Indian Kanoon - Search engine for Indian Law

9.1 The following submissions have been made by the learned Counsel on behalf of the Appellants.

9.2 that the Central Commission has not accounted for the interest earned on DVC's investments from its Pension and Gratuity either by reducing the annual provision for such Fund by the amount of interest earned or by reducing the Annual Revenue Requirement of DVC. The CERC has mechanically accepted DVC's contention that the income on investments from Pension and Gratuity Fund is used on the welfare activities of the employees.

9.5 That the Central Commission stated that the investments made by the Trust and not DVC is inconsistent with the following footnote to DVC's audited accounts for the FY 2008-09:

"6. Interest on investment and securities for 2008-09 pertaining to PF/PG fund investment has been taken into account on realization basis after considering tax deducted at source."

9.6 That the Central Commission has failed to exercise adequate prudence check in accepting the pension and gratuity liability projected by DVC instead of undertaking a critical examination of the data furnished by the DVC, the actuarial is stated to have subjected the data to sustain co-relation test. The results of this have not been disclosed in the report.

11.2 That as stated by the Appellant, the foot note to the audited accounts of DVC pertaining to the Year 2008-2009 regarding interest earned on investments of securities out of P&G Fund is created to the fund itself and is not flown back to the DVC. The question of its adjustment against the ARR of DVC cannot arise.

12. Our Consideration on this issue.

12.1 The contention of the Petitioner/Appellant is that the Central Commission, while allowing P&G Fund of Rs.169.90 Crore did not consider the interest accrued on the investment of P&G Fund in the approved securities. Further, the Central Commission determined the Tariff without going through the actual number of employees assigned to the power business of DVC and without prudence check on the details of the report submitted by the Actuary.

19.3 That the DVC's contractual right to claim liquidated damages from BHEL was independent of capital cost of the subject project. The amount of liquidated damages payable by BHEL ought to have been reduced from the capital cost approved by DVC. However, by omitting to claim liquidated damages, DVC has extended an undue favour to BHEL at the expense of the consumers.

19.4 That the Central Commission's decision to approve DVC's omission to claim liquidated damages on the ground that DVC's capital cost (Rs. 3.33 crore/ MW) was lower than that of Suratgarh TPS (RS. 3.99 crore/ MW) is not supported by the Tariff Regulations, 2004. There is nothing under the said Regulations which allows a generating company to waive its entitlements to liquidated damages - in a manner prejudicial to consumer interest - merely because its capital cost/ MW is lower than that of an unrelated project.