M/S DLF Power Limited
Vs. Central Coalfields Ltd. & ANR.  INSC 679 (1 April 2009)
IN THE SUPREME COURT
OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 3109 OF 2006 M/s. DLF
Power Limited .....Appellant Versus Central Coalfields ltd. & Anr.
....Respondents (With Civil Appeal No. 3561 /2006 )
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 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
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.
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.
(Dr. ARIJIT PASAYAT)