M/S. DLF POWER LIMITED versus CENTRAL COALFIELDS LTD. AND ANR.

M/S. DLF POWER LIMITED versus CENTRAL COALFIELDS LTD. AND ANR.

The Supreme Court held that before final determination of tariffs under the power purchase agreement, actual capital costs incurred up to commissioning of the appellant's power plants must be verified by the Cost Accounts Wing of Ernst & Young, and tariff would be set accordingly by the State Commission.

Parties
Appellant: DLF Power Limited; Respondent: Central Coalfields Ltd.; Respondent: State Electricity Regulatory Commission/Jharkhand State Electricity Regulatory Commission
Jurisdiction
India
Judgment Date
11 July 2007
Procedural Posture
Civil Appeal / Order After Hearing Appeal From Appellate Tribunal for Electricity
Outcome
Matters adjourned with directions for verification of costs and subsequent determination of tariff by the State Commission.
Legal Topics
Tariff Fixation, Capitalisation Verification, Power Purchase Agreement
Electricity Laws Tariff Fixation Capitalisation Verification Power Purchase Agreement

Case Brief

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Parties

DLF Power Limited

Appellant

Central Coalfields Ltd.

Respondent

State Electricity Regulatory Commission/Jharkhand State Electricity Regulatory Commission

Respondent

Procedural Posture

Civil Appeal / Order After Hearing Appeal From Appellate Tribunal for Electricity

Legal Issues

  1. 1 Whether the State Electricity Regulatory Commission has authority to fix the tariff under the Electricity Act, 2003 for the agreement in dispute
  2. 2 Whether the Appellate Tribunal for Electricity has jurisdiction to entertain the appeal
  3. 3 Need for verification of capitalisation of costs incurred up to commissioning of power plants

Ratio Decidendi

The Supreme Court held that before final determination of tariffs under the power purchase agreement, actual capital costs incurred up to commissioning of the appellant's power plants must be verified by the Cost Accounts Wing of Ernst & Young, and tariff would be set accordingly by the State Commission.

Court Disposition

Matters adjourned with directions for verification of costs and subsequent determination of tariff by the State Commission.

Orders

  • Cost Accounts Wing of Ernst & Young, Chartered Accountants, to determine actual capital costs for the two power plants as per power purchase agreement.
  • Report to be issued to parties and State Commission; upon report, State Commission to determine tariff within two months.