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As, regards the latter :i.e. electricity purchased from external sources the clause says that the actual increase in the average unit rate of purchase will apply, that is to say, will be the basis.

10. On 4.4.1994 the Board issued circular stating that on final calculation the fuel surcharge for the period 1992-1993 had been determined as 26.14 paise per Kwh. On 5.1.95 the Board issued another circular calculating the fuel surcharge for the period July 1993 ( i.e. after coming into force of the new tariff) to March 1994 to be 25.98 paise per Kwh. I am not referring to the rate of other operational surcharge under clause 16.10.4 which was also notified by the same circular because that has already been struck down. The consumers were billed accordingly. Writ Petitions were filed challenging the rates in CWJC No.2771 of 1995(R) and analogous cases. During the pendency of the said writ petitions the Board proposed certain amendments in clauses 16.10.3, 16.10.3.1 and 17, vide letter no.135 dated 28.12.1995. I shall refer to the salient features of the proposed amendment later. The implementation of the circular dated 5.1.1995 was kept pending vide circular dated 8.2.1995 in the meantime. On 8.3.1995 and 17.4.1995 circulars were issued directing payment @ 15 paise/Kwh from 1.7.1993 to 31.3.1995 instead of 25.98 paise per Kwh as fuel surcharge as stipulated in circular dated 5.1.1995. However, by circular dated 20.9.1995 the said circulars dated 8.3.1995 and 17.4.1995 were withdrawn and the earlier circular dated 5.1.1995 by which fuel surcharge @ 25.98 paise/Kwh had been fixed was restored.

13. At this stage it may be relevant to advert to the Board's letter dated 28.12.95, referred to above, suggesting certain amendments in clauses 16.10.3, 16.10.3.1 and 17. The substance of the proposed amendment was that instead of calculating the increase in the average unit rate of purchase of energy from DVC, UPSEB, OSEB, NTPC, PGCL and any other source with respect to the year 1992-93, as prescribed in clause 16.10.3 the same should be calculated with respect to the year 1991-92, and similarly with respect to the year 1991-92, and similarly in clause 16.10.3.1 the average cost of fuel in respect of energy generated at Board's own generating stations be computed on the base rate of 1991-92 and not 1992-93. In other words, the base year with respect to these two sets of components was sought to be changed from 1992-93 to 1991-92. Clause 17 was also proposed to be amended by that in accordance with the instructions issued by the Government of Bihar to the Board, the increase in the rate of fuel surcharge between January 1992 and June 1993 which came to 20 paise (12 paise as in January 1992 and 32 paise as in June 1993) had been merged in the tariff and thus any increase in the fuel surcharge thereafter only shall be levied after accounting for the increase already merged in the tariff.

33. It is not in dispute that TVNL came into existence in 1996-97 whereas while calculating the electricity 1991-92 is to be treated as the base year. As a matter of fact, as seen above, it was on that ground, namely, that a different base year i.e. 1992-93 was provided for computing the increase in the average unit rate of purchase of electricity from external sources, that the High Court directed the Board to consider amending clause 16.10.3 so as to provide for the same base year i.e. 1991-92 with respect to both the increase in the average cost of generation and increase in the rates of purchase, and accepting the verdict of the High Court the Board amended the last part of clause 16.10.3. Purchase of electricity from TVNL which admittedly came into existence in the year 1996-97, therefore, cannot be treated as component of H3 i.e. increase in the average unit rate of purchase of electricity from "any other source". As a matter of fact, the case of writ petitioners was that the TVNL is nothing but a unit of the Board in disguise of a subsidiary company and, therefore, could not be treated as a component of 113. It may not be necessary to go behind the veil of the separate legal character of the TVNL. The fact that TVNL did not exist in the year 1991-92 and came into existence only in the year 1996-97 is sufficient to justify its deletion as component of H3. Counsel for the Board accepted that if TVNL is to be treated as a source, some mechanism has to be worked out, and the Court has then to see whether it is rational. The Board submitted that if the High Court comes to the conclusion that the supply from TVNL, cannot be included, the consequence will be that the units purchased from TVNL would have to be kept out, which is not the intention underlying levy of fuel surcharge. It is like `escalation' clause, and the additional cost has to be reimbursed. The High Court did not accept the same submissions as it will result in creating a different base year. The relevant clause of the formula, after amendment, reads, "the said increase to be calculated with respect to the year 1991-92"

34. As regards "deemed supply" by the Board to TISCO High Court noticed that under a tripartite agreement between the Board, the DVC and the TISCO, with the consent of the State Government, the electricity is being supplied directly by the DVC to the TISCO but such supply is treated as made-by the Board to the TISCO. It seems to be an admitted position that the tariff rates of the Board are higher than the tariff rates of the DVC. But since legally the TISCO cannot directly but electricity from the DVC it has entered into agreement with the Board to buy electricity directly from DVC but pay the amount at the Board's rates. Though the amount is paid to DVC, such payment is adjusted against the amount due from the Board to it i.e. DVC. As seen above, DVC is one of the external sources, represented by D1. The Board buys the electricity from DVC, amongst others, and pays to it for the same. The increase in the average unit rate of purchase from it is reflected by D3. However, so far as the supply made by DVC to TISCO is concerned, it is treated as a "deemed supply" by the Board. While it may be permissible to charge the TISCO at the rates prescribed by the Board, i.e, at rates higher than the DVC rates, and it may also be permissible to treat sale of such electricity sold by DVC to TISCO as deemed supply/sale by the Board to TISCO. High Court held that two rates of supply/sale cannot be permitted for the purpose of computing D3 in the ordinary course, in the absence of any tripartite agreement referred to above, the Board would have supplied/sold electricity to TISCO and charged at its rates. Such supply would have been made from the electricity either generated by it at its own generating station or purchased from external sources including DVC. Clause 16.10.3.1 provides for computation of the cost of generation at the Board's own generating station; as regards purchase of energy from other sources, the said clause lays down that the actual increase in average unit rate of purchase will apply. If the Board is purchasing electricity from different sources for the purpose of D3, E3, F3 etc. the actual increase in the average unit rate of purchase so far as the particular source is concerned, is to be taken into consideration. DVC has thus to be treated as one source. The source being one there cannot be two rates of purchase or increase in the average unit rate of purchase. It may be mentioned here that NTPC sells electricity generated different power stations, namely, Farakka, Kahalgaon Talchar or Anta and though the increase in the average unit rate is not the same, it charges the Board at a uniform rate. It is an admitted position that though the DVC has revised its tariff from year to year the Board so far has not recognised the revision and has been paying it at the rates applicable in the year 1991-92. In the agenda note dated 26.11.98 it has been clearly mentioned "that during the 1996-97 the DVC rates for the purchase remained unchanged but the rates applicable to deemed supply to TISCO rose upto 13P/kwh. High Court held that the Board cannot treat the sale of electricity by the DVC to the TISCO as a separate class or category for the purpose of computing D3. The computation of D3 to this extent, was held to be not correct.