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Showing contexts for: Dvc in M/S Balasree Metals Pvt.Ltd. vs Union Of India & Ors on 20 March, 2012Matching Fragments
(Annexure3) passed in Tariff Petition no.240 of 2009 submitted by the respondentDVC before the Commission in the year 2009 and, that too, without affording an opportunity of hearing to any of the parties, the writ petitioners or to writ petitioner, who submitted its objection against the Tariff Petition no.240 of 2009 of the DVC before the Commission. All the petitioners claimed that they are beneficiaries of DVC being purchasers of the electricity generated by the DVC and falling in the definition of beneficiaries as given in Regulation 3(6) of the Regulation, 2009 but CERC has prescribed the provisional tariff vide impugned order dated 23rd June, 2011, not only without giving opportunity of hearing to the writ petitioners but has passed the provisional tariff order without assigning any reason and, therefore, the provisional tariff order dated 23rd June, 2011 is in violation of the principle of natural justice as well as a non speaking order.
15. Learned counsel for the Commission has relied upon the judgment of the Hon'ble Supreme Court, delivered in the case of West Bengal Electricity Regulatory Commission Vrs. CESC Ltd., reported in (2002) 8 SCC 715 in support of his argument that Commission has power and authority to regulate the proceeding before the Commission and this has been recognized by the Hon'ble Supreme Court in the above judgment. Therefore, the Commission was competent to frame such Regulation and has rightly framed the Regulation. Learned counsel for the Commission vehemently submitted that the term 'tariff' has not been defined by the Act and Tariff Order as envisaged under Section 62 of the Act would also include 'provisional tariff'. Learned counsel for the Commission also submitted that the provision of subclause(a) of subsection(3) of Section 64 is not under challenge wherein also no provision of personal hearing of the members of the public is there and none of the provisions of the Act of 2003 or Regulation provides for prior hearing of any of the person or even consumer before prescribing provisional tariff. Learned counsel for the Commission relied upon judgment of the Hon'ble Supreme Court, delivered in the case of Union of India Vrs. Tulsiram Patel , reported in (1985) 3 SCC 398, which is a Constitutional Bench judgment which clearly declared that observance of the principle of natural justice can be dispensed with by or under statutory provision. However, according to the learned counsel for the Commission , the Commission by considering the suggestions and objections of tariff application fully observed the principle of natural justice. But, so far as personal hearing is concerned, it is neither provided in the Act, nor it can be given to the public at large, looking to the nature of the function of the commission and order which is to be passed by the Commission of prescribing the tariff. Learned counsel for the Commission further submitted that even under the Central Electricity Regulatory Commission(Conduct of Business) Regulation, 1999 which was framed in exercise of power conferred by Section 55 of the Central Electricity Regulatory Commission Act, 1998, personal hearing was excluded by the Commission, which is clear from the Regulation 52(3) of the Regulation of 1999, which says that unless permitted by the Commission, the person filing objection or comments, shall not necessarily be entitled to participate in the proceedings to make oral submissions and it provided that Commission shall be entitled to take into account the objections and comments filed by the parties to the proceeding and even in Regulation of 2004 i.e., Central Electricity Regulatory Commission(Terms and Conditions of Tariff) Regulation, 2004, there was provision for provisional tariff under Regulation 5(A) and, therefore, concept of prescribing provisional tariff was also statutory in existence with power to Commission to prescribe the provisional tariff on its own motion, obviously without there being application of the parties and in the present case, the DVC submitted application for provisional tariff but it withdrew because of the insertion of sub clause(4) under Regulation 5, which empowers the Commission to consider and pass appropriate provisional tariff order without there being any application and, therefore, the Commission has not committed any illegality in prescribing the provisional tariff at its own, after withdrawal of the application for prescribing provisional tariff by the DVC, which was withdrawn because of the reason of insertion of sub clause(4). Learned counsel for the Commission further submitted that even in the Regulation of 1999 Commission was given power to pass any interim order, which Commission may consider appropriate and which can be passed at any stage of proceeding, as has been provided under Regulation 6(8) of the Regulations, 1999. According to the learned counsel for the Commission, the Commission has power to pass interim order under Section 94(2) of the Act, 2003 and this power is also a suo motu power of the Commission. However, that was a general power and, therefore, the Commission has included the said power in the Regulation of 2009 by the impugned notification. It is also submitted that prescribing of a tariff is also an order, which can be in the form of interim order under Section 79(2). The learned counsel for the Commission also submitted that DVC submitted its tariff application but in consolidated form and, therefore, only the Commission in its order dated 23rd June, 2011 directed the applicant DVC to submit separate applications which is only a direction to make some technical correction in the application, otherwise the facts in relation to all claims, which should have been filed separately, are already in the consolidated application and, therefore, it cannot be said that the application filed by the DVC was not in accordance with the Regulation of 2009.
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.
51. Learned counsel for the petitioners also submitted that DVC itself submitted application for provisional determination of tariff, which was withdrawn by the DVC and in that situation the Commission should not have passed the interim order.
Admittedly, the DVC withdrew the application for provisional tariff because of the insertion of subclause(4) under Regulation 5, which is clear from the order of withdrawal and this Court is of the view that the interim tariff order can be passed by the Commission suo motu and without application of any of the parties. Therefore, in that situation, if the DVC has withdraw its application for determination of provisional tariff , it has not effected the right of the Commission to prescribe any provisional tariff. We also find no force in the submission of the learned counsel for the petitioners that Regulation 5(4) gives unguided, unfettered , unbridled and uncanalized power to the Commission because of the reason that the Commission in the matter of passing interim order is guided by the principles laid down for final determination of tariff. At this juncture, it will be appropriate to mention here that the Commission has not only passed the provisional tariff for DVC but also for number of applicants, including NTPC while invoking the same sub Clause(4) of Regulations 5 and increase the tariff upto 90% in place of to the extent of 70%, as has been done in this case.