SC says no to Ispat Ind plea on Rs 500 cr power tariff adjustment

The Supreme Court has declined the request of Ispat Industries and some other industrial customers of Maharashtra's power distribution company MSEDCL to readjust Rs 500 crore tariff paid by them against future billing, though the issue will decided without delay.

However, a three judge bench headed by the Chief Justice S H Kapadia said the matter would be heard expeditiously and dismissed the application filed by the industries.

"The interlocutory applications are dismissed. The civil appeals are expedited," the apex court said.

Senior advocate C S Vaidyanathan appearing for the Ispat Industries submitted that industrial customers had supported MSEDCL through increased tariff during its bad days and that the discom should now return the money.

"Our monthly bill is Rs 80 crore. Let them adjust Rs 10 crore per month," he said.

Earlier, passing an interim order in the matter, the apex court had on December 4, 2010, stayed the directions of electricity tribunal APTEL to refund Rs 500 crore collected as special tariff from subsidised industrial customers, including Ispat Industries.
    
However, the bench said  pending proceedings over the special tariff, (the issue of) Regulatory Liability Charge (RLC), before Maharashtra Electricity Regulatory Commission (MERC) would continue.
    
"Pending hearing and final disposal of this appeal, the proceedings before the Maharashtra Electricity Regulatory Commission shall proceed. However, there shall be no repayment till further orders," said the bench which also consisted Justices K S Radhakrishnan and Swatanter Kumar.
    
MSEDCL has challenged the order of Appellate Tribunal for Electricity (APTEL), which had on October 10, 2010, directed the company to pay money back to Ispat Industries along with interest.
    
RLC is a special tariff collected by the discoms from their High Tension Industrial category consumers to compensate for loss incurred for providing subsidised electricity.
    
However, it has to be refunded, along with interest, when the discoms become profitable.
    
MSEDCL has contended that it would have to pay no interest on RLC, as it was collected as tariff from the industry houses and not as a loan.
    
MSEDCL had collected Rs 3,225 crore as RLC from 2004 to 2006 after getting approval from MERC. It was levied at the rate of 50 paise per unit.
    
However, MSEDCL stopped the collection from October 2006, after the MERC asked it to discontinue the charge and return the amount along with interest.
    
It was challenged by MSEDCL before APTEL, which also said that the discom would have to pay interest on RLC.