Appellate Tribunal For Electricity
Ntpc Ltd. (Ntpc) vs Chhattisgarh State Power Distribution ... on 13 January, 2026
IN THE APPELLATE TRIBUNAL FOR ELECTRICITY
(Appellate Jurisdiction)
APL No. 399 OF 2019
Dated: 13.01.2026
Present : Hon`ble Ms. Seema Gupta, Technical Member (Electricity)
Hon`ble Mr. Virender Bhat, Judicial Member
In the matter of:
NTPC LTD. (NTPC)
Through its AGM,
NTPC Bhawan Core-7, Scope Complex 7,
Institutional Area, Lodhi Road,
New Delhi- 110003. ... Appellant(s)
VERSUS
1. CHHATTISGARH STATE POWER DISTRIBUTION COMPANY
LIMITED
Through its CEO
P.O. Sundernagar
Danganiya, Raipur - 492013
2. MADHYA PRADESH POWER MANAGEMENT COMPANY
LIMITED
Through its Managing Director,
Sakti Bhawan, Vidyut Nagar, Rampur,
Jabalpur - 110003
3. MAHARASHTRA STATE ELECTRICITY DISTRIBUTION
COMPANY LIMITED
Through its Managing Director,
Prakashgad, Bandra (East),
Mumbai - 400051.
4. GUJARAT URJA VIKAS NIGAM LIMITED
Through its Managing Director,
Sardar Patel Vidyut Bhawan,
Race Course, Vadodara
Gujarat-390007
5. ELECTRICITY DEPARTMENT, GOVT. OF GOA,
Through its Chief Electrical Engineer
Vidyut Bhawan,
Panaji, Goa - 403001
6. ELECTRICITY DEPARTMENT, ADMINISTRATION OF DAMAN &
DIU,
Through its Executive Engineer
Daman - 396210
7. ELECTRICITY DEPARTMENT
Through its Chief Engineer
Administration of Dadra & Nagar Haveli,
Silvasa - 396230
8. A.P. EASTERN POWER DISTRIBUTION COMPANY LTD.
Through its CEO
P&T Colony, Seethammadhara,
Vishakapatnam - 503013
9. A.P. SOUTHERN POWER DISTRIBUTION COMPANY LTD
Through its CEO
Beside Srinivassakalyana Mandapam,
Tiruchanur Road, Kesavayana Gunta,
Tirupati - 517501
10. TELANGANA NORTHERN POWER DISTRIBUTION COMPANY
LTD
Through its CEO
H.No. 2-5-31/2, Vidyut Bhavan, Nakkalagutta,
Hanamkonda,
Warangal - 506001
11. TELANGANA STATE SOURTHERN POWER DISTRIBUTION
COMPANY LTD
Through its CEO
Mint Compound,
Corporate Office Hyderabad - 500063.
12. TAMIL NADU GENERATION & DISTRIBUTION CORPORATION
LTD. (TANGEDCO)
Through its CEO
NPKRR Maaligai, 144, Anna Salai,
Chennai - 600002.
13. BANGALORE ELECTRICITY SUPPLY COMPANY LTD.
_________________________________________________________________________
Appeal No. 399 of 2019 Page 2 of 46
(BESCOM)
Through its CEO
Krishan Rajendra Circle,
Bangalore - 506001
14. MANGALORE ELECTRICITY SUPPLY COMPANY LTD.
(MESCOM)
Through its CEO
MESCOM Bhavana,Corporate Office Bejjaikevai Cross
Road Mangalore - 575004
15. CHAMUNDESHWARI ELECTRICITY SUPPLYCOMPANY LTD.
(CESC)
Through its CEO
CorporateOffice, No.29, GROUND Floor,
Kaveri Grameena Bank Road Vijayanagar 2nd Stage,
Mysore - 570017
16. GULBARGA ELECTRICITY SUPPLY COMPANY
LTD.(GESCOM)
Through its CEO
Main Road,Gulbarga - 585102
17. HUBLI ELECTRICITY SUPPLY COMPANY LTD. (HESCOM)
Through its CEO Navanagar,
PB Raod,
Hubli - 580025.
18. KERALA STATE ELECTRICITY BOARD LTD.
Through its CMD
Vaidyuthibhavana, Pattom,
Thiruvananthapuram - 695004
19. CENTRAL ELECTRICITY REGULATORY COMMISSION
Through its Secretary,
3rd & 4th Floor, Chanderlok Building,
36, Janpath, New Delhi - 110001. .... Respondent(s)
Counsel on record for the Appellant(s) : Shri Venkatesh
Shryeshth Ramesh Sharma
Suhael Buttan
Priya Dhankar
Anant Singh
Vineet Kumar
Nikunj Bhatnagar
_________________________________________________________________________
Appeal No. 399 of 2019 Page 3 of 46
Kunal Veer Chopra
Vedant Choudhary
Akash Lamba
Ashutosh Kumar Srivastava
Bharath Gangadharan
Nihal Bhardwaj
Siddharth Nigotia
Shivam Kumar
Kartikay Trivedi
Mohit Gupta
Manu Tiwari
Aashwyn Singh
Harsh Vardhan
for App. 1
Counsel on record for the Respondent(s) : Ravin Dubey
for Res. 2
Udit Gupta
Anup Jain
Vyom Chaturvedi
Pragya Gupta
Sneha Singh
Nishtha Goel
Deepshikha Kumar
for Res. 3
JUDGMENT
(PER HON'BLE MRS. SEEMA GUPTA, TECHNICAL MEMBER -
ELECTRICITY)
1. The captioned appeal has been filed by the Appellant-NTPC challenging the Order dated 28.08.2019 ("Impugned Order") passed by the Central Electricity Regulatory Commission ("CERC/Central Commission") in Petition No. 46/MP/2018.
2. The CERC, in the Impugned Order has held that NTPC is not entitled to the relaxation in the Target Availability of the following _________________________________________________________________________ Appeal No. 399 of 2019 Page 4 of 46 Generating Stations of NTPC for the period from 01.04.2017 to 31.03.2019 to the extent of coal non- availability:
(i) Mouda Thermal Power Station, Stage I (2X500 MW);
(ii) Mouda Thermal Power Station, Stage II (2 X 660 MW);
(iii) Solapur Thermal Power Station (2X660 MW); and
(iv) Simhadri Super Thermal Power Station, Stage I (2X500 MW)
3. The Appellant - NTPC Limited (hereinafter referred to as 'NTPC') is a Company incorporated under the provisions of the Companies Act, 1956 and is engaged in the business of generation and sale of electricity to various purchasers and beneficiaries in India.
4. Respondent Nos.1 to 18 are the Distribution Companies/ departments for Western and Southern Region Constituents and Respondent No.19 is the Central Electricity Regulatory Commission (hereinafter referred to as "CERC/Central Commission"), which is the statutory body under Section 76 of the Electricity Act, 2003.
5. The said Petition (No. 46/MP/2018) was filed by NTPC before the CERC invoking Sections 62, 64 and 79 of the Electricity Act, 2003 read with Regulations 36(a) and 54 of the CERC (Terms and Conditions of Tariff) Regulations, 2014 ("2014 Tariff Regulations"), seeking relaxation of the Normative Annual Plant Availability Factor (NAPAF) for above mentioned generation projects for the period 01.04.2017 to 31.03.2019.
6. NTPC contended that the inability of its Generating Stations to achieve the target NAPAF of 85% during the relevant period was due to reasons beyond its control, primarily arising from the shortage of domestic _________________________________________________________________________ Appeal No. 399 of 2019 Page 5 of 46 coal caused by policy decisions and directives of the Government of India restricting import of coal by public sector generating companies.
7. NTPC has submitted that it made regular and continuous representations to the Ministry of Coal, Ministry of Power, and Coal India Limited (CIL) to address the shortfall. A series of letters issued between October 2016 and November 2017 were placed before the CERC to demonstrate efforts made by NTPC to augment domestic coal supply and mitigate operational challenges and sought relaxation in the Normative Annual Plant Availability Factor ("NAPAF") the above mentioned Generating Stations for the period from 01.04.2017 to 31.03.2019 on account of the non-availability of coal and consider difference between NAPAF of 85 % and availability declared by referred NTPC generating stations as deemed for the purpose of computing fixed charges payable to NTPC. The Plant Availability achieved for these stations as reported by NTPC is given below FY Mouda, Mouda, Sholapur Simhadri, Stage I Stage I Stage II Plant Plant Plant Plant Availability Availability Availability Availability Factor (%) Factor (%) Factor (%) Factor (%) 2014- 83.45 - - 93.73 15 2015- 97.42 - - 94.05 16 2016- 94.98 - - 94.69 17 2017- 76.73 43.90 49.67 81.97 18 2018- 85.01 78.31 86.45 88.68 19
8. In the Impugned Order, the Central Commission held that NTPC is not entitled to the relaxation in the Normative Annual Plant Availability Factor ("NAPAF") on account of the non-availability of coal for the above-
_________________________________________________________________________ Appeal No. 399 of 2019 Page 6 of 46 mentioned generating Stations for the period from 01.04.2017 to 31.03.2019.
9. Aggrieved by the Impugned Order, Appellant -NTPC filed present Appeal seeking to set aside of the Impugned Order with a direction to allow relaxation of NAPAF for the affected generating stations for FY 2017-18 and FY 2018-19, treating the shortfall attributable to non- availability of coal as deemed generation for the purpose of recovery of fixed capacity charges.
SUBMISSIONS URGED ON BEHALF OF APPELLANT - NTPC
10. Learned counsel submitted that NTPC's inability to achieve the Target Availability of 85% during FY 2017-18 and FY 2018-19 for the referred generating projects was solely due to factors beyond its control, specifically the non-availability of domestic coal from Coal India Limited ("CIL") and its subsidiaries. The Appellant actively attempted to procure coal through the e-auction route, but the deficit in required coal could not be bridged. Further, import of coal was restricted/stopped in view of Central Government's binding directions dated 20.10.2015, 03.05.2017, and 04.05.2017, which required generating stations to minimize and eventually discontinue coal imports. These directives constitute a Change in Law / uncontrollable event and therefore warranted relaxation under the Tariff Regulations by Central Commission. Since these executive directions fundamentally altered the operational conditions applicable to coal procurement, the implications of the CIL-related shortfall ought to have been duly considered while examining relaxation under the Tariff Regulations 2014, and the failure to do so vitiates the Impugned Order.
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11. It is a settled legal position that executive instructions are binding and enforceable, and therefore, cannot be disregarded by NTPC, rendering the situation a clear case of force majeure event, as noted in "Kusum Ingots and Alloys v. Union of India" (2004) 6 SCC 254. Further, the Generator cannot be penalised for non-availability of fuel, which constitutes a force majeure event, as held in "Maharashtra State Power Generation Co. Ltd. v. Maharashtra Electricity Regulatory Commission & Ors.", Appeal No. 72 of 2010.
12. It is further submitted that historically, CERC has exercised its power to relax norms where circumstances could not have been foreseen at the time of framing the Tariff Regulations, and therefore, under Regulation 36, while reviewing the 83% target, it ought to have assessed performance based on actual feedback for FY 2014-15, FY 2015-16, and FY 2016-17 including the actual domestic coal received rather than relying merely on ACQ figures which do not reflect real availability; CERC failed to appreciate that coal sourced through e-auction/open market is inherently limited in view of nationwide domestic shortages, and NTPC's non-pithead stations face additional logistical constraints, rendering large-scale e- auction procurement impractical.
13. Learned counsel submitted that the present case is squarely covered by the judgment dated 08.04.2025 passed by this Tribunal in Appeal No. 318 of 2019, titled "NTPC Tamil Nadu Energy Company Ltd. vs. AP Transmission Corporation Ltd. & Ors." ("Vallur Judgment"), wherein the principal issue was whether the CERC ought to have exercised its power to relax under Regulation 54 of the 2014 Tariff Regulations to reduce the NAPAF from 85% to 83% for the Vallur Thermal Power Station for the period 01.04.2017 to 31.03.2019 (Petition No. 68/MP/2018), in the backdrop of persistent shortfall in domestic coal _________________________________________________________________________ Appeal No. 399 of 2019 Page 8 of 46 supply, the prohibition on coal imports imposed by the Ministry of Power, and the failure of the CERC to undertake the mid-term review mandated under the proviso to Regulation 36(A); this Tribunal held that NTPC's inability to achieve 85% NAPAF was due to uncontrollable factors and granted relief by reducing the NAPAF to 83%.
14. The present appeal stands on an identical legal and factual footing, as the generating stations in question were also unable to achieve the normative NAPAF of 85% due to a persistent shortfall in domestic coal availability, compounded by binding policy directives including the NCDP 2013, SHAKTI Policy, and the Ministry of Power instructions restricting coal imports by CPSU power producers, thereby deprived NTPC of any commercial or operational recourse to secure additional fuel.
15. With regard to the contentions of Respondent No. 3 - MSEDCL that the present case is governed by the principles laid down by this Tribunal in Appeal No. 110 of 2012, titled "NTPC Limited vs CERC & Ors.", wherein it was held that: (a) the coal shortage at Farakka and Kahalgaon- I arose solely because NTPC diverted linked coal to Kahalgaon-II after 2007-08; (b) despite using costly imported coal, NTPC could not meet NAPAF, and the diversion benefitted NTPC commercially while the beneficiaries suffered reduced power and higher costs; (c) the Regulations place full responsibility for fuel procurement on the generating company; and (d) non-availability of sufficient fuel due to the reasons cited by the Appellant does not fall within the scope of a Force Majeure event and accordingly responsibility for arranging fuel lies entirely with the generating company, i.e., NTPC, and the beneficiaries cannot be held accountable, learned Counsel submitted that referred judgement is inapplicable, as the case involved voluntary diversion of coal between _________________________________________________________________________ Appeal No. 399 of 2019 Page 9 of 46 stations, constituting a commercial decision by the generator, and relief was denied because the generator itself altered the supply structure.
16. Learned Counsel placed reliance on the judgment dated 07.02.2024 in Appeal No. 297 of 2019, "Jindal India Thermal Power Limited vs Odisha Electricity Regulatory Commission,", wherein this Tribunal held that where two coordinate benches render conflicting decisions on the same issue, the later decision prevails; this principle was reiterated in the judgment dated 04.07.2025 in Appeal No. 267 of 2023, "Surya Alloy Industries Limited vs West Bengal Electricity Regulatory Commission". Accordingly, even assuming that judgement in Appeal No. 110 of 2012 represents a contrary view, it must yield to the Vallur Judgment.
17. It is further submitted that Ministry of Coal (MoC) introduced the New Coal Distribution Policy for the Power Sector, 2017 (SHAKTI) for signing Fuel Supply Agreements with LoA holders, under which coal supply to power stations beyond 31.03.2017 was limited to 75% of the ACQ, corresponding to a PLF of 63.75% (0.85 × 0.75). Coal materialization remained significantly below the committed ACQ during FY 2017-18 and FY 2018-19 due to limited domestic production and logistical constraints, despite repeated representations by NTPC to the concerned authorities. The actual coal materialization at these stations ranged only between 12% and 73% of the committed ACQ, substantially lower than required to maintain the normative Target Availability of 85%.
18. NTPC undertook all feasible measures to mitigate the coal shortfall at the aforementioned stations, including procurement through e-auctions, diversion under the Flexible Utilization of Coal Scheme, and making multiple representations to the Ministries of Power, Coal, and Coal India _________________________________________________________________________ Appeal No. 399 of 2019 Page 10 of 46 Ltd to enhance domestic coal supply, production, and rake availability, however it was unable to achieve the Target Availability for these stations due to constraints in both domestic and imported coal supply.
19. With regard to Reliance placed by Respondent No.3-MSEDCL, on the judgments a)Maharashtra State Power Generation Co. Ltd. v. Maharashtra Electricity Regulatory Commission, (Review Petition 9 of 2011 in Appeal 199 of 2010), dated 19.04.2012; b)Maharashtra State Power Generation Co. Ltd. v. Maharashtra Electricity Regulatory Commission, (Appeal No. 47 of 2012) dated 14.12.2012; c) Haryana Power Generation Corporation Ltd. v. Haryana Electricity Regulatory Commission, (Appeal 196 of 2014) dated 18.09.2015; d)Rajasthan Rajya Vidyut Utpadan Nigam Limited v. Rajasthan Electricity Regulatory Commission, (Appeal No. 94 of 2016), dated 21.08.2020; e) Maharashtra State Power Generation Co. Ltd. v. Maharashtra Electricity Regulatory Commission, (Appeal No. 161 of 2011), dated 18.10.2012 asserting that the obligation to secure fuel lies solely with the generating company and the beneficiaries bear no responsibility in this regard, learned Counsel submitted that these judgements are not applicable in the present case as facts are clearly distinguishable. These judgements mainly pertained to quality of coal, which can be improved through operational measures, while in the present case the shortfall occurred despite NTPC's demonstrable efforts, including e-auction procurement, and resulted from Central Government directives prohibiting imports and limiting domestic coal supply.
20. It is submitted that the 'Power to relax' has been vested upon the Central Commission to ensure that the party who is aggrieved due to non- compliance of a particular threshold/regulation as specified, due to _________________________________________________________________________ Appeal No. 399 of 2019 Page 11 of 46 reasons beyond its control, does not have to suffer loss. It is a well-settled principle of law that while exercising the power to relax, there should be sufficient reason to justify the relaxation, considering that non-exercise of discretion would cause hardship and injustice to a party. The Impugned Order of the Central Commission, by refusing to exercise its discretion, has imposed an undue financial burden of approximately Rs. 900 Crore on NTPC, thereby causing injustice. It is submitted that the Appeal deserves to be allowed and the Impugned Order set aside by this Tribunal.
SUBMISSIONS URGED ON BEHALF OF RESPONDENT- MPPMCL
21. It is submitted that the Central Commission, in the Explanatory Memorandum to the 2014 Tariff Regulations, has categorically stated that the arrangement of fuel is the responsibility of the Generator, who is entitled to declare capacity based on fuel sources other than linked/domestic sources; however, the Appellant failed to fulfil this primary responsibility of arranging fuel for its generating stations and consequently, could not declare/achieve the targeted NAPAF in terms of the Tariff Regulations. With regard to contention of Appellant that there was lesser supply from coal companies and constraints in transportation of coal, it is submitted that this Tribunal, in its order dated 30.04.2013 passed in Appeal No. 110 of 2012 "NTPC Ltd. Vs. CERC & Ors." has already held that the responsibility of arranging fuel lies with the Generator and this responsibility cannot be shifted to beneficiaries. Regarding the contention of Appellant that the referred judgment could not be applied to the present Appeal as certain facts are distinct, as the principles laid down therein squarely apply to claims seeking relaxation of NAPAF norms on the ground of non-availability or scarcity of coal.
_________________________________________________________________________ Appeal No. 399 of 2019 Page 12 of 46
22. In regard to the contention of Appellant that it faced problem in transportation of coal due to railway congestion and non-availability of rakes from Indian Railways; learned counsel submitted that such a contention is untenable as the three entities involved NTPC, Coal India Ltd., and Indian Railways are all Central Government organisations and are expected to function harmoniously and efficiently to advance the objective of the Central Government under the Electricity Act, 2003 and ensure delivery of economic power to citizens.
23. The Appellant has relied on the Judgement of this Tribunal dated 04.07.2025 in Appeal No. 267 of 2023 , which held that in case of contrary judgement passed by a coordinate bench of a court, later judgement shall prevail and therefore the ratio laid down in this Tribunal order dated 08.04.2025 passed in Appeal No. 318 of 2019 shall apply to the facts of the present appeal; firstly the facts of the present case are materially different from those in Appeal No. 318 of 2019, and therefore, the ratio of the said judgment is not applicable to the present Appeal and secondly the contention that later judgement will prevail is fundamentally contrary to the basic tenets of judicial discipline and settled principles of judicial precedent, as a coordinate bench is bound by the decision of an earlier coordinate bench, and the doctrine of stare decisis mandates consistency, certainty, and predictability in law. A later coordinate bench cannot simply take a contrary view or ignore an earlier binding judgment and if a later coordinate bench disagrees with the judgment of an earlier coordinate bench, it cannot overrule it. The only permissible course of action is to refer the matter to a larger bench for an authoritative resolution of the conflict.
_________________________________________________________________________ Appeal No. 399 of 2019 Page 13 of 46
24. It is submitted that the Appellant's claim regarding shortage of coal and uncertainty in coal supply on a sustained basis is misconceived, arbitrary and devoid of substance. Based on the data from the website of WRPC, 9 out of 11 thermal generating stations of the Appellant in the Western Region have consistently achieved more than the normative availability factor of 85% in 2017-18, with only two generating stations i.e., Mouda STPS-I and II falling below the NAPAF of 85% and merely 3 out of 41 recorded incidences ( FY 2014-15 till FY 2017-18 ) failed to NAPAF, thereby demonstrating that there is no sustained shortage, non- availability, or uncertainty of coal supply to the Appellant's thermal stations. The figures relied upon by the Appellant pertain only to a limited period and are not reflective of the overall position; rather, they contradict the Appellant's own claim and, in fact, demonstrate inefficiency and inaction on the part of the Appellant in taking adequate measures to ensure the requisite coal supply to Mouda STPS-I and II.
25. It is further submitted that the Appellant has also cited New Coal Distribution Policy issued by the Ministry of Coal vide Office Memorandum dated 26.07.2013 as one of the reason for shortage of coal; however, NTPC, being fully aware of the impact of the said Policy on its financial performance and its obligations under the PPAs executed with the Beneficiaries including the Answering Respondent, failed to raise any concern before the appropriate Government authorities or seek exemption/relaxation from any restrictive provisions thereof to secure supply of the full ACQ of coal for its power stations. In fact, the New Coal Distribution Policy expressly permitted import of coal by CIL and by power plants to meet their FSA requirements, and CIL could have been requested to fulfil its obligations under the FSA either through domestic coal or through imported coal, and as such the Appellant was also given _________________________________________________________________________ Appeal No. 399 of 2019 Page 14 of 46 option to import coal on its own to mitigate any shortfall in coal availability. This arrangement was applicable to the identified TPPs of 78,000 MW capacity commissioned during the period from 01.04.2009 to 31.03.2015. VSTPS-IV & V, Sipat-I & II, Korba-III and Mouda-I & II were all commissioned during this period, and except for Mouda-I & II, all stations consistently demonstrated sufficient coal availability, achieving availability of more than 90% during the said period. The said New Coal Distribution Policy remained in effect until 2017, and throughout this period, except for Mouda, all stations continued to receive adequate coal supply.
26. It is submitted that the Appellant has contended that the SHAKTI Policy, 2017 has restricted coal supply beyond 31.03.2017 to 75% of ACQ, equivalent to 57% of PLF; however, this interpretation is misconceived, as the said Policy stipulates that the capacities totalling approximately 68,000 MW would continue to receive coal at 75% of ACQ even beyond 31.03.2017, which corresponds to a PLF of 67.5% of installed capacity. Further, the Policy dated 22.05.2017 stipulates that for capacities under the old LoA-FSA regime, coal supply may be increased in the future based on availability. Data available on the websites of the Ministry of Coal and CIL indicate that coal availability increased to 567.36 million tonnes during 2016-17, reflecting a growth of 2.4%.
27. Further, the Appellant's claim that it was directed by the Ministry of Power to minimize import of coal, is a gross misrepresentation of facts. The Minutes of Meeting held on 20.10.2015, chaired by the Secretary (Power), record that the CMD (NTPC) stated that imported coal receipt had been 6.4 MMT till September 2015, and the Secretary advised NTPC "to consider the CEA target as the upper limit and try to minimize imports as far as possible". The Office Memorandum dated 30.03.2015 issued by _________________________________________________________________________ Appeal No. 399 of 2019 Page 15 of 46 the Central Electricity Authority (CEA) set the target for coal imports by NTPC for FY 2015-16 at 22 MMT, against which only 6.4 MMT, i.e., 29% of the target, was imported by NTPC till September 2015. The Appellant was well aware, right from FY 2015-16, of the MoP's direction to minimize imported coal procurement, and despite observing low receipts of coal from linked mines, there is no record to show that the Appellant ever approached the Ministry of Power or Ministry of Coal to allow coal imports or increase supply from linked mines, failing which it would suffer commercially under the terms of the PPA and the provisions of the Tariff Regulations. Moreover, the Appellant had the option to procure coal through e-auction to meet any shortfall but chose not to do so. Having failed to procure adequate coal to achieve the target NAPAF, the Appellant cannot now claim Fixed Charge without achieving target NAPAF and praying for relaxation considering deemed generation. In view of above submissions, Appeal need to be dismissed.
SUBMISSIONS URGED ON BEHALF OF RESPONDENT - MSEDCL
28. It is submitted that the Appellant's request for further relaxation of NAPAF is baseless and illogical, particularly when CERC has already granted relaxation by reducing NAPAF to 83% for the period 01.04.2014 to 31.03.2017 due to shortage of coal and uncertainty in its assured supply, in terms of Clause 36(A) of the Tariff Regulation, 2014, and such relaxation was subject to review after three years, which has not taken place thereby reinforcing that the existing relaxation was adequate for recovery of fixed charges and that no further relaxation is warranted.. The Appellant's reliance on the judgement of this Tribunal dated 08.04.2025 in Appeal No. 318 of 2019 is misplaced, as the said judgment pertains only to a relaxation of NAPAF from 85% to 83% (i.e., a 2% relaxation), whereas the Appellant herein while relying upon the said judgement, is _________________________________________________________________________ Appeal No. 399 of 2019 Page 16 of 46 seeking relaxation of NAPAF from 85% to actual NAPAF, which was not allowed in the said relied order and cannot be allowed in the facts of the present case.
29. It is submitted that the Central Electricity Authority ("CEA"), Government of India, vide Notification dated 08.06.2016, issued the Methodology for Flexibility in Utilization of Domestic Coal among Power Generating Stations ("CEA Notification"), permitting Central/State generating stations to utilize coal across their units while maintaining normative availability. During FY 2014-15 to FY 2016-17, all 12 generating stations of the Appellant, except Mouda in FY 2014-15--achieved NAPAF above 85%, and the Appellant has already availed incentive for NAPAF beyond 85%; further, in FY 2017-18 only 3 out of 12 stations and in FY 2018-19 only Mouda-II failed to meet the prescribed level, clearly indicating sufficient coal supply to the majority of stations. Appellant could and ought to have distributed coal optimally to maintain the mandated 85% NAPAF rather than seeking incentive under Regulation 30(4)2014 Tariff Regulations.
30. It is contended that the Appellant, despite having already received incentives of Rs. 51.58 Crore in FY 2017-18 and Rs. 58.15 Crore in FY 2018-19 for higher availability, now seeks deemed generation under the pretext of coal shortage, which is wholly unjustified, and its plea for relaxation of NAPAF was rightly rejected by the CERC in Petition No. 46/MP/2018. Further, CERC, in its various orders has unequivocally held that it is the responsibility of the generator to arrange coal and bear the associated risks, particularly since both - the Appellant and the coal supply companies are government entities. The Appellant, despite being fully aware of the coal-flexibility policy of the Government of India, failed _________________________________________________________________________ Appeal No. 399 of 2019 Page 17 of 46 to take essential steps for optimal coal management while simultaneously enjoying incentives for higher availability across most of its stations, a conduct that should not be permitted as it imposes an unwarranted double financial burden on distribution companies and ultimately on the end consumers.
31. It is also submitted that due to the shortfall in generation from Solapur STPS and Mouda STPS, the Respondent was compelled to procure costly power from the market at Rs. 5 to Rs. 6 per unit during peak demand periods, while these stations remained available only during moderate demand periods such as the monsoon season, resulting in continued payment of capacity charges exceeding Rs. 2.50 per unit for the Declared Capacity despite such charges being intended to ensure availability during peak demand. The Appellant's mismanagement of fuel resources cannot be shifted onto the Beneficiaries/Distribution Companies and ultimately to consumers, as it is the legal and contractual responsibility of the Appellant to ensure proper fuel management and optimal utilization across all generating stations.
32. As per the data submitted by the Appellant, the Annual Contracted Quantity ("ACQ") under the FSA for Simhadri, Solapur, and Mouda Generating Stations was lower than the coal required to achieve 85% NAPAF, thereby clearly indicating that the Appellant was aware from the outset that additional coal sources were necessary; however, it has failed to produce any evidence of efforts made to secure full ACQ, and its belated plea that NAPAF could not be achieved due to import restrictions is misconceived and untenable. Moreover, despite the alleged restriction being in force during FY 2017-18, the Appellant imported 3 lakh MT of coal but has not demonstrated utilization of the said imported coal for the disputed stations, and administrative instructions cannot override _________________________________________________________________________ Appeal No. 399 of 2019 Page 18 of 46 contractual or regulatory obligations. Having neither shown past reliance on imported coal nor explained why the available imports were not deployed for Mouda, Simhadri, and Solapur, the Appellant's reliance on import restrictions is wholly misplaced and only reflects its own mismanagement.
33. Learned counsel asserted that during FY 2017-18, Appellant participated in e-auctions for procurement of additional domestic coal for Mouda Stage-I (602 rakes), Stage-II (465 rakes) and Solapur (190 rakes), securing success rates of 82%, 54% and 44% respectively, which itself evidences that coal was accessible through the e-auction mechanism and that the limitation in procurement stemmed from the Appellant's own bidding performance. The Appellant has failed to disclose how many auctions it did not participate in, the reasons for unsuccessful bids, or why coal from other NTPC stations could not be diverted to these generating units; in the absence of such justification, no relaxation of normative PLF can be justified. Thus, the failure to achieve 85% NAPAF for referred projects is attributable solely to the Appellant's own bidding strategy and not to unavailability of coal, and the resulting consequences cannot be imposed upon the Beneficiaries.
34. It is submitted that so-called "administrative instructions", could not, even if assumed to be so, affect contractual obligations with beneficiaries and in any case cannot control the actions of Regulators under the Act and the law.
ANALYSIS AND DISCUSSION
35. Elaborate Submissions have been made by Mr. Shri Venkatesh, learned counsel on Behalf of the Appellant, Mr Ravin Dubey Learned _________________________________________________________________________ Appeal No. 399 of 2019 Page 19 of 46 Counsel on behalf of MPPCL and Mr Buddy Ranganathan, learned senior Counsel on behalf of MSEDCL. The main observation in the Impugned Order are as under:-
As per the modified New Coal Distribution Policy (2013), the assured domestic coal supply was limited to 65%, 67% and 75% of the Annual Contracted Quantity (ACQ) for 201415 to 2016-2017. This obligated NTPC to procure additional coal from alternative sources, with associated costs being pass-through in tariffs, to meet the required NAPAF. There was no embargo on NTPC to procure coal from alternative sources such as imported coal e-auction and accordingly give declaration based on coal stock. The uniform NAPAF of 83% was fixed for all generating stations ( FY 2014-15 to FY 2016-17) without getting into the details of coal supplies received by individual generating stations. NTPC, in spite of shortage of coal, was able to meet NAPAF during 1.4.2014-31.3.2017. During FY 2017-18 also, Out of Eleven (11) Thermal Generating Stations of NTPC situated in Western Region, Nine (9) have achieved NAPAF of 85%. NAPAF norm would lose its sanctity if relaxed for certain stations.
The CERC in Petition No 89/MP/2018, rejected a similar prayer for consideration of difference in NAPAF of 85% and the availability declared by Aravali Power Company Private Ltd. ("APCPL") (to the extent of coal actually available) as deemed availability for the purpose of computation of fixed charges; Similarly, in Petition 68/MP/2018, revision of NAPAF was rejected by the CERC. CERC in the Impugned Order at Para 52 held as under :
"52 From the above decisions of the Commission, it is clear that the Commission has consistently taken the view that the consequences of failure to arrange fuel by the petitioner cannot be passed on to the beneficiaries, especially when the Petitioner does not appear to have _________________________________________________________________________ Appeal No. 399 of 2019 Page 20 of 46 taken timely action to ensure enough supply of fuel so as to achieve the target PAF. The reasonableness of transferring the cost implication without commensurate benefits to the beneficiaries needs to be seen in the context that the beneficiaries also do not have any control-over coal supplies. It is the responsibility of the generator to arrange the coal and bear and the associated risks involved. Further, since the Petitioner as well as the coal supply companies are both owned / controlled by the Government, it pass on the fuel supply risks to the beneficiaries."
36. After considering the rival submissions, perusal of documents, following issues emerges for Consideration:
i) The Directions issued by Government of India vide Minutes of meetings constitutes binding directive and be covered under Force Majeure/ change in Law?
37. The main contention put forth on behalf of Appellant - NTPC is that vide Minutes of meeting / direction dated 20.10.2015, 03.05.2017 and 04.05.2017, Govt of India directed them not to Import Coal which affected the availability of coal at the referred stations and for period under consideration, and to be considered as a Force Majeure and / or Change in Law.
38. We note from the Minutes of Meeting chaired by the Secretary (Power) on 20.10.2015 regarding the QPR of NTPC, that at point no 3.6, with regard to the import of coal, CMD (NTPC) stated that imported coal receipts has been 6.4 MT till September 2015. In this context, "Secretary Power advised NTPC to consider the CEA target as an upper limit and try to minimise imports as far as possible".
_________________________________________________________________________ Appeal No. 399 of 2019 Page 21 of 46
39. It is observed from the CEA OM dated 30.03.2015 that, for import of coal the target set for NTPC for the year 2015-16 is 22 MMT, against which only 6.4 MT (29%) was imported by NTPC till September 15 and Ministry of Power has only advised to reduce the import of power and to consider the limit set by CEA as upper limit. No information has been submitted by NTPC, that why ceiling limit so set by CEA, for import of coal was not utilised, when they were facing/envisaging shortage of domestic coal for meeting the NAPF for these projects in terms of the applicable Regulations. Thus, we are unable to agree with the contention of NTPC, that there was restriction for import of coal since 2015, which resulted in shortage of coal at these stations and NAPAF could not be achieved.
40. In the minutes of meeting of the conference of "Power Renewable Energy and Mines Ministers of States and Union Territories (UTs) held on 3rd and 4th May 2017, under resolution No. 45, it is recorded that "Coal Imports by Public Sector TPPs based on domestic coal shall be reduced to zero". In the referred minutes of meeting, though there is a decision to reduce coal import by PSU to be Zero, no firm timeline has been indicated as well as there are no discussion/ submissions put forth on behalf of NTPC with regard to their Contractual obligation to meet the specified NAPF and its consequences of not meeting the same, as the Appellant has contended that there was sustained shortage of domestic coal. Even subsequent to these minutes, NTPC has not produced any document to show that issue of non-fulfilment of their contractual obligation being impacted by such direction was taken up by them with Government of India. NTPC has also failed to produce any formal direction issued by the Government to satisfy the requirement of a "Government Directive" as contemplated under the Act or under established jurisprudence. It is also not established by NTPC that such a direction in the minutes of meeting _________________________________________________________________________ Appeal No. 399 of 2019 Page 22 of 46 had force of law and created a legal compulsion that rendered performance impossible or impracticable. As such there was no legal bar on procurement of coal from alternate sources or diversion of coal from other generation projects as other generation projects in western region have achieved plant availability significantly higher than the prescribed NAPAF during the relevant period.
41. We also take note that under the New Coal Distribution Policy there is a provision to import coal by CIL as "... to meet its balance FSA obligations towards the requirement of the said 78,000 MW TPPs, CIL may import coal and supply the same to the willing power plants on cost plus basis. Power Plants may also directly import coal themselves, if they so opt, in which case, the FSA obligations would be deemed to have been discharged." As contended by Respondents, and not disputed by the Appellant that aforesaid arrangement was applicable for the identified TPPs of 78,000 MW capacity, commissioned during the period from 01.04.2009 to 31.03.2015, in which referred projects of NTPC are included. It is surprising to note that NTPC, in spite of anticipating / experiencing shortage of domestic coal for referred projects, did not pursue with CIL to import coal on their behalf in terms of New Coal Distribution Policy and only contended and they did not ask CIL to import Coal, it also being a Govt of India company and covered under GOI directions restricting import of coal. It is a settled law that executive instructions cannot override statutory provisions or duly approved policy frameworks ("K.Kuppusamy & Anr. V State of T.N"; (1998) 8 SCC 469;
"Partha Das & Ors Vs the State of Tripura" 2025 SCC OnLine SC1844).
_________________________________________________________________________ Appeal No. 399 of 2019 Page 23 of 46
42. It is further observed that the Plant Availability factor for Simhadri I & II, Mauda 1 has been reported to be consistently more than 85 % from 2014-15 to 2016-17 i.e. up 97% for Mauda Stage 1 and about 94 % for Simhadri generation projects. Data submitted by NTPC, as given below, does not establish the heavy reliance on imported coal to achieve the plant availability in previous years, as only part of imported coal has been used in these projects with varying deployment from 15% % to 0 % of imported coal in these projects.
Quantity of imported coal received (Lakh Metric Ton) Station NTPC Simhadri Mouda Solapur Total 2014-15 164 25 7 Not Applicable 2015-16 95 22 1 (Unit-1 declared 2016-17 10 1 - CoD on 25th Sept'17) 2017-18 3 - - -
43. Learned Counsel on behalf of NTPC placing reliance on the judgment of the Hon'ble Supreme Court in "Kusum Ingots and Alloys v. Union of India"; (2004) 6 SCC 254, submitted that executive instructions are binding and enforceable, and therefore, cannot be disregarded by NTPC, rendering the situation a clear case of force majeure event. There is no dispute that the directions by a Minister are generally administrative instructions and it has been held in this judgement that such directions are binding internally on government officials, but these executive directions cannot create enforceable rights against third parties unless supported by law. In our view, such directions do not have statutory force unless backed by a law or formal government notification /order issued under statutory authority. The direction issued vide Minutes of Meeting may have binding internally on NTPC, however in our view the Appellant should have either _________________________________________________________________________ Appeal No. 399 of 2019 Page 24 of 46 taken sufficient measures to safeguard its contractual obligations or sought for relaxation from such direction; and as deliberated above, Appellant has failed to establish the efforts in this regard. The referred judgement is of no avail to Appellant - NTPC.
44. Reliance has been placed on behalf of the NTPC on the judgement of this Tribunal in "Maharashtra State Power Generation Co. Ltd. v. Maharashtra Electricity Regulatory Commission & Ors.", Appeal No. 72 of 2010 dated 27.04.2011 contending that the Generator cannot be penalised for non-availability of fuel, which constitutes a force majeure event. In the referred judgement issued involved pertained to delay in commissioning of Parli generating project and consequential disallowance of capital cost and what the prudence check of cost involved. This tribunal, after analysing the reasons impacting the delay in commissioning which was mainly on account of delay by the supplier of equipment i.e. BHEL, which was the lone bidder, specifically noted that time schedule as per terms of the contract may result in imprudent time schedule, not in accordance with good industry practice. No blanket allowance of cost overrun due to such delay was accorded. It was noted that impact of time over run beyond contractual schedule is only on IDC and overhead cost and only 50 % of such cost was only allowed. In our view, this judgment has no application in the present case and does not advance the case of the Appellant.
45. Learned Counsel on behalf of Appellant has also contended that CERC has failed to appreciate that the directives of the Central Government qualifies as a Change in Law event in term of Regulation 12.2 of the 2014 Tariff Regulations which deals with 'uncontrollable factors' and _________________________________________________________________________ Appeal No. 399 of 2019 Page 25 of 46 the same includes Change in Law events. The definition of Change in Law in terms of Tariff Regulation 2014 is reproduced hereunder:
"(9) 'Change In Law' means occurrence of any of the following events:
(a) enactment, bringing into effect or promulgation of any new Indian law; or
(b) adoption, amendment, modification, repeal or re-enactment of any existing Indian law; or
(c) change in interpretation or application of any Indian law by a competent court, Tribunal or Indian Governmental Instrumentality which is the final authority under law for such interpretation or applications or
(d) change by any competent statutory authority in any condition or covenant of any consent or clearances or approval or licence available or obtained for the project or
(e) coming into force or change in any bilateral or multilateral agreement/treaty between the Government of India and any other Sovereign Government having implication for the generating station or the transmission system regulated under these Regulations."
46. Thus, change in Law broadly encompasses the occurrence of any event by way of enactment of new law, amendment or repeal of existing law, or change in judicial interpretation of law, which has a direct impact on the cost or revenue of the regulated entity. The emphasis is on law with binding force--statutes, rules, regulations, or judicial pronouncements. In our view, the Executive directions do not have the force of law; they are administrative instructions, not statutory enactments and therefore cannot be considered as "Change in Law" under Regulation 12.2. We therefore find no infirmity or error in the CERC's Impugned Order by not considering it under change in law.
47. In view of above deliberation, we do not find merit in the contention of NTPC that on account of binding directions issued by Government of India during 20.10.2015, 03.05.2017 & 04.05.2017, materially and _________________________________________________________________________ Appeal No. 399 of 2019 Page 26 of 46 adversely affected the coal availability at referred generation projects and such a situation to be construed as Force Majeure/ Change in law event and difference between actual availability and specified NAPAF to be treated as deemed availability for the purpose of calculation of Fixed capacity charge.
Domestic Coal Shortage at these stations to be a force majeure event??
48. The Learned Counsel on behalf of NTPC has contended that under the Scheme for Harnessing and Allocating Koyala ( "Shakti") policy, domestic coal supply was restricted to 75 % of ACQ i.e. 63.75 % of PLF and even there were shortages in this supply of coal and matter was persistently taken up by them with Ministry of Power and Coal India for augmenting the supply of coal, accordingly shortage of coal to be considered under Force Majeure, beyond the control of NTPC. Per Contra, learned senior counsel on behalf of Respondents have contended that arrangement of sufficient quantity of raw material i.e. coal is the basic requirement of plant developer and cannot be shifted to the beneficiary.
49. Even considering the restriction imposed under SHAKTI policy with regard to ACQ, we note from the data submitted by NTPC that FSA agreement entered by NTPC did not cover the coal required at referred generating stations for meeting NAPAF of 85 %, as quoted below :
Station-wise details of ACQ as per FSA, and coal required for NAPAF in FY 2017-18 All figs in Million MT S.N. Station Installed Capacity Total Coal required ACQ as per (MW) for Normative FSA Availability of 85% 1 Simhadri Stage-I & 2000 (2x500 MW 10.1 9.8 II +2x500 MW) _________________________________________________________________________ Appeal No. 399 of 2019 Page 27 of 46 2 Mauda Stage - I 1000 5.0 6.0 3 Mauda Stage - II 1320 (Unit-2 5.1 declared CoD on 18th Sept' 17 4 Solapur 660 (Unit-I declared 1.7 1.3 CoD on 25th Sept' 17 Station-wise details of ACQ as per FSA, and coal required for NAPAF in FY 2018-19 S.N. Station Installed Capacity Total Coal required ACQ as per (MW) for Normative FSA Availability of 85% 1 Mauda Stage-I 1000 5.0 8.8 2 Mauda Stage-II 1320 6.6
50. From the above table, it is observed that specially for Mauda Stage I&II, the Coal as per existing FSA was limited to 60% for FY 2017-18 and 80 % for FY 2018-19 of total requirement for meeting NAPAF of 85 % and main reason put forth by NTPC is due to delay in signing of FSA for Mauda II generation project. The Cumulative Plant availability factor of various generating projects of NTPC, including referred generation projects, as reported by Respondent MSEDCL basis WRPC CEA report for FY 2014- 15 to FY 2018-19 is as given below:
Name of FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19 Stations Korba 88.11 90.45 91.43 90.30 87.60 VSPTS-I 86.80 91.57 93.79 91.81 90.70 VSPTS-II 85.11 88.38 86.90 91.85 90.92 VSPTS-III 88.18 93.59 95.07 93.30 94.48 VSPTS-VI 86.45 94.68 97.35 90.96 95.89 VSPTS-V - 94.40 90.88 99.06 92.87 SSTPS-II 90.54 96.13 96.18 89.78 91.51 KSTPS-III 89.61 88.31 90.98 90.39 92.69 Sipat-I 89.02 87.85 92.91 88.49 92.57 _________________________________________________________________________ Appeal No. 399 of 2019 Page 28 of 46 Mouda 79.45 97.41 95.51 76.75 85.03 Mouda-II - - 89.46 43.89 78.31 Solapur - - - 49.66 86.45
51. From the above table, it is observed that before commissioning of Mauda Stage II, Mauda Stage I has achieved availability of 79.45%, 97.41% and 95.51% for the year 2014-15, 2015-16 and FY 2017-18. For the year 2018-19, both Mauda I and Mauda II could not achieve NAPAF, and plant availability factor remained less than NAPAF, presumably, coal for both the stages of Mauda was utilised from the existing FSA ( Mauda
-I). Thus, in the absence of FSA for Mauda II generation project, NTPC was fully aware that the coal supply to both the stages of Mauda can not be covered under the Mauda Stage -I FSA and should have taken steps to augment the supply of coal for Mouda II, prior to its declaration of COD.
52. Further, it is observed that other than referred generation projects ( Mauda I&II, Sholapur), other generation projects of NTPC, also operating under claimed coal shortage scenario, as contended by NTPC, have achieved PAF much more than the NAPAF as per Regulations. Out of the total 54 recorded Plant Availability Factor for generation projects for western region ( FY 2014-15 to FY 2018-19), there are only 5 incidences, in which plant availability achieved is less than NAPAF, which does not support the contention of the Appellant that there was sustained shortage of coal on account of coal policy and executive directions. We are in agreement with the observations of CERC that uniform NAPAF of 83%/ 85 % has been fixed for all generating stations ( FY 2014-15 to FY 2018-
19) without getting into the details of coal supplies received by individual generating stations and relaxing it any further for specific generation projects would lose the sanctity of NAPAF. It has been submitted on _________________________________________________________________________ Appeal No. 399 of 2019 Page 29 of 46 behalf of Respondents, that for projects which achieved generation above NAPAF, NTPC has received incentive in terms of the extant Regulations, and consequently, the consequences of non-achievement of NAPAF by few generation projects should not be passed on the beneficiaries.
53. On a query with regard to participation by NTPC in E-auction process to supplementing coal supply, NTPC has submitted that it achieved the success rate of 44 % for Sholapur generating station (during FY 2017-18), 82 % for Mouda generating station (during FY 2017-18) and 54 % Mouda generating station ( during FY 2018-19) in the bids in which it participated. The success rate in the bidding process depends upon the bidding strategy adopted by a participant, however Appellant has failed to disclose how many auctions it did not participate in, the reasons for unsuccessful bids to justify their contention that no major opportunities were available under E -auction, as it is of relevance considering, that NTPC was fully aware that for Mauda ( I&II) generating stations only 60- 80 % of Fuel requirement was tied up through FSA while there is statutory requirement of 85 % NAPAF in terms of extant Regulation to be eligible for 100 % Fixed Capacity Charge and NTPC contending that they were experiencing shortage of coal under FSA.
54. It has been brought to our notice that Central Electricity Authority ("CEA"), Government of India, vide Notification dated 08.06.2016, have issued the Methodology for Flexibility in Utilization of Domestic Coal among Power Generating Stations permitting Central/State generating stations to utilize coal across their units while maintaining normative availability. We note that in FY 2017-18, only 3 ( Mauda I &II, Solapur) out of 12 generating stations, and in FY 2018-19, only Mouda-II, failed to _________________________________________________________________________ Appeal No. 399 of 2019 Page 30 of 46 meet the prescribed level of plant availability factor, while all other generating stations have achieved higher availability indicating adequate coal availability and as submitted by Respondents, NTPC has claimed incentives for higher availability for the year FY 2017-18 & FY 2018-19. In response, NTPC has only contended that they pursued the matter with Ministry of Power and Singereni Collieries company limited to augment the coal supply for these projects. In our view NTPC failed to establish, the efforts undertaken by them for optimal utilisation of available coal for the referred generation projects to enhance plant availability and to achieve specified NAPAF.
55. This Tribunal in the judgement dated 30.04.2012 in "NTPC Limited Vs CERC" in Appeal no 110 of 2012 has held that arranging the adequate fuel for the plant is the responsibility of generator and beneficiaries cannot be held responsible. Relevant Paragraphs from the judgment are reproduced below: -
"21. Coal is the basic raw material for generation of electricity. Arrangement of sufficient quantity of said raw material is the basic responsibility of the Plant Developer, the NTPC. At any cost, the responsibility of the Appellant for procurement of the basic raw materials cannot be shifted to the beneficiaries. ...... .....
23. So, for inability to arrange adequate fuel by NTPC, the beneficiaries cannot be held responsible. Further, if the relaxation in the NAPAF is allowed to the Appellant, then it would tantamount to penalize beneficiaries and ultimately the consumers for no fault _________________________________________________________________________ Appeal No. 399 of 2019 Page 31 of 46 of theirs. Further, it would also lead to re-opening of several similar cases of non-achievement of NAPAF and relieve the plant developer from the onus of arranging proper and sufficient quantity of basis raw material"
56. The Appellant has placed heavy reliance on the judgement of this Tribunal in Appeal No. 318 of 2019, titled "NTPC Tamil Nadu Energy Company Ltd. vs. AP Transmission Corporation Ltd. & Ors." ("Vallur Judgment"). CERC in Tariff Regulation 2014, fixed the NAPAF as 85 %, however considering the shortage of coal and uncertainty of assured coal supply on sustained basis experienced by the generating stations, the NAPAF for recovery of fixed charges was allowed as 83 % and this provision was to be reviewed based on actual feedback after 3 years from 01.04.2014. For the referred Vallur Generating Station, CERC granted NAPAF of 83 % for FY 2014-15 till FY 2016-17, however, subsequently CERC denied the relaxation in NAPAF from 85 % to 83 % for FY 2017-18 and FY 2018-19. Acknowledging that Appellant was facing shortage of coal due to less supply under its FSA as well as restriction in import of coal, this Tribunal held that there is no change in circumstances and moreover CERC has not undertaken the review of the special dispensation of 83 % NAPAF after three years in terms of Proviso under Tariff Regulation 2014, and held that CERC ought to have continued such relaxation in the figure of NAPAF for the thermal power plant beyond 01.04.2017 in terms of the said Proviso. Thus, this judgement pertains to the continuation of relaxation in NAPAF from 85 % 83% for FY 2017-18 and FY 2018-19, in terms of proviso of the Regulation that CERC shall undertake the review after three years.
_________________________________________________________________________ Appeal No. 399 of 2019 Page 32 of 46
57. We find it profitable to extract herein the relevant Paragraphs of the said judgment of this Tribunal in Appeal no.318 of 2019.
"19. We have already noted herein above that by attaching proviso to Regulation 36 (A) of 2014 CERC Tariff Regulations, the Commission had reduced the NAPAF figure for all thermal generating stations based on domestic coal from 85% to 83% in view of the shortage of coal and uncertainty of assured coal supply on sustained basis faced by these generating stations till 31st March, 2017. The proviso provided for review of the situation after 1st April, 2017 based on actual feed back. It cannot be gainsaid that the office memorandum dated 26th July, 2013 issued by Government of India thereby revising the new coal distribution policy had created such situation for the thermal power plants based on domestic coal as the assured annual coal quantity was restricted to 65% for the Financial Year 2014-15, 67% for Financial Year 2015-16 and 75% for Financial Year 2016-17. It is not disputed that from 1st April, 2017 also, the domestic coal supply to the thermal power plant was only to the extent of 63.75% of the installed capacity. However, the review of the situation as contemplated by the proviso attached to Regulation 36(A) has not been conducted by the Commission. Nothing has been brought on record _________________________________________________________________________ Appeal No. 399 of 2019 Page 33 of 46 on behalf of Respondent No. 14 to show that entire assured quantity of coal as per FSA dated 24th July, 2013 was being supplied to the Appellant by MCL w.e.f. 1st April, 2017.
20. Further, in a meeting held on 20th October, 2015 under the Chairmanship of Secretary, Ministry of Power, Government of India pertaining to the performance review of NTPC power stations, the NTPC, its joint ventures and its subsidiaries were directed to minimize the import of coal as far as possible. In the subsequent meetings held on 3rd May, 2017, 4th May, 2017 during the conference of Power, Renewable Energy and Mines, Ministries of States and Union Territories, it was decided that coal import by public sector thermal power plant based on domestic coal shall be reduced to zero.
21. Therefore, it was not possible for the Appellant to augment coal supply to its thermal power plant at Vallur by resorting to import of coal from outside India.
22. The Appellant has also been constantly and vigorously following up with Coal India Limited and its subsidiaries by way of letters dated 1st July, 2016, 28th August, 2016, 19th October, 2016, 10th November, 2016, 20th December, 2016 and 10th _________________________________________________________________________ Appeal No. 399 of 2019 Page 34 of 46 March, 2017 citing shortfall in the supply of coal and requesting for augmentation of coal supply from MCL to achieve bare minimum generation target of 85% PLF and to avoid import of coal. Even though, it has been submitted on behalf of Respondent No. 14 that the only issue raised in these letters by the Appellant is with regards to the shortfall of supply of coal as compared with the quantity committed under FSA and no request was made to increase the total quantum of coal contracted under the FSA, yet in the written submissions filed on behalf of Respondent No. 14 itself, it has been stated that in the minutes of meeting dated 9th October, 2017 of SRPC, it is noted that Director (O) NTPC had requested the Joint Secretary, Thermal, Ministry of Power for enhancement of ACQ of NTECL value from 6.24 MMT to 8.863 MMT equivalent to 85% PLF.
Therefore, it cannot be said that the Appellant never requested for increase in the total quantum of coal allocated to it under the FSA. Further, admittedly, all these letters contained request from the Appellant for augmentation of coal supply to its thermal power plant.
23. Therefore, it can't be said that the Appellant did not make any efforts to obtain sufficient supply of domestic coal as per FSA in order to achieve the target availability of 85%. On the contrary, it is _________________________________________________________________________ Appeal No. 399 of 2019 Page 35 of 46 evident that the Appellant was taking continuous steps for augmentation of supply of coal to its generating station, which did not yield any result. The Appellant neither had adequate domestic coal supply from MCL as assured under the FSA nor could it take steps to import coal from outside India. The situation was completely beyond its control. Therefore, in these circumstances, the Appellant had made out a good case for invocation of power to relax under Regulation 54 of the Commission for revision of target availability factor from 85% to 83% from 1st April, 2017 onwards. In our opinion, it was a fit case in which the Commission ought to have exercised its power under Regulation 54 of 2014 CERC Regulations for relaxation of the target availability factor for the Appellant's Vallur thermal power plant.24. It is argued on behalf of Respondent No. 14
that since there was no embargo on the Appellant for importing coal which it chose not to do, it not only failed to meet the plant's operational needs but also missed the opportunity to recover the associated costs. The argument has been noted only to be rejected. It is true that there was no embargo upon the Appellant for importing coal but it is equally true that since the shortfall in supply of domestic coal to its thermal power plant form MCL under the FSA was not attributable to it, the _________________________________________________________________________ Appeal No. 399 of 2019 Page 36 of 46 Appellant was entitled to relaxation in the figure of NAPAF as was granted to all coal based thermal power plants by way of proviso to Regulation 36(A) till 1st April, 2014, since there was no improvement in situation as was prevailing upto 01/04/2014."
58. It is manifest that the findings of this Tribunal in the said judgment are based upon the same set of documents as have been relied upon by the parties in the instant appeal. Therefore, we do not find any reason or occasion to ignore the said previous judgment of this Tribunal and take a departure from the findings as well as the conclusion arrived at therein that the Commission ought to have provided relaxation to the appellant NTPC by reducing the figure of NAPAF for its thermal power plants involved in this appeal for recovery of fixed charges from 85% to 83% for the Financial Year 2017-18 and 2018-19. Based on deliberations in the preceding paragraphs, we hasten to add that the appellant has not made out any case for reducing the figure of NAPAF to the declared availability, as sought by it.
59. With regards to the power of the Commission to relax any of the provisions of the regulations i.e. 2014 CERC Tariff Regulations as contained in Regulation 54, this Tribunal has held in Appeal No.318 of 2019 (Vallur Judgment) as under: -
"16. Regulations 54 empowers the Commission to relax any of the provisions of these Regulations either on its own motion or on an application submitted to it by any interested _________________________________________________________________________ Appeal No. 399 of 2019 Page 37 of 46 person/party and the Commission is obligated to give reasons for any decision in this regard.
17. It is settled by a catena of decisions rendered by this Tribunal that while exercising power to relax, the Commission must get satisfaction from the material of record that there are sufficient reasons to justify such relaxation and non-exercise of power to relax would cause hardship and injustice to the party/person concerned. Additionally, Commission must gains satisfaction with regards to the fact that the circumstances under which relaxation is sought are not created due to any act of omission or commission attributable to the part/person claiming the relaxation."
60. In the said case, it was argued before this Tribunal that the test to be applied by this Tribunal in a case where relaxation has been refused by the Commission would be different as compared to a case where relaxation has been granted and this Tribunal held in this regard as under:-
"25. The arguments advanced on behalf of Respondent No. 14 - TANGEDCO that the test be applied by this Tribunal in a case where relaxation has been refused by the Commission would be different as compared to a case whether relaxation _________________________________________________________________________ Appeal No. 399 of 2019 Page 38 of 46 has been granted, is devoid of any merit. It is for the reason that the Appellate power to be exercised by this Tribunal under Section 111 of the Electricity Act, 2003 is uniform in all situations and cannot be circumscribed merely for the fact that the lower forum i.e. Electricity Regulatory Commission has chosen not to exercise its power to relax. In its Appellate jurisdiction, this Tribunal would be within its powers to examine each and every case brought before it to ascertain whether the Commission has wrongly refused to exercise its power to relax which has resulted into a grave injustice to the person/party seeking such relaxation. The argument that this Tribunal would exercise its appellate power only in the situations where the Commission is found to have wrongly exercised its power to relax is absolutely flawed and frivolous.
26. The judgement of this Tribunal in Madhya Pradesh Power Generation Company Limited vs. Madhya Pradesh Electricity Regulatory Commission and Ors., 2011 SCC online APTEL 72, cited by the Learned Counsel for Respondent No. 14 is patently not applicable to the facts of the instant case. In that case, the Appellant generating company had sought a direction to the Commission to amend the Regulations on the ground of alleged defects therein impairing the fulfillment of the _________________________________________________________________________ Appeal No. 399 of 2019 Page 39 of 46 object of the Act, which was found by the Tribunal beyond its powers and accordingly the appeal was held to be not maintainable. Further, the Appellant in that case had sought invocation of the Commission's "power to remove defects" and not its "power to relax". The relevant portion of the judgement is quoted herein below :-
"65. Thus, to summarize our reasoning, power to remove difficulties is a power given to the executive in order that the provisions of the Act may be given effect to. The Executive may exercise such power by executive order or in some cases they exercise legislative function to bring about minor adjustments so that implementation of the Act may be smoothened. Here in regulation 57 it is an express language that the Commission may by general or special order itself do or undertake or direct a generating company to do or undertake things for the purpose of removing the difficulties. This provision in the context of an express provision in regulate in 58 giving the Commission power to amend is not attracted here.
66. In view of the decisions cited in the preceding paragraphs, we find that this appeal fails to be an appeal under Section 111 of the Act. The prayer in substance in this appeal has been one to give a command to the _________________________________________________________________________ Appeal No. 399 of 2019 Page 40 of 46 Commission to effect amendment of the regulation on the ground of alleged defects therein impairing the fulfilment of the object of the Act which we are unable to subscribe to in as much as to do so would entail in travelling beyond our jurisdiction. While saying so, we do not say that the Commission at no point of time can exercise the powers conferred on it under regulation 56, 57, 58 and 59 in appropriate cases."
(Emphasis supplied)
27. In the instant case, the Appellant is neither seeking direction to the Commission to invoke power to remove the defects nor is seeking amendment of the Regulations but has contended that the Commission has erroneously and unjustifiably refused to invoke its power to relax as per Regulation 54 of 2017 CERC Tariff Regulations.
28. Similarly, the judgement of this Tribunal in Ratnagiri Gas & Power Pvt. Ltd. Vs. CERC & Ors.
2011 SCC online Aptel 44 and in Tata Power Company Limited vs. Jharkhand State Electricity Regulatory Commission & Anr. (Appeal No. 189 of 2011) decided at 20th September 2012 do not, in any manner, advance the case of Respondent No. _________________________________________________________________________ Appeal No. 399 of 2019 Page 41 of 46
14. In the case of Ratnagiri, this Tribunal has explained the principles to be kept in mind by the Commission while exercising power to relax which have already been noted herein above. In Tata Power Company case also, this Tribunal has culled out certain principles relating to exercise of power to relax by the Commission, one of which is that this Tribunal cannot exercise its appellate authority normally for the purpose of substituting one subjective satisfaction with another without there being any specific and valid reasoning for such substitution.
29. In the instant case, manifestly, the Commission has not considered the fact that the Appellant was genuinely experiencing shortfall in domestic coal for its vallur thermal power plant despite making endeavors to augment supply of domestic coal for the said plant. The Commission has also failed to consider the fact that the situation in which the Appellant was placed due to shortage in coal supply, was not its own creation and could not be attributable to it. Mere fact that there was no embargo upon the Appellant for importing coal for its power plant cannot be taken to indicate that the shortfall in coal was creation of the Appellant itself. It would not be out of place to mention here that the Appellant's thermal power plant in question was established primarily based on domestic coal linkage allocated by the Government of India and _________________________________________________________________________ Appeal No. 399 of 2019 Page 42 of 46 as per FSA dated 24th July, 2015 executed by it with MCL, it expected to receive 100% of its normative coal requirement from MCL. However, the supply of annual coal quantity from the coal lines to thermal power plants under the FSAs was restricted by the Government of India through office memorandum dated 26th July, 2013 which was the main reason for shortfall in coal supply experienced by the thermal power plants. Such situation created by the said office memorandum dated 26th July, 2013 was taken note of by the Commission itself while issuing the 2014 Tariff Regulations. Accordingly, by inserting proviso to Regulation 36(A), a general relaxation was given to all the thermal power plants till 1st April, 2014 by reducing the figure of NAPAF for recovery of fixed charges to 83% from 85%. At the same time, the Commission also stated in the proviso that this dispensation shall be reviewed after 1st April, 2017 based on the actual feed back. Admittedly, no such review has taken place but the thermal power plants continued to experience shortfall in coal supply and uncertainty of assured coal supply as per the FSA's from the linked coal mines. In view of the said situation, we are of the opinion that since there was no change in circumstances, that were prevailing as regards the coal supply from the linked coal mines to the thermal power plant before 1st April, 2014, after the said date also, the _________________________________________________________________________ Appeal No. 399 of 2019 Page 43 of 46 Commission ought to have continued such relaxation in the figure of NAPAF for the thermal power plant beyond 1st April, 2017 also. This would have certainly been done, in case the Commission had conducted a review of the situation as envisaged in the above noted proviso attached to Regulation 36(A).
30. Therefore, when we say that the Commission ought to have exercised its power to relax under Regulation 54 of 2014 CERC Regulation for relaxation of the target availability factor for Appellant's vallur thermal power plant, it cannot be said that we are substituting our subjective satisfaction with the one gained by the Commission while passing the impugned order. It is clearly a case where the Commission has failed to take note of the reasons due to which the Appellant was experiencing shortfall in coal supply for its coal based thermal power plant at Vallur and to ascertain whether or not was such shortfall the creation of the Appellant itself or attributable to the Appellant."
61. We may note that once a coordinate bench of a court/tribunal has rendered a judgment on certain facts or has settled a question of law, a subsequent bench of equal strength is bound to follow that judgment in a subsequent case involving identical facts and identical issues. Such discipline to be adhered to by the coordinate benches has been reiterated _________________________________________________________________________ Appeal No. 399 of 2019 Page 44 of 46 by the Supreme Court in a catena of judgments, the latest being the judgment in Adani Power Ltd. and Anr. v. Union of India and Ors. pronounced on 05.01.2026. The relevant portion of the said judgment is reproduced hereinbelow: -
"77. The discipline expected of coordinate Benches does not permit such an approach. This Court, in State of Uttar Pradesh v. Ajay Kumar Sharma (2016) 15 SCC 289, has reiterated that once a coordinate Bench of a High Court has settled a question of law, a subsequent Bench of equal strength is bound to follow that view when confronted with the same issue. If the later Bench believes that the earlier view is so manifestly erroneous or inapplicable that it ought not to be followed, the later Bench must refer the matter to a larger Bench for reconsideration. What it cannot do is to sidestep or whittle down the earlier pronouncement by confining it artificially or by treating it as a fact-specific indulgence.
78. The discipline of precedent is not a matter of personal predilection; it is an institutional necessity.
Stare decisis et non quieta movere which means to stand by what is decided and not to disturb what is settled, is a working rule which secures stability, predictability and respect for judicial outcomes. The law cannot change with the change of the Bench."
(Emphasis supplied) _________________________________________________________________________ Appeal No. 399 of 2019 Page 45 of 46
62. Thus, it is not permissible for us in this appeal to sidestep or ignore the earlier pronouncement of this Tribunal in Appeal No.318/2019 (Vallur Judgment) which has been rendered on identical facts and issues. We are bound to follow the findings arrived at therein and the ratio of that judgment.
63. In view of above deliberation, we are unable to sustain the impugned order of the Commission as it has erroneously refused to invoke its power to relax under Regulation 54 of 2014 CERC Regulations despite there being sufficient ground for such invocation. The impugned order is, thus, set aside. We hereby direct the Commission to provide relaxation to the appellant by reducing the figure of NAPAF for its thermal power plants mentioned in Paragraph no.2 of the judgment, for recovery of fixed charges from 85% to 83% for the period from 01.04.2017 to 31.03.2019.
64. The appeal stands allowed to the above extent.
Pronounced in open court on this 13th Day of January, 2026 (Virender Bhat) (Seema Gupta) Judicial Member Technical Member (Electricity) Reportable / Non-Reportable _________________________________________________________________________ Appeal No. 399 of 2019 Page 46 of 46