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Showing contexts for: prudence check in M/S Praneet Ispat Udyog Pvt. L vs Union Of India & Ors on 20 March, 2012Matching Fragments
11. It is submitted that even if any authority has been given power to pass order, even in administrative side, having any adverse civil consequence, then also the said authority is required to pass speaking order and that order must speak itself, so that the affected person as well as if challenged, the Court may find out the reasons for passing the order from the order itself as mere use of some words picked up from the Statute is not compliance of requirement of statutory provision, as has been sought to be done in the present case, with the help of words used in order dated 23rd June, 2011 wherein the Commission without mentioning any of the reason for passing the order has used the word "in exercise of power under clause (4) of Regulation 5 of 2009 regulations, we have decided to grant provisional tariff to the petitioner for its assets mentioned in para2 above pending determination of the final tariff" and thereafter in next paragraph, used the words 'after carrying out due prudence check, we allow the provisional annual fixed charges for the period 200914 in respect of the generation, transmission, and other assets, as stated overleaf.........' Learned counsel for the petitioners vehemently submitted that the word 'prudence check' has been used in the order dated 23rd June, 2011 without reflecting that , in fact, Commission has even made check before passing the impugned order.
17. In sum and substance, according to the learned counsel for the CERC, the Commission had authorized suo motu powers to pass interim orders and also had power to prescribe provisional tariff earlier in 2004 Regulations and, that too, without there being any applciation of the applicant and the Commission had also power to pass orders, without affording an opportunity of hearing to the concerned parties under specific statutory provisions in Regulations and even under the Electricity Act, 2003 specifically under Section 64(3)(a), the Commission has power to prescribe even final tariff after considering the suggestions and objections of the public without giving an opportunity of hearing to anybody and, therefore, framing of regulation empowering the Commission to prescribe provisional tariff is in consonance with the provisions of the Act of 2003 and does not violate the Constitution in any manner . The power is not arbitrary, even prescribing the tariff , which may be upto 95%. Sofar reasons in the order are concerned, the Commission has clearly mentioned that it has passed the order after prudence check and consideration of the materials on record, which includes all the aspects of the matter, including the objections/suggestions which might have been received by the Commission. Therefore, neither the insertion of clause(4) under Regulation 5 is ultravires, nor it has been enacted transgressing the Act of 2003.
64. It is also submitted that nature of compliance of natural justice varies as per the scheme of the statute under which it is claimed and Statute may even exclude natural justice, if so required for achieving the object of the Statute. There is no straight jacket formula for complying the natural justice. It depends on the facts and circumstance of the case, the nature of enquiry and the rules under which the authority is acting, the subject mater to be dealt with. It is also submitted emphatically that if natural justice is translated to personal hearing in every case then it would lead to chaotic situation and may defeat the object of the statutory provision. Applying this principle in the present facts, it has been submitted that in the instant case, statute requires tariff to be determined within 120 days upon considering objections and suggestions received from the public . Under such scheme, the Statute has excluded personal hearing of objector to avoid a chaotic situation and the same will frustrate the object and the scheme of the statute and in all probability drag the process of determination of the tariffs indefinitely and thereby rendering generating utilities financially unviable . In support of this proposition, learned counsel for the DVC also relied upon the same judgment reported in K.M. Chikkaputtaswamy & Ors. Vrs. State of Andhra Pradesh & Ors. reported in 1985(3) SCC 398 and also relied relied upon the judgment of the Hon'ble Supreme Court delivered in the case of Union of India & anr. Vrs. Jesus Sales Corporation (1996) 4 SCC 69 as well as in the case of Madhya Pradesh Industries Ltd. Vrs. Union of India and Ors. , reported in AIR 1966 S.C. 671. Learned counsel for the DVC also relied upon the judgments of the Hon'ble Supreme Court delivered in the cases of K.L.Tripathi Vrs. State Bank of India & Ors., reported in (1984)1 SCC 43 and also Mohd. Ibrahim Khan & Ors. Vrs. State of Madhya Pradesh & Ors., reported in 1979 (4) SCC 458. Learned counsel for the DVC submitted that one of the petitioner has made a detailed objection to the tariff application and the CERC has considered the same and after due prudence check , as required by Regulation7 of the Tariff Regulation 200914 has granted provisional tariff to the DVC and prudence check is a methodology prescribed in the procedure for determining tariff and Commission has recorded in its order for provisional tariff that after due prudence check, DVC is granted provisional tariff at the rate of 70% of the capital AFC. It is also submitted that petitioner has not pointed out in its petition as to what real prejudice has been caused to the petitioner in not being given hearing in person. It is also submitted that out of all the writ petitioners, who have preferred these writ petitions, except Steel Authority of India Limited , none of the petitioners has filed any objection to the tariff petition of the DV C and, therefore, they are not entitled in law to contest the interim relief that was granted to the DVC by way of provisional tariff. Sofar as SAIL is concerned, the SAIL in its writ petition nowhere stated that its objection was not considered by the Commission in passing provisional tariff order and, therefore, SAIL has also , in fact, could not make any case of prejudice or grievance for not being given an opportunity of hearing in person. It is submitted that even in final determination of the tariff also the consumers have not been even provided by Statute any right to be heard. The counsel for the DVC submitted that every month DVC has to incur expenditure to the tune of Rs.700 Crores , but DVC has been realizing revenue to the tune of only Rs.475 to 500 Crores and as such every month DVC is suffering revenue shortfall of Rs.200 to Rs.225 Crores due to continuation of the previous tariff, which is eroding the financial base of the DVC . In order to meet such shortfall , the DVC had to borrow huge amount of money from the nationalized banks on short term borrowing to the tune of Rupees four thousand one hundred Crores upto 31st July, 2011 and the repayment schedule of such debts has commenced from September, 2011 and DVC is under obligation to repay about Rs.400 Crores per month on a average to the lending banks. It is submitted that , if the DVC is not allowed to recover some revenue under the provisional tariff, DVC shall not be in a position to repay its debts to bank and in such circumstances bank shall not extend further financial assistance to the DVC , which may lead to closure of DVC and that will result into credit lose to the State of Jharkhand and State of West Bengal and Industries set up therein. Learned counsel for the DVC further submitted that this is a fact in present case that inspite of statutory period of 120 days given to the Commission for passing the final tariff order, the tariff order could not be passed because of the none of the fault of anybody but because of the dispute raised and pending in the Courts. Therefore, in that situation, if the Commission has passed the interim order suo motu , it cannot be questioned. It is submitted that there was urgent need of obtaining provisional tariff and, therefore, the DVC tried its best to obtain the interim relief from the Commission by moving application but after insertion of Clause(4) under Regulation 5 , there was no need for the DVC to press the application for interim relief as the Commission got the power to pass appropriate order of prescribing the provisional tariff. It is also submitted that the entire record has been summoned by the Court and that has been perused wherefrom it can be gathered that Commission has considered all the issues and thereafter prescribed the provisional tariff.
47. We have already referred the detailed argument of the learned counsel for the parties and, therefore, we need not to give details of the argument here again.
It appears from the impugned order dated 23 rd June, 2011 that this order is a brief order and we cannot appreciate the order. It was expected of the Commission that in a case where opportunity of hearing is not provided to the effected party then order must be indicating reasons which may be in brief but reasons should have been in the order, so that the person who give suggestion and submits objection against tariff application as well as, including the member of public, may come to know that order has been passed after considering his suggestion and objection and what is reason for passing order and may not feel aggrieved and challenge such order. Only mentioning of the word ' after carrying due prudence check' is not sufficient compliance of the requirement of passing any order by such authority, like CERC. Even where ex parte order is passed, here ex parte is virtually final interim order, then in that situation it was all the more necessary for Commission to give some basic facts for arriving at the conclusion. However, we have called record of the Commission and found that several calculations have been made in that record before passing the impugned order. The gist of those could have been given in the impugned order, which may have satisfied the writ petitioners, which could have avoided unnecessarily litigation.