Tamil Nadu Generation and Distribution Corp Ltd v. Central Electricity Regulatory Commission

14. Non-applicant/petitioner has filed reply to this present application. It is the case of the petitioner that the principal challenge in the writ petition is to the retrospective applicability of Notifications dated December 08, 2017 and subsequent Notification dated June 01, 2018 issued by respondent No.1 and that the applicant / respondent No.4 vide the present application seeks to adjudicate the applicability of the said Notifications from April, 2017. In other words, the applicant / respondent No.4 cannot widen the scope of the writ petition which is limited to the retrospective applicability of Notification dated December 08, 2017 issued by respondent o.[1] / CERC.

15. The non-applicant/petitioner has also stated that the application filed by the respondent No.4 seeking payment as per escalation index notified by respondent No.1 / CERC from April, 2017 is not maintainable. The dispute raised by the respondent No.4 / applicant in the application has no concern with the issue raised in the writ petition. In other words, the applicant / respondent No.4 is required under law to file a substantive petition under the relevant provisions of law / power purchase agreement for redressal of its grievances before the appropriate forum.

16. The applicant / respondent No.4, who is impleaded cannot seek such reliefs in the present writ petition filed by the nonapplicant/petitioner. It is stated that by this application, the applicant/ respondent No.4 is seeking to enlarge the scope of the writ petition which is limited to challenge relating to the retrospective applicability of CERC Notification notifying the escalation index. A plea is also taken that jurisdiction of this court under Article 226 of the Constitution of India is not for adjudicating the disputes relating to the payments made under escalation index published by respondent No.1 / CERC from time to time. Disputes relating to methodology of calculation of payment and the period of calculation irrespective of whether it is retrospective or prospective are required to be raised by the applicant / respondent No.4 before the CERC under Section 79 of the Electricity Act, 2003.

17. Without prejudice it is stated by the non-applicant/ petitioner that the case of the applicant / respondent No.4 in the application is that on May 25, 2018, this Court stayed the retrospective operation of Notification dated December 8, 2017 w.e.f October 2, 2012. On June 1, 2018, respondent No.1 / CERC again issued Notification changing the indices consequent to available to new series of WPI for noncoking coal from April, 2013 stating that it will be w.e.f April, 2017. On July 18, 2018, this Court ordered to pay the amount prospectively for December 8, 2017 Notification and writ petitioner paid the amounts from December, 2017. It is also stated that respondent No.1 / CERC issued Notification dated July 26, 2018 and stated that w.e.f April, 2017, the escalation rates based on the new series of WPI for non-coking coal is applicable for payments. The escalation rate from April, 2013 to March 2017 is for correcting the index only and for not payment purpose. On August 28, 2018, this court clarified that the interim order passed by this court on May 25, 2018 will not affect the payments in terms of the said Notification for the period after April,

2017. The petitioner / non-applicant was directed to pay the amount due under Notification dated June 1, 2018. It is stated by the nonapplicant / petitioner that as per Schedule-IV of the PPA relating to formula of calculation of monthly tariff, the escalation rate for the previous month will be the index for beginning of the next month if the index for the end of March, 2019 is 103, which will be considered as index for payment from April, 2017. Likewise, the escalation index at the end of April, 2017 will be used for payment purpose for the month of May, 2017.

18. It is further stated that the non-applicant/ petitioner considered the index for March, 2017 to calculate the energy charge for April, 2017 for the purpose of correcting the payment index and not for the purpose of payment, as per Notification and clarification issued by respondent No.1 / CERC. As per said Notification and clarification, the revised index from April, 2013 to March, 2017 are for correcting the payment index only and not for actual payment purpose and index from April, 2017 may be used for payment purpose after 2017. In this regard, a reference has been made to the order dated August 28, 2018 of this Court.

19. The non-applicant/petitioner had considered the index at the end of the April, 2017 notified on June 1, 2018 for calculating the energy charge payment for May, 2017. It is stated that the applicant / respondent No.4 had misconstrued the Notification dated June 01, 2018 of respondent No.1 / CERC and its applicability and filed the present application seeking payment of energy charges for the month of April, 2017. The prayer of the applicant / generator is against the mandate of the Notification of respondent No.1 / CERC dated June 1, 2018 and subsequent clarification dated July 26, 2018. A tabulation chart has been depicted by non-applicant/petitioner; the same is reproduced hereunder for better understanding: Month Actual payment made by TANGEDC O before notification i.e. 8.12.2017 & 01.06.2018 Tariff to be paid as per 08.12.2017 if retrospectively Tariff to be paid as per 8.12.2017 prospectively and paid by TANGEDCO Tariff applicable as per Difference in Tariff payable and paid by TANGEDC O as per column (4-2) Remarks 1 2 3 4 5 4/2017 1.3523 5/2017 1.3607 1.5453 1.6441 0.0988 6/2017 1.3691 1.5558 1.6558 0.1000 7/2017 1.3775 1.5663 1.6674 0.1011 8/2017 1.3859 1.5768 1.6790 0.1022 9/2017 1.3943 1.5873 1.6906 0.1033 1.4026 1.5977 1.7022 0.1045 1.4026 1.5977 1.7022 0.1045 1.5977 1.5977 1.7022 0.1045 1/2018 1.5977 1.5977 1.7022 0.1045 2/2018 1.5977 1.5977 1.7022 0.1045 3/2018 1.5977 1.5977 1.7022 0.1045 4/2018 1.5977 1.5977 1.7022 0.1045 Difference of column 1 & 4 not paid since HC Delhi ordered prospective effect from 12/2017. If difference of 1 & 4 is considered then it becomes given retrospective effect to the notification dated 08.12.2017 which is against the Court order dated 28.05.2018.

20. It is the case of the non-applicant/petitioner that it made the payment prospectively from December, 2017 as per Notification dated December 8, 2017 and as per Notification dated June 1, 2018, the escalation rates applicable from April, 2017 to be used for making payments. It is further stated that above calculation is based on escalation index issued by respondent No.1 / CERC every six months and revised retrospectively for the period after April, 2017 till November, 2017. They seek the dismissal of the application. CM No. 23094/2019

21. This application has been filed by respondent no.3 with the following prayers:

22. The applicant / respondent no.3 having executed PPA with nonapplicant/petitioner on November 27, 2013 for supply of 100 MW power from unit 2 of its thermal generating station, moved an application for impleadment (CM No. 24489/2018) in the present writ petition, which was allowed by this Court vide order dated July 06,

2018.

23. The cause of action for filing the present application, as well as the chronology of events and orders passed by this Court till the filing of the present application, is same as to what has been stated in C.M. 16973/2019 preferred by respondent no.4. In short, nonapplicant/petitioner in its letter dated February 26, 2019 had worked out the differential arrear amount for the period between May, 2017 to May, 2018 by computing the difference in tariff based on the escalation rates stipulated in the impugned Notification dated December 08, 2017 and Notification dated June 01, 2018.

24. It is the case of the applicant / respondent no.3 that payments already made by the non-applicant/petitioner for the period between May, 2017 to November, 2017 is based on earlier Notifications dated May 30, 2017 and October 10, 2017 issued by respondent no.1 / CERC at a different energy tariff. Therefore, the differential amount due ought to have been computed based on the difference in tariffs as per Notification dated June 01, 2018 and Notifications dated May 30, 2017 as well as October 10, 2017 instead of taking difference in tariffs between Notification dated June 01, 2018 and impugned Notification dated December, 08, 2017, i.e., differential amount due would be the difference between what has been already paid by the nonapplicant/petitioner as energy charges and what is due as new energy charges computed as per the escalation rates stipulated by subsequent Notification.

25. Further, based on the computation chart brought on record along with the order passed by this Court on January 08, 2019, the applicant / respondent no.3 seeks payment of `27,39,15,932/- (excluding the carrying cost) for the period between April, 2017 to December, 2018. CM. No. 11585/2019

26. This application has been filed by the respondent no.6 with the following prayers: “a) Direct the Petitioner to forthwith comply with the order dated 08.01.2019 passed by this Hon’ble Court, and also in terms of the letter dated 28.02.2019 for the period starting from May, 2017 to May, 2018, by making immediate payments to the Applicant herein/ Respondent No. 6; b) direct the Petitioner to forthwith comply with the order dated 08.01.2019 passed by this Hon’ble Court by making immediate payments to the Applicant herein/ Respondent No. 6 for the month of April, 2017; c) In the alternative to prayers (a) and (b), attach the accounts of the Petitioner for the purpose of securing the payments of the Applicant herein/ Respondent No. 6; d) to pass such other or further orders as this Hon’ble Court may deem appropriate.”

27. The applicant / respondent no.6 having executed two PPAs with petitioner / non-applicant on August 23, 2013 and December 10, 2013 for supply of power, moved an application for impleadment (CM NO. 26646/2018) in the present writ petition, which was allowed by this Court vide order dated July 09, 2018.

28. The cause of action for filing the present application, as well as the chronology of events and orders passed by this Court till the filing of the present application, is same as to what has been stated in C.M. 16973/2019 preferred by respondent no.4. It is stated by applicant / respondent no.6 that pursuant to orders of this Court dated August 28, 2018 and January 08, 2019, directing non-applicant/petitioner to make payments in accordance with the impugned Notification dated December 08, 2017 as well as Notification dated June 01, 2018, applicant / respondent no.6 has been raising invoices based upon Notification dated June 01, 2018.

29. It is also stated by applicant / respondent no.6 that there is no challenge to the Notification dated June 01, 2018 as an application for amendment of the writ petition was yet to be allowed by the Court. However, it is pertinent to note that the Court vide order dated March 12, 2019 allowed the application for amendment of the writ petition but the amended writ petition is yet to be filed.

30. It is the case of the applicant / respondent no.6 that various invoices raised by applicant / respondent no.6 were disputed by the non-applicant/petitioner vide dispute notices dated December 12, 2018, December 17, 2018 and January 28, 2019. It is further stated that the non-applicant/petitioner acknowledged the amount to be paid to the applicant / respondent no.6 in accordance with Notification dated June 01, 2018 vide its two letters dated February 28, 2019, for the period between May, 2017 and May, 2018, however, is silent for the amount to be paid to the applicant / respondent no.6 for the month of April,

2017.

31. The applicant / respondent no.6 has filed an additional affidavit along with this application in order to correct an inadvertent computational error in determining the differential arrear amount due for the months of April, 2017 to November, 2017 as initially applicant / respondent no.6 had taken the differential of escalation rates mentioned in the impugned Notification dated December 08, 2017, which was stayed by this Court, and Notification dated June 01, 2018.

32. It is the submission of Mr. Sandeep Sethi, learned Senior Counsel appearing for the applicant / respondent No.4 that the nonapplicant / petitioner vide its letter dated February 26, 2019 in response to the supplementary invoice dated June 7, 2018 raised by the applicant / respondent No.4 for the period April, 2017 to April, 2018 had acknowledged the amount to be paid to the applicant / respondent No.6 in accordance with the Notification dated June 1, 2018 issued by the respondent No.1 / CERC. The non-applicant / petitioner accordingly made arrangements to pass an amount of ` 10,11,63,393 for the period May, 2017 to May, 2018 and an amount of `5,50,08,248 for the period between June, 2018 to December, 2018. According to him, on a bare perusal of the computation done by the non-applicant/petitioner in the letter dated February 26, 2019, it becomes evident that the non-applicant/petitioner had acknowledged to pay to the applicant / respondent No.4 for the period between May, 2017 to May, 2018, but it is silent regarding the amount to be paid to the applicant / respondent No.4 for the month of April, 2017. According to him, the non-applicant / petitioner is liable to pay for the month of April, 2017 based on the Notification dated June 1, 2018 issued by the Central Commission an amount of `2,31,82,704/-.

33. Additionally, he submitted that that the non-applicant/petitioner in its letter dated February 26, 2019 has worked out the differential arrear amount for the period May, 2017 to May, 2018 by computing the difference in the tariff based on the escalation rates stipulated in the Notifications dated December 8, 2017 and June 1, 2018. However, the non-applicant/petitioner has made payments for the period between May, 2017 to November, 2017 at a different energy tariff, based on old escalation stipulated in the earlier Notifications of the respondent No.1 / CERC dated May 30, 2017 and October 10,

2017. Essentially, as per the aforesaid orders of this Court dated January 8, 2019 and March 12, 2019, the differential amount ought to have been computed on the basis of difference in the tariffs between as per the Notifications of the respondent No.1 / CERC dated June 01, 2018 and May 30, 2017, October 10, 2017 instead of Notifications dated June 1, 2018 and December 8, 2017. Accordingly, it was his submission that the non-applicant/petitioner is liable to pay arrear amount as per the direction of this court dated August 28,2018 and January 8, 2019 works out to be `21,89,07,684/- for the period April, 2017 and May, 2018 instead of `10,11,63,393. In so far as the arrear of amount of `5,50,08,248 for the period between June, 2018 and December, 2018 proposed by the non-applicant/petitioner is concerned, the same is in order. Accordingly, a total amount to be paid by the non-applicant/petitioner for the period April, 2017 to December, 2018 works out to `27,39,15,932/-. He submitted that the applicant / respondent No.4 vide its reply dated March 23, 2019 to the aforesaid letter dated February 26, 2019 sent by the non-applicant / petitioner explained the basis of computation of the above arrear amount and furnished a correct computation of the two payments. He stated that in terms of Notification dated June 1, 2018, escalation rates applicable from April, 2017 are required to be used for payment purpose. Further, as per the clarification dated July 26, 2018 issued by the respondent No.1 / CERC on the Notification dated June 1, 2018 w.e.f April, 2017, the escalation rates based on new series of WPI for non-coking coal is required to be applied for payment. In fact, he has heavily relied upon the order dated August 28, 2018 wherein it observed that the non-applicant/petitioner would be required to pay tariff as per the rates notified prospectively. It was also clarified that the interim orders passed by this court will not affect the payment in terms of the said Notification for the period after April, 2017. In substance, it is his submission that the non-applicant/petitioner is required to pay energy tariff as per the escalation rates notified by the respondent No.1 / CERC on June 1, 2018 being based on new series of WPI for non-coking coal. Essentially, non-applicant/petitioner is required to pay the difference in the rates as notified on June 1, 2018 vis-à-vis the rates, on the basis on which it had made actual payments to the applicant herein from April, 2017 onwards. On the contrary, non-applicant/petitioner has taken a difference between the rates as notified on June 1, 2018 vis-à-vis the rates notified on December 8, 2018 and has thereby limited the payment only to such difference.

34. Mr. Ganju and Mr. Poovayya appearing for the other applicants i.e., respondent Nos. 3 and 6 have also made similar submissions as made by Mr. Sethi.

35. Having heard the learned counsel for the parties, the issue raised in the applications preferred by the applicants / respondents is whether the non-applicant/petitioner should pay the amounts as due, in terms of Notification dated June 01, 2018 w.e.f April, 2017. Before I come to the merit of the claim in these applications, it is important to deal with the objection of the non-applicant/petitioner that these applications are changing the nature of the scope of the writ petition, inasmuch as in the writ petition, the limited challenge is relating to the retrospective applicability of Notification dated December 08, 2017, whereas in terms of the plea of the applicants / respondents in these applications it is adjudication of the disputes relating to the payments made under the escalation index published by respondent No.1 / CERC from time to time.

36. A plea is also taken that the remedy for the applicants / respondents is, to approach respondent No.1 / CERC under Section 79 of the Electricity Act.

37. I am not impressed by this objection on behalf of the nonapplicant/petitioner for the simple reason, the prayer made in these applications is in effect to implement the orders passed by this Court on January 08, 2019. It is the case of the applicants / respondents that the order dated January 08, 2019 has not been implemented. Concedingly, the order dated January 08, 2019 has not been challenged by the non-applicant/petitioner in an appeal on the ground that such order could not have been passed. In fact, an application has been filed seeking extension of time for implementing the order dated January 08, 2019 and on that application, this Court had granted two months time, as an outer limit to the petitioner / non-applicant to tender payments in terms of the earlier orders. So, it follows, an application for implementation of an order passed by a Court shall lie in the Court, which passed the order. Accordingly, the applications filed by the applicants / respondents seeking implementation of order dated January 08, 2019 shall be maintainable and the objection in that regard need to be rejected.

38. Insofar as the merit of the issue raised by the applicants / respondents in these applications is concerned, as stated above, the applicants / respondents are claiming certain amounts on the ground that the Court has directed vide order dated January 08, 2019 to implement the Notification dated June 01, 2018. In this regard the following aspects have to be noted.

39. The petitioner has challenged the Notification dated December 08, 2017 issued by respondent No.1 / CERC notifying the revised annual escalation rates applicable for the purpose of payments under various PPAs executed for the period between October 01, 2012 to September 30, 2014 based upon corrected WPI for non-coking coal. The ground of challenge relates to the retrospective change in the rates, to be charged. This Court vide order dated May 25, 2018 stayed the operation of the impugned Notification dated December 08, 2017 till the next date of hearing. During the pendency of the writ petition, consequent to the availability of new series of WPI for non-coking coal, respondent No.1 / CERC vide Notification dated June 01, 2018 adopted the same from April 2017. However, it appears that the nonapplicant/petitioner sought to evade its obligation to pay the escalated rates by exempting itself from making retrospective payments. Pursuant to this anomaly, this Court has by noting that the principal challenge in the petition relates to retrospective change in the rates to be charged and there is no doubt that the non-applicant/petitioner would be required to pay the charges, so fixed prospectively and noting the contention of the non-applicant/petitioner that nonapplicant/petitioner would do so, and since there is a Notification dated June 01, 2018, which exempts the non-applicant/petitioner from making any such payment, this Court vide order dated July 18, 2017 directed the respondent No.1 / CERC to examine and clarify, whether the non-applicant/petitioner is required to make payment pursuant to Notification dated December 08, 2017, within a period of one week. It is also clarified that if such clarification is issued then the nonapplicant/petitioner shall ensure payments are made in accordance with the aforesaid Notification for the period after December 08, 2017. Pursuant to order dated July 18, 2018, the respondent no.1 / CERC issued a clarification dated July 26, 2018 in the following manner:- “(6) It is clarified that on account of Notification of the escalation rates vide Notification dated June 01, 2018, the escalation rates notified vide four Notifications dated December 08, 2017 continued to be applicable for payment purpose for the applicable periods.”

40. Subsequent thereto, this Court on November 15, 2018 referred to the order dated August 28, 2018 and clarified that the interim orders passed by this Court will not affect the payments in terms of the said Notifications for the period after April 2017. In any case, vide an application being CM 509/2019 filed by the non-applicant/petitioner wherein the non-applicant/petitioner had sought modification of order dated August 28, 2018 to the extent that the applicability of Notification dated June 01, 2018 be made from June 01, 2018 onwards instead of its applicability from April, 2017, the application was dealt with by the Court on January 08, 2019 wherein this Court by stating the following, rejected the modification application. “It is not in dispute that the modification dated December 08, 2017 has been subject to the condition that the petitioner would be required to pay the tariff as per the rates as notified prospectively.” It was clarified that interim orders passed by this Court would not affect the payments in terms of the said Notification for the period after April, 2017. Thus, no modification was made to order dated August 28, 2018. In fact, I may state here that this Court also in the order dated January 08, 2019 stated as under:- “As stated by learned counsel for the respondent that the payment from April, 2017 to November, 2017 and July, 2018 to December, 2018 has not been paid. Therefore, the applicant / petitioner is directed to clear the payments for the period mentioned above within four weeks from today in accordance with the Notification dated June 01,

2018. The applicant / petitioner is directed to file the affidavit for paying the dues for the period mentioned above.”

41. Even pursuant thereto, a further two months time was sought for by the non-applicant/petitioner to comply with the orders passed by this Court on August 28, 2018 and also January 08, 2019. In fact, a representation was made that orders have already been issued for payments to be made to all the applicants / respondents. The amount so depicted in the orders, were disputed by the applicants / respondents. This Court has stated that, without prejudice the applicants / respondents shall accept the payments. It is in such background, the present applications have been filed.

42. The issue under consideration can be understood by keeping in view the chart filed by the non-applicant/petitioner in their reply to CM No. 16973/2019, which has been depicted in paragraph 19 of this order.

43. The plea of the applicants / respondents is basically twofold firstly that in terms of the orders passed by this Court, the payments must relate back to April, 2017 in terms of Notification dated June 01, 2018; secondly payment should be made on the basis of difference in the tariff as existing in April 2017 (in terms of Notifications dated May 30, 2017 and October 10, 2017) and tariff in terms of Notification dated June 01, 2018. The same is resisted by the nonapplicant/petitioner by making twofold arguments that the Notification dated June 01, 2018 must be given effect to from May, 2017 and the payments have to be made on the difference between the tariff to be paid as per Notification dated December 08, 2017 i.e 1.5453 and tariff applicable as per Notification dated June 01, 2018 i.e 1.6441.

44. It is further the plea of the non-applicant/petitioner that if the plea as made by the applicants / respondents is accepted i.e. the difference between column 1and column 4 (Para 19), it shall amount to giving retrospective effect to the Notification dated December 08, 2017, which is against the Court order dated May 28, 2018 and also for purpose of correcting the payment index for April, 2017 as provided by the Notification dated June 01, 2018 read with clarification of the respondent No.1 / CERC dated July 26, 2018, the escalation index of March, 2017 is applicable.

45. I am afraid, these two submissions made by the non-applicant / petitioner would not be tenable at this stage, when this Court in terms of the orders referred above, has clearly directed payment to the applicants / respondents in terms of Notification dated June 01, 2018 for the period effective from April, 2017. The said orders of August 28, 2018 and January 08, 2019 having attained finality, need to be given effect to in letter and spirit without any condition(s) attached to them. Since, the Notifications dated December 08, 2017, and June 01, 2018, are under challenge, which include their non-applicability from a back date, suffice would it be to state that the payments made to the applicants / respondents, shall be subject to the final orders to be passed by this Court in the writ petition. The applications are disposed of. W.P.(C) 5785/2018 List the writ petition before Roster Bench on 28th January, 2020 along with the connected matter.

V. KAMESWAR RAO, J