SC stays tribunal's order for Rs 3,000-cr refund by DVC

Providing relief to the Damodar Valley Corporation (DVC), the Supreme Court today stayed an order of electricity tribunal APTEL directing the power generator and distributor to refund alleged extra tariff amounting to Rs 3,000 crore collected from its consumers.

A Supreme Court Bench, comprising Chief Justice S H Kapadia and Justices K S Radhakrishnan and Swatanter Kumar, stayed the APTEL order, which required the DVC to refund the money that was allegedly collected in excess of the price determined by power regulator CERC.

The electricity tribunal had directed the DVC to refund the 'extra tariff' collected between April 2006 and March 2010 in an order passed on May 10, 2010.

The Bench directed all the parties to file their replies, after which the matter would finally be heard on August 12.

During the proceedings, Attorney General G E Vahanvati and Solicitor General Gopal Subramanium -- appearing for the DVC -- submitted that the CERC had ignored some basic facts while fixing the tariff for the April 2006-March 2009 period.

According to the petition filed by DVC through its counsel J R Das, CERC had not taken into account the additional cost inputs of the company while fixing the tariff for December 2006.

The additional input costs, according to the DVC, included revision of salaries of DVC employees as per the Sixth Pay Commission, contribution in gratuity and pension, money spent on enhancing generating units and opening of new blocks.

When the tariff fixed by the CERC was first challenged by the DVC before APTEL on November 2006, it had directed the CERC to determine it afresh. Following this, CERC had again decided the tariff on August 2009 and, rejecting the DVC's claims, directed it to refund Rs 3,000 crore to consumers.

When DVC took up the matter before APTEL again, the tribunal ruled in favour of the CERC and directed the corporation to refund the amount.

According to the DVC, the CERC had allowed only an amount of Rs 3,777 crore against its total claim of Rs 8,483 crore for that period -- leaving a huge gap of Rs 4,706 crore. It stated that more than 55 per cent of its claim was disallowed by the CERC.

Challenging this, the DVC requested the Supreme Court to "allow its appeal and set aside the judgement passed by APTEL and remit the matter back to CERC for redetermination of tariff as per its direction".