BEFORE THE GUJARAT ELECTRICITY REGULATORY COMMISSION
GANDHINAGAR
Petition No. 1420 of 2014
And
I.A. No. 7 of 2014.
In the Matter of:
Petition under Section 86 (1) (f) of the Electricity Act, 2003, seeking adjudication
of the dispute between the parties with respect to levy of Cross Subsidy Surcharge
in terms of Section 42 (2) of the Electricity Act, 2003 read with Rule 3 of the
Electricity Rules, 2005.
Petitioner
:
Essar Steel India Limited
27 KM, Surat- Hazira Road,
Surat- 394 270.
Represented by
:
Learned Advocate Shri Saurabh Soparkar with Advocate
Shri Sahil Shah and Shri Ashok Verma
V/s.
Respondent No. 1 :
Gujarat Urja Vikas Nigam Limited
Sardar Patel Vidyut Bhavan, Race Course Circle,
Vadodara- 390 007.
Represented by:
Learned Advocate Shri Anand Ganesan with Shri H.H. Patel
Respondent No. 2 :
Dakshin Gujarat Vij Company Limited
Nana Varachha Road, Kapodara, Surat- 395 006.
Represented by
:
S/Shri B.C. Godhani and C.N. Raval
Applicant No. 1
:
Utility Users’ Welfare Association
Laxmi Ginning Compound,
Opp: Union Co-Op. Bank
Naroda, Ahmedabad – 382330.
Represented by
:
Shri Bharat T. Gohil
27.04.2016
Page 1
Applicant No. 2
:
Laghu Udyog Bharti-Gujarat
307, Ashram Avenue
B/h. Kocharab Ashram,
Near Paldi Char Rasta,
Ellisbrige, Ahmedabad – 380006.
Represented by
:
Nobody was present.
Applicant No. 3
:
Shri Amarsinh Chavda
127, Heritage Bungalow
Opp: Science City,
Ahmedabad – 380060.
Represented by
:
Shri Amarsinh Chavda
CORAM:
Shri P. J. Thakkar, Member
Shri K.M. Shringarpure, Member
Date: 03/05/2016.
DAILY ORDER
1)
The matter was heard on 19.12.2015 on the issue of the impleadment
applications filed by Utility Users’ Welfare Association (UUWA), Laghu
Udhyog Bharti (LUB) and Shri Amarsinh Chavda in the present matter.
2)
The present petition has been filed by the Essar Steel India Limited with a
prayer as under:
(a) To declare that EPMPL Power Plant and its Units are captive generating
plants of ESIL and use of the electricity by ESIL is for captive use;
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(b) To declare that the respondents have no authority to decide the Cross
Subsidy Surcharge;
(c) To quash and set aside the cross subsidy bills raised by DGVCL upon Essar
Steel India Limited in respect of 600 MW (Unit No. 1 of Essar Power MP
Limited);
(d) To declare that the ESIL is exempted from payment of Cross Subsidy
Surcharge in respect of 600 MW (Unit No. 1 of Essar Power MP Limited).
3)
During the proceedings of the aforesaid petition, Commission received
applications from Utility Users’ Welfare Association, Laghu Udhyog Bharti Gujarat and Shri Amarsinh Chavda, requesting the Commission to implead
them as party to the proceedings. The applicants prayed to the Commission to
allow the impleadment applications of the applicants and direct the petitioner
and the respondents to provide a copy of the petition alongwith other
submissions made by them in the petition and also give an opportunity to
make written and oral submissions in the petition.
3.1.
Utility Users’ Welfare Association (UUWA) submitted that it is an Association
of consumers registered vide registration No. F/14442 and its main objectives
are to safeguard the interest of end users in usage of utility services and
making consumers aware about the non-conventional sources of energy like
Solar, Wind, Biomass etc. Laghu Udhyog Bharti - Gujarat submitted that it is
the only all India organization working for the interest of medium and small
scale enterprise. Laghu Udhyog Bharti - Gujarat members are the end users of
electricity in the State of Gujarat and they are participating and representing
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the interest of consumers in various petitions before the Commission. Shri
Amarsinh Chavda submitted that he is a social worker and an RTI activist and
his main objective is to safeguard the interest of end users of electricity
services. The above applicants have made their submissions which are
common in nature.
3.2.
It is submitted that the present petition consists of the subject matter
pertaining to Cross Subsidy Surcharge claimed by GUVNL/DGVCL from the
petitioner which is affecting the tariff of the embedded consumers of the
State. The Cross Subsidy Surcharge if any claimed by GUVNL/DGVCL will pass
through as income and consequent reduction in the tariff determined by the
Commission for all the consumers. Therefore, the decision of the Commission
in the present petition is directly affecting the consumers’ tariff. The benefits
of Cross Subsidy Surcharge recovered from the petitioner will be passed to
the tariff of agricultural, residential consumers etc. and these consumers
would be required to pay less tariff as per the tariff determined by the
Commission. The consumers who are receiving the benefit of cross subsidy
are the affected party in this petition, and hence, it is necessary to hear such
consumers/stakeholders as per Section 64 of Electricity Act, 2003. The
applicant relied upon the Hon’ble APTEL’s judgement dated 16.04.2015 in
Appeal Nos. 258 of 2013 and 24 of 2014 filed by the Indian Wind Energy
Association in which the Hon’ble tribunal upheld that the Commission has
acted against its own regulations.
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3.3.
The applicants submitted that on perusal of the oral orders passed by the
Commission, it appears that M/s. Essar Steel India Limited submitted
requisite documents to establish that they are purchasing power from their
captive generating plant and are exempted from the payment of Cross Subsidy
Surcharge. They are not paying Cross Subsidy Surcharge to DGVCL/GUVNL
amounting to more than Rs. 100 Crores. GUVNL/DGVCL are also not pressing
for their claims since last one and half years which indicates that the
respondents are in collusion with M/s. Essar Steel India Limited. They are
also not able to disconnect the supply of M/s. Essar Steel India Limited though
they are defaulter in payment of Cross Subsidy Surcharge. If the decision is
taken by the Commission for refund of Cross Subsidy Surcharge without
hearing the consumers, the respondents are not affected in any manner since
the Cross Subsidy Surcharge paid by M/s. Essar Steel India Limited is built
into the tariff of the other consumers of the licensees. Therefore, it is
necessary to hear the consumers, otherwise any decision without involving
the applicants will be in violation of the principle of Natural Justice and
Section 94 (3) of the Electricity Act, 2003 empowers the Commission to
authorize any person as deemed fit to represent the interest of the consumers
in the proceedings before it.
3.4.
The Cross Subsidy Surcharge, if not paid by the petitioner will affect the
revenue of the DISCOMs and consequently the tariff of the embedded
consumers as the revenue gap arising on account of non-payment by the
petitioner will be recouped from the consumers through tariff determination
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petition. Thus, any judgement given by the Commission will affect the
ultimate consumers in terms of either benefit or loss.
3.5.
The applicants referred Section 61 of the Electricity Act, 2003 and submitted
that it is the statutory duty of the Commission to protect the interest of the
consumers.
3.6.
The applicants relied upon the judgement of the Hon’ble Supreme Court of
India, AIR 2001, SC, 250 in Food Corporation of India V/s. State and AIR 2003
SC, 2041 in Canara Bank V/s. Devashi Das and submitted that the Hon’ble
Supreme Court of India had observed that one of the cardinal rules of fair play
is that the persons likely to face adverse consequences of administrative or
quasi-judicial decisions have to be given notice and adequate opportunity of
hearing.
3.7.
It is further submitted by the applicant UUWA that Regulation 12 (A) of GERC
(Conduct of Business) Regulations, 2004 empowers the Commission to permit
any association or other bodies corporate or any group of consumers to
participate in any proceedings before the Commission. Further, Regulation 40
of GERC (Conduct of Business) Regulations, 2004 contemplates that if the
Commission admits the petition, it may give such orders and directions, as
may be deemed necessary, for service of notices to the respondent and other
affected or interested parties; for the filing of reply in opposition or in support
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of the petition in such form as the Commission may direct and for the petition
to be placed for hearing before the Commission.
3.8.
The applicants referred Section 86 (3) of the Electricity Act, 2003 and
submitted that while discharging the functions, the Commission shall ensure
transparency. It is further submitted that when the consumers are affected by
outcome of the order in the petition in question, the affected person should be
provided an opportunity to put forward his views before the Commission,
otherwise it is the violation of the principle of natural justice.
3.9.
The applicants also relied upon the judgement dated 25.04.2014 in Appeal No.
24 of 2013 passed by the Hon’ble APTEL and stated that the Commission is
mandated to invite comments/suggestions from the stakeholders while
monitoring the RPO compliance by the DISCOMs.
3.10. The applicants also relied upon the Commission’s order dated 31.08.2010 in
the Petition No. 1000 of 2010 in which the Commission decided to implead
the consumer organization as well as consumers as party to the petition. The
said petition was filed by M/s. Adani Power Limited for termination of PPA
which was dismissed by the Commission.
3.11. The applicants further relied upon the judgement passed by the Hon’ble
APTEL in Appeal Nos. 187 of 2011 and 06 of 2012 and submitted that it was
necessary to hold public hearing and since no public hearing was held in this
case, we feel that the whole proceedings are vitiated on this ground only.
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3.12. The applicants also submitted that CERC has in Case No. 155/MP/2013, in
case of Adani Power Limited V/s. GUVNL and Case No. 159/MP/2012 in case
of Coastal Power Gujarat Limited V/s. GUVNL allowed Prayas Energy Group as
intervener and impleaded them as a party under Section 86 (1) (f) of the
Electricity Act, 2003.
3.13. The applicants also submitted that the Hon’ble APTEL has allowed and
impleaded Energy Watch Dog as a party to the appeal filed against the order
of CERC in case of Adani Power Limited V/s. GUVNL and Coastal Gujarat
Power Limited V/s. GUVNL which were disputes under Section 86 (1) (f) of
the Electricity Act, 2003.
3.14. It is further submitted that the Commission has also allowed and impleaded
seven applicants in Petition No. 1389 of 2014 in case of Essar Power Gujarat
Limited V/s. GUVNL for the disputes under Section 86 (1) (f) of the Electricity
Act, 2003.
3.15. Based on the above submissions, the applicants submitted that the
Commission may implead them as a party to the petition and give an
opportunity of hearing.
4)
The petitioner Essar Steel India Limited, filed its reply and submitted that the
impleadment applications filed by the above applicants at this belated stage is
an attempt to delay and derail the adjudication of the present proceedings.
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4.1.
The applicants failed to demonstrate that any legal injury or legal harm would
be caused to consumers which warrants their impleadment in the present
petition. The applicants have no locus standi, in the present matter and their
presence is not necessary for effective adjudication of the present dispute.
4.2.
The petitioner has sought exemption from the payment of Cross Subsidy
Surcharge for captive use of 600 MW Unit No. 1 of EPMPL. Since no end
consumer whose interest is alleged to be sought to be protected is privy to the
contract with either the petitioner or the respondents, there is no occasion for
any consumer or any other consumers’ associations to intervene in the
matter.
4.3.
The present petition seeks adjudication of disputes between petitioner and
respondents qua wrongful levy of Cross Subsidy Surcharge by the
respondents and it is not a Public Interest Litigation where the rule of locus
Standi will be relaxed. In support of his arguments, the petitioner relied upon
the judgment of the Hon’ble Supreme Court of India in case of Indian Banks
Association, Bombay and others V/s. Devika Consultancy Services & Others,
reported in (2004) 11 SCC 1.
4.4.
The Electricity Act, 2003 does not envisage filing of Public Interest Litigation
(PIL) for adjudication of disputes. The Association has not produced any
evidence or material to show that they are the consumers of distribution
licensees in the State of Gujarat and are considered as person aggrieved and
therefore cannot be joined as a party to the present petition.
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4.5.
There is no iota of evidence on record that the applicants are necessary
parties or an affected party and as such under any circumstances, the
applicants should not be impleaded as a party to the present petition.
5)
The Commission heard the petitioner, respondents DGVCL & GUVNL and the
above three applicants on 19.12.2015.
6)
Shri Bharatkumar Gohil, on behalf of the applicant UUWA, submitted that the
appropriate Electricity Regulatory Commission is bound to act as per the
provisions of Electricity Act, 2003. The preamble of Electricity Act, 2003
contemplates the protection of the consumers’ interest by the Electricity
Regulatory Commissions and the Appellate Tribunal. Section 94 contemplates
that the appropriate Commission may authorize any person, as it deems fit, to
represent the interest of the consumers in the proceedings before it.
6.1. He submitted that various provisions of GERC (Conduct of Business)
Regulations, 2004 empowered the Commission to join the persons as a
necessary party though they are not a party to the petition filed before the
Commission if the orders and directions given by the Commission in the
outcome of the case is going to affect such persons.
6.2. In the present case, the issue involved is Cross Subsidy Surcharge as to
whether payable by the petitioners or not and if it is payable, then what is
the rate and for which period it is required to be paid etc. The Cross
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Subsidy Surcharge is an element of tariff/Aggregate Revenue Requirement of
Distribution Licensees determined by the Commission on annual basis
as part of tariff determination carried out under Sections 61,62, 64 and 86
(1) (a) of the Electricity Act, 2003. The amount of Cross Subsidy Surcharge is
reflected in ARR of the distribution licensees which ultimately is reflected in
the tariff of different categories of consumers.
6.3. The petitioners, who are Open Access Consumers and CPP and the
respondents who are licensees seem to be in collusion and if the
respondents do not defend properly, they are not in loss because they will
pass the burden of Cross Subsidy Surcharge payable by the petitioner on to
the consumers. Therefore, the consumers are the most affected persons and
are required to be joined in the present petition as a party.
6.4. The Cross Subsidy Surcharge is determined by the Commission based
on the formula specified in the Tariff Policy by Government of India. The
Cross Subsidy Surcharge is determined as a part of tariff determination and
ARR on annual basis by the Commission and any change in Cross Subsidy
Surcharge amount is directly affecting the tariff payable by the consumers
as determined by the Commission from time to time.
6.5. Any variation in Cross Subsidy Surcharge is not affecting the guaranteed
return on equity provided in the tariff regulations notified by the
Commission. Variation in Cross Subsidy Surcharge amount payable by the
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petitioner is directly affecting the tariff of different categories of
consumers.
6.6. The tariff determination being done by the Commission as mandated in
Sections 61,62 and 64 and 86 (1) (a) is a statutory function and the
consumers are required to be heard in deciding such elements of tariff.
Therefore, consumers and consumers’ association like interveners are a
proper and necessary party in the present petition.
6.7. He further submitted that Learned Advocate of the respondents Shri Anand
Ganesan and representatives of DISCOMs during hearing admitted before
the Commission that the petitioner is procuring power through open access
for which he is liable to pay Cross Subsidy Surcharge amounting to about Rs.
165 Crores and an amount of Rs. 42 Crores Cross Subsidy Surcharge for
power procured from Essar Mahan Limited. DGVCL/GUVNL disputed that
Essar Mahan Limited is not a Captive Generating Plant and the energy
purchased from Mahan by Essar Steel India Limited (ESIL) cannot be
considered as captive consumption and therefore the petitioner ESIL is
liable to pay Cross Subsidy Surcharge. The respondents further submitted that
the petitioner (ESIL) is not paying the Cross Subsidy Surcharge though they
agreed to pay before CERC in Order 245/MP/2012.
6.8. It is further submitted that UUWA is surprised as to how the petitioner
ESIL is not to be considered as a consumer of DGVCL, when they are
situated in the supply area of DGVCL. Moreover, there is no provision in the
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Electricity Act, 2003, which contemplates that the consumer who receives
power from CTU cannot be considered as a consumer of the distribution
licensee in whose supply area it is situated. The consumers are eligible to
receive power either from distribution licensees or generating company or
from its own captive generating plant and/or from traders. The CTU has
neither any role for supply of power nor it is empowered to supply power to
the consumers. CTU is only a facilitator to the consumers, distribution
licensees, traders and generating companies for the transmission
network created by it. Their role is to recover transmission charges, Cross
Subsidy Surcharge, if any, payable by the open access consumer and provide
the same to the distribution licensees. The Applicant UUWA feels that
the proceedings in the Petition No. 245/MP/2012 filed by the
petitioner ESIL was fully supported by the respondents GUVNL/DGVCL as
well as STU and SLDC and other involved entities by allowing petitioner ESIL
to connect with CTU network by disconnecting from the existing connection
of STU and go away from control area of SLDC Gujarat to WRLDC control area
which is totally against the provisions of Electricity Act, 2003, and prevailing
Grid Code notified by CERC & GERC at that time.
6.9. CERC is not having any jurisdiction to pass such order and to decide the
prayer of the petitioner ESIL. However, it seems that due to the support of
the respondents DGVCL/GUVNL and others, such Order in Petition No.
245/MP/2012 was passed by the CERC in which the affected consumers
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were not given any opportunity to represent before CERC because
consumers are not informed about such proceedings.
6.10. The effect of the outcome of the Order of CERC in the petition
No.245/MP/2012 is that, the consumers who are situated in the licensee
supply area of DGVCL and other distribution licensees are at present
paying additional surcharge for the energy purchased under Open Access
while the petitioner ESIL who is situated in licensee supply area of DGVCL
is not paying additional surcharge which affects the ARR and tariff of
DGVCL's embedded consumers.
6.11. It is also a discriminatory treatment given to the consumers by the
distribution licensees which is totally against the Article 14 of
Constitution of India. The aforesaid facts occurred only after the Order of
C E R C w h ic h h a s not be e n ch a lle nge d by t h e re spond e nt s
GUVNL/DGVCL for the best reasons known to them. Payment or nonpayment of Cross Subsidy Surcharge and additional surcharge is not going to
affect the respondents as they are protected under the Act and their
revenue is also protected up to 14 % on equity deployed by them.
Therefore, the result of non-payment of Cross Subsidy Surcharge and
additional surcharge is directly affecting the tariff payable by the other
categories of consumers. Therefore, the consumers are the most affected
persons and proper and necessary party in the proceedings before the
Commission.
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6.12. The petitioner-ESIL is not paying Cross Subsidy Surcharge payable by them
since 2013. The respondents are also not recovering Cross Subsidy
Surcharge though it is not only due but overdue and also there is no stay
of GERC or any other authority preventing DGVCL/GUVNL to do so since
06/09/2014.
6.13. It is also a matter of surprise that after filing the present petition, the
petitioner has also approached CERC as per their submission on the same
subject matter. It is not permissible under the law to approach two forums on
the same subject matter and the respondents are keeping quiet and not
objecting it. Such conduct of petitioner ESIL and respondents concludes that
they are in collusion with each other because any judgment in the present
petition is not affecting either parties except consumers. Therefore,
consumers and their organization is a proper and necessary party to be joined
in the proceedings of the present petition.
6.14. The contention of the Learned Advocate of the petitioners that the dispute is
pertaining to Section 86(1)(f) of Electricity Act, 2003 as the dispute is
between two parties is not correct, because Section 86(1)(f) contemplates
the dispute between generating company and licensees. The petitioner
ESIL is neither a generating company nor a licensee and dispute is not
under Section 86(1)(f). The dispute is pertaining to Cross Subsidy
Surcharge levied by the respondent licensees. The Cross Subsidy
Surcharge
27.04.2016
is
an
element
of
tariff
determined
through
tariff
Page 15
determination under Sections 61,62 and 64 read with Section 86(1)(a) and
Section 42 of Electricity Act, 2003. Moreover, the determination of CrossSubsidy Surcharge is only in the jurisdiction of SERC and not in CERC because
Cross Subsidy Surcharge is a part and parcel of the tariff applicable to the
different categories of the consumers of distribution licensees. CERC is
neither determining the tariff of distribution licensees nor consumers’
tariff, nor any provision of distribution licensees and no regulatory powers
are vested in CERC to regulate the functions of the distribution licensees
and related issues under Section 79 of Electricity Act, 2003. CERC also
has no jurisdiction to decide the issue of Cross Subsidy Surcharge and
related issues. Therefore, only and only GERC has jurisdiction to decide the
issue pertaining to tariff, its applicability and consumers and their
Association are required to be heard in such cases and opportunity of
hearing is required to be given to such consumers and their group for the
protection of consumers' interest.
6.15. It is also submitted that the contention of Advocate for the petitioner that
Income Tax Act does not provide such intervention by the consumers/persons
before any legal forum under Income Tax Act, 1961, is baseless and misguiding
the Commission because it is a personal assessment under the Income Tax
Act, 1961 and there is no provision of consumer’s participation in the
Income Tax Act, 1961. The aforesaid Act does not have a word like
“consumer” in its provision or in definition or in any other section of the
Act. Income Tax Act is Tax statute which is applicable to individual person or
27.04.2016
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companies etc. The provisions of refund and penalty is also applied to
individual person and companies. By virtue of judgment by Authority in
income tax cases or in Customs & Excise cases, the difference due to reduction
or increase in the assessed value is not affecting to other tax payers or
citizens because the tax rates and revenue are envisaged by Government of
India under Income Tax Act on annual basis in the budget and accordingly
expenditure is also incurred by it. Electricity Act, 2003 is a special Act
enacted by the Parliament which is a self-contained code having
provisions applicable to the licensees, generating companies, SERC, CERC,
CEA, FOR, APTEL and also the consumers. The Electricity Act, 2003 has
the definition of consumers, it also contemplates the protection of
consumers' interest, mandates participation of consumers in the matters
affecting payable tariff, framing of regulations etc. It also provides that
if the provisions of this Act are in conflict with provisions of other Act except
Atomic, Railway, Post & Telegraph, and Consumer Protection Act, the
provisions of Electricity Act, 2003 will prevail. Therefore, the plea and
judgment relied upon by the petitioners’ advocate on the above subject are
liable to be rejected as it is not applicable in the present case.
6.16. The petitioners’ Advocate also relied on the judgment of Grid Corporation of
Orissa Limited V/s. Gajendra Haldia & Others, (2008) 13 SCC 414 w h i c h i s
p e r t a i ni n g t o d i sp u t e s u nd e r S e c t i o n 52,65,66,79(1)(g), 111,120,
142, Rule 9 of Intra-State trading of electricity. The above provisions
are not related to the tariff and its elements or ARR of distribution licensees,
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which is to be paid by the consumers. Moreover, the provisions are not
applicable to the consumers. The respondent Shri Gajendra Haldea is also not
a consumer of Grid Corporation of Orissa. The subject matter of dispute is
pertaining to transaction of electricity carried out by traders and applicable
trading margin thereon which is also not related to the consumers. Therefore,
the decision of Supreme Court is not supporting the contention of the
petitioners.
6.17. It is submitted that the judgment relied upon by the petitioner in
Appeal Nos. 106 & 107 of 2009 dated 31/03/2010 of the Hon’ble APTEL
is pertaining to subject matter of procurement of power by the distribution
licensees under competitive bidding on cost plus basis either under Section
63 or under Section 62 of the Electricity Act, 2003. The subject matter is
neither related to determination of Cross Subsidy Surcharge nor tariff. The
issue is whether distribution licensees are mandated to procure power
under competitive bidding or not which is completely different and distinct
from the subject matter of the present petition.
6.18. The judgment/Order dated 29.03.2014 in Petition No. 1296/2014 of the
Commission is silent on affected and necessary party required to be
impleaded. The said judgment says that it is not necessary to give personal
hearing to the person concerned by the quasi-judicial authority and it says
the principle of natural justice is not violated if an opportunity of hearing is
not provided. It is to mention that UUWA has also filed a Review petition in
this regard before the GERC as the judgment in the main petition
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1296/2014 and Review petition of UUWA being Petition No. 1432/2015,
was pronounced 9 months after hearing was concluded.
6.19. The intervener in support of above arguments relied upon the judgment
dated 18th December 2015 of the Hon’ble APTEL in Appeal Nos. 188 of
2014 to 194 of 2014 in the case of High Tech Industries & Others V/s.
Himachal Pradesh Regulatory Commission, which is very eye opening for the
State Regulatory Commissions who violate the principle of natural justice and
also the provisions of Act and Regulations made thereunder for
participation and hearing of the consumers.
6.20. It is further submitted that the assets of licensees are totally created by
the consumers' money/fund as the interest on loan, RoE, Depreciation,
O&M expenditure and all other expenditure for creation of assets,
for maintenance of assets etc. are borne by the consumers and therefore,
the assets belong to the consumers. The licensees are only the trustee of the
assets whose basic duty is to recover the charges determined by
the
Commission when such assets are used by anybody. In such
circumstances if the consumers being owners of the assets and when their
interest is being victimized, they must be heard in the proceedings to
meet the end of justice.
6.21. It submitted that it is often experienced that the workers/line man working on
the transmission network are electrocuted because of the parallel connectivity
of CPPs with the grid. Staff/workers normally ensure that the power is switched
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off from their transmitting units’ sub-stations and there is no synchronism
between CPP and GETCO/Discoms to avoid such circumstances to take place.
In such case, the compensation paid by GETCO/DISCOMs is passed on to
consumers through tariff.
6.22. Based on above, the intervener requested the Commission to allow the
consumers and its organization to intervene in the present petition, and the
petitioners/respondents may be directed to provide copies of the
petition and subsequent submissions to the interveners.
7)
Shri Amarsinh Chavda submitted that he is a consumer of UGVCL, a State
owned DISCOM and tariff paid by him consists of Cross Subsidy Surcharge
element. The present petition filed by the petitioner for declaring that the
petitioner is not liable to pay Cross Subsidy Surcharge is illegal and not
tenable. The Commission determines the tariff and ARR of the distribution
licensees. The order passed by the Commission consists of Cross Subsidy
Surcharge to be collected by the licensees and such orders are passed after
hearing the consumers.
7.1.
He further submitted that the subject matter of the petition is in respect of
Cross Subsidy Surcharge as to whether payable by the petitioners or not, and
in such matter if the consumers are not heard by the Commission and the
distribution licensees and the petitioner agreed that the Cross Subsidy
Surcharge is not payable by the petitioner, in that case, the burden due to loss
of Cross Subsidy Surcharge is passed on to the other consumers by the
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distribution licensees. Thus, the distribution licensees are not affected in any
manner. It is, therefore, necessary to hear the consumers in the present
petition because the consumers are directly affected persons. In fact, the
Commission should call for comments/suggestions from all the stakeholders.
7.2.
He further submitted that the Commission had earlier joined him as a party in
Petition No. 1000 of 2010 in which the issue was termination of PPA executed
between Adani Power Limited and GUVNL and the petition was rejected by
the Commission. He is also a party to the appeal against the Commission’s
order in above petition before the Hon’ble APTEL. He is also a party before
the Hon’ble Supreme Court in which the judgement of the Hon’ble APTEL is
challenged by Adani Power Limited upholding the judgement passed by the
Commission. Therefore, the Commission may implead him as a party to the
present petition.
7.3.
He submitted that by impleading the applicants as a party, the petitioner or
the respondents are not affected in any manner. Moreover, the respondents
have not objected to the impleadment applications filed by the applicants.
Therefore, the Commission may implead him as a party to the present
petition.
8)
Learned Advocate Shri Saurabh Soparkar, on behalf of the petitioner,
reiterated the facts stated in para 4 above. He contended that the applicants
have no locus standi in the present petition. The petition is not a public
interest litigation in which the consumers need to be heard.
27.04.2016
Page 21
8.1.
He submitted that the dispute in the present petition is under Section 86 (1)
(f) of the Act between the petitioner and the respondent and the subject
matter is whether Cross Subsidy Surcharge is payable by the petitioner or not
as per Section 42 (2) of the Electricity Act, 2003. The dispute is between two
parties in which it is not permissible to hear a third party who is not a party to
the present petition. If the matter is referred to the arbitration, in that case
also the applicants are not permitted to participate in the proceedings.
8.2.
He submitted that in case of dispute between an individual person and
Income Tax authorities pertaining to his tax assessment, the third person, i.e.
general public is not permitted to participate in the proceedings before the
Income Tax authorities or appellate authorities as per the Income Tax Act,
1961. Similarly, in case of dispute between the tenant of a house and the
landlord pertaining to the rent payable by the tenant, no third person is
impleaded as a party to the proceedings.
8.3.
He referred Order I of CPC, 1908 and submitted that the applicants are
neither a necessary nor a proper party in the present petition.
8.4.
He further submitted that under the Electricity Act, 2003 the Commission has
a dual role i.e. as a regulator and as an arbitrator. In the tariff determination
proceedings, the Commission acts as a regulator and such proceedings
necessarily involve hearing of the consumers, whereas in case of dispute
between a licensee and a generator, the Commission acts as an arbitrator and
as stated earlier in any arbitration proceedings no third party is involved.
27.04.2016
Page 22
Dispute has to be settled between the two parties to the dispute. Thus, in the
present petition, the role of the Commission is that of an adjudicator and not a
regulator.
8.5.
He further submitted that the petitioner is a regional entity and connected at
220 kV level with CTU. Therefore, the petitioner is not liable to pay the Cross
Subsidy Surcharge under Section 42 (2) of the Act, 2003.
8.6.
In view of the above, he submitted that the impleadment application of the
applicants deserves to be rejected.
9)
Learned Advocate Shri Anand Ganesan, on behalf of the respondents
submitted that they have no objection, if the applicants are enjoined as a party
to the petition. He referred Section 61 (d) of the Electricity Act, 2003 and
submitted that it is necessary to safeguard the consumer’s interest while
recovering the cost of electricity from the consumers. He further submitted
that under Section 94 (3) of the Act, the Commission is empowered to
authorize any person, as it deems fit, to represent the interest of the
consumers.
9.1.
He further submitted that while determining the tariff of the licensee under
Section 62 read with Section 64 and 86 (1) (a) of the Act, the consumers are
required to be heard. The preamble of the Act also provides for protection of
the consumer’s interest. The issue involved in the present petition is
pertaining to Cross Subsidy Surcharge payable by the petitioner which is
27.04.2016
Page 23
decided as a part of tariff determination process of the Commission and
reflected in the ARR of the distribution licensee and the tariff payable by the
consumers. If the Commission decides that the Cross Subsidy Surcharge is
payable or not payable by the petitioner, its direct effect is passed on in the
ARR of the distribution licensees and tariff of the consumers. Therefore, the
consumers are directly affected persons in the present case. The respondents
are revenue neutral. It will not affect in any manner the revenue of the
respondent decided by the Commission as per the normative parameters of
tariff. He submitted a statement showing that the petitioner is liable to pay
Cross Subsidy Surcharge amounting to Rs. 3,09,99,27,800/- for the period
from June, 2013 to November, 2015 for the power procured by the petitioner.
9.2.
He submitted that the petitioner is liable to pay Cross Subsidy Surcharge
amounting to Rs. 43,14,24,972/- for power purchased from EPMPL claimed to
be a Captive Generating Plant of the petitioner, which is disputed by the
respondents. The balance amount of Rs. 2,66,85,02,828/- payable by the
respondents as Cross Subsidy Surcharge is towards power purchased from
open market other than EPMPL, which is not under dispute between the
parties. The petitioner has paid Rs. 1,00,91,11,336/- during the above period
and Rs. 2,09,08,16,464/- towards Cross Subsidy Surcharge payable by the
petitioner is still not paid by the petitioner.
9.3.
He further submitted that the respondents have approached WRLDC for
cancellation of the Open Access granted to the petitioner as Cross Subsidy
Surcharge payable by the petitioner is not being paid to the respondents.
27.04.2016
Page 24
However, WRLDC denied to cancel the Open Access on the ground that they
have no authority for the same.
9.4.
He further submitted that the petitioner had agreed and undertaken before
CERC that the petitioner will pay Cross Subsidy Surcharge determined by the
Commission; however, the petitioner is not paying the same. CERC has
recorded in its order dated 08.06.2013 in Petition No. 245/MP/2012, the
issue of Cross Subsidy Surcharge, if any, arising between the parties, will be
decided by the State Commission (GERC). Based on the above, he submitted
that the Commission may implead the applicants as a party to the present
petition and that the respondents have no objections to such impleadment.
10) We have carefully considered the submissions made by the parties. The issue
emerged for the decision of the Commission is whether the applicants, viz, (i)
Utility Users’ Welfare Association (UUWA), (ii) Laghu Udhyog Bharti – Gujarat
(LUB), and (iii) Shri Amarsinh Chavda be impleaded in the present petition or
not.
10.1. The applicants have submitted that they are either consumer organization or
consumers of the distribution licensees of the Gujarat. The subject matter of
the present petition relates to the levy of Cross Subsidy Surcharge whether
payable by the petitioner Essar Steel India Limited (ESIL) or not to
GUVNL/DGVCL. The result or final decision in the present petition does not
affect in any manner the respondents as the Cross Subsidy Surcharge amount
is a pass through in the consumers’ tariff while it will directly affect the
27.04.2016
Page 25
consumers of the distribution licensees. The applicants have also alleged that
the petitioner and the respondents are in collusion with each other in the
subject matter of the petition.
10.2. Per contra the petitioner contended that (i) the applicants are not the
consumers of the distribution licensee, (ii) the applicants have no locus
standi in the present petition, (iii) the present petition is pertaining to
adjudication of a dispute between two parties and it cannot be qualified as a
Public Interest Litigation, (iv) the Electricity Act, 2003 does not contemplate
the proceedings under Section 86 (1) (f) as a Public Interest Litigation, (v)
the applicants are not an aggrieved party in the subject matter and they are
not a person who suffered legal grievances or legal injury or have been
unjustly deprived and denied of their rights, (vi) the applications are also
filed at a belated stage to delay the present proceedings, (vii) the Commission
has the role of an Adjudicator and a Regulator and while performing its
functions as an adjudicator the Commission ought to decide the dispute
between two parties by following the adjudication process and in performing
the functions as a regulator, it carries out the functions of regulatory work of
tariff determination etc. In the present case, the role of the Commission is
that of an adjudicator and not as a regulator. Therefore, the intervention of
third party like the applicants is not permissible, (viii) the petitioner is a
regional entity and not connected with 220 kv STU network, and has prayed
for exemption from the payment of cross-subsidy surcharge for captive use
of 600 MW (Unit No. 1) of EPMPL, (ix) the dispute between the parties is a
27.04.2016
Page 26
Private dispute under Section 86 (1) (f) of the Electricity Act, 2003.
Therefore, the applicants should not be impleaded and their applications
deserve to be dismissed.
10.3. The petitioner has relied upon the following judgements/orders in support of
its petition:
(i)
Judgement dated 13.08.2008 in Civil Appeal Nos. 5722/2006,
185/2007, 399/2007 and 399/2007 with SLP (C) No. 11629 of 2007,
of the Hon’ble Supreme Court of India in the case of Grid Corporation
of Orissa Limited V/s. Gajendra Haldia & Others, (2008) 13 SCC 414;
(ii)
The judgement dated 16.04.2004 of the Hon’ble Supreme Court of
India in Civil Appeal Nos. 4655/2000 and 5218/200 in the case of
Indian Banks Association, Bombay & Others V/s. Devika Consultancy
Services & Others, (2004) 11 SCC 1;
(iii)
Judgement dated 31.03.2010 of the Hon’ble APTEL in Appeal Nos.
106/2009 and 107/2009, in the case of BSES Rajdhani Power Limited
V/s. Delhi Electricity Regulatory Commission & Others and BSES
Yamuna Power Limited V/s. Delhi Electricity Regulatory Commission
& Others, (2010) ELR (APTEL) 404;
(iv)
Order dated 04.08.2015 in Petition No. 1296 of 2013 passed by the
Commission.
10.4. We note that the Utility Users’ Welfare Association (UUWA) and Laghu
Udhyog Bharti have filed an application as an intervener on the ground that
they are consumers’ associations and filed the application to protect the
27.04.2016
Page 27
rights and interest of their members. Shri Amarsinh Chavda has submitted
that he is an RTI activist and has filed an application to protect the interest of
the consumers. He further submitted that he is a consumer of UGVCL which is
a distribution licensee formed on unbundling of erstwhile GEB. It is
undisputed that Laghu Udhyog Bharti and UUWA are the organizations
representing on behalf of their members, who are the consumers of the
distribution licensees. Therefore, the contention of the petitioner that the
applicants are not a consumer or representative of consumers is not correct
in case of Laghu Udhyog Bharti and UUWA. While in case of Shri Amarsinh
Chavda, he stated that he is a consumer of UGVCL but there is no evidence on
record which establishes that he is a consumer of the distribution licensees.
However, he has represented that he desires to be impleaded in the matter to
protect the consumer’s interest.
10.5. The issue involved in the present petition is as to whether the petitioner is
liable to pay the Cross Subsidy Surcharge for the energy which it received
from EPMPL, 600 MW (Unit – 1) or not. The issue also emerged in the present
petition as to whether EPMPL is a CGP of the petitioner or not, and if it is CGP,
then in such case for the energy received and consumed by the petitioner,
whether the petitioner is liable to pay the Cross Subsidy Surcharge or not?
Whether the said energy is received by the petitioner from its Captive
Generating Plant or not or whether Unit No. 1 of EPMPL 600 MW is a Captive
Generating Plant or not. Thus, the necessary issue to be decided by the
Commission is the status of EPMPL Unit – 1 and whether the petitioner is
27.04.2016
Page 28
liable to pay the Cross Subsidy Surcharge for energy received from sources
other than DGVCL.
10.6. Prior to deciding the above issue, it is necessary to refer the decision of CERC
in its Order dated 08.06.2013 in Petition No. 245/MP/2012 which reads
under:
“…………………………….
27. It is pertinent to mention that as per Gujarat Electricity
Regulatory Commission (Terms and Conditions of Intra-State Open
Access) Regulations, 2011, long term access is allowed to a
consumer to the inter-State transmission system. Regulation 13 of
the said regulations is extracted as under:
"13. Procedure for Long-Term Access
(1) Involving inter-State transmission system:
Notwithstanding anything contained in clauses (2) and (3)
herein below, procedure for inter-State long-term Access
shall be as per Central Electricity Regulatory Commission
(Grant of Connectivity, Long-term Access and Medium-term
Open Access in inter-State Transmission and related
matters) Regulations, 2009 or its statutory re-enactments
as amended from time to time:
Provided that in respect of a consumer connected to a
distribution system seeking Inter- State long-term access,
the SLDC, before giving its consent to the CTU as
required under the Central Commission’s Regulations, shall
require the consumer to submit the consent of the
distribution licensee concerned."
27.04.2016
Page 29
Thus the GERC Regulations permits a consumer to seek long term
access to the ISTS, subject to the consent of Gujarat SLDC and the
distribution company concerned, in this case DGVCL. Connectivity
has been provided by CTU to ESIL after following the due process and
Gujarat SLDC and DGVCL have given their consent. Although ESIL is
located physically in DGVCL's area, after disconnection from
Gujarat Transmission system, the status of ESIL may not remain
strictly as a consumer of DGVCL as its physical asset would not be
used for supply of electricity to ESIL. Further, the interest of DGVCL
is protected as it will be entitled for Cross Subsidy Surcharge
and other surcharge from the petitioner as per the Open Access
Regulations of GERC. We do not find that there is any
impediment for allowing the request of the petitioner.
…………………………………………
46. In the light of the above discussion and after considering the
views of Central Electricity Authority, the following directions are
issued for compliance by all concerned:
………………………….
(j) M/s. ESSAR Steel Ltd. shall remain liable to pay all applicable
cross subsidy charges including surcharge and other charges,
if any, applicable under the provisions of the 2003 Act and as
per the provisions of the regulations of State Regulatory
Commission. Necessary metering arrangement shall be in
accordance with the arrangement as already agreed to between ESIL
and DGVCL.
From the above decision, it is undisputed that the petitioner is liable to pay
the Cross Subsidy Surcharge to DGVCL as applicable under the provisions of
the Electricity Act, 2003 and Regulations of GERC. The aforesaid order of
CERC is not challenged by the petitioner, and hence, it has attained finality.
The respondents have claimed the cross subsidy amount from the petitioner
27.04.2016
Page 30
on the ground that the energy is consumed from the sources other than
DGVCL including the purchase of energy from EPMPL 600 MW (Unit No. 1).
During the hearing, the respondent submitted a statement showing that the
petitioner is liable to pay Cross Subsidy Surcharge totaling to Rs.
3,09,99,27,800 for the period from June, 2013 to November, 2015 consisting
of Cross Subsidy Surcharge of Rs. 2,66,85,02,828 for the power procured from
the sources other than Mahan Power Station and Rs. 43,14,24,972 cross
subsidy amount for energy procured from Mahan Power Station. The
petitioner paid Cross Subsidy Surcharge of Rs. 1,00,91,11,336 and balance
amount of Rs. 2,09,08,16,464 payable by ESIL to DGVCL is still outstanding.
Thus, a substantial amount of Cross Subsidy Surcharge payable by the
petitioner as claimed by the respondent since June 2013 to November 2015 is
not paid by the petitioner. We also note that the respondents have, during the
hearing before the Commission on 19.12.2015, contended that the petitioner
is not paying the Cross Subsidy Surcharge to the respondents and that there is
no payment security like LC or BG available with the respondent for recovery
of such long outstanding dues. The respondents have approached to WRLDC
for curtailment of Open Access to the petitioner which was denied by WRLDC
stating that WRLDC has no such authority to curtail the Open Access of the
petitioner as per the regulations. Thus, from the conduct of the petitioner who
had agreed in the proceedings of petition no. 245/MP/2012 before the
Central Electricity Regulatory Commission (CERC) that it is liable to pay Cross
Subsidy Surcharge as per the provisions of Electricity Act, 2003 and
Regulations of GERC, is not paying the same despite procuring the power from
27.04.2016
Page 31
the sources other than DGVCL though it is situated in the license area of
DGVCL.
10.7. The petitioner had filed a petition on 15.05.2014 before the Commission
(GERC) and stay was granted by the Commission vide its daily order dated
13.06.2014 which was not extended beyond 06.09.2014 but still the
petitioner has not paid the Cross Subsidy Surcharge to the respondent.
10.8. We also clarify and note that the Cross Subsidy Surcharge is an element of
tariff determination exercise being carried out by the State Electricity
Regulatory Commission for the different categories of the consumers. The
Cross Subsidy Surcharge is factored into the tariff payable by various
categories of consumers for the energy supplied to them by the licensee. It is
also undisputed statutory obligation of the Open Access consumers under
Sections 38, 39, 40 read with Section 42 of the Electricity Act, 2003 to pay
Cross Subsidy Surcharge as determined by SERC. It is also mandated in the
Act that the consumers are required to be heard prior to determining the ARR
of the licensee and applicable tariff payable by the consumers. The
determination of Cross Subsidy Surcharge and its applicability have direct
link with tariff determination of the licensee, and it directly affects the tariff of
the consumers.
10.9. In the present case, the petitioner has disputed the levy of Cross Subsidy
Surcharge on one or the other pretext, which is objected to by the
respondents. As recorded in earlier para though the aforesaid dispute is
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Page 32
between the petitioner and DGVCL/GUVNL, it is directly affecting the ARR of
DGVCL and tariff payable by the consumers of the aforesaid licensee as cross
subsidy amount receivable by DGVCL is given effect in the ARR of DGVCL and
factored in the tariff payable by the consumers of the licensee for the power
being supplied to them. Hence, the contentions of the petitioner that the
present dispute is between the petitioner and the respondents and the
consumers have no locus standi or they are not affected in any manner are
not correct and valid.
10.10. The petitioner contended that the present petition is not a Public Interest
Litigation and the applicants who have filed an application for becoming an
intervener have no locus standi. In this regard, we clarify that the Electricity
Act, 2003 consists of various provisions viz, Section 62 read with Section 64
and 86 of the Act, mandate the Commission to hear the consumers prior to
passing an order for determination of tariff. As stated in earlier para, the
tariff applicable to different categories of consumers consists of the cross
subsidization amongst the consumers. The amount of the Cross Subsidy
Surcharge receivable or received by the licensee is given effect in the
Aggregate Revenue Requirement (ARR) of the licensee in the tariff
determination by the Commission. Cross Subsidy Surcharge determination is
a part of the tariff determination process of the Commission under Sections
39,42, 62, 64 and 86 (1) (a) of the Electricity Act, 2003. Therefore, when the
Electricity Act, 2003 itself provides for determination of Cross Subsidy
Surcharge as a part of the tariff determination, any question as to whether
27.04.2016
Page 33
Cross Subsidy Surcharge leviable on the Open Access customers or not,
whether it is directly affecting the consumers or not, whether it is a Public
Interest Litigation and interveners are to be impleaded or not is not legal and
valid
because
the
outcome/decision
of
consumers
the
are
present
directly
petition.
affected
The
by
way
interveners
of
are
representatives of the consumers. Moreover, Section 61 (d) and 94 (3) of the
Electricity Act, 2003 provide that the State Electricity Regulatory
Commission shall protect the interests of the consumers.
10.11. In view of the above observations, we decide that the plea of the petitioner
that the applicants are not to be impleaded in the present proceedings as it is
not a Public Interest Litigation is not accepted and the same is rejected.
10.12. As far as the contention of the petitioner is concerned that the present
petition is under Section 86 (1) (f) of the Electricity Act and it is a dispute
between the two private parties, and the applicants who have filed
applications for impleadment are not affected person, hence they are not
allowed to be impleaded, we have, in earlier para, clarified that the issue
involved in the present petition i.e. the Cross Subsidy Surcharge leviable on
the petitioner is directly affecting the consumers of the respondent licensees
as the same is reflected in the tariff payable by the consumers. Therefore, the
applicants/their members who are consumers of the licensees are directly
affected by the decision in the present petition. Therefore, the above
contentions of the petitioners are not sustainable and the same are liable to
be rejected.
27.04.2016
Page 34
10.13. The petitioner also contended that no person is allowed in the income tax
dispute between Income Tax Authorities and Individual Assessee under the
Income Tax Act, 1961 and the same logic also applies in the present case. We
clarify that the Income Tax Act, 1961 is a tax statute and the provisions of the
said Act are different and distinct from the provisions of the Electricity Act,
2003. The Electricity Act, 2003 is a self-contained Code having provisions for
dealing with various issues related to electricity subject matters. The Income
Tax Act, 1961 does not envisage participation of individual assessee in
determination of income tax rate for various assessees nor does it recognize
participation of a third party/Association in resolution of any tax related
dispute between an individual assessee and the Income Tax Authorities. The
Income Tax Act, 1961 only provides the applicability of the provisions of the
Act to a person/assessee in their individual capacity, assessment of tax for a
person/assessee and dispute resolution under the said Act. The provisions of
dispute resolution mechanism specified in the Electricity Act, 2003 are
different and distinct from provisions of the Income Tax Act, 1961. The tariff
determination under Sections 61, 62 read with 64 mandate the Commission
to follow public hearing. There are no such provisions under the Income Tax
Act, 1961. The Cross Subsidy Surcharge is a part of tariff determination and
the Commission is mandated to hear the consumers during tariff
determination process. Therefore, the reliance of the petitioner on the
provisions of the Income Tax Act, 1961 is not relevant and valid and the same
is rejected.
27.04.2016
Page 35
10.14. The petitioner contended that the applicants are not the affected persons or
aggrieved persons in the present dispute, therefore, they are not to be
impleaded in the present petition. We clarify that in earlier para we decided
that the applicability of the Cross Subsidy Surcharge to the petitioner and the
respondent’s claim for recovery of the same from the petitioner has direct
effect on the ARR of the respondent and the tariff payable by various
categories of consumers. The income on account of Cross Subsidy Surcharge
receivable/received from the Open Access Customers as per the provisions of
the Electricity Act, 2003 is given effect in ARR of the licensees and tariff
applicable to various categories of consumers is determined accordingly.
Therefore, the consumers are also the affected persons in this case and
hence, when any consumer organization/consumer requests for being given
an opportunity of hearing, the same is valid and legal. The respondents have
also during the hearing admitted and stated that the final decision in the
present petition will have an impact on the tariff applicable to the consumers
of the licensees. They have also admitted that the applicants are the affected
persons and they are required to be joined in the present petition. The
petitioner is not affected in any manner if the impleaders are allowed. We,
therefore, decide that the contention of the petitioner that the applicants are
not aggrieved person or affected persons, is not legal and valid and the same
is rejected.
10.15. The petitioner contended that the applicants have filed the application at a
belated stage to delay the proceedings. We observed that the petition was
27.04.2016
Page 36
filed by the petitioner on 15.05.2014 and till the date of hearing on
05.12.2015, the petitioner sought adjournment on 11.06.2014, 06.09.2014,
15.11.2014, 20.12.2014, 07.03.2015, 18.04.2015, 04.07.2015 and 05.12.2015
while the respondent sought adjournment on 04.10.2014, and both the
parties sought an adjournment on 23.07.2014 and 31.01.2015. Thus, it
transpires that the petitioner itself has delayed the proceedings before the
Commission. The petitioner has failed to prove that the applicants are
seeking impleadment for delaying the present proceedings. We therefore
decide that contention of the petitioner that the applicants intend to delay
the proceedings is not valid and legal and the same is rejected.
10.16. The petitioner contended that in the present case the role of the Commission
is that of an adjudicator and not as a regulator and hence no one except the
petitioner and the respondent are required to be heard in the present
petition. However, as decided in earlier para, the issues involved in the
present petition are (i) whether the petitioner purchasing power from
EPMPL is from its CGP or not, (ii) whether the petitioner is liable to pay the
Cross-Subsidy Surcharge on the energy procured from the EPMPL and other
sources under open access or not, (iii) The consequential impact of above (i)
& (ii), what is the rate and the amount of Cross-Subsidy Surcharge payable by
the petitioner to the respondents, and (iv) what are its implications on the
tariff of ultimate consumers of the respondent through its ARR under the
tariff determination. The above issues majorly affect the revenues of the
respondent licensees and consequently the tariff of the consumers. Hence,
27.04.2016
Page 37
the plea of the petitioner that the Commission is not required to hear the
applicants in the adjudicatory process of the present petition is not correct
and the same is rejected.
10.17. The Petitioner contended that it is a Regional Entity and not liable to pay the
Cross Subsidy Surcharge for captive use of energy from 600 MW (unit 1) of
EPMPL. The petitioner contended that he is not liable to pay Cross Subsidy
Surcharge on the energy being procured from EPMPL, his CGP. However, it is
necessary for the petitioner to prove before this Commission that EPMPL is
the CGP of the petitioner and that EPMPL has fulfilled the criteria as specified
in the Electricity Rules, 2005 for being qualified as a captive generating plant
during the period in question. We also note that the petitioner had filed
Petition No. 245/MP/2012 before the CERC to pray as under:
(i)
Allow the petitioner and direct WRLDC to transfer the load control
area jurisdiction of ESIL from SLDC, Gujarat to WRLDC Mumbai.
(ii)
Grant ESIL the status of a regional entity under the Grid Code for the
purpose of scheduling of power and unscheduled interchange
accounting.
(iii)
Lay down guidelines for addressing such situations in future and/or.
(iv)
Pass any other order(s) or direction(s) as the Commission may
deem fit and proper in the circumstances of the case.
In the aforesaid petition there is a prayer of the petitioner that the control
area for scheduling and energy accounting be shifted from SLDC to WRLDC
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Page 38
and the petitioner be declared as a Regional entity. Though the petitioner
was declared a Regional entity by CERC, there is neither any prayer of the
petitioner nor any order of the CERC that the petitioner shall not remain in
the area of the DGVCL and not liable to pay Cross Subsidy Surcharge and the
provisions of Universal Service Obligations (USO) of DGVCL as specified in
Section 43 of the Act are not applicable to it. As far as Cross Subsidy
Surcharge issue is concerned, CERC has, in its order dated 8.06.2013 in para
47, 48 and 49 recorded as under:
“………….
(c) Metering arrangements for computation of cross subsidy
charges of DGVCL
47. For the metering arrangement for computation of cross
subsidy charges to be paid to DGVCL after the disconnection of ESIL
from Gujarat Transmission System, DGVCL has suggested following
metering arrangement in its affidavit dated 17.1.2013:
"I say that the petitioner is also required to install a electricity
meter at 400 kV sub-station at Jhanor, i.e. the sending end of the
CTU inter-connection network of the radial line in accordance
with applicable rules. I further say that the Petitioner being in
the area of operation of distribution licensee, i.e. DGVCL, is also
required to pay cross-subsidy surcharge to DGVCL for the supply
taken by the Petitioner from third parties as recorded at the
meter at the CTU inter-connection network, In the circumstances,
the incidence of Cross Subsidy Surcharge is liable to be paid by
the petitioner on the total supply of electricity being taken from
third parties.”
The petitioner in its response dated 22.2.2013 had stated following: “In this context it is submitted that connectivity granted by
27.04.2016
Page 39
Power grid to ESIL is at Hazira end. Hence, it is submitted that it
would be preferable to conduct energy recording for Cross
Subsidy Surcharge at gantry (interface of ESIL substation) of
220 kV ESIL sub-station after ICT and connecting lines of 220
kv. since, the power received at the gantry will include captive
power as well as power sourced from bilateral and/or IEX/PTC,
the cross subsidy can be calculated on net off basis as is being
done in the current scenario."
DGVCL vide its submission dated 15.4.2013 had submitted the
following: On the aspect of installation of energy meter on the 400 kV Essar
Power Transmission Company Limited's feeder at Gandhar, I say
that since the Essar Power Transmission's system will intervene
between the CTU system and Essar Steel's system, meters can be
installed at the 220 kV side of substation for the purpose of
measuring the cross subsidy and calculation of surcharge
thereon.
The petitioner, in its response dated 18.04.2013, had stated following:
It is submitted that this is in conformity with ESIL's submission in
its Rejoinder affidavit dated 22.02.2013 and hence requires no
response.
From the foregoing, it is evident that the issue of location of meters
has been agreed to between DGVCL and ESIL and the issue appears
to have been resolved. In any case since the issue of Cross Subsidy
Surcharge is falling within the jurisdiction of the Gujarat Electricity
Regulatory Commission, parties may approach the said Commission
with regard to Cross Subsidy Surcharge.
48. The petitioner has sought relaxation of the provisions in
terms of Regulation 6.3(3) read with clause 4 of part 7 of the
Grid Code to provide that WRLDC shall exercise control area
jurisdiction over the petitioner. As we have already come to the
conclusion that WRLDC can exercise control area jurisdiction over
ESIL in terms of Regulation 6.4.1 of the Grid Code read with the
definition of ‘control area’, there is no requirement of exercising
power under Part 7 of the Grid Code. However, for the sake of
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clarity, we direct the staff to propose appropriate amendment to
the Grid Code regarding control area jurisdiction of RLDC and SLDC
over the bulk consumers.
Conclusion:
49. In the light of the above discussion and after considering the
views of Central Electricity Authority, the following directions are
issued for compliance by all concerned:
(a)
The load control area jurisdiction of ESIL shall be shifted
from Gujarat SLDC to WRLDC, Mumbai after disconnection of ESIL
from Gujarat Transmission system;
(b) ESIL shall be granted status of a Regional Entity of Western
Regional Grid.
(c) Scheduling and Energy accounting of ESIL shall be carried
out by WRLDC in accordance with the prevailing Regulations.
(d) All telemetry, voice and data communication in accordance with
the IEGC shall be provided by ESIL to the satisfaction of WRLDC
before commencement of scheduling of ESIL.
(e) ESIL shall comply with various provisions of Connectivity
Regulations, Grid Code, UI Regulations and other relevant
regulations of the Commission and maintain its drawl as per
schedule.
(f) All instructions of WRLDC shall be complied with by ESIL in
accordance with the 2003 Act and Grid Code and any instance of
non-compliance by ESIL would be viewed seriously and dealt with in
accordance with law.
(g) RLDC may like to satisfy itself about the effectiveness of the
system of load shedding scheme in case of Generator outage and
suggest suitable operational protocol to the petitioner to make this
system responsive for safer grid operation. Petitioner shall provide
necessary arrangements at its own cost.
(h) ESIL shall be granted status of Designated ISTS Customer (DIC)
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and since it is connected at 400 kV node of CTU network and not
connected with state system, it will be considered as a separate
(drawl) zone in accordance with the principles adopted for
generating stations directly connected at 400 kV ISTS under the
Sharing Regulations as amended from time to time. Till computation
of POC charges for next application period, Gujarat Withdrawal
Zone charges and losses shall be applied in case of ESIL.
(i) Staff of the commission shall process the case for necessary
amendment to the Grid Code to clarify the position of bulk consumers
which are connected only to inter-State transmission system and the
major portion of its long term power is coming from a generator
located outside the state in which bulk consumer is located.
(j) M/s. ESSAR Steel Limited shall remain liable to pay all applicable
cross subsidy charges including surcharge and other charges, if
any, applicable under the provisions of the 2003 Act and as per the
provisions of the regulations of State Regulatory Commission.
Necessary metering arrangement shall be in accordance with the
arrangement as already agreed to between ESIL and DGVCL.
(k) The issue of dues of DGVCL needs to be sorted out by DGVCL and
ESIL bilaterally.
………………..”
From the above it is clear that the CERC has decided that the issue of Cross
Subsidy Surcharge falls within the jurisdiction of the GERC. The said order
has attained the finality. Thus it is without any iota of doubt that this
Commission only has the jurisdiction to decide the issue of Cross Subsidy
Surcharge in the present petition. We also clarify that the Cross Subsidy
Surcharge is payable by the open access customer as specified in Section
42(2) of the Electricity Act, 2003 which reads as under:
“…………………………
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42. Duties of distribution licensee and open access
…………..
(2) The State Commission shall introduce open access in such phases
and subject to such conditions, (including the cross subsidies, and
other operational constraints) as may be specified within one year of
the appointed date by it and in specifying the extent of open access in
successive phases and in determining the charges for wheeling, it
shall have due regard to all relevant factors including such cross
subsidies, and other operational constraints:
PROVIDED that such open access may be allowed before the cross
subsidies are eliminated on payment of a surcharge in addition to the
charges for wheeling as may be determined by the State Commission:
PROVIDED FURTHER that such surcharge shall be utilized to meet
the requirements of current level of cross subsidy within the area of
supply of the distribution licensee:
PROVIDED also that such surcharge and cross subsidies shall be
progressively reduced and eliminated in the manner as may be
specified by the State Commission:
PROVIDED also that such surcharge shall not be leviable in case open
access is provided to a person who has established a captive
generating plant for carrying the electricity to the destination of his
own use:
PROVIDED also that the State Government shall, not later than five
years from the date of commencement of the Electricity (Amendment)
Act, 2003, by regulations, provide such open access to all consumers
who require a supply of electricity where the maximum power to be
made available at any time exceeds one megawatt.
………………..”
As per aforesaid Section, the Cross Subsidy Surcharge determination falls
within the jurisdiction of SERC. Therefore, in the present case the
determination of Cross Subsidy Surcharge falls within the jurisdiction of this
Commission in whose area of jurisdiction the petitioner is situated. We also
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note that there is no concept of “Regional Entity” under the Electricity Act,
2003. The petitioner who is declared as a “Regional Entity” for the purpose of
scheduling of power, connectivity with CTU, energy accounting purpose by
CERC cannot in any manner say that it is not a consumer and is not liable to
pay the Cross Subsidy Surcharge though it is liable to pay the same as per the
provisions of the Electricity Act, 2003 and regulations framed thereunder.
10.18. The petitioner has, in support of his argument relied upon the judgement of
Hon’ble Supreme Court of India reported in (2004) SCC 1 in the case of Indian
Banks Association, Bombay & Others v/s Devika Consultancy Services &
Others and submitted that the issue involved in the present petition is not an
issue of PIL, the Electricity Act, 2003 does not envisage filing of PIL and the
interveners have no locus standi. It is necessary to refer para 32, 33 and 34 of
the said judgment which is relevant in this case:
“…………………………….
32. The writ petitioner before the High Court was a firm of the Chartered
Accountant. As an expert in accountancy and auditing, it must have come
across several cases where its client had to pay a higher amount of interest
to the banks pursuant to or in furtherance of the impugned action of the
appellants. By reason of such an action on the part of the appellants as also
the Reserve Bank of India, as noticed hereinbefore, the citizens of India had
to pay a higher amount of tax as also a higher amount of interest for no fault
on their part. The same had been recovered from them without any authority
of law. While entertaining a public interest litigation, this Court in exercise of
its jurisdiction under Article 32 of the Constitution of India and the High
Courts under Article 226 thereof are entitled to entertain a petition moved
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by a person having knowledge in the subject matter of lis and, thus, having
an interest therein as contradistinguished from a busy body, is the welfare of
the people. The rule of locus has been relaxed by the courts for such purposes
with a view to enable a citizen of India to approach the courts to vindicate
legal injury or legal wrong caused to a section of people by way of violation
of any statutory or constitutional right.
33. In fact the Courts had even been treating a letter or telegram sent to
them as a public interest litigation by relaxing the procedural laws especially
the law relating to pleadings. We need not dilate further on this subject as a
Bench of this Court in Guruvayur Devaswom Managing Committee & Anr. Vs.
C.K. Rajan & Others [JT 2003 (7) SC 312] observed:
“41. "The Courts exercising their power of judicial review found to its
dismay that the poorest of the poor, depraved, the illiterate, the urban
and rural unorganized labour sector, women, children, handicapped
by 'ignorance, indigence and illiteracy' and other down trodden have
either no access to justice or had been denied justice. A new branch of
proceedings known as 'Social Interest Litigation' or 'Public Interest
Litigation' was evolved with a view to render complete justice to the
aforementioned classes of persons. It expanded its wings in course of
time. The Courts in pro bono publico granted relief to the inmates of
the prisons, provided legal aid, directed speedy trial, maintenance of
human dignity and covered several other areas. Representative
actions, pro bono publico and test litigations were entertained in
keeping with the current accent on justice to the common man and a
necessary disincentive to those who wish to bypass the real issues on
the merits by suspect reliance on peripheral procedural shortcomings.
(See Mumbai Kamgar Sabha, Bombay Vs. M/s. Abdulbhai Faizullabhai
& Others (1976) 3 SCR 591).
27.04.2016
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42. The Court in pro bono publico proceedings intervened when there
had been callous neglect as a policy of State, a lack of probity in public
life, abuse of power in control and destruction of environment. It also
protected the inmates of prisons and homes. It sought to restrain
exploitation of labour practices.
43. The court expanded the meaning of life and liberty as envisaged in
Article 21 of the Constitution of India. It jealously enforced Article 23
of the Constitution. Statutes were interpreted with human rights
angle in view. Statutes were interpreted in the light of international
treatises, protocols and conventions. Justice was made available
having regard to the concept of human right even in cases where the
State was not otherwise apparently liable. (See Kapila Hingorani V/s.
State of Bihar reported in JT 2003 (5) SC 1).
44. The people of India have turned to courts more and more for
justice whenever there had been a legitimate grievance against the
States statutory authorities and other public organizations. People
come to courts as the final resort, to protect their rights and to secure
probity in public life.
45. Pro bono publico constituted a significant state in the present day
judicial system. They, however, provided the dockets with much
greater responsibility for rendering the concept of justice available to
the disadvantaged sections of the society. Public interest litigation has
come to stay and its necessity cannot be overemphasized. The courts
evolved a jurisprudence of compassion. Procedural propriety was to
move over giving place to substantive concerns of the deprivation of
rights. The rule of locus standi was diluted. The Court in place of
disinterested and dispassionate adjudicator became active participant
in the dispensation of justice."
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34. Furthermore, even where a writ petition has been held to be not
entertainable on the ground or otherwise of lack of locus, the court in larger
public interest has entertained a writ petition. In an appropriate case, where
the petitioner might have moved a Court in his private interest and for
redressal of the personal grievance, the Court in furtherance of public
interest may treat it a necessity to enquire into the state of affairs of the
subject of litigation in the interest of justice. Thus, a private interest case can
also be treated as public interest case. We, therefore, do not agree with the
submissions of the learned counsel of the appellants that the respondent had
no locus to maintain the public interest litigation or the writ petition filed by
him pro bono publico before the High Court was not maintainable.
………………..”
The above judgement provides that the Hon’ble High Court under Article 226
and Hon’ble Supreme Court under Article 32 of the Constitution of India are
empowered to allow PIL filed by a person who may or may not have intent in
the subject. The person may or may not have any linkage with subject matter.
Moreover, the rule of locus standi may be relaxed by the courts with a view to
enable citizen of India to vindicate legal injury or legal wrong caused to a
section of the people by way of violation of any statutory or constitutional
right. In the present case, the issue of Cross Subsidy Surcharge is directly
related with the tariff payable by different categories of consumers as
discussed above. Moreover, it is a part and parcel of tariff determination
process being carried out by the Commission. Hence, any decision in the
present petition will directly affect the consumers of the respondent
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licensees. The applicants are either consumers or the organizations
representing the consumers. Hence, the reliance of the above judgment is in
favor of the interveners.
10.19. The petitioner also relied upon the Judgment of Hon’ble Supreme Court of
India reported in (2012) 8 SCC 384 in Civil Appeal No. 5918 of 2012 in the
case of Vidur Impex & Traders Pvt. Limited V/s. Tosh Apartments Pvt.
Limited. The relevant portion of said judgement is reproduced below:
“…………………..
41. Though there is apparent conflict in the observations made in some of
the aforementioned judgments, the broad principles which should
govern disposal of an application for impleadment are:
41.1. The Court can, at any stage of the proceedings, either on an application
made by the parties or otherwise, direct impleadment of any person as
party, who ought to have been joined as plaintiff or defendant or whose
presence before the Court is necessary for effective and complete
adjudication of the issues involved in the suit.
41.2. A necessary party is the person who ought to be joined as party to the
suit and in whose absence an effective decree cannot be passed by the
Court.
41.3. A proper party is a person whose presence would enable the Court to
completely, effectively and properly adjudicate upon all matters and
issues, though he may not be a person in favor of or against whom a
decree is to be made.
41.4. If a person is not found to be a proper or necessary party, the Court does
not have the jurisdiction to order his impleadment against the wishes of
the plaintiff.
41.5. In a suit for specific performance, the Court can order impleadment of a
purchaser whose conduct is above board, and who files application for
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being joined as party within reasonable time of his acquiring knowledge
about the pending litigation.
41.6. However, if the applicant is guilty of contumacious conduct or is
beneficiary of a clandestine transaction or a transaction made by the
owner of the suit property in violation of the restraint order passed by
the Court or the application is unduly delayed then the Court will be fully
justified in declining the prayer for impleadment.
…………………………
43.
We are in complete agreement with the Delhi High Court that the
application for impleadment filed by the appellants was highly belated.
Although, the appellants have pleaded that at the time of execution of the
agreements for sale by respondent No.2 in their favor in February 1997,
they did not know about the suit filed by respondent No.1, it is difficult, if
not impossible, to accept their statement because the smallness of time
gap between the agreements for sale and the sale deeds executed by
respondent No.2 in favor of the appellants and the execution of
agreement for sale by the appellants in favor of Bhagwati Developers
would make any person of ordinary prudence to believe that respondent
No.2, the appellants and Bhagwati Developers had entered into these
transactions with the sole object of frustrating agreement for sale dated
13.9.1988 executed in favor of respondent No.1 and the suit pending
before the Delhi High Court. In any case, the appellants will be deemed to
have become aware of the same on receipt of summons in Suit No.
161/1999 filed by respondent No.2 for annulment of the agreements for
sale and the sale deeds in which respondent No. 2 had clearly made a
mention of Suit No. 425/1993 filed by respondent No. 1 for specific
performance of agreement for sale dated 13.12.1988 and injunction or at
least when the learned Single Judge of the Delhi High Court entertained
IA No. 625/2001 filed by respondent No. 1 and restrained respondent
Nos.2 and 4 from transferring possession of the suit property to the
appellants. However, in the application for impleadment filed by them,
the appellants did not offer any tangible explanation as to why the
application for impleadment was filed only on 4.2.2008 i.e. after 7 years
of the passing of injunction order dated 22.1.2001 and, in our considered
view, this constituted a valid ground for declining their prayer for
impleadment as parties to Suit No. 425/ 1993.
………………………”
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In the aforesaid finding, the Hon’ble Supreme Court has laid down the
principles with regard to necessary and proper party in para 41 of its
judgement. As per the aforesaid decision, a proper person is the one whose
presence before the court is necessary for effective and complete adjudication
of the issue involved in the suit and the necessary party is a person who ought
to be joined as party to the suit and in whose absence, an effective decree
cannot be passed by the court. A proper party is a person whose presence
would enable the court to completely, effectively and properly adjudicate
upon all matters and issues though he may not be a person in whose favor or
against whom a decree is to be made. It is further held that in a suit for
specific performance, the court can order impleadment of a purchaser whose
conduct is above board and who files application for being joined as a party
within a reasonable time of his acquiring knowledge about pending litigation.
We note that in the present case, the applicants made an application on
03.07.2015 during the pendency of the aforesaid petition when they came to
know about the subject matter of the petition. We also noted in the earlier
para that the decision in the present petition will be directly reflected in tariff
petition; tariff payable by the consumers and ARR of the respondents. The
revenue of the respondents is not altered in any manner by the decision in the
present petition. Therefore, the applicants are a necessary and proper party
in the present petition.
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In para 43 of the said order, the Hon’ble Supreme Court recorded that the
application for impleadment was filed on 04.02.2008 i.e. after 7 years of
passing the injunction order dated 22.01.2001 by Delhi High Court restraining
the respondent No. 2 and 4 from transfering the possession of suit property to
the appellants of the aforesaid case. The subject matter of the said case is
pertaining to the property dispute and specific performance of the agreement
for sale of immovable property which qualifies as a dispute between the
individual private parties and limited to the affected parties by a decision in
such dispute between the individual private parties and limited to the
disputing parties. In such case, the necessary and proper party are those
persons who are affected by the decision in such dispute as they are the
persons who have direct linkage with the subject matter of sale and purchase
of property. As recorded in earlier para, in the present case, the applicants
have filed the applications during the pendency of the present petition and
issue is not pertaining to specific performance of the agreement for sale of
immovable property between the parties. The decision in the present petition
about the Cross Subsidy Surcharge whether payable or not will affect the
other consumers whose tariff will get impacted. Thus, the above decision of
Hon’ble Supreme Court is not applicable in the present case.
10.20. The petitioner also relied upon the order of Hon’ble Delhi High Court reported
in 1996 (36) DRJ 416 in the case of State Bank of India V/s. Siddhartha
Enterprise. In para 9 of the said order, it is stated that a person be impleaded
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as a party or not is a matter of judicious discretion of the authority concerned
which is reproduced below:
“………………….
9. The addition of parties under Order 1 Rule 10 CPC, 1908 is a matter of
judicious discretion to be exercised, in the light of the facts and
circumstances of the case. The fact that a party has relevant evidence to
give will not make it a necessary or proper party, it would only make him
a necessary witness.
………………….”
As discussed in the earlier para since the rights and interests of the applicants
are getting impacted with either rise or reduction in the tariff applicable to
them by the decision in the present case, they become a necessary and proper
party and become eligible for being joined in the present petition.
10.21. The petitioner also relied upon the judgment of Hon’ble Supreme Court
reported in (2008) 13 SCC 414 in the case of Grid Corporation of Orissa
Limited V/s. Gajendra Haldea & Others and submitted that the person is
required to establish that he suffered legal grievances or the legal injury. The
relevant portion of the said Judgment is reproduced below:
“……………………….
13. Additionally, learned counsel for GRIDCO has submitted that in reply to
the petition filed GRIDCO had categorically submitted that respondent
Gajendra had no locus standi to file the petition and the petition filed was
not maintainable. CERC held that trading margins are not applicable to
GRIDCO since it is carried out the functions of bulk supply of electricity
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within the State of Orissa under Bulk Supply Licence issued by the CERC and
the transactions were completed in the State of Orissa. The entire benefit
from the sale of such surplus power was passed on to the consumers of the
State through the Bulk Supply Tariff Orders.
14. CERC, it is pointed out, had dismissed the petition by respondent No.1Gajendra Haldea by holding that GRIDCO is an intra state trader. GRIDCO's
transactions under the said contract with PTC were completed within the
State of Orissa. Accordingly, it was held that the Regulations were not
applicable to GRIDCO. CERC in view of the above did not deal with the
question of locus standi. Appellate Tribunal held that Gajendra Haldea had
locus standi to file the petition. Though it did not disturb the findings of CERC
that GRIDCO is an intra-state trader, it held that the transactions of sale of
surplus power by GRIDCO to the inter-state traders are in the nature of interstate trading. Accordingly, it held that the transactions of GRIDCO are
governed by the Trading Regulations and directed CERC to find out a
methodology for refund of the excess amount.
15. On behalf of respondent No.1-Gajendra Haldea the order of Appellate
Tribunal is supported.
16. It is unnecessary to go into the question as to the nature of the
transaction, because respondent No.1-Gajendra Haldea in order to prove
that he had locus standi relied on Section 121 and 142 of the Act. It was also
stated that it is not in the nature of PIL. It was stated that the prayer for
refund was not being pressed.
17. A bare reading of Section 121 and 142 of the Act which read as follows
shows that those provisions are not applicable”
"121. Power of Appellate Tribunal- The Appellate Tribunal may, after
hearing the Appropriate Commission or other interested party, if any,
from time to time, issue such orders, instructions or directions as it may
deem fit, to any Appropriate Commission for the performance of its
statutory function under this Act.
"142. Punishment for non-compliance of directions by Appropriate
Commission.-In case any complaint is filed before the Appropriate
Commission by any person or if that Commission is satisfied that any
person has contravened any of the provisions of this Act or the rules or
regulations made thereunder, or any direction issued by the Commission,
the Appropriate Commission may after giving such person an opportunity
of being heard in the matter, by order in writing, direct that, without
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prejudice to any other penalty to which he may be liable under this Act,
such person shall pay, by way of penalty, which shall not exceed one lakh
rupees for each contravention and in case of a continuing failure with an
additional penalty which may extend to six thousand rupees for every day
during which the failure continues after contravention of the first such
direction."
Therefore, the Appellate Tribunal was wrong in interfering with the
conclusions of CERC that respondent No.1's petition was not
entertainable and/or maintainable.
In above case, the issue is pertaining to the trading margin levied by the
traders. Moreover, the respondent Gajendra Haldea in order to prove that he
had locus standi relied upon Sections 121 and 142 of the Electricity Act, 2003.
Hon’ble Supreme Court of India held that the respondent Gajendra Haldea’s
petition is not entertainable and/or maintainable. The facts of above case are
different and distinct from the facts in the present petition as the issue for
consideration in the present petition is whether Cross Subsidy Surcharge is
leviable on the petitioner or not and its impact on the tariff payable by the
other consumers of the licensee.
10.22. The petitioner also relied upon the judgement dated 31.03.2010 in Appeal
Nos. 106/2009 and 107/2009 and submitted that the applicants are not the
aggrieved persons in the present case and relied on para 10, 11 and 12 of the
said judgement which are reproduced below:
“…………………………
10. According to the Appellants, the expression “person aggrieved”
appearing under Section 111 of the Act, which has not been defined
in the Act, has to be given its natural and liberal meaning in the
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wider sense possible and since the impugned order had been passed
in disregard of clause 5.1 of the NTP which would result in denial to
access of power to the Appellant through Competitive Bidding Process
which consequentially would adversely affect the interest of the
consumer, the Appellants would certainly come under the category of
aggrieved person and therefore, the Appeal is maintainable.
Though the word “person aggrieved” as provided under Section 111 of
the Act has not been defined, this Tribunal as well as the Supreme
Court has given interpretation and meaning of the words “person
aggrieved” in the following decisions:
(i) (2008) 1 3 S C C 4 1 4 i n G R I D C O V /s. Gajendra Haldia and
others.
(ii) (2007) - APTEL 746 Energy Journal in Chhattisgarh State
Electricity Board V/s. Chhattisgarh State Electricity Regulatory
Commission and others.
(iii) The recent decision is (2000)-LR-APTEL 0459 Jindal Stainless
Limited V/s. State of Orissa.
11. In the Jindal Stainless Limited case this Tribunal has quoted the
various Supreme Court decisions in (2003) 9 606 Banarasi and others
versus Rampal; (1997) 7 SCC 452 in Northern Plastic Limited V/s.
Hindustan Photo Films and referred to various propositions laid down
by the Supreme Court with reference to the term “Aggrieved person”.
These proportions are as follows:
(i)
A person w h o was not a party to the original proceedings may
still file an appeal with leave of the Appellate court, provided that
the person claiming himself to be the aggrieved party shall make it
a prima facie case as to how he is aggrieved.
(ii)
A person can be said to be aggrieved by an order only when it
caused on him some prejudice in some form or another unless the
person is prejudicially or adversely affected by the order, he cannot
be entitled to file an Appeal as an aggrieved person.
(iii)
The words “person aggrieved” did not mean a man who is
merely disappointed of a benefit which he may have received if
some other order had been passed. A person aggrieved means a
person who has suffered a legal grievance, a person against whom
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a decision has been pronounced which have wrongly deprived him
of something or wrongfully refused him something or wrongly
affected his title to something.
(iv)
When a person had not been deprived of a legal right, when he is
not subject to legal wrong, when he has not suffered any legal
grievance, when he has no legal peg for a justifiable claim to hang
on, he cannot claim that he is a person aggrieved.
12. In the light of the above principles laid down by the Hon’ble Supreme
Court, this question has to be analyzed. There is no dispute in the fact that
the Appellants were a party in the proceedings before the State
Commission as they had opposed the prayer made by the NDPL (R-2). But
that alone will not entitle the person to file an appeal before this Tribunal.
The ratio decided by the Supreme Court as mentioned above is that a
person aggrieved does not mean a man who is merely disappointed of a
benefit which he might have received. On the other hand, it is to be
established that the order impugned has caused a legal grievance to him,
order impugned is prejudicially or adversely affecting him, or the order
impugned has wrongfully deprived him or wrongly refused him
something. Only when all these ingredients are satisfied, the party can
claim himself as aggrieved party and is entitled to file an appeal.
…………………..”
On perusal of the aforesaid judgement, it transpires that a person is aggrieved
only when the impugned order causes grievance to him, the order is
prejudicially or adversely affecting him or wrongfully deprives him or
wrongly refuses him something. In the present case, the issue of the Cross
Subsidy Surcharge whether payable by the petitioner or not is a part of tariff
determination process and if any Cross Subsidy Surcharge is leviable on the
petitioner, it is reflected in Aggregate Revenue Requirement of the
respondent DGVCL as well as tariff payable by other categories of consumers
to whom the applicants are representing as the consumers of the licensee are
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getting directly affected. Hence, if the applicants are not impleaded; it is a
prejudice against them and will adversely affect their rights to protect the
interest of the consumers. We also note that during the hearing, the
respondents fairly admitted that the applicants are directly affected due to
result in the present petition and the respondents are not affected in any
manner as they are revenue neutral. The impact of Cross Subsidy Surcharge if
any received or not is passed on in the ARR of the licensee and factored in the
tariff payable by the consumers which is determined by the Commission
under tariff determination proceedings. It is therefore, incorrect to say that
the applicants are not an affected or aggrieved party. We are, therefore, of the
view that the applicants are aggrieved persons in view of the aforesaid
judgement.
10.23. The petitioner also relied upon the daily order dated 29.03.2014 of this
Commission in Petition No. 1296 of 2013 and submitted that in the said
petition, the Commission decided not to implead UUWA as a party to that
petition. The relevant portion of the said judgement i.e. para 7.8, 7.9, and 8 are
reproduced below:
“…………………………
7.8. The applicant also relied on the judgment passed by the CERC in Petition
No. 159/MP/2012 in Coastal Gujarat Power Limited V/s. GUVNL and in
Case No. 155 of 2013 of Tata Power Limited in which Prayas Energy
Group and Mr. Surana were allowed to be impleaded as a party. On this
issue, the petitioner has submitted that the prayers sought in these
petitions were quite different and not within the ambit of the PPA,
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whereas in the present case, the petitioner’s claims are strictly within the
ambit of the approved PPA. We agree with the contention of the
petitioner and observe that these judgements are not relevant in the
present case.
7.9. The Hon’ble Supreme Court of India has in the case of Union of India &
Anr V/s. M/s. Jesus Sales Corporation, 1996 AIR 1509, 1996 SCC (4) 69,
held as under:
“…5. The High Court has primarily considered the question as to whether
denying an opportunity to the appellant to be heard before his
prayer to dispense with the deposit of the penalty is rejected,
violates and contravenes the principles of natural justice. In that
connection, several judgments of this Court have been referred. It
need not be pointed out that under different situations and
conditions the requirement of the compliance of the principle of
natural justice varies. The courts cannot insist that under all
circumstances and under different statutory provisions personal
hearings have to be afforded to the persons concerned. If this
principle of affording personal hearing is extended whenever
statutory authorities are vested with the power to exercise
discretion in connection with statutory appeals, it shall lead to
chaotic conditions. Many statutory appeals and applications are
disposed of by the competent authorities who have been vested with
powers to dispose of the same. Such authorities which shall be
deemed to be quasi-judicial authorities are expected to apply their
judicial mind over the grievances made by the appellants or
applicants concerned, but it cannot be held that before dismissing
such appeals or applications in all events the quasi-judicial
authorities must hear the appellants or the applicants, as the case
may be. When principles of natural justice require an opportunity
to be heard before an adverse order is passed on any appeal or
application, it does not in all circumstances mean a personal
hearing. The requirement is complied with by affording an
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opportunity to the person concerned to present his case before such
quasi-judicial authority who is expected to apply his judicial mind
to the issues involved. Of course, if in his own discretion if he
requires the appellant or the applicant to be heard because of
special facts and circumstances of the case, then certainly it is
always open to such authority to decide the appeal or the
application only after affording a personal hearing. But any order
passed after taking into consideration the points raised in the
appeal or the application shall not be held to be invalid merely on
the ground that no personal hearing had been afforded……”
In the above judgement, the Hon’ble Supreme Court has decided that the
principles of natural justice vary under different situation and
conditions. It cannot be insisted that under all circumstances and under
different statutory provisions, personal hearings have to be afforded to
the person concerned. When Quasi-Judicial Authorities apply their
judicial mind over the grievances made by the appellants or applicants
concerned, it cannot be held that before dismissing such appeals or
applications, in all events, the quasi-judicial authorities must hear the
appellants or the applicants as the case may be.
In the present case, the Commission has adopted the tariff as
recommended by the Bid Evaluation Committee and the PPA was
uploaded on the website of the Commission and thereafter decided the
matter. Hence, it is incorrect to say that the Principles of Natural Justice
is being violated.
8) Considering the above facts, we decide that the request of the applicant
UUWA to implead it as a party to the present petition is not valid and the
same is rejected.
………………………”
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In the aforesaid decision, the Commission decided that the subject matter of
Petition No. 159/MP/2012 in case of Coastal Gujarat Pvt. Limited V/s. GUVNL
and Case No. 155/MP/2013 in case of Adani Power Limited, in which CERC
has allowed Prayas Energy Group and Mr. Suresh Khurana as party is having
the subject matter different and distinct from the subject matter of Petition
No. 1296 of 2013 in which the subject matter is pertaining to Change in Law.
The Commission has relied on the judgement of Hon’ble Supreme Court of
India in the case of UOI & Others V/s. Jesus Sales Corporation, AIR (1996)
1509. In the said judgement, the Hon’ble Supreme Court decided that when
the quasi-judicial authorities apply their judicial mind over the grievances of
the appellant, it cannot be held that in all events, the Qausi Judicial Authorities
must hear all the appellants or the applicants as the case may be. Thus, the
issues decided in the aforesaid petition are with regard to Principle of Natural
Justice and Opportunity of hearing afforded to the parties. The Commission
also recorded that the tariff adopted by the Commission is as per the
recommendation of Bid Evaluation Committee. The PPA was uploaded on the
website of the Commission and thereafter the matter was decided by the
Commission and hence, it is incorrect to say that the Principle of Natural
Justice is violated in that case. In the present case, the issue is pertaining to
Cross Subsidy Surcharge and its impact on the ARR of the licensees and tariff
payable by various categories of consumers and whether the consumers who
are directly affected by the decision in the present petition are required to be
heard or not. Thus, the subject matter of the present petition is different and
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distinct from the aforesaid decision and the same is not applicable in the
present case.
10.24. The applicant UUWA relied upon the judgement dated 18.12.2015 passed by
the Hon’ble APTEL in Appeal Nos. 188 of 2014 to 194 of 2014 between High
Tech Industries & Others and Himachal Pradesh Regulatory Commission. The
relevant para of judgement is reproduced as under:
“…………………….
11. Such kind of approach by any State Regulatory Commission
cannot be allowed to be continued in future because it gives a wrong
signal to the consumer at large. What we expect from the State
Commission is that the State Commission should candidly and
honestly observe the principles of natural justice and if the provisions
of law require the issuance of notice, such notice should be issued to
the persons who are likely to be affected and the affected persons or
the public at large or the consumers of the State, like industrial
consumers in the present Appeals, should be afforded reasonable
opportunity of hearing and only, thereafter, judicial order/quasijudicial order should be passed and not otherwise.
………………………..”
In the aforesaid decision, the Hon’ble Tribunal decided that whenever the
issue involved in the matter affecting a person or likely to be affected to the
public at large or the consumer of the State an opportunity of hearing be given
to the affected the person. In the present case, as recorded in earlier para, the
effect of decision of the Commission in the present petition affects to the
consumer of the licensees which includes the associations whose members
are the consumers of the respondent licensees. Hence, on this ground also, we
decide to allow the applicant to be impleaded in the present petition.
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10.25. Considering the above observations, we are of the view that the applicants are
required to be impleaded as a party to the present petition.
11) In view of the above observations, we decide to implead UUWA, Laghu Udyog
Bharti - Gujarat and Shri Amarsinh Chavda as a party respondent in the
present petition. The petitioner and the respondents are directed to provide a
copy of all submissions made by them in the present petition to the
impleaders within 15 days from the receipt of this order. The respondents are
directed to file their submissions, if any, within two weeks after the receipt of
the aforesaid submissions from the parties.
12) The next date of hearing will be intimated separately.
13) We order accordingly.
Sd/-
Sd/-
[P. J. THAKKAR]
[K. M. SHRINGARPURE]
MEMBER
MEMBER
Place: Gandhinagar.
Date: 03/05/2016.
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