Central Electricity Authority

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the Electricity Act, 2003= whether the CERC and the Tribunal have correctly interpreted Regulation 2.5 of the said regulations while permitting capitalisation of the additional expenditure for purposes of determining the tariff. = the respondent-Corporation sought additional capitalisation of the expenditure on the project in question relevant to the period 2001-2004. The Central Commission determined the additional capitalisation and allowed the same to the respondent, which determination was upheld by the Tribunal with the modification to which we have adverted in the beginning of this order. 22. There is no gainsaying that the prayer for additional capitalisation was made by the respondent-Corporation and considered by CERC after the Electricity Act 2003 had come into force, repealing the earlier enactments. The new legislation did not set out any role for the CEA, in the matter of approval of the schemes for the generating companies or the capital expenditure for the completion of such projects. The entire exercise touching the regulation of the tariff of generating companies owned or controlled by the Central Government, like the respondent was entrusted to the Central Commission. The role of the Central Electricity Authority established under Section 7 of the 2003 Act, was limited to matters enumerated under Section 73 of the Act, approval of the scheme for generating companies or the capital expenditure for the completion of such projects or capitalisation of the additional expenditure not being one such function. The CERC was, therefore, right when it said that the Central Electricity Authority had no part to play in the matter of approval for purposes of capitalisation of the extra expenditure incurred on a project. That was so notwithstanding the continuance of Regulation 2.5 of the regulations framed by the CERC providing for such an approval by the CEA. The far reaching changes that came about in the legal framework with the enactment of the 2003 Act, made Regulation 2.5 redundant in so far as the same envisaged a reference to the CEA or an Independent Agency for approval of the additional capitalisation. Insistence on a reference, to the CEA for such approval, despite the sea change in the legal framework would have been both unnecessary as well as opposed to the spirit of new law that reduced the role of CEA to what was specified in Section 73 of the Act. The CERC and the Tribunal were in that view justified in holding that a reference to the CEA was not indicated nor did the absence of such a reference denude the CERC of its authority to fix the tariff after the 2003 Act had come into force. That was so notwithstanding the fact that proviso to Section 61 of the Electricity Act, 2003 continued the terms and conditions for determination of tariff under the enactments mentioned therein and those specified in the Schedule for a period of one year or till such terms were specified under that section whichever was earlier. In the result this appeal fails and is hereby dismissed with costs assessed at Rs.50,000/- Civil Appeal Nos.5361-5362 of 2007 23. In these appeals the order impugned by the appellant places reliance upon the order passed by the Tribunal, in Appeal No.36 of 2006 against which order we have in the foregoing part of this judgment dismissed the appeal preferred by the appellant. On a parity of reasoning these appeals are also destined to be dismissed and are, accordingly, dismissed with costs assessed at Rs.50,000/-.

published in http://judis.nic.in/supremecourt/imgst.aspx?filename=40786   REPORTABLE     IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.4117 OF 2006   U.P. Power Corporation Ltd. …Appellant   Versus   N.T.P.C. Ltd. & Ors. …Respondents   WITH CIVIL APPEAL NOS.5361-5362 OF 2007               J U D G M E N … Continue reading

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