Vs.

Judges:

Date of Judgment: Feb 16, 2000

ELECTRICITY LAW
Section 43-A(2) Tariff – Determination – MOUs signed – Terms for providing security by way of Escrow Account not finalised – Meanwhile, on account of amendment in tariff, State Electricity Board inviting fresh bids on “least tariff criteria” basis – One IPP not bidding afresh – another gave bid but protested due to condition of 2% security deposit and unable to achieve financial closure in two months, as one of the conditions of fresh bid – If condition of 2% security and financial closure was arbitrary and invalid – Letter of Power Minister to give priority to those which offers the State, the least tariff for power supply to SEB – Justification in reduction of tariff – Criteria of “least tariff”, if a hoax and unreasonable or irrational – Is it unre-alistic, because one IPP not recommended and others were recom-mended for Escrow Account cover. Held that criteria was reason-able and justified and it cannot be stated to be unrealistic as techno-economic clearance was obtained. Decision to recommend the IPPs cannot be faulted with.

It is difficult to appreciate how the least tariff criteria can be said to be hoax when it is based upon and consistent with the notification issued under Section 43 A(2). To give priority to that project which will supply electricity to MPEB at a cheap-er rate far from being regarded as an hoax or as an excuse must be regarded as a rational criteria because it will be more bene-ficial to MPEB and the general public who are the ultimate con-sumers of the electricity. The situation in which MPEB was placed at the relevant time justified adopting that criteria and the Court cannot in such matters substitute its opinion and say that it would have been better if a different criteria had been adopted. (Para 19)

If, considering all the relevant aspects MPEB thought it proper to prioritise the projects on the basis of least tariff criteria it cannot be said that thereby it acted in an arbitrary or unreasonable manner. It is also not possible to accept the contention that the said criteria was adopted with a view to favour some and rule out others as no material is available on record to justify such an inference. Certain assumptions had to be made while determining the project cost and inviting offers on the basis thereof. It would not be proper to invalidate the decision taken on the basis of such assumptions. It is not possible to agree with the contention that the least tariff criteria was not a good criteria as it was unrealistic and arbi-trary.
(Para 19)