MAHINDRA CIE AUTOMOTIVE LIMITED vs MAHARASHTRA ELECTRICITY REGULATORY COMMISSION & Anr on 22 August 2025

J U D G M E N T

PER HON’BLE MR. VIRENDER BHAT, JUDICIAL MEMBER

1. The appellant Mahindra CIE Automotive Limited has, in this appeal, assailed the order dated 16.09.2019 passed by 1st respondent Maharashtra Electricity Regulatory Commission (hereinafter referred to as “the Commission”) in case no.93/2019 under sections 142, 146 and 149 of Electricity Act, 2003, thereby holding that the 2nd respondent Maharashtra State Electricity Distribution Company Limited (in short “MSEDCL”) has rightly given adjustment in line with the billing methodology specified by the Commission in its previous order dated 23.10.2018 passed in appellant’s petition bearing no.71/2018. The Commission has also held MSEDCL not liable to payment of interest.

2. The brief conspectus of the facts and circumstances of the case giving rise to the instant appeal is given below.

3. Appellant is an open access consumer of 2nd respondent MSEDCL having contract demand of 45500kVA. Since 2012, it has been sourcing conventional power under open access from Captive Generating Plant

(CGP) Sai Wardha Power Generation Limited. In addition thereto, the appellant has also been sourcing power under open access from renewable energy (i.e. wind power) sources namely Sharda Energy and Infra Projects Limited, Serum Institute of India etc. for different periods from April, 2016 onwards.

4. In the open access bills received by appellant for the month of April, 2014, adjustment was given to power from Captive Power Plant first and then wind power was set off. However, in the bills of May, 2016, the credit mechanism of generation units was changed by MSEDCL by adjusting RE Power first and then conventional CGP power. Since the repeated requests on behalf of appellant to follow the correct mechanism of adjustment of generation units and for rectification of bills issued from May, 2016 onwards were not acceded to by MSEDCL, the appellant approached the Commission by way of original petition bearing no.71/2018 with the following prayers: - “a. Direct the Respondent to forthwith correct the bills raised upon the Petitioner from May 2016, due to incorrect adjustment of power and no later than seven (7) days from date of Order;

b. Direct MSEDCL to credit the amount of Rs.2,02,29,726/- (Rupees Two Crores Two Lacs Twenty None Thousand Seven Hundred and Twenty-Six Only) towards Foundry Division Urse and Rs. 1,48,76,179 (Rupees One Crore Forty Eight Lacs Seventy-Six Thousand Seven Hundred Twenty-Six Only) for Forging Division Chakan in respect of loss incurred by the Petitioner on account of alleged over-injected units which occurred due to incorrect billing method by MSEDCL in the ensuing billing cycle; c. Direct the Respondent to adopt correct practice of set- off open access power i.e. first conventional OA power and then RE power in accordance with DOAR, 2016; d. Award costs of these proceedings against the Respondent and pay to the Petitioner; and e. Pass such further order(s) as the Hon'ble Commission may deem just in the facts of the present case."

5. The petition was disposed off by the Commission vide order dated 23.10.2018, the operative portion of which is extracted hereinbelow: -

“1. The Petition of Mahindra CIE Automotive Ltd. In Case No. 71 of 2018 is allowed.

2. As the under this Petition has already been settled by the Commission vide Order dated 11 August, 2017 in Case No. 139 of 2016, MSEDCL is directed to correct the billing methodology accordingly.” (Emphasis supplied)

6. Since the said petition of the appellant was allowed by the Commission in terms of its order dated 11.08.2017 passed in case no.139/2016, it would be apposite to reproduce hereunder the relevant portion of the said order of the Commission also:- “ …

12. The DOA Regulations, 2016 provide only for banking of RE and not conventional power. Moreover, in this Case, the consumer is a captive consumer. The basis for establishing a CPP is primarily for own use. That being the case, the captive supply needs to be adjusted first from the total consumption of the captive consumer and the

rest of the sources thereafter. Besides, the captive power in this case is schedulable, being firm conventional power, while the RE power is non- firm and ‘must run’. Hence, if this conventional power is not adjusted first, it may lapse since it cannot be banked.

13. In view of these basic considerations, MSEDCL is directed to correct the billing methodology in the true spirit of the DOA Regulations, 2016as discussed at para. 12 above so as to remove the ambiguity regarding the adjustment of units, incorporate it in its OA procedure and host it on its website within a month.

14. MSEDCL shall also correct the bills of all such OA consumers accordingly within two months and report the action taken to the Commission.

The Petition of M/s Ultra Tech Cement Ltd. in Case No.139 of 2016 stands disposed of accordingly.” (Emphasis supplied)

7. Perusal of the order dated 23.10.2018 passed by the Commission in appellant’s petition no.71/2018 in conjunction with Commission’s order dated 11.08.2017 passed in case no.139/2016 reveals that the Commission clarified the billing methodology adjustment to be adopted in case of open access consumers sourcing conventional power under open access from generators for their own utilization and RE power to meet their RPO obligations. The Commission has held in these two orders that the captive source conventional power has to be adjusted first and thereafter RE power shall be adjusted.

8. It may be noted here that the order dated 11.08.2017 passed by the Commission in case no.139/2016 was impugned by the MSEDCL by way of appeal no.368/2017 before this Tribunal, which came to be dismissed vide judgment dated 28.11.2018. Thus, the said order has attained finality.

9. According to the appellant, it had repeatedly requested MSEDCL to follow the correct credit mechanism of generation units and to rectify the bills issued from May, 2016 onwards in line with the billing methodology specified by the Commission in above noted two orders and since MSEDCL failed to do so, it was constrained to approach the Commission again by way of petition no.93/2019 under Sections, 142, 146 and 149 of the Electricity Act,

2003, seeking directions to the MSEDCL to comply with the order dated 23.10.2018 passed in case no.71/2018 in letter and spirit. The prayers made by the appellant in the said petition were as under: - “(a) This Hon’ble Commission be pleased to direct MSEDCL to forthwith comply with the Order dated October 23, 2018 and issue corrected and revised bills to the Petitioner, as applicable from the month of May, 2016 onwards; (b) This Hon’ble Commission be pleased to direct MSEDCL to forthwith comply with the Order dated October 23, and pay the Petitioner outstanding dues towards costs incurred, on account of adopting incorrect billing methodology by MSEDCL, amounting to Rs. 5,79,17,464/- (Rupees Five Crores Seventy Nine Lakhs Seventeen Thousand Four Hundred and Sixty Four Only), as calculated upto January 30, 2019, along with an interest of 18% per annum from October 23, 2018 till date of payment thereof;

(c) This Hon’ble Commission be pleased to initiate proceedings against MSEDCL and its officers under provisions of the EA, 2003 including sections 142 and 146 of the EA, 2003, for wilful disobedience and for securing compliance of the Orders passed by the Hon’ble Commission; (d) This Hon’ble Commission be pleased to refer the matter to the Hon’ble High Court for initiation of contempt proceedings against the directors and officers of MSEDCL; (e) This Hon’ble Commission be pleased to order Interim and Ad-interim reliefs in terms of prayers (a) to (b) above;

(f) This Hon’ble Commission be pleased to award cost for these proceedings against MSEDCL and in favour of the Petitioner.”

10. The said petition has been disposed off by the Commission vide impugned order dated 16.09.2019 holding therein as under: -

“16. The Commission finds merit in the submission of MSEDCL that the Petitioner has not calculated the refundable amount as per 15 min/ TOD slot wise billing methodology. The Commission observes that MSEDCL has given adjustment as per 15 min/TOD slot wise billing methodology. The Commission further notes the submission of Petitioner that a sum of Rs.2, 36, 82,077 has been received as credit in the bills for the month of June, 2019 for Consumer Nos. 176029030058 and 181209030548.Thus the Commission rules that MSEDCL has rightly given the adjustment in line with billing methodology specified by the Commission in Order of Case No. 71 of 2018 and the said Order is accordingly complied with by MSEDCL.

17. The Petitioner raised the issue that MSEDCL has again adopted incorrect methodology by not

giving credit for conventional units first from April 2018. The Commission notes that the Order in Case No. 139 of 2016 and 71 of 2018 provided the billing adjustment methodology only for CGP/captive supply/own use. The relevant para. in Case No. 139 of 2016 is reproduced as under: "11. The Commission notes that MSEDCL published its procedure after the present Petition was filed. While MSEDCL took cognizance of many other issues in its procedure, it ought to have also addressed issues with large commercial implications such as billing methodology, adjustment of energy in case of multiple sources, etc.

12. The DOA Regulations, 2016 provide only for banking of RE and not conventional power. Moreover, in this Case, the consumer is a captive consumer. The basis for establishing a CPP is primarily for own use. That being the case, the captive supply needs to be adjusted

first from the total consumption of the captive consumer and the rest of the sources thereafter. Besides, the captive power in this case is schedulable, being firm conventional power, while the RE power is non-firm and `must run'. Hence, if this conventional power is not adjusted first, it may lapse since it cannot be banked." [Emphasis added]

18. The above Order provides the methodology for treatment/ adjustment of conventional CGP power first and then RE. The issue of treatment/adjustment of conventional IPP power and RE was not before the Commission in Case No. 139 of 2018 and 71 of 2018 and hence the Commission has limited its ruling to adjustment of conventional CGP power first and then RE. However, the Commission in the said Order also noted that MSEDCL in its DOA Procedure ought to have addressed issues with large commercial implications such as billing methodology, adjustment of energy in case of multiple sources. In the present

Petition as a compliance of Order in Case No. 71 of 2019, MSEDCL has changed treatment of adjustment of power i.e RE power first before the Commission in Order in Case No. 71 of 2019.The cause of action for MSEDCL for these changes in the methodology /treatment of adjustment from April 2018 is that SWPGL has not fulfilled the CGP criteria for FY 2018-

19. Under such circumstances, the Commission observes that this issue has come before the Commission for the first time and has not been agitated by the Parties in the past. Therefore, the Commission feels it appropriate that Petitioner may approach the Commission afresh on this issue, its argument for the treatment /adjustment of RE power first and then Conventional IPP power, from April, 2018 onwards as the views /submissions of both the Parties will be required to bring about clarity on this issue.” (Emphasis supplied)

11. Thus, the Commission has held that MSEDCL has rightly given adjustment in line with the billing methodology specified by it in order dated

23.10.2018 passed in petition no.71/2018 till 31.03.2018. With regards to the period from April, 2018 onwards, the Commission has held that the treatment/adjustment of conventional IPP power and RE power was not before it in case no.139/2016 as well as case no.71/2018 and has come up before it for the first time. Accordingly, the Commission directed the appellant to approach it afresh with a separate petition on this issue.

12. We have heard learned counsel for the appellant as well as learned counsel for the 2nd respondent MSEDCL. We have also perused the written submissions filed by the learned counsels.

Our Analysis: -

13. With regards to the period up to 31.03.2018, we find the impugned order of the Commission cryptic and devoid of any proper discussion/reasoning. The Commission has come to conclusion that MSEDCL has given credit adjustment in line with the methodology specified by it in order dated 23.10.2018 passed in petition no.71/2018 merely on the submission of the appellant that a sum of Rs.2,36,82,077/- has been received as credit in the bills for the month of June, 2019. The Commission has nowhere dealt with the neglect or failure on the part of the MSEDCL for not complying with the order dated 23.10.2018 in timely manner. Further,

the Commission has nowhere discussed the actual claim of the appellant as on 31.03.2018 which, according to the appellant, was due to it from MSEDCL on account of wrongful adjustment of power, the details of which were given in the pleadings before the Commission. Intriguingly, the Commission has not referred to any calculation with regards to the amount actually receivable by the appellant from the MSEDCL on account of wrongful adjustment of power done by the MSEDCL during the said period and the amount actually refunded/repaid by the MSEDCL to the appellant in pursuance to order dated 23.10.2018. Considering the same, we are of the firm opinion that the Commission shall take up the matter again and issue fresh directions on this aspect after discussing the rival contentions of the parties and taking note of rival calculations to be given by the parties.

14. In so far as the portion of the impugned order relating to the period from April, 2018 onwards is concerned, we feel in agreement with the submissions of the appellant that the Commission has traversed beyond the main order dated 23.10.2018 passed in petition no.71/2018 (of which non- compliance was complained by the appellant), which is not permissible in law. Once the Commission held in the main order dated 23.10.2018 that the adjustment of power made by MSEDCL in the bills issued to the appellant was incorrect and directed MSEDCL to follow the billing methodology in line

with order dated 11.08.2017 passed in case no.139/2016, it was not open to the Commission to hold in the execution petition under Section 142 filed by the appellant that the said methodology is not applicable to the case of the appellant. In doing so, the Commission has in effect reviewed its own order dated 23.10.2018 in the absence of any prayer for review from any of the parties and without following the proper procedure. In case the Commission was of the view that order dated 23.10.2018 suffers from any inherent error and needs reconsideration, it ought to have registered a suo motu case in this regard and should have passed a fresh order after hearing the concerned parties. In a petition under Section 142 of the Electricity Act, 2003, what the Commission is required to do is to ensure compliance of its directions and to punish the person for contravention of those directions. The applicability of the billing methodology specified by Commission in order dated 11.08.2017 passed in case no.139/2016 to the instant case was determined by the Commission in the main order dated 23.10.2018 passed in petition no.71/2018 and therefore, the job of the Commission in the contempt/execution petition no.93/2019 (disposed off vide impugned order dated 16.09.2019), was to ensure compliance of its order dated 23.10.2018 and to punish the guilty who were responsible for non-compliance of the said order. After holding in the main order dated 23.10.2018 that the billing adjustment done by MSEDCL was incorrect and directing it to correct the

billing methodology in line with order dated 11.08.2017 passed in case no.139/2016, it was not open or permissible for the Commission to hold in the impugned order passed in contempt/execution petition that the said billing methodology is not applicable to the case of the appellant. Moreover, it was nowhere contended by the MSEDCL itself before the Commission that the said billing methodology specified by the Commission in case no.139/2016 was not applicable to the instant case.

15. Further, the Commission has very specifically held in case no.139/2016 that conventional power sourced under open access for captive needs shall be adjusted first from the total consumption of the captive consumer and rest of the power sourced from renewable sources i.e. RE power shall be adjusted thereafter. The rationale being that the conventional power is schedulable, firm and non-bankable whereas RE power is non-firm, bankable and “must run”. Therefore, if the conventional power is not adjusted first, it may lapse as it cannot be banked. It hardly matters whether the conventional power is being sourced from a captive generating plant or an independent power producer. Its nature would remain always the same i.e. schedulable, firm and non-bankable. The Commission has committed a patent error in creating a distinction between conventional power sourced

from a captive source and from an independent power producer. Such distinction is artificial, unjustified and arbitrary.

16. Therefore, the direction of the Commission to the appellant to approach it afresh with regards to the billing methodology to be followed by MSEDCL from April, 2018 onwards cannot be countenanced. Same is totally erroneous and deserves to be set aside. The Commission ought to have directed MSEDCL to follow the same billing methodology as specified by it in case no.139/2016 for the period from April, 2018 also.

17. In so far as claim of the appellant for interest on the refundable amount is concerned, the Commission has faltered on this aspect also in rejecting the said claim on the ground that no such relief for payment of interest by MSEDCL has been provided in the orders passed in case no.139/2016 and case no.71/2018.

18. We may note that payment of “interest” cannot be equated to payment of penalty or fine. “Interest” is normal accretion to money when invested lawfully by the person in whose hands it is. When a person is deprived of the use his money to which he is lawfully entitled, he would have a legitimate claim for interest upon such amount of money for the period during which he

was deprived of its use. In other words, any person who has enriched himself by use of the money belonging to some other person, is legally duty bound to compensate the latter by payment of interest on the said money, from the use of which he had been deprived. Payment of interest is a necessary corollary to the return on money retained by a person unjustly or unlawfully. This has been explained by the Supreme Court succinctly in Alok Shanker Pandey v. Union of India & Ors. (2007) 3 SCC 545 by way of the following illustrations: - “For example if A had to pay B a certain amount, say 10 years ago, but he offers that amount to him today, then he has pocketed the interest on the principal amount. Had A paid that amount to B 10 years ago, B would have invested that amount somewhere and earned interest thereon, but instead of that A has kept that amount with himself and earned interest on it for this period. Hence equity demands that A should not only pay back the principal amount but also the interest thereon to B. With these observations the impugned judgment is modified and the appeal is disposed of accordingly.”

19. In a recent decision dated 27.08.2024, the Hon’ble Supreme Court in Bangalore Electricity Supply Company Limited -v- Hirehalli Solar Power Project LLP & Others, reported as 2024 INSC 631, has held as under: - “5.1 Learned ASG argued that a force majeure clause must be strictly interpreted … … … … Further, he has also argued that the APTEL was not justified in granting late payment surcharge to the respondent as the same was not pleaded before the KERC or in appeal … …

14. Lastly, we also reject the appellant’s contention that the APTEL’s direction to pay late payment surcharge to the respondents is unjustified since the same was not pleaded. As we have already held, the APTEL rightly restored the tariff of Rs.8.4 per unit and directed the appellant to pay the difference amount. The direction to pay the late payment surcharge on this amount is explicitly rooted in the PPA, and hence, is in furtherance of the intention of the parties. There is no reason to set aside the same.”

20. In this context, we also find the following observations of the Hon’ble Supreme Court in a recent judgment dated 18.02.2025 in Dr. Purnima Advani and Anr. v. Government of NCT and Anr. Civil Appeal No.2643 of 2025, very material: - “25. If on facts of a case, the doctrine of restitution is attracted, interest should follow. Restitution in its etymological sense means restoring to a party on the modification, variation or reversal of a decree or order what has been lost to him in execution of decree or order of the Court or in direct consequence of a decree or order. The term “restitution” is used in three senses, firstly, return or restoration of some specific thing to its rightful owner or status, secondly, the compensation for benefits derived from wrong done to another and, thirdly, compensation or reparation for the loss caused to another.

26. In Hari Chand v. State of U.P., 2012 (1) AWC 316, the Allahabad High Court dealing with similar controversy in a stamp matter held that the payment of interest is a necessary corollary to the retention of the money to be

returned under order of the appellate or revisional authority. The High Court directed the State to pay interest @ 8% for the period, the money was so retained i.e. from the date of deposit till the date of actual repayment/refund.

27. In the case of O.N.G.C. Ltd. v. Commissioner of Customs Mumbai, JT 2007 (10) SC 76, (para 6), the facts were that the assessment orders passed in the Customs Act creating huge demands were ultimately set aside by this Court. However, during pendency of appeals, a sum of Rs.54,72,87,536/- was realized by way of custom duties and interest thereon. In such circumstances, an application was filed before this Court to direct the respondent to pay interest on the aforesaid amount w.e.f. the date of recovery till the date of payment. The appellants relied upon the judgment in the case of South Eastern Coal Field Ltd. v. State of M.P., (2003) 8 SCC

648. This Court explained the principles of restitution in the case of O.N.G.C. Ltd. (supra) as under: -

“Appellant is a public sector undertaking. Respondent is the Central Government. We agree that in principle as also in equity the appellant is entitled to interest on the amount deposited on application of principle of restitution. In the facts and circumstances of this case and particularly having regard to the fact that the amount paid by the appellant has already been refunded, we direct that the amount deposited by the appellant shall carry interest at the rate of 6% per annum. Reference in this connection may be made to Pure Helium Indian (P) Ltd. v. Oil & Natural Gas Commission, JT 2003 (Suppl. 2) SC 596 and Mcdermott International Inc. v. Burn Standard Co. Ltd. JT 2006 (11) SC 376.”

21. Thus, where there is an order for restitution by way of return or restoration/payment of some specific money or thing to its rightful owner, the direction to pay interest must follow. It is noteworthy that in the case of O.N.G.C. Ltd. v. Commissioner of Customs Mumbai, JT 2007 (10) SC 76 (referred by the Supreme Court in the above noted judgment), the application for payment of interest was filed for the first time before the Supreme Court

during the pendency of the appeal, which was entertained and allowed by the Supreme Court.

22. In view of the law laid down by the Hon'ble Supreme Court in the above noted judgment, the appellant cannot be deprived of interest on the amount refundable to it by MSEDCL even if relief of interest was not claimed by it in the original petition or was not provided by the Commission in the order dated 23.09.2018 of which non-compliance was complained of by the appellant.

Conclusion: -

23. For the above noted reasons, we find merit in the instant appeal and the same hereby succeeds. The impugned order of the Commission is found to be absolutely erroneous and is hereby set aside.

24. The Commission is hereby directed to hear the parties afresh on the claim of the appellant for the amount refundable to it by MSEDCL for the period up to 31.03.2018 and render a fresh decision on this aspect after taking note of rival contentions / calculations to be submitted by the parties. The MSEDCL is directed to follow the billing methodology specified by Commission in order dated 11.08.2017 in case no.139/2016 for the period from April, 2018 also and to refund the excess amount recovered from appellant to the appellant within one month from the date of this judgment along with interest / carrying cost @ 9% per annum.

25. Accordingly, the appeal stands allowed in these terms.

Pronounced in the open court on this the 22nd day of August, 2025.

(Virender Bhat) Judicial Member (Sandesh Kumar Sharma) Technical Member (Electricity)

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REPORTABLE / NON-REPORTABLE

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