DAMODAR VALLEY CORPORATION versus CENTRAL ELECTRICITY REGULATORY COMMISSION & OTHERS

Citation: [2018] 14 S.C.R. 433 · Decided: 03-12-2018 · Supreme Court of India · Bench: RANJAN GOGOI · Disposal: Dismissed

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Judgment (excerpt)

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DAMODAR VALLEY CORPORATION
v.
CENTRAL ELECTRICITY REGULATORY COMMISSION
& OTHERS
(Civil Appeal No. 4881 of 2010)
DECEMBER 03, 2018
[RANJAN GOGOI, CJI, SANJAY KISHAN KAUL AND
K. M. JOSEPH, JJ.]
Damodar Valley Corporation Act, 1948: s.38 – Computation
of tariff – Benefit of interest on capital –  Claim for benefit under
s.38 on the ground that though interest was given on the loan portion
and the return on equity was also ensured on the normative equity
portion still over and above the same, appellant was entitled to the
benefit of interest on capital on the whole amount as provided in
s.38 – Appellate Tribunal held that DVC Act provided for interest
on capital which is contributed by the participating Governments
and that under the Act, if there is any deficit in the capital contributed
by the participating Governments, it is to be made good by taking
loan on behalf of the participating Governments and said debt
would attract interest – The average interest rate of the repayment
payable is to be applied on a 50:50 normative debt capital which
means that out of the aggregate equity including reserves, equity
considering the normative debt ratio of 50:50 would be eligible for
return on equity as specified in the Regulations and the excess of
equity if any over the equity earning ratio of 14% is to be considered
as interest bearing debt – On the basis of remand, the Commission
worked out the debt equity ratio as directed by the Appellate Tribunal
– Thus, appellant was already given return on equity in terms of
Tariff Regulation in respect of capital on the basis of debt equity
ratio which was fixed by Appellate Tribunal on a ratio which became
final between the parties – Electricity Act, 2003.
Damodar Valley Corporation Act, 1948: Claim for treating
cumulative depreciation as repayment of loan and thereby reducing
the notional loan component in the capital cost – The said plea was
not taken in the first round of litigation in the appeal before the
[2018] 14 S.C.R. 433
433
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434                    SUPREME COURT REPORTS            [2018] 14 S.C.R.
appellate authority – First order of appellate tribunal having become
final, the matter cannot be  reopened in the appeal from the order
passed pursuant to remand.
Bhaskar Shrachi Alloys Limited & Ors. v. Damodar
Valley Corporation & Ors (2018) 8 SCC 281 ; Delhi
Electricity Regulatory Commission v. BSES Yamuna
Power Limited & Others (2007) 3 SCC 33 : [2007] 2
SCR 747 – referred to
Case Law Reference
(2018) 8 SCC 281
referred to
Para 4
[2007] 2 SCR 747
referred to
Para 8
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4881
of 2010.
From the Judgment and Order dated 10.05.2010 of the Appellate
Tribunal for Electricity in Appeal No. 146 of 2009.
M. G. Ramachandran, K. V. Mohan, Ms. Anushree Bardhan,
Ms. Poorva Saigal, Shubham Arya, Advs. for the Appellant.
A. N. S. Nadkarni, ASG, Basava Prabhu Patil, Sr. Adv.,
Pukhrambam Ramesh Kumar, K. Amrit Kumar Sharma, Rajiv Yadav,
Rajiv Shankar Dvivedi, Ms. Arti Dvivedi, S. K. Sarkar, Nikhil Nayyar,
N. Sai Vinod, Dhananjay Baijal, Divyanshu Rai, Naveen Hegde, Hiren
Dasan, Harish Dasan, Chand Qureshi, Mrs. Sarla Chandra, Mohan
Prasad Gupta, Liz Mathew, Sachin Sharma, A. K. Verma, G. S. Makker,
Anil K. Jha, Ms. Sharmila Upadhyay, Partha Sil, Arvind Kumar Sharma,
Saurabh Mishra, Abhishek Singh, Sunil Kumar Jain, Devashish Bharuka,
Abhijit Sengupta, Advs. for the Respondents.
The Judgment of the Court was delivered by
K. M. JOSEPH, J.
1. By this appeal maintained under Section 125 of the Electricity
Act 2003 (hereinafter referred to as ‘the Act of 2003), the appellant
seeks to challenge the order passed by the Appellate Tribunal dismissing
the appeal filed by the appellant against the order of the Central Electricity
Regulatory Commission (hereinafter referred to as ‘the Commission’).
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BACKGROUND FACTS
2. The appellant is a statutory body constituted under the Damodar
Valley Corporation Act, 1948 (hereinafter referred to as ‘the DVC Act’).
It was entrusted with multifarious functions. One of the functions it was
entrusted was that it was duty bound to carry out generation, transmission
and distribution of electrical energy both hydro electrical and thermal. It
was also called upon to, operate schemes for irrigation, water supply
and drainage besides flood control in the Damodar river and its tributaries.
Acting under Section 20 of the DVC Act, the appellant was fixing the
tariff for the electric

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