The main legal principle established in the judgment is the importance of literal interpretation when the language of a statute is clear and unambiguous, and the rejection of alternative interpretations based on legislative intent or logic.

JUDGMENT

V.S. SIRPURKAR, J.

1. This judgment will dispose of the above three Civil Appeals which have been filed by three Appellants, namely, Tamil Nadu State Electricity Board, Uttar Pradesh Power Corporation Ltd. and Rajasthan Rajya Vidhyut Prasaran Nigam Ltd. The common question of law is involved in all the three appeals which relates to the interpretation of Regulation 2.7(d)(iv) of the Central Electricity Regulatory Commission (Terms & Conditions of Tariff) Regulation, 2001 (hereinafter called the "CERC Regulations, 2001").

These appeals are filed under Section 125 of The Electricity Act, 2003 (36 of 2003) and against the orders passed by the Appellate Tribunal allowing the appeals filed by the respondents therein. The following factual matrix would be necessary for the proper understanding of the controversy involved in these appeals.

2. Before the present Act came in the anvil, the Electricity Supply Act, 1948 was occupying the field and the Central Government norms for fixing tariff for the period 1.11.1992 to 31.10.1997 were notified under Section 43A of the said Act. The Legislature then brought in Electricity Regulatory Commissions Ordinance which was ultimately converted into an Act in the year 1998. Section 3 of the Act provides for the establishment and incorporation of Central Electricity Regulatory Commission (hereinafter called the "CERC" for short). Section 13 provides power to regulate the tariff of generating companies, owned and controlled by the Central Government, sub-section (b) thereof provides power to regulate the tariff of the other companies amongst the other powers which are to be found upto clauses (i) of that Section. Section 28 of the 1998 Act reads as under:

"28. The Central Commission shall determine by regulations the terms and conditions for fixation of tariff under clauses (a), (b) and (c) of Section 13, and in doing so, shall be guided by the following namely:

(a) the generating companies and transmission entities shall adopt such principles in order that they may earn an adequate return and at the same time that they do not exploit their dominant position in the generation, sale of electricity or in the inter-State transmission of electricity;

(b) the factors which would encourage efficiency, economical use of the resources, good performance, optimum investments and other matters which the Central Commission considers appropriate;

(c) national power plans formulated by the Central Government; and

(d) such financial principles and their applications contained in Schedule VI to the Electricity (Supply) Act, 1948 as the Commission considers appropriate."

A bare glance of the above quoted Section suggests that the CERC would formulate regulations for providing terms and conditions for fixation of tariff under Clauses (a), (b) & (c) of Section 13. The power for making Regulations is to be found in Section 55 of the 1998 Act. Accordingly, the CERC has formulated Regulations which are called Central Electricity Regulatory Commission (Conduct of Business) Regulations, 1999. We are concerned herein with the Regulations called CERC Regulations, 2001 and more particularly, clause 2.7(d)(iv) thereof.

3. Before we take up the task of interpretation, we must state the facts which necessitate the interpretation of the above clause. In all these appeals we are concerned with the tariff for the period 1.4.2001 upto 31.3.2004. Clause 1.4 of the CERC Regulations, 2001 provides as under:

"1.4 The generation tariff under these Regulations shall be determined station-wise and transmission tariff shall be determined line wise, sub station-wise, as the case may be, and aggregated to regional tariff."

Provided that a utility may file a petition for fixation of tariff in respect of the completed units/systems.

Clause 1 .11 provides:

"For removal of doubts, it is clarified that the norms prescribed herein are the ceiling norms only and this shall not preclude the Generating Company and other beneficiaries from agreeing to impro