The has decisively set aside an order passed by the , which had reviewed and reversed its own five-year-old decision regarding the for the . In a scathing judgment delivered by Justices J. B. Pardiwala and K. Vinod Chandran, the apex court characterized the tribunal’s action as a blatant breach of and an . The court restored the original tribunal order from , while imposing significant financial costs on the respondents involved in what the bench described as an unnecessary and delayed litigation effort.
The dispute centered on the recovery of contributions to a ''—a financial reserve appropriated from profits specifically for redeeming bonds—and its inclusion as an expense in the for power generation and supply. The original 2019 order had upheld the DVC’s tariff structure, relying on established precedents and specific statutory provisions. However, five years later, the tribunal entertained a filed by , arguing that the inclusion of the alongside depreciation on bond-funded capital assets constituted a "double benefit" that unfairly burdened consumers. By the time the tribunal issued its review order in , it had reversed its previous stance, ruling that the DVC could claim either the contribution or depreciation, but not both.
The Supreme Court’s intervention reinforces the sanctity of finality in litigation. Observing the problematic nature of the review, the bench highlighted the constitutional implications of such judicial conduct. As the judgment noted:
"It is not often, but we do come across orders akin to the one impugned, which is in blatant breach of
and in clear violation of
. It raises serious doubts in our minds about independence vis-à-vis accountability."
The court further reminded the tribunal that a judicial body must operate within the confines of established law rather than "innovating at pleasure" to suit evolving interpretations of accounting principles that were already settled by higher courts.
The Conflict Over Statutory Tariff Regulations
The core of the legal controversy involved the interplay between the , and the . The respondents contended that permitting both depreciation and deductions allowed for a double financial advantage, which they argued was contrary to the underlying objectives of the 2003 Act. Conversely, the DVC maintained that its unique status—mandated by the DVC Act to oversee flood control, irrigation, and regional development—necessitated a distinct tariff regime.
The Supreme Court found that the earlier decision in
had already conclusively addressed these issues. The court emphasized the fourth proviso to
, which explicitly preserves the application of the DVC Act to the extent that it is not inconsistent with the Electricity Act. By failing to respect the settled position of law affirmed by the Supreme Court, the tribunal had essentially sat in appeal over its own judgment, a practice strictly prohibited under the scope of
. The bench observed:
"If an error is not self-evident and detection thereof requires long debate and process of reasoning, it cannot be treated as an
."
Scope of Review and Judicial Restraint
A significant portion of the Supreme Court’s reasoning focused on the limited scope of review powers under the Electricity Act, which the court noted is analogous to the power of a civil court under . The tribunal’s attempt to revisit complex accounting issues five years after the initial adjudication was deemed an overreach. The bench underscored that the review jurisdiction cannot be used to correct an order simply because a different view might be preferred on the same facts or points of law.
The judgment articulated that the tribunal must confine its adjudication to material that was available during the initial decision-making process. The subsequent discovery of arguments—or a change in perspective regarding the fairness of a tariff—does not constitute an
"
."
By reopening the case, the tribunal allowed a stale dispute to disrupt the finality of a settled tariff regime, which the Supreme Court declared to be a misuse of the judicial system. The court noted:
"We find the review to be clearly illegal, totally misplaced and blatantly in breach of the principles of
."
Consequences for Parties and Future Compliance
In addition to setting aside the review order, the Supreme Court imposed stringent costs on the parties that had sustained the legal challenge. The court directed to pay costs of ₹2,00,000 for its role in initiating the , which the court identified as an abuse of the process of law. Furthermore, the court imposed costs of ₹1,50,000 on the , which had intervened in the proceedings to support the challenge. The court expressed surprise that a public sector undertaking, described as a 'Maharatna' company, would participate in a case that violated the fundamental principles of and constitutional authority.
The payments are to be made directly to the Damodar Valley Corporation within one month from the date of the order. Failure to comply with this deadline will attract interest at a rate of 18% per annum. This ruling serves as a stern reminder to regulatory tribunals that they must adhere to the precedent established by the Supreme Court. The restoration of the original 2019 tribunal order brings finality to the tariff disputes for the period, ensuring that the DVC’s revenue recovery remains consistent with the statutory framework established by the 1948 Act and the 2003 Electricity Act. The judgment reaffirms that once a question of law or a determination of tariff is settled by the apex court, subsequent attempts to relitigate through the guise of review petitions will be met with severe judicial censure and fiscal accountability.
tariff determination - judicial discipline
