Appeal No. 178 of 2016, IA No. 389 of 2016; Appeal No. 179 of 2016, IA No. 390 of 2016; Appeal No. 180 of 2016, IA No. 392 of 2016; Appeal No. 181 of 2016, IA No. 394 of 2016; Appeal No. 183 of 2016, IA No. 396 of 2016; Appeal No. 184 of 2016, IA No. 397 of 2016; Appeal No. 185 of 2016, IA No. 399 of 2016 and Appeal No. 186 of 2016, IA No. 401.... Case: Torrent Power Limited and Ors. Vs Gujarat Electricity Regulatory Commission and Ors.. APTEL (Appellate Tribunal for Electricity)

Case NumberAppeal No. 178 of 2016, IA No. 389 of 2016; Appeal No. 179 of 2016, IA No. 390 of 2016; Appeal No. 180 of 2016, IA No. 392 of 2016; Appeal No. 181 of 2016, IA No. 394 of 2016; Appeal No. 183 of 2016, IA No. 396 of 2016; Appeal No. 184 of 2016, IA No. 397 of 2016; Appeal No. 185 of 2016, IA No. 399 of 2016 and Appeal No. 186 of 2016, IA No. 401...
CounselFor Appellant: Ramji Srinivasan, Sr. Adv., Deepa Chawan, Hardik Luthra, Chetan Bandela, Tapan, Tushar Bhardwaj and Vivek Paul Oriel and For Respondents: Sanjay Sen, Sr. Adv., Buddy A. Ranganadhan, Hemant Singh, Sikha Ohri, Saahil Kaul, Nimesh Kr. Jha and S.R. Pandey, Rep.
JudgesRanjana P. Desai, J. (Chairperson) and I.J. Kapoor, Member (T)
IssueCode of Civil Procedure, 1908 (CPC) - Order XLVII Rule 1; Order XLVII Rule 5, XLVII; Sections 114, 121, 122, 123, 124, 125, 126, 127, 128, 129, 130, 122, 345; Code of Criminal Procedure, 1973 (CrPC) - Section 346; Electricity Act, 2003 - Sections 181, 2, 2(2), 2(62), 82, 84, 85, 92, 92(1), 92(2), 93, 94, (1)(f), 94(f), 95
Judgement DateMarch 30, 2017
CourtAPTEL (Appellate Tribunal for Electricity)


Ranjana P. Desai, J. (Chairperson)

  1. All these appeals can be disposed of by a common judgment because they arise out of same facts and involve common issues. In Appeal Nos. 178 of 2016, 179 of 2016, 180 of 2016 and 181 of 2016, Order dated 16/06/2016 passed by the Gujarat Electricity Regulatory Commission ("the State Commission") is challenged. In Appeal No. 183 of 2016, 184 of 2016, 185 of 2016 and 186 of 2016, Order dated 01/07/2016 passed by the State Commission is challenged.

  2. We must begin with the facts. In all these appeals, Torrent Power Limited is the Appellant. It is a company incorporated under the provisions of the Companies Act, 1956 ("the Appellant"). The Appellant is in the business of generation and distribution of electricity. Respondent No. 1 is the State Commission in all these appeals.

  3. On 31/03/2016, two members of the State Commission (Mr. P.J. Thakkar and Mr. K.M. Shringarpure) passed the Tariff Order in respect of the Truing Up of F.Y. 2014-15, Approval of Provisional ARR for F.Y. 2016-17 and Determination of Tariff for F.Y. 2016-17 for the Appellant in Petition No. 1552 of 2015. Bipinchandra Kanaiyalal Joshi (Respondent No. 2 in Appeal No. 178 of 2016), Government of Gujarat (Respondent No. 2 in Appeal No. 179 of 2016) and Surat Citizens Council Trust (Respondent No. 2 in Appeal No. 180 and 181 of 2016) filed review petitions seeking review of Order dated 31/03/2016.

  4. The Appellant objected to the maintainability of the review petitions. Prayer for interim relief was made. On 21/04/2016 in R.P. No. 1568 of 2016 filed by Bipinchandra Joshi arguments were heard on maintainability and interim relief. The review petitions were heard by three members i.e. Mr. Anand Kumar, the Chairman and the earlier two members i.e. Mr. P.J. Thakkar and Mr. K.M. Shringarpure. On 22/04/2016, the aforestated Three-Members passed the daily order granting interim relief and staying the levy of the regulatory charge of 45 paise per unit stipulated in the Tariff Order dated 31/03/2016 passed in Petition No. 1552 of 2015 which had come into effect from 01/04/2016. Any reference to Three-Members in this judgment is reference to the aforestated Three-Members of the State Commission.

  5. In Appeal No. 121 of 2016, the Appellant challenged the interim Order dated 22/04/2016 in R.P. No. 1568 of 2016 passed by Three-Members. On 16/05/2016, this Tribunal disposed of the said appeal observing that since impugned orders are interim orders and the State Commission had fixed the hearing on 18/05/2016, this Tribunal was not inclined to interfere with them at this stage. This Tribunal expressed that it expected the State Commission to dispose of the review petitions on 18/05/2016 finally and pass a speaking order within ten days thereafter.

  6. The State Commission filed an application for extension of time. On 03/06/2016, the said application was heard. This Tribunal directed the State Commission to decide the issue regarding maintainability of the petitions within two weeks i.e. on or before 17/06/2016 and to pass appropriate order on merit within four weeks' time i.e. on or before 01/07/2016. This Tribunal made it clear that the order was being passed without prejudice to the rights of the Appellant to challenge the order to be passed on maintainability if the need arises.

  7. Gist of each of the review petitions filed by the parties and response of the Appellant to the same is found in the Order dated 16/06/2016. It would be appropriate to set out the same here because that will give some idea about the grievance of the review petitioners.

  8. In Review Petition No. 1572 of 2016 filed by the Government of Gujarat, the issue raised is about the double counting of revenue requirements on account of rebate on prompt payment given over and above the interest on working capital. It is stated that in the Order dated 31/03/2016 the State Commission has allowed the Appellant Prompt Payment Rebate. In addition to that the Appellant claimed and was allowed interest on working capital on normative basis inclusive of the two months' receivables. It is stated that Prompt Payment Rebate takes care of carrying cost during the said period. The Prompt Payment Rebate given over and above the interest on working capital would be double counting of the revenue requirements. The Prompt Payment Rebate makes cash flow available to the Appellant. Therefore the increase in revenue requirements by allowing Prompt Payment Rebate would be an additional benefit to the Appellant at the cost of the consumers. Another issue raised by the Government of Gujarat in its letter dated 16/04/2016 was that subsidy support available to the Appellant under E-Bid RLNG Scheme of the Government of India was not taken into account. If that was taken into account revenue gap would have reduced, consequently reducing the regulatory charge.

  9. In Review Petition No. 1568 of 2016 filed by Shri Bipinchandra Joshi - a consumer of the Appellant in Gandhinagar, also, issue is raised about Prompt Payment Rebate. It is contended that if the rebate given to the consumers is once again to be recovered from the consumers in the revenue requirements, there is no purpose whatsoever in granting rebate. Hence, Prompt Payment Rebate of about 168 crores should be given due adjustment in the revenue requirements of the Appellant. In this petition also, it is urged that subsidy support available to the Appellant from PSDF Fund under E-bid RLNG Scheme of the Government of India which would reduce the revenue gap consequently reducing the regulatory charge had the same been taken into account, in the Order dated 31/03/2016 erroneously it has not been taken into account. Thirdly, it is stated that if the Prompt Payment discount as well as the subsidy support from the PSDF Fund, a total whereof aggregating to around Rs. 700 crores was taken into account while passing the order dated 31/03/2016, the revenue gap would not have been Rs. 470 crores and therefore there was no question of allowing a regulatory charge of 45 paise per unit.

  10. In Review Petition No. 1573 of 2016 filed by the Surat Citizens Council Trust & Anr. review of order dated 31/03/2016 is sought on three grounds. It is urged that during F.Y. 2014-15, the Appellant had failed to fulfill its Renewable Purchase Obligation, however, its claim of power purchase cost of Rs. 1902.08 crores which included Rs. 142.69 crores for renewable energy was fully allowed. This has impacted the tariff ultimately determined by the State Commission to the detriment of the consumers. Therefore, ARRs need to be reviewed. Secondly, it is submitted that the ARRs and the Tariff Orders for the two different and distinct licensed areas of Ahmedabad and Surat have always been separate. In F.Y. 2015-16 in Surat areas there were only 5,86,000 consumers whereas in Ahmedabad/Gandhinagar there were 17,00,000 consumers. The revenue gap arrived at for Ahmedabad in the impugned order is Rs. 409.62 crores, whereas the revenue gap for Surat is Rs. 150.88 crores. Despite this, a common regulatory charge of 45 paise per unit has been applied for recovery from the consumers of both these areas. If the regulatory charge would have been bifurcated in the proportion of 26.92% and 73.08% between Surat and Ahmedabad/Gandhinagar respectively, a proportion arrived at by applying the respective revenue gaps to the total revenue gap of Rs. 470.50 (Ahmedabad gap of Rs. 407.62 i.e. 73.08% and Surat gap of Rs. 150.88 crores i.e. 26.92%), that would have resulted in regulatory charge of 12 paise per unit from the consumers of Surat and 33 paise per unit from the consumers of Ahmedabad/Gandhinagar areas. Thirdly, it is submitted that this Tribunal in Appeal Nos. 190 of 2011 and 162 of 2012 laid down principles with regard to carrying cost. Question is raised whether the State Commission examined that carrying cost is a legitimate expenditure of the distribution company as per the above mentioned judgment of this Tribunal. In Review Petition No. 1574 of 2016, Surat Citizens Council Trust & Anr. has raised similar grounds.

  11. The Appellant's reply to the review petitions needs to be summarized. As regards Prompt Payment Discount, it is submitted that Prompt Payment Discount was put into operation pursuant to this Tribunal's directions in Orders dated 06/09/2011, 02/06/2012, 16/04/2013 and 29/04/2014. Hence, Prompt Payment Discount cannot be reviewed till Order dated 06/09/2011 is challenged or reviewed. Issues raised by the State Government in its letter have been dealt with by the State Commission in its Order dated 31/03/2016. Raising the same issues would amount to hearing the matter under the garb of review proceedings. So far as PSDF Scheme is concerned, it is submitted that no such amounts were paid to the Appellant. The amounts were received by the generator through the Appellant and, therefore, the question of including the said amounts in the projected revenue requirements does not arise.

  12. The Appellant further contended that the review petitions are beyond the scope of original proceedings as the original proceedings neither relate to F.Y. 2015-16 nor is the Appellant participating in PSDF Scheme for F.Y. 2016-17. It is submitted that there is no error apparent in the impugned order. A review petition cannot be an appeal in disguise. The review petitions are also barred by limitation.

  13. So far as allowance of Rs. 142.69 crores towards Power Purchase Cost of renewable energy is concerned, it is contended that the State Commission has stated that it will take a decision in the appropriate pending proceedings. Hence, no review can be sought on that ground.

  14. As regards the contention of disproportionately levying regulatory charge amongst the consumers of Surat and Ahmedabad/Gandhinagar is concerned, it is submitted that the same is subject to verification and consideration during truing up of F.Y. 2016-17. In any case it is in the discretion of the...

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