have to
be consistent with the Act and the Rules, generally to carry out the
provisions of the Act.
6. Such language, it is contended, indicates that the Regulations framed by
the State Commissions have to be not only consistent with the 2003 Act
and Rules but generally designed to carry out the provisions of the Act
itself and cannot be in derogation of any provision of the said Act.
7. It is argued that in the present case, despite having initially declared the
Control Period to be 2017-18 to 2019-20 (3 years) on May 4, 2016, vide
Order dated December 14, 2016, the WBERC, in supersession of the May
4, 2016 Order, declared that the financial year 2017-18 would be a one-
year Control Period, thereby resorting to a SYT instead of MYT framework.
The present impugned tariff order of May 5, 2022 is an implementation of
such order and is effective for 2017-18. Such tariff order is the immediate
cause of action for the challenge preferred by the petitioners in the present
set of writ petitions.
8. Learned counsel for the petitioners argue that as per Section 64(3) of the
2003 Act, the tariff order is to be published within 120 days from accepting
any application for tariff determination by a generating company or
licensee. In the present case, although DVC filed such application in the
year 2016, the determination took place in 2022, that is, after about six
years' lapse. Such delay is also one of the grounds of challenge in the
present writ petitions.
9. It is next submitted that Regulation 48/WBERC of 2011, in Clause 2.5.1,
refers to MYT framework. Hence, even the Regulations contemplate an
MYT Framework and not an SYT system.
10. Again, Clause 5.3(h) of the National Tariff Policy of 2006, which was framed
in consultation with all stakeholders, including the WBERC, fixed the
Control Period at five years. The said policy was enacted on June 6, 2006
and for about 16 years, till the month of May, 2022, such policy was never
deviated from by the WBERC.
11. Again, it is argued that when a decision affects public interest or is quasi-
judicial in nature, reasons in writing have to be furnished for the same. In
support of such contention, learned counsel for the petitioners cite
primarily the following judgments:
i) M.L. Jaggi Vs. Mahanagar Telephone Nigam Limited and others [(1996)
3 SCC 119],
ii) Charan Singh Vs. Healing Touch Hospitals and others [(2000) 7 SCC
668];
iii) S.N. Mukherjee Vs. Union of India [(1990) 4 SCC 594]; and
iv) Kranti Associates Private Limited and another Vs. Masood Ahmed
Khan and others [(2010) 9 SCC 496].
12. It is next contended that, to understand legislative intent of a statute, all its
provisions are to be seen harmoniously. In support of such proposition,
the petitioners cite:
i) Poppatlal Shah, Partner of Messrs Indomalayan Trading Company Vs.
State of Madras, Represented by Deputy Commercial Tax Officer,
Sowcarpet, Madras [AIR 1953 SC 274];
ii) University of Allahabad and others Vs. Amrit Chand Tripathi and
others [(1986) 4 SCC 176]; and
iii) D. Sanjeevayya Vs. The Election Tribunal, Andhra Pradesh and others
[AIR 1967 SC 1211].
13. It is also sought to be argued, by placing reliance on Clauses 2.1.15 and
2.2.1(vi) of the 2011 Regulations, that it is the responsibility of the State
Commission to determine tariff. However, the WBERC is abdicating such
responsibility by foisting the determination of "fuel surcharge" on the DVC
itself, thereby permitting the DVC to determine its own price, which is in
contravention of the Scheme of the 2003 Act as well as the 2011
Regulations.
14. Learned counsel for the petitioners then argue that a statute is to be
prospective if it contains substantive provisions imposing penalty.
15. Regulation 2.10.2 of the 2011 Regulations clearly provide that the tariff is
normally to be revised from a prospective date unless there is compelling
reason otherwise - if so, detailed justification in writing is required to be
given for deviating from the said norm, which is utterly absent from the
decision taken by the WBERC and the subsequent implementation of the
same by introducing a tariff order for a single year control period. However,
the WBERC accorded no reason, compelling or otherwise, for doing so.
16. The petitioners also seek to argue that the policy is not pragmatic since it
has a strong financial impact on consumers. Since 2017 onwards, tariff
was never determined by the WBERC. Whatever rates prevailed in the
interregnum, were either as per various orders of different forums or as per
the previous rates of DVC. In view of the impugned decision of the
WBERC, there will be adverse financial impact on consumers now, since
the tariff increases substantially.
17. By placing reliance on BSES Rajdhani Power Limited Vs. Delhi Electricity
Regulatory Commission, reported at (2022) SCC OnLine SC 1450, learned
counsel for the petitioners contend that the concept of 'truing up', which
has to be done for the second ensuing year onwards in MYT structure, is
not on the same footing as amendment of tariff order under Section 64 of
the 2003 Act. Hence, there is no parity between a single year and a multi
year tariff inasmuch as the former leaves no scope for such truing up.
Hence, without bringing about such a specific amendment to the tariff
order, the tariff would be determined every single year which would create
utter uncertainty.
18. Since the licensees adjust the extra payments to be made by them with the
price of power/electricity, the burden would ultimately be shifted on the
consumers.
19. Thus, it is contended that the single year tariff order for the financial year
2017-18 ought to be struck down.
20. Learned senior counsel appearing for the WBERC and the DVC argue that
the cardinal principles of an MYT framework are not changed despite the
SYT structure of 2017-18.
21. It is argued that, just as in an MYT structure, the so called SYT structure
contemplates the year before the commencement of the tariff order as the
"Base Year" and the first year of the control period to be the first "Ensuing
Year".
22. That apart, the ARR and ERC are determined for each ensuing year of the
Control Period. The initial determination of tariff is only for the first
ensuing year and not at a flat rate for all the ensuing years. From the
second year onwards in an MYT structure, there is a truing up/adjustment
of tariff after taking into account the ARR of the ensuing year as
determined in the first ensuing year. Under the MYT framework, the
generating company and licensee files composite applications with
projection of ARR and ERC without a tariff structure proposal for each
ensuing year, which is for the purpose of ARR determination for each
ensuing year, tariff determination for the first ensuing year and
amendment of tariff of the first or any subsequent ensuing year for fixation
of tariff of any ensuing year, after ARR adjustment.
23. Therefore, tariff of each year of the control period is projected and/or
determined separately and not all together at the inception of the Control
Period. Hence, it is argued that there is no difference in principle between
the SYT and MYT tariff structures as such.
24. It is further argued that Section 61 contemplates guidelines which are to be
considered at the preliminary stage of framing the Regulations and not for
each control period decision.
25. It is submitted that, under Clause 2.2.3 of the 2011 Regulations, the
Commission has the sole discretion to follow the MYT principles stipulated
in Section 61 and suitably apply the same. It is the prerogative of the
Commission to determine the extent to which reliance is to be placed on
any one principle.
26. The parameters take into consideration complex calculations and various
components, which is best done by an expert authority, that is, the
Commission and, as such, it cannot be said that the Commission erred in
law by placing less reliance on the MYT framework stipulated in Section
61(f) of the 2003 Act. Chapter 8, Clause 8.2 (a) of the Tariff Regulations of
2011 confers discretion solely on the Commissioner to fix norms/limits.
Again, Clause (b) of the same confers power on the Commission to vary or
modify the Regulations.
27. Learned senior counsel for the WBERC places reliance on Tata Power
Commission Vs. Maharashtra Electricity Regulatory Commission, reported at
(2022) SCC OnLine 1615. It was held therein, inter alia, that the National
Tariff Policy law cannot bind or affect the interpretation of the expression
"shall be guided" as used in Section 61. It was further observed that the
determination of tariff and framing of Regulations is within the exclusive
domain of the Appropriate Commission. In the present case, it is argued
that the only said exercise had been undertaken by the WBERC. It is
contended that Section 61 of the 2003 Act can at best specify the general
terms and conditions and guiding factors. Section 86, on the other hand,
stipulates that the State Government is to determine tariff.
28. Learned senior counsel for the WBERC next cites Reliance Infrastructure
Limited Vs. State of Maharashtra and others, reported at (2019) 3 SCC 352
wherein it was held that courts can interfere in judicial review in cases
where the Commission has arrived at a decision only where manifest
unreasonableness or arbitrariness occurred. It was held by the Supreme
Court that the Commission weighs numerous factors and its decision in
carrying out complex exercise cannot be constrained. Moreover, the
Regulation-framing powers are legislative in nature.
29. The decision taken by the WBERC on December 14, 2016, that the next
Control Period would be for the single year 2017-18, was never challenged
for six years thereafter.
30. As such, the writ petitions ought to be dismissed on such score alone, it is
argued.
31. It is further argued by the WBERC that there is uniformity in the decision
of introducing single year tariff for a single financial year by the
Commission inasmuch as the tariff for all other licensees have also been
determined on single year basis for the same period. Setting aside of the
impugned SYT tariff order shall affect the entire tariff structure for other
licensees too, whose tariff determinations have already been acted upon by
the concerned parties.
32. It is argued on behalf of the WBERC that tariff determination is equivalent
to price fixation, which has been declared by the Supreme Court to be a
legislative function. For such proposition, learned senior counsel for the
WBERC cites:
i) Shri Sitaram Sugar Company Limited and another Vs. Union of India
and others [(1990) 3 SCC 223];
ii) Union of India and another Vs. Cynamide India Limited and another
[(1987) 2 SCC 720];
iii) ESSAR Steel Limited Vs. Union of India and others [(2016) 11 SCC 1];
and
iv) PTC India Limited Vs. Central Electricity Regulatory Commission
[(2010) 4 SCC 603].
33. It is further contended that the right of a consumer is very little in price
fixation. In support of the said proposition, learned senior counsel relies
on an unreported Division Bench Judgment in WBERC Vs. Impex Ferro
[FMA 4319 of 2014].
34. Moreover, it is argued that a co-ordinate Bench decision dated January 9,
2017 of Harish Tandon, J., in DVC Vs. WBERC [WP 26442(W) of 2016]
contained a direction for making investment proposal. However, the DVC
never made the same, due to which the delay occasioned in proceeding
thereon was inevitable. Only when a connected matter came up before
Amrita Sinha, J., a direction was given on January 13, 2022 for
determining the tariff for the relevant period, pursuant to which the
WBERC formulated the tariff order for 2017-18 and for the next control
period of 2018-19 to 2019-20.
35. The consumers, it is argued, shall not be prejudiced in any manner by the
impugned order of the WBERC. It is argued that the "useless formality"
theory comes into play. As both in SYT and MYT tariff structures, different
tariff is determined for different ensuing years and the same is determined
on the basis of base year for the first ensuing years, there is no difference
in principle between the SYT and MYT structures.
36. On the score of prejudice and non-interference by courts if there is no
violation of natural justice, learned senior counsel for the WBERC places
the following judgments:
i) Ashok Kumar Sonkar Vs. Union of India and others [(2007) 4 SCC 54];
ii) Canara Bank and others Vs. Debasis Das and others [(2003) 4 SCC
557];
iii) Sohan Lal Gupta (Dead) Through LRS. and others Vs. Asha Devi Gupta
(Smt.) and others [(2003) 7 SCC 492]; and
iv) S.L. Kapoor Vs. Jagmohan and others [(1980) 4 SCC 379].
37. It is also contended by the WBERC that the writ petitions are not
maintainable inasmuch as Section 111 of the 2003 Act provides sufficient
efficacious alternative remedy to the petitioners. Such an appeal has a
limitation period of 45 days. However, instead of preferring an appeal, the
petitioners have taken out the present writ petitions.
38. Moreover, there is no appeal against the May 5, 2022 tariff order as such.
On the score of maintainability and alternative remedy, learned senior
counsel for the WBERC places reliance on West Bengal Electricity
Regulatory Commission Vs. CESC Limited, reported at (2002) 8 SCC 715 and
H.P. Electricity Regulatory Commission Vs. H.P. State Electricity Board,
reported at (2006) 9 SCC 233.
39. The Regulations themselves having not been challenged as such, no
Constitutional point has been questioned in the present case, it is argued.
Accordingly, in the light of the existing Regulations as indicated above,
which have never been challenged by the petitioners, no Constitutional
point is raised in the present matters.
40. In order to properly appreciate the issues involved in the present writ
petitions, certain terms are required to be looked into.
41. The expression 'Control Period' is defined in Clause 1.2.1(xxx) of the 2011
Regulations. As per the said definition, control period is a period consisting
of a number of year(s) fixed from time to time under the MYT framework.
42. Clause 1.2.1(xviii) defines "Base Year" as the year preceding the first year of
the control period.
43. "Ensuing Year", as defined in Clause 1.2.1(xlviii), is year(s) in a control
period for which the tariff is determined. 'One', 'two', etc. in reference to
ensuing year means respectively the first, second, etc. year immediately
subsequent to the base year. A careful perusal of the above definitions
indicates that the term "base year" signifies a single year prior to the first
year of control period whereas the expressions "control period" and
"ensuing year" refer to "year(s)". The use of plural in parentheses indicates
that both definitions may contemplate either a single or several years.
44. Hence, there is nothing in the definitions to preclude an MYT Framework
having only a single year of control period.
45. Secondly, even in case of an SYT Framework, there can be a base year and
at least one ensuing year.
46. In our present example of SYT determination for the financial year 2017-
18, the base year would be 2016-17 and first ensuing year would be 2017-
18.
47. As such, even a 'Single Year Tariff' takes within its fold the consideration of
at least two years, that is, the preceding year (base year) and the single
year of control period (ensuing year). Thus, although we loosely refer to the
2017-18 tariff order as having a single year format, the minimum number
of years which have to be taken into consideration in that case also are
two, that is, 2016-17 and 2017-18.
48. That apart, Clause 2.5 of the 2011 Regulations provides for Multi Year
Tariff Framework. It is clear from the opening paragraph of Clause 2.5.1
that MYT Framework shall be based on certain elements, for calculation of
ARR (Aggregate Revenue Requirement) and ERC (Expected Revenue from
Charges) of each ensuing year. The determination of tariff is done only for
the first ensuing year. From the second year onwards, there is amendment
of tariff after adjustment with ARR of the ensuing year as determined in the
first ensuing year. Under the MYT Framework, generating companies and
licensees file composite applications with projection of ARR and ERC and
tariff structure proposal for each ensuing year for the following purposes:
a) ARR determination for each ensuing year,
b) Tariff determination for first ensuing year.
c) Amendment of tariff of first or any subsequent ensuing year for fixation
of tariff for any ensuing year after ARR adjustment.
49. As per the language of Clause 2.5 above, the tariff of each year of the
control period is projected and/or adjusted and determined separately, as
opposed to determination of tariff for entire control period at the inception.
50. Hence, there is sufficient flexibility within the multi year tariff system itself
to determine tariff for one ensuing year at a time.
51. In any event, since the control period in the present case is a single year,
the ARR and ERC calculations will remain valid only for the said period, as
opposed to a control period of several years, in which case also each
ensuing year's tariff would have to be determined individually and not at a
flat rate at the outset of the first ensuing year.
52. Hence, I do not find any cardinal difference insofar as calculations are
concerned between an MYT and an SYT system.
53. Clause 5.3(h) of the National Tariff Policy contemplates Multi Year Tariff on
the basis of Section 61 of the 2003 Act. It speaks about the MYT
'framework', which may also accommodate a control period of a single
financial year, as discussed above.
54. It mentions that the framework should feature a five year control period
and the initial control period may be of three years if deemed necessary by
the Regulatory Commission on account of data uncertainty and other
practical considerations. In cases of lack of reliable data, the Appropriate
Commission may state remissions in MYT for the first control period and a
fresh control period may be started as and when more reliable data
becomes available. Section 61(i) of the 2003 Act mentions the National
Electricity Policy and National Tariff Policy as two of the guiding factors for
determination of tariff. We must read the said Clause in proper
perspective. The multi year framework and the initial suggestion of a five
year control period is not a sole and exclusive binding factor on the State
Commission and the weightage to be given to the said component of the
guiding factors, which are about nine (09) in number, depends on the
Commission itself.
55. Although the National Tariff Policy is a factor to be considered, a particular
expression or clause used in the National Tariff Policy cannot be so
sacrosanct that it would transcend the component of guidance which it is
supposed to provide, along with other components under Section 61 of the
2003 Act.
56. In fact, Sections 61 and 62 of the 2003 operate in different fields. Whereas
Section 61 speaks about tariff regulations to be formulated by the
Appropriate Commission, Section 62 deals with the actual determination of
tariff.
57. For the purpose of testing the legality of the Single Year Tariff under
challenge, we are to look into the provisions of the 2003 Act and the 2011
Regulations.
58. Since the tariff regulations, as reflected in the Clauses of the 2011
Regulations discussed above, read in conjunction with Section 61 of the
2003 Act, do not preclude the formulation of a control period of one year
specifically, in the absence of any such bar, it cannot be said that the
WBERC acted de hors the law in framing the 2017-18 control period.
59. Under Clause 8.2(a) of the 2011 Regulations, the Commission is
empowered, at its sole discretion, to fix suitable norms/limits for any or all
the items of expenses.
60. Sub-clause (b) of the Clause provides that the Commission may, at any
time, at its sole discretion, vary, alter, modify, add or amend any provision
of the Regulations.
61. However, in the present case, sub-clause (a) is not applicable at all, since it
is not a question of the Commission fixing norms/limits of expenses.
62. Insofar as sub-clause (b) is concerned, there is no change in the
Regulations, as such, in the present case to attract the said provision.
63. It is seen clearly that the WBERC acted within the ambit of its existing
Regulations while fixing the tariff for the period 2017-18.
64. As long back as on December 14, 2016, the 2017-2018 control period was
declared by the WBERC by its order. Such order was not challenged over a
period of six years prior to the tariff order itself being made effective for
2017-18 vide the impugned order dated May 5, 2022.
65. Thus, it does not now lie in the mouth of the petitioners to say that the
fixation of one-year control period was itself bad. The determination of
tariff in 2022 was merely a consequence and incidental to the said fixation
of one-year control period on December 14, 2016.
66. Again, if we read Clause 2.2.3 of the 2011 Regulations, it is the
Commission's sole discretion to follow the MYT principles and suitably
apply those principles and also to choose the extent to which reliance on
any one principle would be placed.
67. In the present case, it is the MYT principles which are under consideration.
Since the MYT Framework as contemplated in the 2011 Regulations
themselves accommodate single year control period, there is no reason why
the exercise of discretion under Clause 2.2.3 of the WBERC has to be
faulted on the ground of statutory violation.
68. Insofar as Tata Power Company (supra) is concerned, it is clearly observed
that the National Tariff Policy cannot bind interpretation of the expression
"shall be guided" under Section 61 of the 2003 Act. Determination of tariff
and framing Regulations was held to be within the exclusive domain of the
Appropriate Commission. As per Section 61, it is the State Commission
which has to specify the terms and conditions for determination of tariff
and, as such, the impugned exercise was within the jurisdiction of the
WBERC.
69. However, Reliance Infrastructure (supra), cited by the WBERC, does not
have any direct relevance since it was held there that the Commission
weighs numerous factors and its decision in carrying out complex exercise
cannot be constrained. The Court in judicial review can interfere in such a
discretionary exercise only where there is manifest unreasonableness or
arbitrariness, it was held. In the present case, however, the challenge is
not directed against any Regulation framed by the Commission but
concerns mere interpretation of an order of the WBERC in the context of
existing Law and Regulations.
70. It is seen that the tariff determined for the financial year 2017-18 is
uniform for all licensees including the DVC.
71. As such, there is no discrimination between the licensees inter se. In fact,
the Commission is justified in arguing that in the event the tariff
determination for the said financial year is interfered with at this juncture,
it shall affect the entire tariff structure for other licensees as well, whose
tariff determination exercise is long over and has been acted upon.
72. It is evident from the judgments cited by the WBERC in the cases of Shri
Sitaram Sugar Company Limited and another (supra), Cynamide India
Limited and another (supra), ESSAR Steel Limited (supra) and the
unreported judgment of this Court in WBERC Vs. Impex Ferro in FMA 4319
of 2014 that price fixation and tariff determination are legislative functions.
73. In the present case, as such, the question of passing a reasoned order does
not arise at all. First, since the order determining the control period, which
is substantially under challenge, was passed in the year 2016 and attained
finality over the next six years. Secondly, there is no contravention of any
law or Regulation on the part of the WBERC in consequentially fixing tariff
for the financial year 2017-18.
74. Insofar as the alleged delay on the part of the WBERC in passing the tariff
order for 2017-18 in the year 2022 is concerned, one of the factors to be
considered was that the order passed by the co-ordinate bench of Harish
Tandon, J. in WP 6442(W) of 2016 dated January, 9, 2017 incorporated a
specific direction for making investment proposal.
75. Insofar as the DVC is concerned, no such tariff determination proposal was
given. Only on January 13, 2022 another co-ordinate bench of Amrita
Sinha, J., specifically directed the WBERC to determine the tariff, although
no investment proposal came over the years.
76. Hence, there is sufficient reason for the WBERC delaying the tariff
determination awaiting investment proposal as per the order of Harish
Tandon, J.
77. As far as maintainability of the present challenge is concerned, it has been
rightly argued on behalf of the WBERC that Section 111 of the 2003 Act
provides for appeal by any person aggrieved by an order made by an
adjudicating officer under the 2003 Act or an order made by the
Appropriate Commission under the Act before the appellate tribunal for
electricity. In the present case, if aggrieved by the order of the Commission
dated December 14, 2016, whereby the control period was determined as
one year for the financial year 2017-18, the present petitioners could very
well have preferred a challenge within the limitation period of 45 days as
stipulated in sub-section (2) of Section 111 of the 2003 Act. Having not
done so, the said order has attained finality and the tariff determination of
2022 is clearly an exercise under Section 62 of the 2003 Act consequential
to the said order of 2016.
78. Hence, the judgments of WBERC Vs. CESC (supra) and H.P. ERC Vs. H.P.
SEB (supra) cited by the WBERC are apt in this regard.
79. Inasmuch as the challenge to the alleged retrospectivity of the tariff
determination of 2017-18 is concerned, the said argument does not stand
on firm ground.
80. In fact, the arguments advanced of such score refer primarily to the
retrospectivity of statutes. In the present case, however, there is no
question of any statute being retrospective. Insofar as the tariff
determination itself is concerned, the stipulation of 120 days after the
filling of the application for determination of tariff by the DVC in 2016, it
was the DVC itself which delayed the matter by failing to honour the co-
ordinate Bench direction of filing an investment proposal which was the
reason for the entire delay in ascertaining the tariff. Moreover, the tariff for
the period of 2017-18 was never decided before the year 2022.
81. The first time it was determined was by the impugned determination in the
year 2022. Whatever tariff was paid in the meantime in consonance with
the orders of Courts/forums and/or Central Regulations prevailing from
time to time, if any, were subject to the final determination of tariff by the
WBERC, which is the State Commission.
82. Since the tariff for 2017-18 has been determined by the WBERC for the
first time in 2022 with effect from the year 2017-18, the same is not a
"retrospective" determination but a late/subsequent determination of tariff.
It would, no doubt, be a retrospective determination in the true sense in
the event a tariff had been determined previously for the relevant period of
2017-18 and subsequently another imposition of tariff was made for a
previous period. The present determination, however, covers the period
after 2016, till when the determinations had last been made. Therefore the
retrospective argument fails.
83. Insofar as the requirement of giving reasons in writing is concerned, as per
the judgments cited by the petitioners, the same pertains primarily to
quasi-judicial or judicial orders. In the present case, the exercise
undertaken by the WBERC, which is impugned herein, was of a legislative
nature and not a quasi-judicial or adjudicatory function relating to
disputes of particular individuals. Hence, the said judgments do not apply
as well in the present case.
84. The argument that WBERC is foisting the determination of fuel surcharge
on the DVC, thereby abdicating its own responsibility of determining tariff,
is neither here nor there. The same is divorced from the entire challenge
preferred in the present batch of writ petitions.
85. If we look into the relevant Clauses of the 2011 Regulations, which have
been cited by the petitioners, we do not find corroboration of the said
argument of the petitioners. The calculation of fuel surcharge is in its very
nature an additional charge to be imposed by the licensee itself, in the
present case the DVC and does not have anything to do with the
determination of tariff by the Regulatory Commission.
86. Inasmuch as the alleged financial impact on consumers is concerned, such
argument does not find favour with this Court, since the WBERC
determined tariff for the period of 2017-18 for the first time in 2022 by the
impugned tariff order. The consumers were well aware that the tariff
charged from them would ultimately be that determined by the WBERC.
The charges previously paid were in terms of the orders of different forums
and/or the previous rates of the DVC, passed from time to time, and were
to be ultimately adjusted with the tariff to be determined by the WBERC.
87. There is nothing on record to indicate that if the investment proposal was
given by the DVC and taken into consideration, the Commission would not
have increased the tariff instead of decreasing the same for the consumers.
88. Moreover, the impact, if any, is not universal but only applies to the
consumers to the DVC.
89. There is nothing to show that there would be adverse impact on the
consumers, sufficiently to afford a cause of action to the consumers to
challenge the impugned tariff order.
90. Inasmuch as BSES Rajdhani Power Limited (supra) judgment is concerned,
the same does not acquire relevance in the present context. It was held
there that 'truing up' is not amendment of tariff order under Section 64,
which has no application in the facts of the instant case. In the present
case, however, the MYT framed for 2017-18 took into consideration the
base year of 2016 and the ensuing year of 2017, which falls entirely within
the MYT Framework itself and does not violate any of the definitions in the
2011 Regulations and/or any concept therein.
91. Accordingly, there is no scope of interference in the present writ petitions.
Hence the following writ petitions are dismissed without any order as to
costs:
i) WPA No.9857 of 2022 with
ii) WPA No.10069 of 2022 with
iii) WPA No.10107 of 2022 with
iv) WPA No.10315 of 2022 with
v) WPA No.10654 of 2022 with
vi) WPA No.10700 of 2022 with IA No. CAN 1 of 2022 with
vii) WPA No.10962 of 2022 with IA No. CAN 1 of 2022 with
viii) WPA No.10963 of 2022 with
ix) WPA No.10967 of 2022 with
x) WPA No.11196 of 2022 with
xi) WPA No.11200 of 2022 with
xii) WPA No.11268 of 2022 with
xiii) WPA No.11691 of 2022 with
xiv) WPA No.11913 of 2022 wi9th
xv) WPA No.12060 of 2022 with
xvi) WPA No.16133 of 2022 with
xvii) WPA No.16136 of 2022 with
xviii) WPA No.16834 of 2022 with
xix) WPA No.17227 of 2022 with
xx) WPA No.17234 of 2022 with
xxi) WPA No.22993 of 2022 with
xxii) WPA No.9861 of 2022 with
xxiii) WPA No.9869 of 2022 with
xxiv) WPA No.9872 of 2022 with
xxv) WPA No.9892 of 2022 with
xxvi) WPA No.9897 of 2022 with
xxvii) WPA No.9902 of 2022 with
xxviii) WPA No.9933 of 2022 with
xxix) WPA No.9938 of 2022 with
xxx) WPA No.9942 of 2022 with
xxxi) WPA No.9947 of 2022 with
xxxii) WPA No.15255 of 2022 with IA No. CAN 2 of 2022, CAN 3 of 2022
with
xxxiii) WPA No.17114 of 2022.
92. Urgent certified copies, if applied for, be issued to the applicants subject to
compliance of due formalities.
( Sabyasachi Bhattacharyya, J. )
