M/S Dlf Power Limited vs Central Coalfields Ltd. & Anr

M/s. DLF Power Limited .....Appellant

Versus

Central Coalfields ltd. & Anr. ....Respondents

(With Civil Appeal No. 3561 /2006 )

JUDGMENT

Dr. ARIJIT PASAYAT.

1. These two Civil Appeals are inter related and are, therefore, disposed

of by this common order. Civil Appeal No. 3561 of 2006 has been filed by

Central Coalfields Limited (in short the `CCL') under Section 125 of the

Electricity Act, 2003 (in short the `Act') impugning the judgment and order

dated 11th May, 2006 passed by the Appellate Tribunal for Electricity, New

Delhi (in short the `Appellate Tribunal') in Appeal No.166 of 2005. The

other appeal i.e. Civil Appeal No. 3109 of 2006 has been filed by DLF Power Limited (in short the `DLF') challenging part of the judgment dated

11.5.2006 passed by the Appellate Tribunal. By order dated 11.7.2007 this

court directed the Cost Accounts Wing of M/s. Ernst & Young to determine

the actual capital cost based on the formula in the "Power Purchase

Agreement" dated 8.2.1993 between CCL and DLF. This Court further

directed that the copy of the report of the Cost Accounts Wing be given to

the parties and to the Jharkhand State Electricity Regulatory Commission

(in short the `State Commission'). It was further directed that the State

Commission on receipt of the report shall determine the tariff as per the

terms of the "Power Purchase Agreement" between the parties for the two

power plants.

2. CCL's case is that the Cost Accounts Wing of M/s. Ernst & Young

only on the basis of the documents supplied by DLF have carried out the

exercise of determining the actual capital cost of the two power plants

without even asking for any comments or any inputs from CCL while

working out the actual capital cost. Grievance is that the report was based

solely on the basis of the documents supplied by DLF, copies of which were

also not made available to CCL. M/s. Ernst & Young have determined the

capital cost of the two power plants at Giddi at Rs.72.34 crores and for

Rajrappa determined the actual capital cost of Rs.67.45 crores. On receipt

2 of the report from the Cost Accounts Wing of M/s. Ernst & Young, State

Commission determined the tariff cost. The Commission consisted of two

members; one was the Chairman and the other was the Member (Technical).

Both of them separately determined the tariff for the subsequent year after

the first year based on the actual capitalization cost supplied by the Cost

Accountants. It is submitted that the two determinations are at great

variance from each other.

3. It is submitted that the international norms for actual capitalization

cost for power has not been kept in view. It is pointed out that the actual

capitalization cost arrived at is apparently highly excessive, purportedly

based on the inflated figures supplied by DLF without supplying copies to

CCL.

4. Learned counsel for the appellant CCL submitted that the basis of

tariff fixation is erroneous and in any event a statutory forum is available to

question correctness of the report, which can be availed.

5. On the other hand learned counsel for the DLF submitted that M/s

Ernst & Young are internationally reputed financial consultants. There is

no substance in the objections raised by CCL.

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6. We are inclined to accept the submissions of learned counsel for the

CCL that the complex process of evaluation is involved in fixing the tariff

and it would be in the interest of parties challenge, if any, to the report is

made before the prescribed authority. That being so, we dispose of the

appeals with the direction that in case CCL files appeal within four weeks

from today the same shall be considered by the Appellate Tribunal in

accordance with law. The Appellate Tribunal is requested to dispose of the

appeal on merits within a period of two months from the date of filing. All

questions are left open to be decided without the question of limitation

relating the filing of appeal. It is stated that CCL is paying Rs.2.07 of KWH

for both Rajrappa and Giddi for the second year after commissioning in

July, 2000 for Rajrappa and in April, 2001 for Giddi. CCL shall continue to

make the payment. We make it clear that by providing interim protection

we have not expressed any opinion on the merits of the case.

........................................J. (Dr. ARIJIT PASAYAT)

..........................................J. (LOKESHWAR SINGH PANTA) New Delhi, April 01, 2009

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