Petition No. 241/2009. Case: Bhaskhar Shrachi Alloys Ltd. Vs Damodar Valley Corporation, The Chairman and The Chief Engineer (Commercial), Damodar Valley Corporation. Central Electricity Regulatory Commission

Case NumberPetition No. 241/2009
CounselFor Appellant: Shri Amit Kapur, Advocate, BSAL and For Respondents: Shri M.G. Ramachandran, Advocate, DVC
JudgesPramod Deo, Chairperson, V.S. Verma and M. Deena Dayalan, Members
IssueDamodar Valley Corporation Act,1948 - Section 20; Electricity Act, 2003 - Sections 135, 136, 137, 138, 139, 140, 141, 142, 146, 149, 150, 185, 62(6)
Judgement DateJune 07, 2013
CourtCentral Electricity Regulatory Commission


1. The petitioner, Bhaskhar Shrachi Alloys Ltd. has filed this petition under Sections 142 and 149 of the Electricity Act, 2003 (referred to as "the 2003 Act") against Damodar Valley Corporation (referred to as 'DVC"), Chairman, DVC and Chief Engineer, (Commercial), DVC (the respondents herein), with the following prayers:

(a) Appropriate proceedings be drawn up and initiated against the respondents under Sections 142 and 149 of the Electricity Act, 2003 and if no cause or sufficient cause is shown, appropriate action and directions be issued against the respondents; and

(b) pass such other or further orders as to this Hon'ble Commission may deem fit and proper.

DVC was established under the Damodar Valley Corporation Act, 1948 (hereinafter "the 1948 Act") and performs multifarious functions including the generation, transmission and sale/supply of electricity within its statutory 'Command Area'. Under Section 20 of the 1948 Act, the charges for the supply of electrical energy, including the rates for bulk supply and retail distribution, were being fixed by DVC itself. Accordingly, DVC in exercise of its powers under Section 20 of the 1948 Act had fixed the schedule of charges in the year 2000, which included Fuel Cost Surcharge or FCS Formula for adjusting the prices, GCV etc of fuels used for generation of electricity.

2. After coming into force of the 2003 Act, the powers to fix tariff of the power component of tariff of DVC was vested in this Commission. DVC filed Petition No 66/2005, before this Commission for approval of tariff for its generation and transmission related activities. The Commission vide order dated 3.10.2006 granted exemption to DVC to charge its own tariff till 1.4.2006 and determined the tariff for the period 1.6.2009 till 31.3.2009. The order was challenged before the Appellate Tribunal for Electricity and the matter was remanded to the Commission vide judgment dated 23.11.2007. The Commission implemented the judgment of Appellate Tribunal and revised the tariff of DVC by its order dated 6.8.2009.

3. The petitioner has filed this petition alleging willful, deliberate and contumacious acts and omissions by the respondents for disobedience and contravention of the orders of the Commission dated 29.3.2005, 3.10.2006 and 6.8.2009 in Petition No. 66/2005 and also the provisions of the 2003 Act read with the 2004 and 2009 Tariff Regulations of the Commission. The gist of the submissions of the petitioner is as under:

(a) The Fuel Cost Surcharge (FCS) applicable to DVC (the respondent No. 1) was approved by the Commission in the tariff order dated 3.10.2006. As no appeal was filed on the issue of FCS, the order of the Commission was final and binding. However, DVC in gross contravention of the 2003 Act has refused to implement this order of the Commission dated 3.10.2006 and charged FCS as per its own formula under Section 20 of the DVC Act, 1948, which has been repealed by the Act;

(b) Even though the Commission by order dated 6.8.2009 had directed DVC to implement the FCS formula approved in order dated 3.10.2006, the said order has been flouted with impunity by DVC by continuing to charge FCS as per different formula;

(c) The respondents have failed, refused and neglected to file the tariff petition before the Commission for the period 2009-14;

(d) Even though the order of the Commission dated 6.8.2009 was not stayed by the Appellate Tribunal in the appeal (Appeal No. 146/2009) filed by DVC, the order of the Commission was not implemented and DVC continued to charge its own ad hoc tariff in contravention of the provisions of the 2003 Act.

(e) Pursuant to the order of the Commission dated 6.8.2009, which was not stayed by the Appellate Tribunal, DVC in contravention of the 2003 Act, did not file appropriate application before the State Commissions of West Bengal and Jharkhand.

4. According to the petitioner, the above deliberate acts and omissions on the part of the respondents constitute actionable wrongs in terms of Section 142 and 149 of the 2003 Act, and appropriate action be initiated against the respondents for contempt and violation of the following:

5. At the hearing held on 17.12.2009, the learned counsel for DVC accepted notice and submitted that in view of the interim order dated 16.9.2009 of the Appellate Tribunal in Appeal No. 146/2009 filed by DVC against this Commission's order dated 6.8.2009, the petition was not maintainable. Learned counsel for the petitioner pointed out that the interim order dated 16.9.2009 did not exonerate DVC from implementing the Fuel Price Adjustment Formula notified by this...

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