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Rajasthan Electricity Regulatory Commission
Petition No. RERC-476/14
In the matter of adjudication of dispute under Section 86 (1) (f) of the Electricity
Act, 2003.
Coram:
Shri Vishvanath Hiremath, Chairman
Shri Vinod Pandya,
Member
Shri Raghuvendra Singh, Member
Petitioner
:
Respondent
:
M/s DCM Shriram Ltd., Kota
1.
2.
3.
4.
Jaipur Vidyut Vitran Nigam, Jaipur (JVVNL)
Ajmer Vidyut Vitran Nigam, Ajmer (AVVNL)
Jodhpur Vidyut Vitran Nigam, Ajmer (JdVVNL)
Raj. Discoms Power Procurement Centre (RDPPC)
Date of hearings
:
30.10.2014, 11.11.2014, 02.12.2014, 30.12.2014 &
10.3.2015
Present
:
1. Sh. P. N. Bhandari, Advocate for Petitioner
2. Sh. Bipin Gupta, Advocate for Respondent
3. Sh. Jaideep Charan, Asstt. Manager, DCM
4. Sh. S.T. Hussain, Ex. En., JVVNL
Order Date:
10.04.2015
ORDER
1.
M/s DCM Shriram Ltd, (herein after referred to as ‘Petitioner’) has filed this
petition on 17.10.2014 under Section 86(1)(f) of the Electricity Act 2003 for
adjudication of dispute with Discoms.
2.
Notices were issued to Respondents on 31.10.2014 for filing reply. Discoms
filed their reply on 23.12.2014 endorsing a copy to the Petitioner.
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3.
The matter was heard on 10.03.2015. Sh. P. N. Bhandari, Advocate
appeared for Petitioner and Sh. Bipin Gupta, Advocate appeared for
Respondents.
4.
The Petitioner has made the following submissions in its petition and during
the hearing:
(i)
The Petitioner has Captive Power Plant (CPP) at Kota with capacity
of 125 MW.
(ii)
In 2009, the State authorities invited bids for purchasing electricity
from the CPPs of the State. The Petitioner was one of the successful
bidders.
(iii)
The Respondent RDPPC issued an LOI to the Petitioner on 30.6.2009
for supply of round the clock power upto 30 MW. In the LOI, the tariff
was fixed at Rs.6.50/kWh.
(iv) The procedure of adjustment of bills was indicated at Clause 5 of the
LOI, which is reproduced as under:
“You will have the option of sale of electricity after meeting
requirement of captive use by your industrial unit(s) and meeting
commitment for sale of power to Rajasthan Discoms. You will not be
eligible for sale of power if your industrial unit(s) is drawing net electricity
from the grid i.e. the power exported to the grid should be more than
the power drawn from the grid at any instant during the contracted
period. The energy drawn from Rajasthan Discoms by your other unit(s)/
sister concern(s) as an HT consumer of the Discoms, located adjoining
the industrial unit where your CPP is located and also elsewhere at
different places in Rajasthan shall be adjusted/ accounted for, first from
the energy supplied on ‘firm’ basis and if the same still remains
unadjusted then such unadjusted energy shall be adjusted/accounted
for from the energy supplied on ‘Day ahead’ basis, if any to Rajasthan
Discoms, on weekly basis during the contracted period. The balance
energy, after such adjustment, shall be considered as sale to Rajasthan
Discoms, irrespective of whether there exists an open access
agreement, between your CPP and RVPN/Discoms for wheeling of
power from your CPP to your such other unit(s)/sister concern(s) or not.
Such adjustment shall be effected based on weekly meter readings of
the other unit(s)/sister concern(s), for which concerned SE (RDPPC)
Discoms shall take necessary action. However the power/energy drawn
by such other unit(s) or sister concern(s) shall not be considered for the
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RERC/476/14
purpose of comparing the actual power supply vis-à-vis scheduled
power to see that the variation in any time block of 15 minutes is
between 95% to 105% or not and also for the purpose of working out
the actual supply of energy to see whether the same is at least 80% of
the contracted quantity during a week or not. You will provide the
details viz Name, Location, Contract Demand and Account No. of the
HT connection, indicating the Name of the concerned Discom, in
respect of your other unit(s) and/or sister concern(s) to the concerned
SE (RDPPC) Discom.”
(v)
Based on the LOI and mutual discussions with the parties, the Jaipur
Discom had issued a clarification on 17.08.2009 with respect to
procedure for adjustment of energy to be sold by CPP to Discoms.
(vi) All the bills pertaining to the LOI, raised by the Petitioner were settled
with no dispute from either side. All contractual obligations were duly
fulfilled by both parties.
(vii) After lapse of nearly two and half years from completion of all
contractual obligations, Respondent unilaterally on 06.11.2012 issued
a revised order, modifying the order dt.17.08.2009 which was issued
after mutual discussions.
(viii) Subsequently, Respondent JVVNL had issued another order dt.
20.02.2013 indicating that prima facie, Rs.27449724/- became
recoverable from the Petitioner. The said amount was further revised
by Discom to Rs. 37090381/- vide their order dt. 17.05.2013.
(ix) This order is an attempt to retrospectively revise the terms and
conditions of the contract, as indicated in the LOI. The adjustment
procedure was arbitrarily sought to be changed, without even
extending a mock formality of seeking the explanation of the
Petitioner. The Petitioner vide its letter dated 27.2.2013 protested the
action of Discoms.
(x)
Petitioner vide its letter dt. 01.06.2013 to Discoms reiterated its stand
not to impose retrospective demand when the entire contractual
obligation has been consummated.
(xi)
Any unilateral revision of the terms and conditions of the agreement
is void ab initio. Even otherwise, a unilateral retrospective
change/amendment is not permissible in any contract mutually
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agreed between the parties. Such an act is arbitrary, malafide and
patently illegal.
(xii) This action is also hit by the doctrine of promissory estoppels, because
what had been agreed and promised in the contract cannot be
unilaterally amended by one of the contracting parties.
(xiii) It is well established through a plethora of judgments of the Hon’ble
Supreme Court that except an act of Parliament or State Legislature,
no Rule, Regulation, Order or Circular can be issued with
retrospective effect.
(xiv) Reliance is placed on the various judgments of Hon’ble Supreme
Court viz State of Orissa v/s Mangalam Timber Products Ltd. (2004) 1
SCC 139, Hukam Chand etc. v/s Union of India & ors. (1972) 2 SCC
601, Bejgam Veeranna Venkata Narasimloo v/s State of Andhra
Pradesh AIR 1998 SC 542, Bakul Cashew Co. and ors. V/s Sales Tax
Officer (1986) 2 SCC 365, T.R. Kapur and Ors. vs. State of Haryana and
Ors. 1986(SUPP) SCC 584,
Sri Vijayalakshmi Rice Mills, New
Contractors Co. and Ors. vs. State of Andhra Pradesh (1976) 3 SCC
37.
(xv) In LML Ltd. vs. State of UP & ors (2008) 3 SCC 128, the Hon’ble
Allahabad High Court had struck down an order of the UP Power
Corp. on the ground that it was beyond the jurisdiction of the
Corporation. Accordingly the order issued by the Corporation was
withdrawn retrospectively. The matter was challenged before the
Hon’ble Supreme Court.
Even though it was clear that the
Corporation’s order was without jurisdiction, still the Hon’ble Supreme
Court held that for the lapse of the Corporation, the consumer should
not suffer and therefore the quashing of the order was given
prospective effect in order to protect the interest of the consumers
who had acted upon the circular of the Discom.
(xvi) In light of the above facts, Petitioner sought the following directions
from the Commission:
a) Order dated 17.5.2013 may kindly be quashed and heavy cost
should be allowed in favour of the Petitioner in view of the
avoidable harassment and forced litigation upon the Petitioner.
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b) Any other relief in favour of the Petitioner, which the Hon’ble
Commission deems fit and proper in this case;
5.
Sh. Bipin Gupta, Advocate appeared for the Respondent and made the
following submission:
(i) Present dispute is not covered before the Hon’ble Commission because
whatever is sought to be recovered is the amount on account of refund
of fixed charges, transformer rent and meter equipment rent which has
wrongly been paid to the Petitioner and its sister concerns having HT
connection from the Respondents and such a dispute is not
maintainable before the Hon’ble Commission and, therefore, the
petition is liable to be rejected.
(ii) The impugned circular/order dt. 17.08.2009 is only an illustration which
has shown as how bill raised to industrial unit / sister concern and how
the adjustment should have been made in respect of the units utilized
by the industrial concern and not the entire bill raised as it is incumbent
on an HT consumer to pay fixed charges, transformer rent and metering
equipment rent, etc. under its HT agreement on the basis of tariff
determined by this Hon’ble Commission.
(iii) When it came to the knowledge of the Discoms that wrong payments
were made to the Petitioner on account of refund of fixed charges,
transformer rent and metering equipment rent, a clarification was issued
on 06.11.2012 and it was decided to review all the payments made
earlier. As the adjustment can be given only in respect to the energy
utilized and not in respect to the fixed charges, transformer rent and
metering equipment rent, therefore, said are liable to be paid by a
consumer having a different contract with Respondents. Also, it is an
obligation of the consumer to pay charges according to the tariff
determined by the Commission under retail tariff order.
(iv) In LOI, issued to the Petitioner, it was only a requirement to give details
of all HT connections of its industrial units as well as its sister concerns
whereas these HT connections would be governed by their own
agreement.
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RERC/476/14
(v) If both the impugned circular/order are seen together then it would be
clear that the earlier circular/order also provided for raising of bills by
the Discoms as usual, which indicates that a consumer of Discom and a
CPP has to pay the charges under its obligation of connection which he
had taken from the Respondents.
(vi)It is not a case of change in Rules, Regulations or Law but rather it is
matter of applying correct application and adjustment which is being
done and which was also the requirement of Supply Code Regulations.
(vii) The judgments on which Petitioner relied are not applicable to the facts
and circumstances of the present case.
(viii) It is only correction of the adjustments as per retail tariff order and an HT
consumer of a CPP is supposed to pay fixed charges, transformer rent,
metering equipment charges as decided by the Commission, even if he
does not consume any electricity from the Discoms. Under the
adjustments, the refund of the said amounts were inadvertently given
by the Discom and such claim and demand for inadvertent payment
made to the consumer and such recovery is totally permissible as the
consumer was under an obligation to make payment of fixed charges,
transformer rent, metering equipment charges and therefore, the
demand which has been raised by the Respondents is perfectly legal
and justified and the petition filed by the Petitioner is without any basis
and is liable to be rejected.
(ix) Petitioner, in his present petition, has not challenged the order dated
06.11.2012 or 17.08.2009 and, therefore also, the petition is not
maintainable and is liable to be rejected.
Commission’s view and decision :
6.
There is no dispute between the parties that Petitioner supplied electricity
to the Discoms in pursuance to LoI dt.30.6.2009 issued by RDPPC which is
produced as Annexure-I of the petition. It is also undisputed that clause 5
of the LoI dealt with energy accounting, billing and payment of the
electricity supplied. The Chief Engineer (Commercial), JVVNL issued an
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order dt.17.8.2009 explaining the procedure to be followed for adjustment
of energy sold by CPP to Rajasthan Discoms as well as its own industries. It
is also undisputed that the bills were settled, based on the terms of LoI
read with procedure order dt.17.8.2009.
7.
Thereafter JVVNL issued an order dt.6.11.2012 wherein it was clarified that
there is an error in billing of energy supplied and energy used for self.
While giving credit to the energy utilized for self, fixed charges along with
meter rent have been refunded which was incorrect and therefore the
bills settled have to be reworked out and the excess amount to the tune
of Rs. 2,74,49,724 has to be recovered back. Subsequently this amount
has been modified on 17.5.2003 as Rs.3,70,90,381/-.
8.
According to the Petitioner’s Counsel Shri Bhandari, the order dt.6.11.2012
through which recovery is sought to be made is illegal. He vehemently
contended that once the power supply has been made and the bills are
settled as per LoI, the contract stands performed fully and discharged. It
cannot be reopened now on the ground that there are errors in settling of
the bills. The Respondents’ action is hit by the doctrine of promissory
estoppel as the procedure provided in the order dt.17.8.2009 was one
which was mutually agreed between the parties.
9.
He further contended that the order providing for reworking of bills
retrospectively is contrary to law as no authority can revise the terms of an
order with retrospective effect that too without giving an opportunity of
hearing. In support of this argument, he has cited the following
judgments:
a)
b)
c)
d)
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State of Orissa V/s Manglam Timber Products Ltd. (2004) 1 SCC 139.
Hukam Chand etc. V/sUnion of India & Ors. (1972) 2 SC 601.
Bejgam Veeranna Venkata Narsamloo V/s State Of Andhra Pradesh
AIR 1998.SC 542.
Bakul Cashew Co. and Ors.V/s Sales Tax Officer (1986)25 SCC 365.
RERC/476/14
e)
f)
g)
10.
LML Ltd. V/s State of UP & Ors. (2008) 3 SCC 128.
T.R. Kapur and Ors. V/s State of Haryana and Ors. 1986 (SUPP) SCC
584.
Shri Vijayalakshmi Rice Mills, New Contractors Co. and Ors. V/s State
of Andhra Pradesh (1976) 3 SCC 377.
Per contra Shri Bipin Gupta, Learned Counsel for the Respondents has
contended that the impugned order is not a statutory order and is only a
billing procedure correction order. According to him, while implementing
the billing procedure, there was an error which has been corrected and
recovery has been ordered. Therefore, it is a simple case of correcting the
error and recovery of the amount which was wrongly paid to the
Petitioner. He also contended that legal principles submitted by the
Petitioners’ Counsel have no application to the present case.
11.
We have carefully considered the rival submissions in the light of facts
placed before us. In our view, the order dt.17.8.2009 and revised order of
adjustment dt.6.11.2012 are only billing procedure order. They do not
have any statutory character. They are only contract (LoI) performance
orders. Therefore, what will govern the relation is the terms of LoI and not
the earlier procedural order. We have perused Clause 5 of LoI which
deals with adjustment of bills. As per this clause only the energy billed and
paid for self shall have to be adjusted. The procedural order issued on
17.08.2009 is not in accordance with the term of the LOI, the same cannot
be relied upon to retain an unjust benefit.
12.
As per the Respondents, while settling the bills, instead of giving credit
only for the energy charges billed and paid, demand and meter charges
were also refunded. On noticing this, the impugned order dt. 6.11.2012
has been issued and the wrongly allowed amount is being ordered to be
recovered back. It is submitted by the Respondents that the impugned
action is nothing but correcting the error that was committed.
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13.
In the above action of the Respondents, we do not find any illegality.
Apparently what is being done is only the correction of the error
committed. Nobody can claim a vested right in a wrong action taken. If
we allow the Petitioner to retain the amount wrongly refunded, it will
amount to perpetuating the error. Further it will be unjust enrichment on
the part of the Petitioner. This will be inequitable. The contention that the
first procedural order was as a result of an agreement has no basis and
therefore cannot be accepted.
14.
In a recent case of Birla Cement Works (SB (Civil) Writ Petition No.16789 of
2013 & Others), similar question came for consideration before the
Hon’ble High Court of Rajasthan. Rejecting the similar arguments made in
the present case, the Hon’ble High Court of Rajasthan has held as follows:
“Adverting now to the submissions made on behalf of the Petitioners
that the recovery of the amount of power factor incentive already
extended to the Petitioners from retrospective effect would be
incompetent in view of the settled proposition of law that only an Act
of parliament or State Legislature can be retrospective and no rule,
regulation, order or notification can have retrospective effect, suffice
to say that the argument proceeds on the fallacious assumption of
retrospectivity in the recovery, which in fact it is not. What is being
recovered is the amount, benefit of which has wrongly been
extended to the Petitioners. In other words, what benefit has been
extended to the Petitioners, was not payable on the date it was
granted to them. Therefore, what is being recovered now by the
respondent-Discoms is an amount benefit of which has unduly been
granted to the Petitioners. They are merely seeking to rectify this
mistake. Not making such recovery would tantamount to unjust
enrichment of the Petitioners. Thus viewed, recovery of the incentive
granted or extended by way of under-billing to the Petitioners
cannot be said to be retrospective recovery. The cited judgments
are therefore wholly inapplicable.”
15.
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The above judgment of Learned Single Judge Bench has been affirmed
by the Division Bench in DB Special Appeal No.599 of 2014.
RERC/476/14
16.
Respectfully following the view taken by the Hon’ble High Court of
Rajasthan and considering the facts of the present case, we hold that the
recovery initiated by the Respondents cannot be termed as illegal and no
exception can be taken of the same.
17.
Coming to the contention of Shri Bhandari that the action of the
Respondents is hit by the principle of promissory estoppel, we are of the
view that in a concluded contract there is no question of promissory
estoppel. What should govern is the contract and its terms. Any
discussions that have taken place before concluding the contract will no
longer be relevant unless the contract is not clear. Further in the present
case it has not been pointed out what was the promise held out to the
Petitioner. Wrong settling of bill cannot amount to a promise. Even
otherwise as held by us there was an erroneous action on the part of the
Respondents while settling the bills and that cannot stop the Respondents
from correcting the error.
18.
As regards the contention of Shri Bhandari that no authority can modify
the order retrospectively is concerned we are of the view that there is no
such retrospective amendment of any statute or statutory order in the
present case. As pointed out in the earlier paragraphs, two orders
dt.17.8.2009 and 6.11.2012 are neither statutory orders nor have the force
of the law. They were only administrative orders for implementing the
contract. Consequently the judgments cited by Shri Bhandari in support
have no application to the present case.
19.
For the foregoing reasons, this petition has to be rejected and
accordingly stands rejected.
(Raghuvendra Singh)
Member (T)
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(Vinod Pandya)
Member (F)
(Vishvanath Hiremath)
Chairman
RERC/476/14