NTPC Limited vs AP Eastern Power Distribution Company Limited & Ors on 29 May 2026

JUDGEMENT

PER HON’BLE MR. AJAY TALEGAONKAR, TECHNICAL MEMBER

1. The Present Appeal has been filed by NTPC Limited (NTPC/Appellant) challenging the Order dated 16.02.2017 passed by the Central Electricity Regulatory Commission (Respondent No. 14/ CERC/ Central Commission) in Petition No. 293/GT/2014 wherein the Central Commission had determined the tariff applicable for the generation and supply of electricity by the Appellant from its Talcher Super Thermal Power Station, Stage II (Talcher Station - Stage II) for the period from 1.04.2014 till 31.03.2019.

Description of the Parties

2. The Appellant, NTPC Limited, is a Government of India enterprise incorporated under the provisions of the Companies Act, 1956 and is engaged in the business of generation and sale of electricity.

3. Respondent Nos. 1 to 13 are the beneficiary distribution licensees, electricity utilities and procurers of power from Talcher Station - Stage II ownwd by the Appellant.

4. Respondent No. 14, CERC is the Central Commission constituted under Section 76 of the Electricity Act, 2003 and is vested with powers and functions, inter alia, relating to regulation of tariff of generating companies owned or controlled by the Central Government.

Factual Matrix of the Case

5. On 26.06.2009, a Fuel Supply Agreement (FSA) was entered into between Mahanadi Coalfields Limited (MCL) and the Appellant for supply of 17.3 Million Tonnes Per Annum (MTPA) of coal to Talcher Super Thermal Power Station, Stages I and II having a cumulative installed capacity of 3000 MW.

6. On 21.02.2014, the Central Commission notified the Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2014 (Tariff Regulations, 2014) applicable for the tariff period from 01.04.2014 to 31.03.2019. Pursuant thereto, on 19.08.2014, NTPC filed Petition No. 293/GT/2014 before the Central Commission seeking determination of tariff for Talcher Station - Stage II for the tariff period from 01.04.2014 to 31.03.2019.

7. In the said Petition, NTPC claimed projected additional capitalization, inter alia, towards installation of Wagon Tippler and associated works under Regulation 14(3)(x) of the Tariff Regulations, 2014. The Appellant claimed an expenditure of Rs. 112.50 Crores for the year 2016-17 and Rs. 12.50 Crores for the year 2017- 18 towards the said works.

8. During the proceedings before the Central Commission, Record of Proceedings dated 24.05.2016 was issued seeking certain information, clarifications and details from the Appellant in relation to the tariff petition. According to the Appellant, no specific information or justification was sought by the Central Commission in respect of the Wagon Tippler and associated works claimed under additional capitalization.

9. On 14.07.2016, the Appellant furnished the information and clarifications sought by the Central Commission pursuant to the Record of Proceedings dated 24.05.2016.

10. Thereafter, the Central Commission passed the Impugned Order dated 16.02.2017 in Petition No. 293/GT/2014 determining the tariff for Talcher Station

- Stage II for the period 01.04.2014 to 31.03.2019. By the said Order, the Central Commission disallowed the projected additional capitalization claimed towards Wagon Tippler and associated works.

11. Aggrieved by the aforesaid disallowance, the Appellant filed Review Petition No. 14 of 2017 before the Central Commission seeking review of the Order dated 16.02.2017.

12. The Central Commission, however, dismissed the Review Petition No. 14 of 2017 vide Order dated 31.08.2017 (Review Order).

13. Aggrieved by the Impugned Order, the Appellant has filed the present Appeal before us challenging the disallowance of additional capitalization towards Wagon Tippler and associated works.

14. The Appellant has prayed for the following relief before us:

“(i) Allow the appeal and set aside the order dated 16.02.2017 passed by the Central Commission to the extent challenged in the present appeal; and

(ii) Pass such other Order(s) and this Hon’ble Tribunal may deem just and proper.” Submissions of the Appellant

15. The Appellant submitted that by the Impugned Order, the CERC disallowed the claim of additional capitalization towards Wagon Tippler and associated works on the ground that the coal requirement of the generating station could allegedly be met through the existing arrangement with Mahanadi Coalfields Limited (MCL) and that no documentary evidence had been placed regarding the phasing out of Bottom Opening Bottom Releasing (BOBR) wagons.

16. The Appellant contended that the findings recorded in the Impugned Order are contrary to the prevailing operational realities during the relevant tariff period, including the persistent nationwide coal shortage, the increasing dependence on alternate coal sources transported through BOXN wagons and the operational and safety necessity of installation of Wagon Tipplers. It was further submitted

that the disallowance is inconsistent with the settled regulatory and judicial position subsequently recognized by this Tribunal.

17. The Appellant further submitted that although the claim for Wagon Tippler works was initially raised in the tariff proceedings for the period 2014-19 against the Impugned Order dated 16.02.2017 in 293/GT/2014, the said works could not be capitalized during the said tariff period. Consequently, the Appellant projected the same in Petition No. 441/GT/2020 pertaining to the tariff period 2019-24 before the CERC.

18. It was pointed out that the Commission, by order dated 27.04.2023 in Petition No. 441/GT/2020, made the said claim subject to the final outcome of the present Appeal. The Wagon Tippler works were ultimately capitalized in FY 2019- 20 and were accordingly claimed in the truing up petition for the tariff period 2019- 24 along with detailed justifications and supporting documents.

19. The Appellant submitted that the disallowance of additional capitalization towards Wagon Tippler is founded on an erroneous understanding of the operational requirements of a thermal generating station. It was contended that manual unloading of coal from BOXN wagons is unsafe, inefficient, labour intensive and operationally unsustainable. The requirement for Wagon Tipplers arose due to persistent shortages in domestic coal supply from linked mines, increasing dependence on alternate coal sources transported through BOXN wagons, phasing out of BOBR wagons by Indian Railways and the necessity of ensuring safe, automated and uninterrupted unloading of coal.

20. The Appellant submitted that manual unloading of BOXN wagons increases rake cycle time by approximately 8-9 hours, resulting in operational inefficiencies

and exposure to demurrage charges due to detention of subsequent rakes. It was further submitted that manual unloading exposes plant personnel to serious safety and health risks, particularly in coal-laden dusty environments during monsoon and festive seasons when labour mobilisation becomes difficult. The Wagon Tipplers constitute an essential component of modern coal handling infrastructure and facilitate high-volume coal handling, uninterrupted fuel supply, reduced dependence on manual labour, improved safety standards, compatibility with modern BOXN wagon configurations, reduction in environmental pollution through integrated dust suppression systems and long-term operational efficiency. It was pointed out that after commissioning of the Wagon Tippler in FY 2019-20, loss in station availability on account of coal shortage became nil, thereby demonstrating its operational significance.

21. The Appellant further submitted that the Commission failed to appreciate the severe coal shortage situation prevailing during the relevant tariff period. It was contended that from FY 2010-11 onwards the country witnessed acute coal shortages which was itself acknowledged by the Commission by prescribing reduced normative availability norms of 83% for coal-based stations during 2014- 17 instead of the normal 85%. Despite such acknowledgement, the Commission failed to consider the necessity of Wagon Tipplers arising from dependence on alternate coal sources transported through BOXN wagons.

22. It was submitted that although the FSA dated 26.06.2009 stipulated annual contracted quantities of coal for Talcher Super Thermal Power Station, actual coal receipts from MCL consistently remained below the contracted quantities. The Appellant contended that the additional information filed before this Tribunal establishes recurring coal deficits and demonstrates that substantial quantities of coal had to be procured from alternate sources.

23. During FY 2010-11 to FY 2013-14, coal shortages were particularly acute, resulting in significant availability losses. In FY 2010-11, availability losses were 3.11% for Stage-I and 4.03% for Stage-II, while in FY 2012-13, the losses increased to 7.48% for Stage-I and 8.26% for Stage-II. It was further submitted that although coal availability marginally improved during FY 2014-15 to FY 2016- 17, dependence on alternate coal sources continued including receipt of approximately 3.01 MTPA of coal from alternate sources during FY 2014-15.

24. Thereafter, shortages intensified during FY 2017-18 to FY 2019-20 due to declining receipts from MCL and increasing operational demand. In FY 2019-20, total coal receipts reduced to 16.50 MTPA, out of which coal received from MCL was only 14.36 MTPA, resulting in availability losses of 11.98% for Stage-I and 10.26% for Stage-II. On this basis, the Appellant contended that dependence on alternate coal sources and BOXN wagons had become unavoidable and installation of Wagon Tipplers was therefore an operational necessity and not a discretionary expenditure.

25. The Appellant further submitted that the Commission erroneously assumed that the entire quantity of coal under the FSA dated 26.06.2009 was exclusively available for Talcher Stage-II whereas the said FSA pertained to the combined installed capacity of Talcher Stages-I and II aggregating to 3000 MW. It was further contended that the FSA itself contemplated procurement of coal from alternate sources in case of shortfall and, therefore, additional infrastructure in the nature of Wagon Tipplers became necessary due to transportation of coal through BOXN wagons.

26. The Appellant also submitted that the Commission erred in computing coal requirement on Gross Calorific Value on “as billed” basis instead of “as received”

basis in terms of the Tariff Regulations, 2014 thereby underestimating the actual coal requirement for achieving normative availability.

27. The Appellant further assailed the finding of the Commission that no documentary evidence had been produced regarding phasing out of BOBR wagons. It was submitted that the Ministry of Railways, by communication dated 20.07.2004, had itself acknowledged increasing transportation of coal through BOXN wagons and advised NTPC to plan installation of Wagon Tipplers in addition to Track Hoppers. The said communication also advised development of appropriate infrastructure for unloading coal from linked and alternate coalfields. The Appellant submitted that the Commission never specifically called upon the Appellant during the original proceedings to produce the said communication or furnish clarification regarding Wagon Tipplers.

28. Under Regulation 55 of the Conduct of Business Regulations, the CERC possessed ample power to seek clarifications and additional information. Reliance was placed on the Record of Proceedings dated 24.05.2016 to contend that while clarifications were sought regarding other expenditures, no clarification was sought in relation to Wagon Tipplers.

29. The Appellant further submitted that the Commission, in Review Petition No. 14/RP/2017 decided on 31.08.2017, rejected reliance upon the Railway communication on hyper-technical grounds despite the document clearly substantiating increasing use of BOXN wagons and the operational necessity of Wagon Tipplers. The Appellant contended that the Commission adopted an inconsistent approach in the present case as capitalization towards Wagon Tipplers had been allowed in similarly situated generating stations including Kahalgaon ST-I (245/2009), Vindhyachal-III (342/GT/2014) and Farakka-I & II

(222/2009). It was submitted that in those cases the Commission itself recognized that Wagon Tipplers improve unloading time of coal rakes, enhance operational flexibility and reduce apprehensions regarding diversion of wagons by Railways. Having acknowledged the operational necessity of Wagon Tipplers in other matters, the Commission could not adopt a contradictory approach in the present case.

30. The Appellant finally submitted that the issue stands covered by the Judgment dated 01.12.2022 passed by this Tribunal in Appeal No. 311 of 2017 and connected matters wherein this Tribunal recognized that automated unloading facilities cannot be equated with manual unloading of coal from BOXN wagons which was held to be highly unsafe. This Tribunal further observed that Wagon Tipplers constitute the only safe and reliable mechanism for unloading coal from BOXN wagons and also acknowledged the prevailing nationwide coal shortage situation during the relevant period.

31. On the aforesaid grounds, the Appellant prayed that the disallowance of additional capitalization towards Wagon Tippler and associated works be set aside and the claim be allowed.

Submissions of the Respondent No. 5 - TANGEDCO

32. TANGEDCO submitted that from the order dated 29.03.2023 passed by the CERC in the true-up proceedings for the control period 2014-19 in Petition No. 392/GT/2020, it appears that no expenditure under the said head was actually claimed during the relevant tariff period. It was further pointed out that in the subsequent tariff proceedings for the control period 2019-24 in Petition No. 441/GT/2020, the Appellant claimed projected additional capital expenditure of INR 116 Crores towards Wagon Tipplers and associated infrastructure.

Accordingly, TANGEDCO contended that the question of allowing such expenditure for the period 2014-19 does not arise.

33. TANGEDCO submitted that the CERC assessed the coal requirement of the generating station on the basis of normative Plant Availability Factor of 85%, Station Heat Rate of 2375 kCal/kWh and Gross Calorific Value (GCV) of coal of 3127.66 kCal/kg in the absence of “as received” GCV data furnished by the Appellant.

34. It was further submitted that in the review order dated 31.08.2017 passed in Review Petition No. 14/RP/2017, the CERC specifically rejected the Appellant’s contention that coal received from MCL had to be apportioned between Stage-I and Stage-II and held that the Appellant failed to establish any actual shortfall in MCL coal supply even after such apportionment. TANGEDCO submitted that the Appellant’s plea regarding replacement of BOBR wagons by BOXN wagons was also found unsubstantiated by the CERC. Reliance was only placed on a letter dated 20.07.2004 issued by the Ministry of Railways recommending use of Wagon Tipplers despite the fact that no such expenditure had been claimed during the tariff period 2004-09.

35. It was also contended that the data furnished by the Appellant itself did not establish any correlation between alleged coal shortage and plant availability. As per the chart annexed to the Additional Affidavit dated 02.12.2024, plant availability had reduced in several periods despite higher receipt of MCL coal thereby negating the Appellant’s contention that alternate coal procurement and Wagon Tipplers were necessary to maintain availability.

36. TANGEDCO also submitted that the Appellant failed to furnish material particulars regarding procurement of coal from alternate sources, including details of procurement, quantum, source of coal and contemporaneous justification necessitating such procurement. In the absence of such material, the Appellant failed to establish any actual coal shortage, operational necessity for modification of the coal handling system or any nexus between the alleged shortage and installation of Wagon Tipplers.

Submissions of the Respondent No. 13- GRIDCO

37. GRIDCO submitted that the claim of NTPC for additional capitalization of Rs.125 Crore towards Wagon Tippler and associated works was rightly rejected for want of proper justification and documentary evidence.

38. It was submitted that the burden of proving the claim lay upon NTPC in terms of Section 101 of the Indian Evidence Act, 1872 and such burden could not be shifted upon the Commission. The mere filing of projected expenditure under the Tariff Regulations did not absolve NTPC from substantiating its claim through documentary evidence.

39. GRIDCO further submitted that NTPC had failed to furnish any documentary evidence before the Commission in support of its contention that Indian Railways was phasing out BOBR wagons and replacing them with BOXN wagons thereby necessitating installation of Wagon Tipplers. Even in the review proceedings, NTPC relied only upon a letter dated 20.07.2004 issued by the Ministry of Railways. The Commission rightly held in the review order dated 31.08.2017 that the said letter did not support NTPC’s case since it indicated that coal was already being transported through BOXN wagons and did not establish any proposed phasing out of BOBR wagons.

40. It was also pointed out that despite the said letter being of the year 2004, NTPC never raised any claim for Wagon Tipplers during the tariff periods 2004- 09 and 2009-14. Reliance is placed upon the judgment of this Tribunal dated 10.02.2015 in Power Grid Corporation of India Limited vs. Central Electricity Regulatory Commission & Ors., Appeal No. 13 of 2014, wherein it was held that assertions made in affidavits cannot be accepted in tariff proceedings in the absence of documentary or supporting evidence.

41. GRIDCO further contended that the pro- rata share of coal in 14.5 MTPA for TSTPS Stage-I (1000 MW) is 4.83 MTPA and TSTPS Stage-II (2000MV) is 9.67 MTPA. At 85% availability, the annual coal requirement for Stage-II of the generating station works out to 8.22 MTPA which is well below the quantum of coal of 9.67 MTPA received by the generating station and quantum of coal required as per FSA i.e., 11.53 MTPA.

42. The operating performance data of the generating station clearly demonstrated absence of coal shortage. The average Plant Availability Factor during FY 2011-12 and FY 2013-14 remained above 85%, while the lower availability in FY 2012-13 (82.88%) was attributable to environmental issues and not coal shortage. Hence, NTPC failed to establish that installation of Wagon Tipplers was operationally necessary.

43. GRIDCO also submitted that NTPC’s reliance upon the judgment dated 01.12.2022 passed by this Tribunal in Appeal No. 311 of 2017 was misplaced. The said judgment merely recognized Wagon Tipplers as a safe and efficient mechanism for unloading coal from BOXN wagons but did not lay down that Wagon Tipplers are mandatorily required in every generating station.

44. It was further submitted that pursuant to the order dated 05.11.2024 passed by this Tribunal directing NTPC to furnish details regarding shortage of coal prior to commissioning of Wagon Tipplers, NTPC filed an affidavit dated 02.12.2024. However, instead of providing concrete data regarding coal shortage, the affidavit primarily emphasized the general advantages and significance of Wagon Tipplers.

45. In Para 3 (a) to (c) of the Affidavit dated 02.12.2024 NTPC has contended that “post commissioning of wagon tipplers in 2019-20, the loss in station availability due to coal shortage was nil”. However, from the past Operating Performance it is noticed that the Generating Station has not faced Coal Shortages and Average PAF during the past years (2011-12 and 2013-14) is above 85% except in 2012-13 (82.88%) which is attributable to Environmental issues rather than Coal Shortage.

46. Vide Annexure A of the Affidavit dated 02.12.2024, NTPC has furnished Data from 2010-11 to 2023-24 in a Tabular Form showing receipt of Coal from MCL Mines and Alternate Sources, contending that with the use of Wagon Tipplers % loss in Station Availability due to Coal Shortages was reduced to Zero. The said Tabular Statement shows that the Average Receipt of Coal from MCL Mines during the period 2014-19 was 16.46 MTPA.

47. The Pro-rata Share of above received Coal for TSTPS Stage-II (2000 MW) is 10.97 MTPA. At 85% Availability, Annual Coal Requirement for Stage-II of the Generating Station works out to 9.32 MTPA which is below the quantum of Coal received (10.97 MTPA) by the Generating Station.

48. Moreover, in terms of CERC Tariff Regulations, 2014 and as observed by the Commission in Para 49 of the impugned Order dated 16.02.2017, with the Data furnished by NTPC considering 85% Availability, Station Heat Rate of 2375 kCal/kWh and As Fired GCV of Coal of 3127.66 kCal/kg (in the absence of As received GCV), Annual Requirement of Coal for the Generating Station is found to be 11.29 MTPA. Even if 100% availability is considered, the Annual Coal Requirement of the Generating Station would be 13.28 MTPA (approx.). The above Annual Coal Requirement is much lower than the Year-wise Coal procured by NTPC from MCL Mines during 2014-19 period.

49. It is submitted that in the present Case NTPC has failed to justify the requirement of Wagon Tippler for the subject Generating Station and thus based on the above, the Appeal is devoid of any merit and is liable to be dismissed.

Analysis and Conclusions

50. We note from the copy of the tariff petition filed by NTPC in CERC, which is available as part of our records, NTPC had submitted following justification in Form-9A: “At present MCL is not able to meet the supply of coal upto FSA quantity (14.5 MT coal is being received in place of FSA quantity of 17.5 MT). Extra coal requirement is being met by Import Coal as well as for other domestic sources, for which TSTPS remains dependant of Railways through BOBR wagons. However, Railways is planning to phase out BOBR rakes and use only BOXN wagon Rakes and handling of BOXN rakes at track hoppers take very long time involving large no. of manual labours apart from causing widespread dust pollution. Hence to handle the BOXN rakes at station in an efficient and envoirnment friendly manner Wagon Tippler along with associated track, conveyor, crusher etc. is essentialy required. Further, due to delay in unloading of BOXN type Indian Railways wagons, total receipt of coal at station shall further reduce, hence Hon'ble Commission may please allow Capitalisation of the same under Regulations 14(3) (x).”

51. In the Impugned Order, the CERC had rejected the claim with following observations on the above justification:

(i) No documentary evidence submitted by the NTPC to support the claim that BOBR wagons will be phased out, and

(ii) The estimated coal requirement of 11.29 MTPA (at 85% availability) and 13.28 MTPA (with 100% availability) is lower than actual availability of 14.5 MTPA

52. The gist of NTPC’s submission is that the Tariff Regulations, 2014 had no mandatory requirement of submitting documentary evidence; and CERC should have excercised specific powers to call for information under its Conduct of Business Regulations 1999. Further, CERC has fact finding and inquisitional powers flowing from the Electricty Act, 2003 (“the Act”), and could have sought specific information before rejecting the claim. NTPC has relied on several authorities to contend that CERC had powers to seek specific information.

53. It may be worthwhile to see if the requirement of documentary evidence flows from the Regulations. The Regulation 14(3) of Tariff Regulations 2014 on the issue of additional capitalization is reproduced below: “14. Additional Capitalisation and De-capitalisation: …

(3) The capital expenditure, in respect of existing generating station or the transmission system including communication system, incurred or projected to be incurred on the following counts after the cut-off date, may be admitted by the Commission, subject to prudence check:

(i) Liabilities to meet award of arbitration or for compliance of the order or decree of a court of law;

(ii) Change in law or compliance of any existing law;

(iii) Any expenses to be incurred on account of need for higher security and safety of the plant as advised or directed by appropriate Government Agencies or statutory authorities responsible for national security/internal security;

(iv) Deferred works relating to ash pond or ash handling system in the original scope of work;

(v) Any liability for works executed prior to the cut-off date, after prudence check of the details of such undischarged liability, total estimated cost of package, reasons for such withholding of payment and release of such payments etc.;

(vi) Any liability for works admitted by the Commission after the cut-off date to the extent of discharge of such liabilities by actual payments;

(vii) Any additional capital expenditure which has become necessary for efficient operation of generating station other than coal/lignite based stations or transmission system as the case may be. The claim shall be substantiated with the technical justification duly supported by the documentary evidence like test results carried out by an independent agency in case of deterioration of assets, report of an independent agency in case of damage caused by natural calamities, obsolescence of technology, up-gradation of capacity for the technical reason such as increase in fault level;

(viii) In case of hydro generating stations, any expenditure which has become necessary on account of damage caused by natural calamities (but not due to flooding of power house attributable to the negligence of the generating company) and due to geological reasons after adjusting the proceeds from any insurance scheme, and expenditure incurred due to any additional work which has become necessary for successful and efficient plant operation;

(ix) In case of transmission system, any additional expenditure on items such as relays, control and instrumentation, computer system, power line carrier communication, DC batteries, replacement due to obsolescence of technology, replacement of switchyard equipment due to increase of fault level, tower strengthening, communication equipment, emergency restoration system, insulators cleaning infrastructure, replacement of porcelain insulator with polymer insulators, replacement of damaged equipment not covered by insurance and any other expenditure which has become necessary for successful and efficient operation of transmission system; and

(x) Any capital expenditure found justified after prudence check necessitated on account of modifications required or done in fuel receiving system arising due to non- materialisation of coal supply corresponding to full coal linkage in respect of thermal generating station as result of circumstances not within the control of the generating station: Provided that any expenditure on acquiring the minor items or the assets including tools and tackles, furniture, air-conditioners, voltage stabilizers, refrigerators, coolers, computers, fans, washing machines, heat convectors, mattresses, carpets etc. brought after the cut-off date shall not be considered for additional capitalization for determination of tariff w.e.f. 1.4.2014: Provided further that any capital expenditure other than that of the nature specified above in (i) to (iv) in case of coal/lignite based station shall be met out of compensation allowance:

Provided also that if any expenditure has been claimed under Renovation and Modernisation (R&M), repairs and maintenance under O&M expenses and Compensation Allowance, same expenditure cannot be claimed under this regulation.”

(Emphasis supplied)

54. It may be seen from the above extract that CERC has specified requirement of submission of the documentary evidence only in respect of item (vii) regarding additional capitalization for efficiency improvement that too not in case of coal/lignite-based stations and transmission systems. On the other hand, in the item (x) which covers the investment in question, no specific requirement of submission of documentary evidence has been mentioned. We note that some of the forms attached to the Tariff Regulations, 2014 for submission of information in tariff petitions also mention submission of documentary evidence, though no such requirement has been mentioned in relevant Form 9A (“Year wise statement of Additional Capitalization after COD”).

55. The tariff determination for the Talcher Station- Stage II was being undertaken by the CERC under Section 79(1) (a) of the Act, which confers it powers “to regulate the tariff of the generating companies owned or controlled by the Central Government”. It is a well-settled principle of law that where a statute confers substantive jurisdiction or regulatory authority upon a statutory body, it impliedly grants all such incidental and ancillary powers as are reasonably necessary to make the exercise of that jurisdiction fully effective; provided that without such implied powers, the statutory provision would become unworkable or ineffectual. [ITO v. M.K. Mohd. Kunhi, (1969) 71 ITR 815; Union of India v. Paras Laminates (P) Ltd., (1990) 4 SCC 453]. Therefore, in the absence of any requirement under the Tariff Regulations, 2014 for submission of specific documentary evidence, if the CERC considered such evidence necessary to take a judicious decision, it had powers to specifically

direct the NTPC to furnish the same. Admittedly, no such direction to seek clarification or additional information was issued by the CERC on the issue of additional capitalization for wagon tippler and associated works; though a direction was issued as part of Record of Proceeding date 24.05.2016 in respect of certain other issues relevant to tariff determination. In this background, we are of the opinion that the claim of the Appellant-Petitioner NTPC could not have been rejected on the ground of non-submission of documentary evidence.

56. In the Review Order, CERC has relied on the Section 101 of the Evidence Act to fault NTPC for non-submission of the documentary evidence. This contention has also been advanced by GRIDCO in its submissions.

57. The Electricity Regulatory Commissions are statutory expert bodies exercising quasi-judicial and regulatory functions under the Act. Section 94 of the Act confers upon the Appropriate Commission certain powers of a civil court, including the power to receive evidence on affidavit, summon and enforce attendance, and require production of documents. The proceedings before the Commission are therefore not required to conform to the strict framework of a conventional civil trial. The Hon’ble Supreme Court in PTC India Ltd. v. CERC (2010) 4 SCC 603 recognized the specialized regulatory character of the Commission, and in Energy Watchdog v. CERC, (2017) 14 SCC 80 reiterated the Commission’s role as an expert statutory authority under the Act.

58. In view of the statutory framework and the settled principles governing quasi-judicial proceedings, it follows that proceedings before the Commission are not strictly bound by the technical rules of evidence embodied in the Indian Evidence Act, unless such requirement is expressly incorporated by the governing statute.

59. We note that in the review petition filed by NTPC, a letter dated 20.07.2004 from Ministry of railways was enclosed. In the Review Order, CERC continued to hold original finding on the ground of non-submission of documentary evidence. However, it also examined the aforesaid letter of Ministry of Railways and found that the letter does not support claim of the NTPC as (i) the letter shows that even in 2004, coal was being transported through BOXN wagons and (ii) the capitalization for wagon tippler in 2014-19 period was after much efflux of time based on 2004 letter.

60. We are unable to persuade ourselves to agree with the rationale adopted by CERC in the review order for not giving any credence to the letter of the Ministry of Railways. It is well known that BOXN wagons can be unloaded by other means also, including manually. The fact, however, remains that methods other than wagon tippler are highly unsafe and inefficient way of unloading the coal from BOXN wagons (APTEL judgment dated 01.12.2022 in NTPC vs. CERC & Ors, Appeal No. 25 of 2017 and batch). Therefore, prior existence of BOXN wagons does not necessarily mean that wagon tippler and associated facilities should not be developed at a later point, just to handle the fuel in an efficient manner.

61. However, in our opinion, the Appellant-Petitioner had not furnished a clearly articulated justification in support of its claim. A party to any proceeding ought not to remain complacent regarding the outcome and must place on record a proper and cogent rationale for the relief sought. Such rationale should, as far as possible, anticipate potential objections from the opposing parties as well as issues that may reasonably arise in the mind of the adjudicatory forum.

62. In regard to the second ground for rejection of claim, we note that in the review petition, NTPC had claimed error on the part of CERC to assume that the 14.5 MTPA coal availability was with respect to Talcher Station - Stage II. It was contended that FSA is for combined requirement of both stage-I and stage-II and that the aforesaid availability was for both stages taken together. In the Review Order, CERC revisited this aspect. It was calculated that when pro-rated to the Installed capacity (1000 MW for stage I and 2000 MW for Stage II), the coal availability for Talcher Station - Stage II works out to be 9.67 MTPA. In the Review Order, CERC concluded that there was no coal shortage as pro-rata coal availability for Talcher Station - Stage II (9.67 MTPA) is more than coal requirement at 85% availability (8.22 MTPA). Similar argument has been given by GRIDCO based on average availability of coal from designated source MCL during 2014-19; contending that pro-rated average coal availability for Talcher Station- Stage II during this period was 10.97 MTPA as against requirement of 8.22 MTPA at 85% availability (worked out by CERC in Review Order).

63. It is interesting to note that in the Review Order, CERC mentions requirement of coal at 85% availability as 8.22 MTPA as compared to 11.29 MTPA mentioned in the Impugned Order. Further, the coal requirement at 100 % availability which was mentioned as 13.28 MTPA in the Impugned Order, has not been calculated in the Review Order. A close look reveals that in the Review Order, the requirement of coal has been estimated based on the “as billed” GCV of 4095.15 kcal/kg whereas in the Impugned order it was estimated based on “as fired” GCV of 3127.66 kcal/kg (in the absence of as received GCV). The only explanation in the Review Order as to why the GCV used for calculation was changed from “as received” to “as billed” is that for pit head stations, there will not be any difference in these two values.

64. In our view, there is fundamental error in the reasoning given by CERC. The Form 15 (“Details/Information to be Submitted in respect of Fuel for Computation of Energy Charges”) which was submitted by the NTPC as part of the original Tariff Petition clearly shows that about 14% to 16% imported coal was used in January to March 2014. It is not very common for domestic coal supplied to the power stations to have even “as billed” GCV of 4000 kcal/kg or more. The Form 15 giving data from January 2014 to March 2014 shows “as billed” GCV of domestic coal ranging from 3763 to 3821 kcal/kg and that of imported coal ranging from 5583 to 5964 kcal/kg. Therefore, it is clear that the high “as billed” GCV exceeding 4000 kcal/kg adopted by the CERC in the Review Order is weighted average after blending of imported coal with domestic coal. It was also not noticed by CERC that, in paragraphs 75 to 77 of the Impugned Order, the “as billed” GCV of 4095 kcal/kg was adopted for computation of the energy charge after applying the correction factor of (1 −Total Moisture)/(1 −Inherent Moisture). After such correction, the effective GCV ordinarily gets reduced. Further, with imported coal being used, which essentially requires transportation of coal from the port of unloading to the power station, the presumption that in the pit head station, coal transportation takes place for a short distance and hence there would not be any difference between “as billed” and “as received” GCV, does not hold good.

65. TANGEDCO and GRIDCO have mainly supported the rationale given by CERC for rejecting the claim. In addition, it has been contended by TANGEDCO that the expenditure was never incurred by NTPC during control period of 2014- 19 since the same was capitalized in next tariff period. It was clarified by the Appellant during the hearing that since the claim was rejected by the CERC in the Impugned Order (for the control period 2014-19), it had claimed the same in next control period, which was allowed by CERC subject to judgement of this Appeal.

66. TANGEDCO has also mentioned that NTPC failed to submit information about procurement of domestic and imported coal. This does not appear to be correct as NTPC had furnished information in Form 15 about domestic and imported coal for a limited period, as required under Tariff Notification, 2014.

67. We have perused this Tribunal’s judgement in Power Grid Corporation of India Limited vs. Central Electricity Regulatory Commission & Ors., Appeal No. 13 of 2014, which has been relied upon by GRIDCO to support its contention that in the tariff proceedings, mere assertions or averments unsupported by documentary evidence cannot be accepted by the Commission. We find that the facts of the present case are different from that in Appeal No. 13 of 2014. In PGCIL vs. CERC & Ors., Appeal No. 13 of 2014, the Commission had, in the first instance, directed PGCIL to file affidavit explaining the delay. It was only after examining the contents of the affidavit that CERC had allowed part of the expenditure, while disallowing the remaining in the absence of proper justification backed by documentary evidence. In the case in hand, CERC had not directed NTPC to file affidavit on the aspect of additional capitalisation for wagon tippler and associated work.

68. In view of our analysis in the preceding paragraphs, we conclude that CERC has erred in rejecting the claim without seeking requisite information and documents, in the absence of specific provision in the Tariff Regulations, 2014. Therefore, there is a case for remanding the matter to CERC. The CERC may consider issuing appropriate directions to NTPC for furnishing the requisite information, so as to satisfy itself regarding the necessity of investment in the wagon tippler and associated items during the relevant period, and to undertake prudence check thereof, if considered necessary. Needless to mention that all the

affected beneficiaries shall also be given opportunity to respond to the justification and documents submitted by NTPC in support of its claim.

ORDER

For the foregoing reasons as stated above, we are of the considered view that the captioned Appeal No. 10 of 2018 has merit and is allowed.

The Impugned Order dated 16.02.2017 passed by the Central Commission in Petition No. 293/GT/2014 to the extent it disallows the claim of additional capitalization towards Wagon Tippler and associated works is set aside.

The matter is remanded to the Central Commission for fresh consideration of the Appellant’s claim in accordance with law and after affording opportunity of hearing to all concerned parties.

The Captioned Appeal and pending IAs, if any, are disposed of in the above terms.

PRONOUNCED IN THE OPEN COURT ON THIS 29th DAY OF MAY, 2026.

(Ajay Talegaonkar) Technical Member (Virender Bhat) Judicial Member

REPORTABLE / NON-REPORTABLE kns/mkj/kks