2026 INSC 1178 Civil Appeal No.11106 of 2024 Page 1 of 27

Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

Civil Appeal No.11106 of 2024

Damodar Valley Corporation

…. Appellant

Versus

Maithan Alloys Limited & Ors.

…. Respondents

J U D G M E N T

K. VINOD CHANDRAN, J .

It is not often, but we do come across orders akin to the one

impugned, which is in blatant breach of judicial discipline and in

clear violation of Article 141 of the Constitution of India. It raises

serious doubts in our minds about independence vis-à-vis

accountability. We cannot but recall the sagacious words of

Justice Benjamin Cordozo that a judge “… (He) is not a knight-

errant roaming at will in pursuit of his own ideal of beauty or of

goodness. He is to draw his inspiration from consecrated principles”

(sic-The Nature of the Judicial Process)”. However, here we have a

Tribunal ‘innovating at pleasure’ (sic-supra). The impugned order

Civil Appeal No.11106 of 2024 Page 2 of 27

was passed in a petition seeking review of an order of the year

2019, which was allowed in 2024, after more than five years. That

too, against established orders of tariff fixation under the

Electricity Act, 2003, also on the strength of a decision of this

Court in Bhaskar Shrachi Alloys Limited & Ors. v. Damodar

Valley Corporation & Ors.

1, a binding precedent under Article

141 of the Constitution of India.

2. The respondent herein was also a party in the earlier

proceedings, which determined the tariff between 01.04.2006 to

31.06.2009, by allowing a two-year transition period to the

Damodar Valley Corporation (DVC), the appellant herein, from

01.04.2004 to 31.03.2006. In the instant case, we are concerned

with the period 2009 to 2014, for which the Central Electricity

Regulatory Commission (CERC) fixed the tariff of DVC based on

the statutory provisions of the Electricity Act, 2003 (the Act of

2003), the Damodar Valley Corporation Act, 1948 (the DVC Act)

and the Central Electricity Regulatory Commission (Terms and

Conditions of Tariff) Regulations, 2009 (the Tariff Regulations of

2009). The very same issue of whether the ‘Sinking Fund’ which

1

(2018) 8 SCC 281

Civil Appeal No.11106 of 2024 Page 3 of 27

refers to a portion of the profits appropriated for the purpose of

redeeming the bonds issued by the DVC, was entitled to be

factored in the tariff of the power generated and supplied by the

DVC was considered and upheld in the cited decision of this

Court, which considered the issue on the basis of the enactments

above referred and the Tariff Regulations of 2004.

3. The CERC, for the subsequent period, passed an order in

the year 2013, which is produced as Annexure A7 when the matter

was pending before this Court. When the orders were passed by

the Appellate Tribunal for Electricity at New Delhi, in the appeal

filed by the consumers, the above cited decision had been

delivered. The Tribunal by Annexure A12 judgment upheld the

order of the CERC on its own reasoning and based on the binding

precedent of the cited decision of this Court. None challenged the

appellate order, and a review was filed by one of the appellants,

which was pending before the Tribunal for 5 years, disposed of

by the impugned order. The DVC has filed the above appeal in

which a Public Sector Undertaking, Steel Authority of India

Limited has intervened to add fuel to the fire.

4. We heard Sri Vikas Singh and Dr. Abhishek Manu Singhvi,

learned Senior Counsel appearing for the appellant, Sri Rajiv

Civil Appeal No.11106 of 2024 Page 4 of 27

Shakdher, learned Senior Counsel appearing for the Steel

Authority of India Limited and Sri Rajiv Yadav, learned AoR

appearing for the first respondent, who was the review petitioner

before the Tribunal.

5. The appellants first took umbrage at the review of an order

passed five years back that too after noticing the binding

precedent, but finding an error apparent on the record, in the

order in review, which was based also on the decision of this

Court. It was also pointed out that apart from accounting

principles ‘Sinking Fund’ is an expense permissible for tariff

determination as enabled by the statutory provisions. We were

taken through the specific provisions of the Act of 2003, the DV

Act as also the Tariff Regulations of 2009. In addition to power

generation, the DVC is statutorily enjoined to ensure flood

control, irrigation and development of the area.

6. On the other hand, the respondents would assert that there is

clearly a double benefit conferred by permitting depreciation of

the assets and then permitting the Sinking Fund to be factored in

the tariff as an expense, which puts an undue burden on the

consumer and enables an illegal enrichment to the DVC. The

provisions of the Companies Act are pointed out to urge the

Civil Appeal No.11106 of 2024 Page 5 of 27

contention that depreciation is in the nature of a charge on the

profits of the company, categorized as expenses, reckoning the

wear and tear of the capital assets; ensuring that within a period,

the company gets back the same so as to refurbish the worn out

assets. The Bonds issued by the DVC is also for the purpose of

building infrastructure, which are capital assets and a reserve

fund created for the purpose of redemption of such bonds can

only be appropriated from profits, which cannot be factored as

expenses for the purposes of tariff determination, especially

when the capital assets procured on the strength of the amounts

derived from the bonds is also granted depreciation.

7. We see that the impugned order has proceeded on the

premise that at the earlier stage the Appellate Tribunal had not

considered the issue of a double benefit having been conferred

by allowing depreciation, while also factoring the Sinking Fund

for the purpose of tariff determination. The impugned order,

hence, ruled that the DVC can claim only one of the two elements;

either the contribution to the Sinking Fund to be factored in the

tariff determination or depreciation of capital assets created by

utilizing the bond amount, as passthrough in tariff. The Tribunal,

in the impugned order, has also noticed the judgment of this Court

Civil Appeal No.11106 of 2024 Page 6 of 27

and has found the specific issue having escaped the notice of this

Court also; which in any event, we would think had to be agitated

before this Court in a properly constituted appeal, if at all.

8. However, the contention being that, the earlier decision had

not considered the issue of double benefit we looked at the cited

decision only for our satisfaction, since, if the Coordinate Bench

had actually committed an error, we could refer it to a Larger

Bench. This Court in Bhaskar Shrachi Alloys Limited

1 was

concerned with two sets of appeals. One, from the initial common

order of the CERC in the appeals filed by the DVC; insofar as

exclusion of the provisions of the DVC Act while determining the

tariff and refusal to grant the claims of certain expenses

thereunder, the appeals of the consumers; one of whom was the

first respondent herein, insofar as the transitory period of two

years granted to the DVC for bringing in the rigor of the

Electricity Act and the appeals filed by the State of Jharkhand and

West Bengal Electricity Regulatory Commission against

excluding the State Regulatory Commission to determine the

Intra-State Transmission of electricity, which common order was

challenged before this Court as against the five counts, finalised

by the CERC. The second; from the order after remand made by

Civil Appeal No.11106 of 2024 Page 7 of 27

the very same common order, which directed de novo

consideration of five other aspects which order on remand was

passed when the appeal from the common order was pending

here.

9. We are only concerned with the ‘Sinking Fund’, which even

at that point was allowed by the CERC and affirmed by the

Appellate Tribunal. On going through the judgment, we find that

this Court had laid emphasis, as had the CERC on the fourth

proviso to Section 14 of the Act of 2003, which preserved the

continued application of the provisions of the DVC Act, which

were not inconsistent with the provisions of the Electricity Act. It

was held that the positive provision enabling the continued

application of the DVC Act, had overriding effect over the

inconsistent provisions of the Tariff Regulations of 2004, therein.

One of the contentions urged by the consumers was that the Tariff

Regulations of 2004 being statutory, as empowered under the

Electricity Act, should override the provisions of the DVC Act,

which was not accepted. Immediately, we should notice that the

aspect of depreciation and the eligibility of the Sinking Fund to be

factored in the expenses have been clearly specified as a special

Civil Appeal No.11106 of 2024 Page 8 of 27

provision under the Regulations of 2009; while the Tarriff

Regulations of 2004 makes no special reference to DVC.

10. In Bhaskar Shrachi Alloys Limited

1, this Court laid emphasis

on the 4

th

proviso to Section 14 of the Electricity Act, which we

agree with fully. In this context, we have to extract Section 173 and

174 of the Electricity Act, 2003, which are as under :-

“173. Inconsistency in laws. – Nothing contained in

this Act or any rule or regulation made thereunder or

any instrument having effect by virtue of this Act, rule or

regulation shall have effect in so far as it is inconsistent

with any other provisions of the Consumer Protection

Act, 1986 (68 of 1986) or the Atomic Energy Act, 1962

(33 of 1962) or the Railways Act, 1989 (24 of 1989).

174. Act to have overriding effect. – Save as

otherwise provided in section 173, the provisions of this

Act shall have effect notwithstanding anything

inconsistent therewith contained in any other law for the

time being in force or in any instrument having effect by

virtue of any law other than this Act.”

11. We have to also extract Section 58 of the DVC Act, which is as

under:

“58. Effect of other laws. – The provisions of this

Act or any rule made thereunder shall have effect

notwithstanding anything contained in any enactment

other than this Act or any instrument having effect by

virtue of any enactment other than this Act.”

12. Section 173 of the Electricity Act of 2003 gives overriding

effect to the provisions of the Consumer Protection Act, 1986,

Civil Appeal No.11106 of 2024 Page 9 of 27

Atomic Energy, 1962 or the Railways Act 1989 as against the

provisions of the Electricity Act, 2003 and any rule or regulation

made thereunder or any instrument by virtue of the Act of 2003. It

was argued by the consumers that the DVC Act not having been

included therein, despite recommendations of the Parliamentary

Standing Committee for such inclusion, Section 174 gives

overriding effect to the Tariff Regulations of 2004 framed under

the Act of 2003. Section 174 clearly provides that the provisions

of the Electricity Act of 2003 will have effect notwithstanding

anything inconsistent in any other law for the time being in force;

which we would think would normally include the DV Act of 1948,

which was enacted long before the Act of 2003 came into force.

Despite Section 58 of the DV Act, in which the absence of the

words ‘any other law for the time being in force’ is striking and

patently obvious, Section 174 would nullify the provisions in the

DVC Act which are inconsistent with the Act of 2003, but it would

not repeal the DVC Act and those provisions which are not

inconsistent with the Act of 2003 remains in force.

13. However, the legislature, presumably as abundant caution,

brought in the 4

th

proviso, which though is a proviso to the

provision providing for licences emphasises that the provisions of

Civil Appeal No.11106 of 2024 Page 10 of 27

the DV Act prevail, which are not inconsistent with the provisions

of the Electricity Act. We extract hereunder the fourth proviso to

Section 14:

‘Provided also that the Damodar Valley Corporation,

established under sub-section (1) of section 3 of the

Damodar Valley Corporation Act, 1948 (14 of 1948),

shall be deemed to be a licensee under this Act but shall

not be required to obtain a licence under this Act and

the provisions of the Damodar Valley Corporation Act,

1948, in so far as they are not inconsistent with the

provisions of this Act, shall continue to apply to that

Corporation:’

It is to ensure that the DVC Act prevails, that the proviso was

brought under the provision with the nominal heading ‘Grant of

Licence’; which proviso by the first limb, exempted DVC from

obtaining a licence under the Act of 2003 and deemed it to be a

licensee under the Act and in the second limb, declared the

continued application of the DVC Act, to that Corporation to the

extent they are not inconsistent with the Act of 2003; which Section

174 also does not detract from.

14. There was also a contention raised in the earlier round that

the proviso giving effect to the provisions of the DVC Act, which

are not inconsistent with the Electricity Act, having been

introduced under Section 14, specifically referring to grant of

Civil Appeal No.11106 of 2024 Page 11 of 27

licences, is restrained or confined in this effect to licenses. We

cannot accept the said argument since the grant of licence is the

first step in transmitting, distributing and undertaking trading in

electricity as distinguished from generation of electricity in Part

III. The proviso, hence, while deeming the DVC to be a deemed

licensee under the Electricity Act, not requiring to obtain a

licence under the Act by the very same proviso, set at naught the

provisions in the DV Act, which were inconsistent with the Act of

2003 and enabled the other provisions to continue in its

application to the DVC. Thus, making the Electricity Act

applicable to the DVC on all other aspects including tariff

determination, despite DVC not being required to specifically

obtain a licence. The licence is the sine qua non for engaging in

transmitting, distributing or trading in electricity, which alone can

enable inter alia a generator who carries on any of these functions

to approach the appropriate Electricity Regulatory Commission

for tariff determination. It is hence that Sections 61, 62 & 64 and

Section 79 have overriding effect and the DVC could not have

determined its own tariff under Section 20 of the DVC Act.

However, our reasoning does not enable a different conclusion

from the earlier judgment on the provisions of the DVC Act having

Civil Appeal No.11106 of 2024 Page 12 of 27

effect even after the Electricity Act came into force, to the extent

they are not inconsistent with the provisions of the Electricity Act

and hence, we find absolutely no reason to doubt the earlier

decision.

15. Our finding insofar as the effect of fourth proviso to Section

14, is in tandem with the decision of this Court in Bhaskar Shrachi

Alloys Limited

1. We also concur with Bhaskar Shrachi Alloys

Limited

1, insofar as finding the proviso to Section 14, in its second

limb, to be a substantive provision, especially considering the

background of the constitution of the DVC. This Court had already

noticed that the DVC was constituted, on the lines of Tennessee

Valley Authority in the USA, so as to control the floods of the

Damodar River and by channelising the potential of the river, to

develop the lands in the Valley. The Tennessee Valley Authority

Act had been enacted to improve the navigability and to provide

for flood control of the Tennessee River, for reforestation and

proper use of marginal lands in the Tennessee Valley, to enable

agricultural and industrial development of the valley and to

provide for the national defence by creation of a corporation for

the operation of the government properties near the Muscle

Shoals in the State of Alabama and for other purposes. The objects

Civil Appeal No.11106 of 2024 Page 13 of 27

and reasons of the DVC Act specifically refer to the Tennessee

Valley Authority and constitute the Corporation as an autonomous

body to carry out the functions of flood control in the Damodar

River, generate electric power, provide water for irrigation and

other purposes. In addition, the Corporation was also constituted

to endeavour promotion of economic development of the

Damodar Valley and the adjoining areas, as was argued before us

by the appellants. So was it argued at the earlier point that the

major areas of activity undertaken by the Corporation were

power generation, transmission and distribution, flood control,

irrigation and some connected activities like soil conservation,

afforestation etc.

16. Presently, it was argued that the other purposes also take in

the establishment of a township and ancillary activities connected

with the development of Damodar Valley. The Corporation is

statutorily mandated to perform the social welfare activities,

which are over and above the electricity generation and

transmission, which has led to the DVC being given a special

status, even insofar as the tariff determination, since electricity

generation is the income earning operation of the Corporation,

whose profits are to be used for other activities too, required in

Civil Appeal No.11106 of 2024 Page 14 of 27

addition to the grants made by the State Governments, the

resultant profits from which are to be apportioned to the State

Governments, in proportion to their contribution.

17. We have to specifically notice the relevant provisions of the

DVC Act, which provides for the expenditure, apportionment of

profits, payment of interest, reduction of capital cost and

provision for depreciation and for reserve and other funds, We

extract the same as hereunder:

32. Expenditure on objects other than irrigation,

power and flood control: - The Corporation shall

have power to spend such sums as it thinks fit on

objects authorized under this Act other than

irrigation, power and flood control and such sums

shall be treated as common expenditure payable out

of the fund of the Corporation before allocation under

section 32.

37. Disposal of profits and deficits: - (1) Subject to

the provisions of sub-section (2) of section 40, the net

profit, if any, attributable to each of the three main

objects, namely, irrigation, power and flood control,

shall be credited to the participating Governments in

proportion to their respective shares in the total

capital cost attributed to that object.

(2) The net deficit, if any, in respect of any of the

objects shall be made good by the Governments

concerned in the proportion specified in sub-section

(1):

Civil Appeal No.11106 of 2024 Page 15 of 27

Provided that the net deficit in respect of flood control

shall be made good entirely by the Government of

West Bengal and the Central Government shall have

no share in such deficit.

38. Payment of interest: - The Corporation shall pay

interest on the amount of capital provided by each

participating Government at such rate as may, from

time to time, be fixed by the Central Government and

such interest shall be deemed to be part of the

expenditure of the Corporation.

39. Interest charge and other expenses to be

added to and receipts taken for reduction of

capital cost: - For a period, not exceeding fifteen

years, from the establishment of the Corporation, if

the Corporation runs in deficit, the interest charges

and all other expenditure shall be added to the

capital cost and all receipts shall be taken in

reduction of such capital cost.

40. Provisions for depreciation and reserve and

other funds: - (1) The Corporation shall make

provision for depreciation and for reserve and other

funds at such rates and on such terms as may be

specified by the Auditor-General of India in

consultation with the Central Government.

(2) The net profit for the purposes of section 37 shall

be determined after such provision has been made.

18. Sub-section (2) of Section 40 requires the net profit, for the

purpose of Section 37, to be determined after provision has been

made under sub-section (1), which includes depreciation,

Civil Appeal No.11106 of 2024 Page 16 of 27

reserve and other funds as specified by the Auditor-General of

India. Section 37 is subject to the provisions of sub-section (2) of

Section 40, which requires the net profit, if any attributable to each

of the main objects namely, irrigation, power and flood control; to

be credited to the participating Governments in proportion to

their respective shares in the total capital cost attributed to that

object. The net deficit is made good by the Governments in the

proportion specified in sub-section (1), except insofar as the flood

control is concerned, where the deficit has to be made good

entirely by the Government of West Bengal. The statutory

provision is a clear departure from the general accounting

principles. Insofar as depreciation is concerned as per normal

accounting principles, it is a charge on the profits, which permits

the depreciation to be deducted, before the net profit is arrived

at, as expenses. Whereas, a reserve fund, herein for redemption

of bonds, as pointed out by the respondents, would be a capital

expenditure, which cannot be deducted to arrive at the net profit

and the amounts kept apart for reserve, normally has to be

appropriated from the net profit; in accounting parlance. Insofar

as the capital assets brought in, expending the money raised on

such bonds, the DVC Act, as per Section 42, enables the net profit

Civil Appeal No.11106 of 2024 Page 17 of 27

to be determined after making provision for not only

depreciation, but also after deducting reserve funds and any

other fund at such rate and on such terms as specified by the

Auditor General of India in consultation with the Central

Government.

19. Section 40 is not inconsistent with the Electricity Act, since

Section 61, which speaks of tariff regulations, empowers the

appropriate commission to specify the terms and conditions for

determination of tariff by taking into account, inter alia, the

factors, which would encourage efficiency, economical use of

resources, good performance and optimum investments (clause

c); safeguarding of consumers’ interests, and at the same time,

recovery of the cost of electricity in a reasonable manner (clause

d); the tariff progressively reflecting the cost of supply of

electricity and reduces cross-subsidies in the manner specified

by the Appropriate Commission (clause g).

20. The Electricity Regulatory Commission has specified

Regulation 43 by Regulations of 2009, which is extracted

hereunder:

‘43. Special Provisions relating to Damodar Valley

Corporation.

Civil Appeal No.11106 of 2024 Page 18 of 27

(1) Subject to clause (2), these regulations shall apply

to determination of tariff of the projects owned by

Damodar Valley Corporation (DVC).

(2) The following special provisions shall apply for

determination of tariff of the projects owned by DVC:

(i) Capital Cost: The expenditure allocated to the object

'power', in terms of sections 32 and 33 of the Damodar

Valley Corporation Act, 1948, to the extent of its

apportionment to generation and inter -state

transmission, shall form the basis of capital cost for the

purpose of determination of tariff:

Provided that the capital expenditure incurred on head

office, regional offices, administrative and technical

centers of DVC, after due prudence check, shall also

form part of the capital cost.

(ii) Debt Equity Ratio: The debt equity ratio of all

projects of DVC commissioned prior to 01.01.1992 shall

be 50:50 and that of the projects commissioned

thereafter shall be 70:30.

(iii) Depreciation: The depreciation rate stipulated by

the Comptroller and Auditor General of India in terms

of section 40 of the Damodar Valley Corporation Act,

1948 shall be applied for computation of depreciation

of projects of DVC.

(iv) Funds under section 40 of the Damodar Valley

Corporation Act, 1948: The Fund(s) established in terms

of section 40 of the Damodar Valley Corporation Act,

1948 shall be considered as items of expenditure to be

recovered through tariff.

xxx xxx xxx’

21. The regulation specifically enables depreciation, at the rate

stipulated by the Comptroller and Auditor General of India, in

Civil Appeal No.11106 of 2024 Page 19 of 27

terms of Section 40 of the DVC Act and permits the funds

established in terms of Section 40 of the DVC Act to be considered

as items of expenditure to be recovered through tariff. Annexure

A1 produced along with the appeal, allows appropriation of the

Corporation power surplus insofar as an allotment of Sinking Fund

as a first charge, which is before any allocation for the Investment

Allowance Reserve, categorized as General Reserve. Hence, in a

departure from the accounting principles of allowing

depreciation as a first charge on the gross profits and

appropriation from the net profits towards general reserves; the

‘Sinking Fund’, which is also in the nature of a reserve fund,

constituted only to redeem the bonds, is allowed to be treated as

a first charge, thus, making it an expense deductible from the

gross profits before arriving at the net profit and consequently

enabled to be factored in the tariff as an expenditure for the

purposes of generation, transmission and supply of power.

22. Now, we come to the disturbing issue of the review and we

extract paragraph 57 from Bhaskar Shrachi Alloys Limited

1 as

under:

‘57. Insofar as the questions under the last two issues at

(g) and (h) above are concerned, the same have

already been dealt with in the present order. Of the

Civil Appeal No.11106 of 2024 Page 20 of 27

remaining heads of tariff fixation, it appears that so far

as the “depreciation rate” and “sinking fund” is

concerned it is the provisions of Section 40 of the 1948

Act which have been held to be determinative. We have

gone through the reasoning adopted by the learned

Appellate Tribunal in this regard. Having clarified the

manner in which the fourth proviso to Section 14 of the

2003 Act has to be understood, we do not find the

reasoning adopted by the learned Appellate Tribunal

on the issues relating to “depreciation” and “sinking

fund” to be fundamentally flawed in any manner so as

to give rise to a substantial question of law requiring our

intervention/interference under Section 125 of the 2003

Act.’

23. In the review filed by the 1

st

respondent, paragraph 7

categorically states that they did not impugn the allowance of

contribution to Sinking Fund as a pass through in tariff since the

issue is no more res integra after the decision in Bhaskar Shrachi

Alloys Limited

1. They also put forth the contention that they were

only aggrieved by the double allowance of the principal

component of Sinking Fund contribution by not reducing a

corresponding amount from the capital cost for the purpose of

allowance of depreciation amount, which is accounted for towards

loan repayments as per the Tariff Regulations of 2009. In the

written submissions, however the emphasis is on Sinking Fund not

being a cost but only appropriation of the net profit; which we

have answered. The SAIL also in their written submissions

Civil Appeal No.11106 of 2024 Page 21 of 27

emphasized the said aspect. The above extract clearly indicates

that the Appellate Tribunal’s findings on the issue relating to

depreciation and Sinking Fund, are perfectly in order and there

was no scope for a review from the order which relied on Bhaskar

Shrachi Alloys Limited

1.

24. There is no room for any doubt that the allowance of

depreciation, as juxtaposed with the Sinking Fund also being

factored as an item of expenditure, to be recovered through tariff

as enabled by Section 40, was specifically considered and

upheld. We also notice from the original decision of the Tribunal

which is reviewed, that it had dealt specifically with the contention

of double allowance; allowance one, being on interest on

normative loan of at least 70% or more of actual capital cost,

depreciation for payment of principal and allowance, two; being

contribution to Sinking Fund created for redemption of bonds,

which factors both the interest on relevant bonds and the

principal amount realized through the bonds issued. It was held

that Section 40 of the DVC Act, referred to in Regulation 43, is

consistent with the Electricity Act insofar as the capital cost

incurred by utilizing the amount received from bonds, is

recovered from Sinking Fund contribution, without any allowance

Civil Appeal No.11106 of 2024 Page 22 of 27

thereof as part of interest on loan and depreciation allowed. The

assets acquired by virtue of the amounts generated by the Bonds,

to redeem which a Sinking Fund is constituted, enables benefit of

depreciation on the assets so acquired and the amounts

appropriated from profits for the Sinking Fund being factored as

expenses to be included in the tariff.

25. The impugned judgment of the Tribunal in the Review

Petition refers to a number of decisions on the contours of review

and finds that allowing depreciation on capital assets created by

utilizing bond amounts clearly makes out a case of duplication or

double allowance, which cannot be permitted and the Tribunal at

the first instance having fallen into a patent error in not

recognizing the same. The Tribunal, in review, sought to draw a

distinction between capital assets created with the use of bond

funds and those from other sources; depreciation being

permissible only insofar the latter one and not with respect to the

former. The impugned decision also refers to Bhaskar Shrachi

Alloys Limited

1 and expressed, according to us, vehemently, but

erroneously that the concept of duplication or double allowance

was not brought before the Tribunal and before this Court, and

Civil Appeal No.11106 of 2024 Page 23 of 27

therefore, the same is alive for consideration in review; definitely

overstepping the contours of review.

26. As we noticed from the above extract, though, the words

‘duplication’ or ‘double allowance’ has not been used, this Court

had found the provision for Sinking Fund to be permissible to be

considered as an item of expenditure, and hence, possible of

recovery through tariff, while accepting the allowance on

depreciation; both under the statutory imprimatur of Section 40 of

the DVC Act.

27. We cannot but observe that the Tribunal has gone haywire;

we are apologetic for the expression but we find no substitute to

express our angst in allowing the review, that too, when the very

same issue, for the earlier years, was settled by this Court in

Bhaskar Shrachi Alloys Limited

1, based on which, the original

order was passed by the Tribunal. In this context, we only notice

the decision of this Court in State of West Bengal and Others v.

Kamal Sengupta and Another

2

, which specifically considered the

power of review conferred under the Administrative Tribunals

Act, 1985, by Section 22(3)(f), which is in pari materia with Section

2

(2008) 8 SCC 612

Civil Appeal No.11106 of 2024 Page 24 of 27

122(f) of the Electricity Act. We specifically extract paragraph 22

from the said decision as under:

‘22. The term “mistake or error apparent” by its very

connotation signifies an error which is evident per se

from the record of the case and does not require

detailed examination, scrutiny and elucidation either of

the facts or the legal position. If an error is not self-

evident and detection thereof requires long debate and

process of reasoning, it cannot be treated as an error

apparent on the face of the record for the purpose of

Order 47 Rule 1 CPC or Section 22(3)(f) of the Act. To

put it differently an order or decision or judgment

cannot be corrected merely because it is erroneous in

law or on the ground that a different view could have

been taken by the court/tribunal on a point of fact or

law. In any case, while exercising the power of review,

the court/tribunal concerned cannot sit in appeal over

its judgment/decision.’

(underlining supplied by us for emphasis)

28. Noticing numerous decisions of this Court on the contours of

review, the principles culled out, are available in paragraph 35,

which is also extracted hereunder:

‘35. The principles which can be culled out from the

above noted judgments are:

(i) The power of the Tribunal to review its

order/decision under Section 22(3)(f) of the Act is

akin/analogous to the power of a civil court under

Section 114 read with Order 47 Rule 1 CPC.

(ii) The Tribunal can review its decision on either of the

grounds enumerated in Order 47 Rule 1 and not

otherwise.

Civil Appeal No.11106 of 2024 Page 25 of 27

(iii) The expression “any other sufficient reason”

appearing in Order 47 Rule 1 has to be interpreted in

the light of other specified grounds.

(iv) An error which is not self-evident and which can be

discovered by a long process of reasoning, cannot be

treated as an error apparent on the face of record

justifying exercise of power under Section 22(3)(f).

(v) An erroneous order/decision cannot be corrected in

the guise of exercise of power of review.

(vi) A decision/order cannot be reviewed under Section

22(3)(f) on the basis of subsequent decision/judgment

of a coordinate or larger Bench of the tribunal or of a

superior court.

(vii) While considering an application for review, the

tribunal must confine its adjudication with reference to

material which was available at the time of initial

decision. The happening of some subsequent event or

development cannot be taken note of for declaring the

initial order/decision as vitiated by an error apparent.

(viii) Mere discovery of new or important matter or

evidence is not sufficient ground for review. The party

seeking review has also to show that such matter or

evidence was not within its knowledge and even after

the exercise of due diligence, the same could not be

produced before the court/tribunal earlier.’

The impugned decision of the Tribunal in the present case does

not fall under any of the principles as culled out hereinabove.

29. We find the review to be clearly illegal, totally misplaced and

blatantly in breach of the principles of judicial discipline. We also

have to emphasize the travesty insofar as violation of Article 141

Civil Appeal No.11106 of 2024 Page 26 of 27

of the Constitution of India. Our judicial system with the hierarchy

of Courts thrives on the sanctity of the decisions of the appellate,

revisional and supervisory jurisdictions to be given due

weightage. As far as Article 141 is concerned it’s a Constitutional

imprimatur which ensures the decisions of the highest court of the

land to be followed, without which there will be mayhem. We are

conscious of the criticism that the Supreme Court’s decisions are

supreme not because it is infallible but only because it is the final

Court. However, finality and closure is the expedient need in

litigation.

30. We set aside the impugned decision and restore the order of

the Appellate Tribunal at the first instance dated 17.05.2019. We

also observe with some consternation that there were no appeals

filed from the earlier order to this Court and one of the appellants

before the Appellate Tribunal had filed for a review and waited

for five years to get it heard. We find the said action to be clearly

an abuse of process of law and impose a cost of Rs.2,00,000/-

(Rupees Two Lakh) on the 1

st

respondent. We cannot also ignore

that a Public Sector Undertaking, who claims to be a Maharatna

Company, has willingly participated in the attempt to canvas for

upholding an order passed clearly in breach of judicial discipline

Civil Appeal No.11106 of 2024 Page 27 of 27

and violating Article 141 of the Constitution of India and sought

intervention in the matter. The Public Sector Undertaking has

been ill-advised, and in that circumstance, we impose a cost of

Rs.1,50,000/- (Rupees One Lakh and Fifty Thousand) on the Steel

Authority of India Limited. The cost shall be paid to the Damodar

Valley Corporation within a period of one month from today,

failing which, interest @18% per annum shall be applied.

31. The appeal is allowed with costs, in addition to the exemplary

costs awarded hereinabove.

32. Pending application(s), if any, shall stand rejected.

.……………………………... J.

(J. B. PARDIWALA)

..………….…………………. J.

(K. VINOD CHANDRAN)

NEW DELHI;

OCTOBER 30, 2026.