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Showing contexts for: prudence check in M/S. South West Miniing Limited (Swml) vs Rajasthan Electricty Regulatory ... on 4 February, 2025Matching Fragments
10.18 In response, the petitioner (BLMCL) has submitted that the Respondent desires SWML to furnish documentary evidence of the monthly expenses incurred by it from year 2011-12. The said Information is not available with the petitioner. The petitioner is a company owned 51% by GoR and has no access/means to access the monthly expenses Incurred by the contractor. 10.19 In this regard, the Commission does not accept the arguments of the petitioner that it has no access/means to access the monthly expenses Incurred by the MDO. The Commission observes that the MDO (SWML) was nominated by the petitioner (BLMCL). It is the responsibility of the petitioner to do prudence check of the invoices raised by the MDO before making payments to the MDO. Further, supporting documents and bifurcation of the amount of the invoices is a must while doing the prudence check. In [2025:RJ-JD:7036-DB] (9 of 41) [SAW-742/2023] view of this, in the larger interest of consumer, the Commission is of considered view that prudence check of the Invoices ralsed by the MDO to the petitioner is necessarily required. The Commission directs the petitioner (BLMCL) to obtain the relevant information regarding monthly mining expenses from the MDO for prudence check and submit to the Commission within two weeks. This Information & detalls of monthly mining expenses should be submitted since the beginning of this project fill 31.03.2023 within a fortnight.
10.23 The Commission has gone through the citations referred by counsel of the petitioner BLMCL. These citations are not applicable in favour of petitioner because facts and circumstances of all these citations are altogether different from the facts and circumstances [2025:RJ-JD:7036-DB] (10 of 41) [SAW-742/2023] of the present case of the petitioner. Also, doctrine of election has no relevance at this stage and it is not applicable in this case considering facts and circumstances of the case. 10.24 All the data and details called for from the petitioner and the MDO will be used for prudence check to arrive at the transfer price in a systematic and rational way. These actuals (GCV figures, detalls of expenditure and payments) may also assist prudence check in evaluating the third bid. Hon'ble APTEL has also directed this commission to expedite the matter vide order date 02.12.2022 in IA No. 1961/2022 In Appeal No. 430/2022. In view of above directions of Hon'ble APTEL the whole exercise is being done to obtain relevant data and details from petitioner BLMCL as well as from MDO so that concrete steps may be taken for prudence check of last bidding process conducted by NTPC and to take necessary steps to determine transfer price in expeditious and prudent way."
7. To support the orders passed by it, the RERC filed a preliminary reply in the writ proceeding the relevant portions of which are reproduced as under :-
"2. That essentially, the present writ petition is being preferred challenging the summons/orders issued to the petitioner company to place on record the monthly mining expenses of the petitioner company being a Mining Developer and Operator (MDO) so as to examine the prudence check as the mining expenses incurred is having a significant impact on the overall transfer pricing of lignite and which in turn shall also have the consequential effect upon the final rate of electricity supplied by the generator and as an end result, the burden would lie upon the public at large as it will impact the cost of electricity to be paid by consumers of respective Discoms in the entire state of Rajasthan. In such circumstances, the prudence check of the mining expenses is very much necessary and as such, there is no logical reasoning available with the petitioner company as to why such records cannot be examined by the humble answering respondents while exercising the powers available under Electricity Act, 2003 read with the Tariff Regulations of 2009 and 2014.
12. This Court also observes that the prudence check in question was only for the evaluation of the fair price, and that, information in question was sought by the respondent-RERC from the petitioner for the said purpose, as, if the price is not evaluated properly, then it would adversely affect the interests and rights of the consumers (public) at large, as has also been held by the Hon'ble Apex Court in the aforementioned judgment.
12.1.This Court also observes that it is necessary for the respondent-RERC to determine the transfer fair price on the basis of authentic and reliable documents, so also to ensure transparency in the process of evaluating transfer fair price.