Supreme Court slams APTEL for overruling precedent in DVC tariff case

The Supreme Court is reviewing an order by the Appellate Tribunal for Electricity that overruled a previous Supreme Court precedent on this issue.

Who it concerns: Appellant: Damodar Valley Corporation; Respondents: Maithan Alloys Limited & Ors.; Intervenor: Steel Authority of India Limited; Bench: Justice K. Vinod Chandran.

What the court decided

• The Court criticized the Appellate Tribunal's order for being in 'blatant breach of judicial discipline' and violating Article 141 of the Constitution by overruling the binding precedent in Bhaskar Shrachi Alloys Limited v. Damodar Valley Corporation.
• The Court examined the interplay between the Electricity Act, 2003, the Damodar Valley Corporation Act, 1948, and the Tariff Regulations, specifically focusing on Section 174 of the Electricity Act and the 4th proviso to Section 14.
• The Court noted that the Tribunal's impugned order allowed DVC to claim either the Sinking Fund or depreciation, but not both, based on a finding of 'double benefit,' which the Court is currently evaluating against the statutory provisions.

Also in the document

• The Court stated that the Tribunal's order was passed in a review petition filed more than five years after the original 2019 order.
• The Court emphasized that the DVC Act provisions continue to apply to DVC to the extent they are not inconsistent with the Electricity Act, 2003, citing the 4th proviso to Section 14 of the Electricity Act.
• The Court rejected the argument that the 4th proviso to Section 14 is confined only to the grant of licenses, holding that it enables the DVC Act to continue in application to DVC on all other aspects, including tariff determination.