GODAVARI BIOREFINERIES LIMITED V. BANGALORE ELECTRICITY SUPPLY COMPANY LIMITED

WP/4158/2019

AI Insights

The case involves Godavari Biorefineries Limited, which operates a bagasse-based cogeneration power project in Karnataka, against multiple electricity supply companies and the Karnataka Electricity Regulatory Commission (KERC). The dispute centered on the tariff applicable to the energy supplied from the petitioner's units, which were commissioned in different years. KERC had issued a clarification on the tariff applicability based on the year of commissioning, which the petitioner contested, arguing it violated principles of natural justice as it was issued without a hearing. The High Court of Karnataka found that the clarification indeed violated natural justice and quashed the related communications from KERC and BESCOM.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 746248 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 23-04-2021
• Assessment Year: misc
• Other Referred Cases: K.L. Tripathi vs State Bank of India and Others, Whirlpool Corporation vs Registrar of Trade Marks, Mumbai and Others, PTC India Limited vs Central Electricity Regulatory Commission
• Laws Referred To: Constitution of India, Companies Act 1956, Electricity Act 2003
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: S SRIRANGA; B N PRAKASH
• Assessee Lawyers: SHRIDHAR PRABHU
• Keywords: Natural Justice; Quasi-judicial; Tariff determination; Writ petition; Co-generation Plants
• Section: 64; 86; 226; 62; 94

Judgement Text

"IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 23RD DAY OF APRIL 2021 BEFORE THE HON’BLE MR.JUSTICE S.G.PANDIT WRIT PETITION No.4158/2019 (GM-KEB) BETWEEN: GODAVARI BIOREFINERIES LIMITED A COMPANY INCORPORATED UNDER THE PROVISIONS OF COMPANIES ACT 1956, HAVING ITS REGISTERED OFFICE AT “SOMAIYA BHAVAN”, 45/47, M.G. ROAD, FORT, MUMBAI -400001, (REPD. BY ITS AUTHORIZED SIGNATORY). ...PETITIONER (BY SRI.SHRIDHAR PRABHU, ADV.) AND: 1. BANGALORE ELECTRICITY SUPPLY COMPANY LIMITED A COMPANY REGISTERED UNDER THE PROVISIONS OF COMPANIES ACT 1956, HAVING ITS REGISTERED OFFICE AT K R ROAD, BENGALURU -560001, (REPD. BY ITS MANAGING DIRECTOR). 2. MANGALORE ELECTRICITY SUPPLY COMPANY LIMITED CORPORATE OFFICE, MESCOM BHAVAN, 4TH FLOOR, BEJAIKAVOOR CROSS ROAD, 2 MANGALORE 575 004. (REPD. BY ITS MANAGING DIRECTOR). 3. GULBARGA ELECTRICITY SUPPLY CORPORATION LIMITED A COMPANY REGISTERED UNDER THE PROVISIONS OF COMPANIES ACT 1956, HAVING ITS REGISTERED OFFICE AT STATION MAIN ROAD, KALABURAGI, (REPD. BY ITS MANAGING DIRECTOR). 4. HUBLI ELECTRICITY SUPPLY COMPANY LIMITED A COMPANY REGISTERED UNDER THE PROVISIONS OF COMPANIES ACT 1956, HAVING ITS REGISTERED OFFICE AT NAVANAGAR, HUBBALI 580 025, (REPD. BY ITS MANAGING DIRECTOR). 5. CHAMUNDESHWARI ELECTRICITY SUPPLY COMPANY LIMITED NO.29, KAVERI GRAMEENA BANK ROAD, VIJAYANAGAR, 2ND STAGE, HINKAL, MYSURU- 570017, (REPD. BY ITS MANAGING DIRECTOR). 6. KARNATAKA ELECTRICITY REGULATORY COMMISSION NO.16 C-1, MILLER TANK BED AREA, VASANTHNAGAR, BENGALURU- 560052, (REPD. BY ITS CHAIRMAN). …RESPONDENTS (BY SRI. S SRIRANGA, ADV. FOR R1 TO R5 SRI. B.N. PRAKASH, ADV. FOR R6) 3 THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO SET ASIDE THE LETTER DATED 12.02.2018 (ANNEXURE-A) ISSUED BY THE RESPONDENT-KERC TO RESPONDENT BESCOM AND CONSEQUENTLY SET ASIDE THE LETTER DATED 30.05.2018 (ANNEXURE-B) ISSUED BY THE RESPONDENT- BESCOM TO THE PETITIONER SOLELY BASED ON THE LETTER DATED 12.02.2018 ISSUED BY KERC AND ETC. THIS WRIT PETITION HAVING BEEN HEARD AND RESERVED ON 30/03/2021 COMING ON FOR PRONOUNCEMENT THIS DAY, THE COURT MADE THE FOLLOWING: O R D E R Petitioner, a Company registered under the provisions of Indian Companies Act, is before this Court under Article 226 of the Constitution of India, praying for a writ of certiorari to quash the letter bearing No.KERC/CT-2/28/Co-Gen PPA/17-18/1983 dated 12.02.2018 (Annexure-A) issued by the respondent-KERC to respondent-BESCOM wherein, respondent-KERC clarified on tariff applicable to Co-generation plants, having multiple units with different commercial operation date and to quash letter bearing No.BESCOM/GM/(Ele)/DGM (F&C)/PP/BC-2490 dated 4 30.05.2018 (Annexure-B) issued by the BESCOM to the petitioner refusing to pay differential amount as claimed by the petitioner, based on Annexure-A/clarification. Further, the petitioner has sought for a writ of mandamus, directing to adhere to the contractual obligations under the Power Purchase Agreement entered into between the petitioner and respondents. 2. Heard learned counsel Sri.Sridhar Prabhu for petitioner; learned counsel Sri.S.Sriranga for respondents No.1 to 5 and learned counsel Sri.B.N.Prakash for respondent No.6. Perused the writ petition papers. 3. Brief facts of the case are that, petitioner owns and operates two units of a bagasse based cogeneration power project in the State of Karnataka. It is stated that Unit-I of the petitioner with capacity of 24.00 MW commissioned in the year 2002 and Unit-II with capacity of 21.56 MW commissioned in the year 2011. The petitioner has obtained Power Evacuation approval for Unit-I for 5 24.00MW and for Unit-II, 12.00 MW, totally 36 MW. It is further stated that the Government of Karnataka by its order dated 11.11.2016 accorded approval to purchase power from bagasse based cogeneration units of 28 sugar factories in the State with the approval of Karnataka Electricity Regulatory Commission (for short ‘KERC’) for a period of 5 years commencing from 2016-17 at the tariff determined by the KERC. The petitioner and respondents entered into Power Purchase Agreement (for short ‘PPA’) on 02.01.2017. The petitioner approached KERC by way of petition for tariff determination. Along with the petitioner, other cogeneration power units and all ESCOMs had approached KERC for tariff determination. KERC, on 11.04.2017 (Annexure-G) by common order, fixed the tariff payable per unit supplied from cogeneration plant commissioned in different years from 2005 to 2014. The petitioner by its letter dated 18.12.2017 requested the first respondent to release the payment. On receipt of petitioner’s letter for payment, 6 respondents No.1 and 5 by their letters dated 17.01.2018 and 24.01.2018 sought certain clarification on the applicability of tariff as per KERC’s order dated 11.04.2017 (Annexure-G). The 6th respondent-KERC vide Annexure-A dated 12.02.2018 issued clarification to respondents No.1 and 5 with regard to applicability of tariff to co-generation plants. On the basis of both order dated 11.04.2017 and clarification dated 12.02.2018, letter dated 30.05.2018 (Annexure-B) is issued to the petitioner rejecting petitioner’s request for payment of difference amount by applying the tariff applicable for the plants based on the year of commissioning of the plant. Aggrieved by both, the clarification as well as rejection of petitioner’s request for payment by applying proper tariff, the petitioner is before this Court in this writ petition. 4. Learned counsel for the petitioner would at the outset submit that clarification dated 12.02.2018 in respect of tariff order dated 11.04.2017 (Annexure-G) is 7 issued in total violation of the principles of natural justice. Learned counsel would submit that 6th respondent-KERC determined the tariff under its order dated 11.04.2017 based on the year of commissioning the cogeneration plants from 2005 or earlier to 2014. On clarification sought for by respondents No.1 and 5 with regard to applicability of tariff based on KERC’s order dated 11.04.2017, the KERC ought to have heard the parties concerned before issuing any clarification. Further, the learned counsel would submit that any clarification by the KERC to the order dated 11.04.2017 fixing the tariff would amount to modification of the order dated 11.04.2017 and any modification to the order dated 11.04.2017 could not be effected without hearing the parties. It is the submission of the learned counsel for the petitioner that while determining the tariff under Section 86 of the Electricity Act, 2003 (for short ‘2003 Act’), the KERC performs quasi judicial function and while acting as quasi judicial authority, it has to follow the rules of natural 8 justice. In support of his contention that the KERC acts as quasi judicial authority, learned counsel relies upon the decision of the co-ordinate bench of this Court in W.P.Nos.36427-36428/2018 dated 29.01.2020. While determining the tariff, KERC shall determine the tariff in accordance with Section 62 of 2003 Act. Further, learned counsel would refer to Section 94 of 2003 Act to contend that the Commission is conferred with power to review its decisions, directions or orders in accordance with the procedure prescribed under the Code of Civil Procedure, 1908. Learned counsel for the petitioner would also refer to Regulation 8 of Karnataka Electricity Regulatory Commission (General and Conduct of Proceedings) Regulations, 2000 (‘Regulations’ for short) with regard to powers of review and revision. 5. Referring to Annexure-R1 letter dated 17.01.2018 of the first respondent-BESCOM addressed to Secretary of 6th Respondent-KERC, learned counsel submits that the 9 first respondent had sought clarification with regard to applicable tariff for cogeneration plants as per Commission’s order dated 11.04.2017. As the first respondent-BESCOM had sought clarification with regard to applicable tariff as per Commission’s order dated 11.04.2017, it was absolutely necessary to hear the petitioner before issuing any clarification with regard to applicable tariff insofar as the petitioner’s Unit is concerned. Further it is submitted that when the Commission has determined the tariff under its order dated 11.04.2017 after hearing all the parties concerned, while issuing clarification to the said order, it was necessary to hear the parties concerned. Thus, he submits that there is total failure of principles of natural justice while issuing clarification by 6th respondent-KERC under Annexure-A dated 12.02.2018. 6. Learned counsel for the petitioner further submits that in view of the clarification issued by 6th respondent- 10 KERC under Annexure-A, the respondent-BESCOM has adopted different methodology for billing/accounting the energy supplied which has resulted in short payment. Further he submits that the petitioner is not being paid tariff as determined under order dated 11.04.2017 based on the year of commissioning of the Unit. Thus, he prays for quashing Annexure-A as the same is the result of violation of principles of natural justice and consequently to quash Annexure-B which is based on Annexure-A/clarification. 7. Per contra, learned counsel for respondents No.1 to 5 and learned counsel for respondent No.6 together contend that writ petition is not maintainable, since the petitioner has remedy of approaching the 6th respondent- KERC under Section 86(1)(f) of 2003 Act as well as remedy of appeal under Section 111 of 2003 Act. It is submitted that if Annexure-A is considered as order, then the 11 petitioner has to avail the remedy of appeal before the Appellate Tribunal for Electricity. 8. Further learned counsel for the respondents contend that the functions of the 6th respondent-KERC is legislative in nature and as such, following principles of natural justice would not arise. It is also contended that the tariff determined under Annexure-G order dated 11.04.2017 is not altered or clarification issued under Annexure-A would not affect the tariff determined. Annexure-A/clarification would only provides clarification as to mechanism of billing. As the Commission’s order dated 11.04.2017 has determined only the tariff and has not provided for method of applying the tariff, first respondent-BESCOM sought clarification. 9. Further the learned counsel for the respondents submit that principles of natural justice is flexible in nature and no straight jacket formula can be applied to the rules of natural justice. It is submitted that tariff 12 applicable to the petitioner was determined under the order dated 11.04.2017 and only the mechanism of billing is what is clarified under Annexure-A dated 12.02.2018. As there is no change in the tariff, the petitioner is in no way prejudiced. Learned counsel would further submit that unless prejudice is demonstrated nor established, the petitioner would not be entitled for relief on the ground of violation of principles of nature justice. In support of their contention, the respondents rely upon the decision of the Hon’ble Apex Court in (1984) 1 SCC 43 in the case of K.L.TRIPATHI v/s STATE BANK OF INDIA AND OTHERS. 10. On hearing the learned counsel for the parties and on perusal of the writ petition papers, the following points would arise for consideration: (a) Whether the petition is liable to be rejected on the ground that there exists alternate remedy of appeal.? 13 (b) Whether the function of determination of tariff by the KERC is legislative as contended by the respondents.? and (c) Whether KERC was required to comply with the principles of natural justice before issuing clarification to order dated 11.04.2017 under Annexure-A dated 12.02.2018.? Point (a): 11. The rule of exclusion of writ jurisdiction by availability of an alternate remedy is a matter of discretion. Whether the petitioner is to be relegated to an alternate remedy of appeal would depend upon the facts and circumstances of each case. Under Article 226 of the Constitution of India, there exists an alternate remedy, writ petition is not to be entertained, is a self-restraint, imposed upon by the High Courts. It is not a rule that wherever alternate remedy exists, writ shall not be entertained. The existence of alternate remedy of appeal would not be a bar to entertain the writ petition under 14 certain circumstances, such as, when the order is passed without jurisdiction; where there has been violation of principles of natural justice or where the validity of the Act itself is under challenge. The Hon’ble Apex Court in WHIRLPOOL CORPORATION v/s REGISTRAR OF TRADE MARKS, MUMBAI AND OTHERS reported in (1998) 8 SCC 1, while considering the issuance of writ under article 226 of the Constitution of India when alternate remedy of appeal exists, has held as follows: “15. Under Article 226 of the Constitution, the High Court, having regard to the facts of the case, has a discretion to entertain or not to entertain a writ petition. But the High Court has imposed upon itself certain restrictions one of which is that if an effective and efficacious remedy is available, the High Court would not normally exercise its jurisdiction. But the alternative remedy has been consistently held by this Court not to operate as a bar in at least three contingencies, namely, where the writ petition has been filed for the enforcement of any 15 of the Fundamental Rights or where there has been a violation of the principle of natural justice or where the order or proceedings are wholly without jurisdiction or the vires of an Act is challenged. There is a plethora of case-law on this point but to cut down this circle of forensic whirlpool, we would rely on some old decisions of the evolutionary era of the constitutional law as they still hold the field. 16. Rashid Ahmed v. Municipal Board, Kairana laid down that existence of an adequate legal remedy was a factor to be taken into consideration in the matter of granting writs. This was followed by another Rashid case, namely, K.S.Rashid & Son v. Income Tax Investigation Commission which reiterated the above proposition and held that where alternative remedy existed, it would be a sound exercise of discretion to refuse to interfere in a petition under Article 226. This proposition was, however, qualified by the significant words, “unless there are good grounds therefore’’, which indicated that alternative remedy would not operate as an absolute bar and that writ 16 petition under Article 226 could still be entertained in exceptional circumstances.” In catena of decisions, the Hon’ble Apex Court has held that writ petition could be entertained against an order complained of, if the said order is passed in defiance of the fundamental principles of judicial procedure or when an order has been passed in total violation of principles of natural justice. Accordingly the point is answered holding that in the facts and circumstances, the writ petition would be maintainable, as this Court is of the view that clarification dated 12.02.2018 (Annexure-A) is issued in total violation of principles of natural justice. Point (b): 12. The petitioner is a bagasse based cogeneration unit. On the application made by the petitioner as well as the respondents-ESCOMs, the respondent-KERC by its order dated 11.04.2017 (Annexure-G) determined the tariff that would be applicable to the petitioner for the energy 17 supplied to the respondent-ESCOMs. KERC is empowered with determination of tariff by following the procedure prescribed under Section 62 and Section 64 of the 2003 Act. Section 86 of 2003 Act enumerates the functions of the State Commission which includes determination of tariff for generation, supply, transmission and wheeling of electricity, wholesale, bulk or retail, as the case may be, within the State among other functions. Section 94 of the 2003 Act prescribes powers of Appropriate Commission. The Commission possesses the same power vested in a Civil Court under the Code of Civil Procedure, among other powers for reviewing its decisions, directions and orders. 13. Learned counsel for the respondents contended that the functions of the KERC is legislative in nature and hence the principles of natural justice would have no application. The question as to whether the functions of KERC is legislative or quasi judicial is determined by 18 a co-ordinate Bench of this Court in W.P.Nos.36427- 36428/2018 decided on 29.01.2020. This Court has held that the order that would be passed by KERC is in the nature of quasi judicial and is susceptible to judicial review. This Court, after taking note of the decision of the Hon’ble Apex Court in PTC INDIA LIMITED v/s CENTRAL ELECTRICITY REGULATORY COMMISSION, reported in (2010) 4 SCC 603 in the above W.P.Nos. 36427- 36428/2018 at paragraph V(b) has held as follows: “5.V(b). going by the above test, the impugned order which in substance relates to fixation of tariff rates on which tariff should be levied arguably could have been branded as “quasi-legislative” in character and consequently, the scope of challenge would have been restrictive; vis-à-vis quasi judicial or administrative; however it is open to the legislature to treat even such orders as being quasi-judicial; the impugned order has been issued by the first respondent-Commission in exercise of power u/ss 62 & 64 of the Act, is not 19 in contest; the Preamble to the said order itself mentions of these sections apart from stating about the application made thereunder and of the objections of the stakeholders; if the product of a statutory exercise is, by fiction of law, quasi- judicial, then the said exercise needs to be treated as quasi-judicial only, a contra contention sounding ill-logical; the Apex Court in PTC INDIA LTD VS.CENTRAL ELECTRICITY REGULATORY COMMISSION, (2010) 4 SCC 603 at paragraphs 49 & 50 has observed as under: “49. On the above analysis of various sections of the 2003 Act, we find that the decision-making and regulation-making functions are both assigned to CERC. Law comes into existence not only through legislation but also by regulation and litigation. Laws from all three sources are binding. According to Professor Wade, “between legislative and administrative functions we have regulatory functions”. A statutory instrument, such as a rule or regulator, emanates from the exercise of delegated legislative power which is a part of administrative process resembling enactment of law by the legislature whereas a quasi-judicial order comes from adjudication which is also a part of 20 administrative process resembling a judicial decision by a court of law. 50. Applying the above test, price fixation exercise is really legislative in character, unless by the terms of a particular statute it is made quasi-judicial as in the case of tariff fixation under Section 62 made appealable under Section 111 of the 2003 Act, though Section 61 is an enabling provision for the framing of regulations by CERC. If one takes “tariff’’ as a subject-matter, one finds that under Part VII of the 2003 Act actual determination/fixation of tariff is done by the appropriate Commission under Section 62 whereas Section 61 is the enabling provision for framing of regulations containing generic propositions in accordance with which the appropriate Commissioner has to fix the tariff…’’ In view of the above, it can be fairly stated that the impugned order is quasi-judicial in nature and therefore, is susceptible to challenge inter alia on the conventional grounds of Administrative Law.” Thus, it would be clear that KERC functions as quasi judicial authority. As stated above, while determining the tariff under Section 62 of 2003 Act, the KERC would take into consideration various factors to determine the tariff. 21 While determining the tariff procedure prescribed under Section 64 of 2003 Act shall be followed. Moreover, Section 94 of 2003 Act confers power vested in a Civil Court under Civil Procedure Code in respect of matters namely summoning and enforcing attendance of any person and examining him on oath; discovery and production of any document or other material object producible as evidence; receiving evidence on affidavits; requisitioning of any public record; issuing commission for the examination of witnesses; and reviewing its decisions, directions and orders. Section 86 of 2003 Act enumerates the functions of the Commission which includes determining the tariff for generation and supply of electricity. Sub-Section (3) of Section 86 of 2003 Act states that Commission shall ensure transparency while exercising its powers and discharging its functions. When such is the nature, character and function of the KERC, it could definitely amount to quasi judicial function. Point (b) is answered accordingly. 22 Point (c): 14. As stated above, both the petitioner a bagasse based cogeneration plant and the ESCOMs had approached KERC to determine tariff for the power plants as per the applicable norms, regulations and PPAs between the parties. After hearing all the parties concerned, by its order dated 11.04.2017 (Annexure-G), KERC determined tariff payable per unit for the energy supplied from the cogeneration plants based on the year of commissioning. Petitioner demanded the ESCOMs to pay for the energy supplied based on the tariff fixed under Annexure-G order dated 11.04.2017. 15. On receipt of the request from the petitioner first respondent-BESCOM addressed a letter dated 17.01.2018 to the 6th respondent-KERC. Relevant portion of the letter reads as follows: 1. Referring to the above, BESCOM had executed Power Purchase Agreements with Co- 23 Gen Plants approved by GOK vide letter cited under reference (1), where in the exportable capacities and installed capacities are agreed. Later, the Hon’ble Commission vide order cited under reference (2) had approved the tariff for Co-Gen Plants based on the commercial operation date in different years. Some of the Co-Gen plants have commissioned more than one or two units of Co-Gen Plants in different year and claiming the different higher tariff based on year of commercial operation which is not agreed in PPA. 2. The following Co-Gen Plants are claiming different rates based on COD of the individual Co-Gen Units. a. Godavari Bio Refineries Limited: The PPA is executed on 02.01.2017. The exportable capacity is 28 Mw and installed capacity is 45.56 Mw, 24 Mw is commissioned during April-2002 and 21.56 Mw is Commissioned during January-2011. The energy exported from these units is recorded in feeder 1 and feeder 2 at IPP end and as well as at 110 Kv Switch yard being receiving end. The Co-Gen Plant is billing at Rs.4.16 per unit for 24 energy received in Feeder1 and at Rs.4.89 per unit for energy received in feeder 2 at 110 Kv Switch yard. The copy of invoice, meter reading statements for the month of November- 2017 is herewith enclosed as “Annexure-1” In the PPA, there is no distinction/bifurcation of energy/ contracted capacity for feeder 1 or feeder 2. The 28Mw power is agreed. Hence, it seems energy exported, up to 28Mw (20.16Mu) is to be payable at a single tariff applicable for the year 2005 and earlier since 24Mw commissioned during April-2002. 3……………… 4……………… 5……………… 6……………… Under the above circumstances, it is requested to kindly peruse the above issues and clarify the applicable tariff for above, cited Co-Gen Plants as per this Hon’ble Commission’s order dated 11.04.2017.” To the above letter, the 6th respondent-KERC, by impugned letter dated 12.02.2018 clarified as follows: 25 Sub: Clarification on tariff applicable to Co-Generation Plants having different Commercial operation dates for admitting tariff as per KERC order dated 11.04.2017. Ref: 1.GOK Letter No.EN 16 PPT 2016, dated 11.11.2016. 2.Commission’s order dated 11.04.2017. 3.Ltr No 15064 dated: 17.01.2017 of Managing Director, BESCOM. 4. Letter No. 20575, dated: 24.01.2018 of Chief Financial Officer, CESC, Mysore. The BESCOM and the CESC have sought clarifications on the applicability of tariff, as per the Commission’s order cited under Reference-2 above, to Co-Generation Plants, which have augmented the capacity of exportable power by commissioning the Co- Generation Plants in a phased manner and have achieved the CoD on different dates. 26 The Commission has examined the issue and I am directed to communicate the methodology of billing, as follows: 1. The total energy injected into the KPTCL Grid at a single inter-face point by the co- generation plants, as per the capacity contracted in the PPA, shall be segregated in accordance with the different generating units as indicated below: (i) Energy equivalent to the maximum exportable capacity, as per the KPTCL Evacuation approval of each unit shall be computed on the basis of ‘Round the Clock Operation (ii) Energy Output, as computed above, for the oldest unit shall be first deducted from the total energy exported from the plant and the balance exported energy shall be segregated amongst the remaining generating units in the chronological order of their commissioning date. (iii) After segregation of the energy as above, the tariff applicable as per the Table indicated in the Commission’s Order dated 11th April, 2017 shall be applied. 27 2. Further, the following points are reiterated for the Tariff payable per unit for the energy supplied from the Go-gen plants commissioned in different years during the period from 2005 onwards or earlier to 2014 as per the Commission’s Order dated 1th April 2017 in OP Nos.38/2016 to 56/2016, 58/2018 to 63/2016, 65/2016 to 68/2018 and 85/2016 in respect of “Determination of Tariff”. (a) The Co-Gen Plants commissioned within a year of commencement of the generic Tariff Order dated 1.1.2015, shall be treated as having been commissioned during the year 2014 for the applicability of the tariff; (b) The Co-Gen Plants commissioned within a year of the commencement of the generic tariff Order dated 11.12.2009, shall be treated as having been commissioned during the year 2009 for the applicability of the tariff. The above clarification is applicable for billing similar cases in all the ESCOMs in respect of Co-generation power plants having PPA under the medium term contract for the period from 2016-17 to 2020-21.” 28 16. A careful perusal of the above two letters would disclose that the first respondent-BESCOM sought clarification with regard to the applicable tariff for the cogeneration plants as per the Commission’s Order dated 11.04.2017. The clarification sought in sum and substance is that where the cogeneration plants have more than one or two units commissioned in different years and claiming different higher tariff based on the year of commercial operation, how the tariff determined under Order dated 11.04.2017 is to be applied. The KERC clarified in sum and substance stating that the energy supplied from the oldest unit shall be first deducted from the total energy exported from the plant and the balance exported energy shall be segregated amongst the remaining generating units in the chronological order of their commissioning date. 17. It is not in dispute and it is an admitted fact that the clarification sought for by the ESCOMs and clarification 29 issued by the KERC is in respect of Tariff Determination Order dated 11.04.2017. It is also not in dispute and it is an admitted fact that order dated 11.04.2017 determining tariff was passed after hearing the Co-Gen plants and the ESCOMs. As stated above, the KERC discharges quasi judicial function. KERC determines the tariff applicable to the energy supplied by the Co-Gen plants to the ESCOMs. The said determination of tariff is by hearing the parties and on examination of various factors such as, cost of the project, year of commissioning, etc. 18. The statement of objections filed by the ESCOMs at paragraph 13 clearly states that respondent is paying the petitioner in accordance with the above mentioned clarificatory letter and the same was communicated to the petitioner vide impugned letter dated 30.05.2018 (Annexure-B). 19. Underlying concept of principles of natural justice are impartiality and fairness. What natural justice 30 requires changes with time and circumstances. Natural justice would entirely depend upon the facts and circumstances of each case and the consequences of the order passed in violation of principles of natural justice. Natural justice is intended to prevent miscarriage of justice. Always decisions of public authorities or quasi judicial authorities shall be made in a fair and just manner. 20. KERC (General and Conduct of Proceedings) Regulations, 2000 (for short ‘Regulations’) provides for procedure for conduct of proceedings before the KERC. Proceedings is defined under Regulation 2(h) of the Regulations. Proceedings shall include proceedings of all nature that the Commission may hold in the discharge of its functions under the Act. Regulation 8 provides Powers of Review, Revision, etc. Regulation 11 provides for inherent Powers of the Commission. Regulation 11(4) reads as follows: 31 “In the exercise of its powers under the Act and in the discharge of its functions, the Commission shall, as circumstances may permit, be guided by the principles of natural justice.” The above regulation would abundantly makes it clear that the Commission shall be guided by the principles of natural justice while discharging its functions under the Act. When the KERC had determined the tariff by order dated 11.04.2017 after hearing all the parties, while clarifying its order in the matter of mechanism of billing, it ought to have heard the parties concerned before issuing any clarification. Whether the KERC could have issued clarifications, whether such clarification amounts to review or modification of the order is a separate question, which would not fall for consideration in this proceeding. The contention of the respondents that no prejudice is caused to the petitioner and there is no change of tariff under the impugned clarification cannot be appreciated in the facts and circumstances of the case, more so, when 32 KERC functions as a quasi judicial authority. When an authority acts or performs ‘quasi-judicial’ function, there is a duty to act judicially, which means to follow the principles of natural justice. Lord Hewart has observed that “it is not merely of some importance, but is of fundamental importance that justice should not only be done, but should manifestly and undoubtedly be seem to be done” (1923 ALL E.R. 233 in the case of R.v.SUSSEX JUSTICES). Whether the violation of principles of natural justice prejudices the case of the petitioner or not, the quasi judicial authority is expected to act in a fair and just manner. Whether the clarification sought by first respondent-BESCOM would cause prejudice or not, when the order is passed after hearing the concerned parties, clarification sought for also shall be considered in the presence of the concerned parties. The same procedure which is followed while determining the tariff by KERC shall be followed while considering the clarification as sought by respondent - BESCOM. In 33 K.L.Tripathi (supra) case, the infraction of natural justice complained of was that he was not given an opportunity to rebut the materials gathered in his absence. In that circumstance, the Hon’ble Supreme Court held that prejudice caused shall be demonstrated while holding that the appellant therein was associated with the preliminary investigation and did not dispute any of the facts nor did he ask for any opportunity to call any evidence to rebut the facts. The facts involved in K.L.Tripathi (supra) case is entirely different from the facts of the present case. Hence, the same will have no application. Non-providing of an opportunity of hearing while issuing clarification with regard to mechanism of billing by applying the tariff itself is a prejudice caused to the petitioner. Moreover the impugned clarification prejudices the case of the petitioner, in that the KERC in its tariff determination order had fixed the tariff per unit supplied from co- generation plants based on the year of commissioning of the unit, whereas in its impugned clarification clarified 34 that oldest unit shall be first deducted from the total energy exported from the plant and the balance exported energy shall be segregated amongst the remaining generating units in the chronological order of the commissioning date and after segregation of the energy, tariff applicable as per order dated 11.04.2017 shall be applied. Point (c) is answered accordingly. 21. For the reasons stated above, Annexure-A/ clarification on tariff issued by the 6th respondent-KERC is liable to be quashed only on the ground of infraction of principles of natural justice. Consequently, Annexure-B endorsement dated 30.05.2018 rejecting the request of the petitioner for payment of energy charges on different rates for the energy supplied from two separate units is also liable to be quashed, with liberty to the respondent No.6 to consider the request of respondents No.1 and 5 for clarification of the tariff order dated 11.04.2017 after affording an opportunity to the petitioner to have its say 35 and pass orders in accordance with law. Hence, the following order: The writ petition is partly allowed. Letter bearing No.KERC/CT-2/28/Co-Gen PPA/17-18/1983 dated 12.02.2018 (Annexure-A) issued by the respondent-KERC to respondent-BESCOM and letter bearing No.BESCOM/GM/(Ele)/DGM (F&C)/PP/BC-2490 dated 30.05.2018 (Annexure-B) are quashed. However, respondent No.6 is reserved liberty to consider the request of respondents No.1 and 5 for clarification of the tariff order dated 11.04.2017 in accordance with law, after affording an opportunity to the petitioner to have its say in the matter. Sd/- JUDGE mpk/-* CT:bms "