The Supreme Court of India has set aside an order of the Appellate Tribunal for Electricity (APTEL) that reopened a settled dispute over the recovery of Damodar Valley Corporation’s (DVC) sinking fund contributions through electricity tariffs. A division bench of Justice J.B. Pardiwala and Justice K. Vinod Chandran restored the Tribunal’s original 2019 decision, holding that its subsequent review violated judicial discipline and disregarded a binding Supreme Court precedent.
The Court also imposed costs totalling ₹3.5 lakh on Maithan Alloys Limited and Steel Authority of India Limited (SAIL).
Background
The dispute concerned electricity tariffs for the period 2009–2014 and whether DVC could recover contributions to its sinking fund, created to redeem bonds, as an expense through electricity tariffs while also claiming depreciation on assets financed through those bonds.
Maithan Alloys challenged the tariff treatment, arguing that allowing both sinking fund contributions and depreciation resulted in a double benefit at consumers’ expense. However, the Supreme Court had already examined the relevant legal framework in Bhaskar Shrachi Alloys Limited v. Damodar Valley Corporation (2018), upholding the treatment of depreciation and sinking fund provisions under the applicable statutory framework.
In May 2019, APTEL upheld the tariff order, relying on the Supreme Court precedent. A review petition was subsequently allowed in 2024, more than five years later, prompting DVC to approach the Supreme Court.
The Court examined Section 40 of the Damodar Valley Corporation Act, 1948, alongside Regulation 43 of the Central Electricity Regulatory Commission’s 2009 Tariff Regulations. Regulation 43 expressly permits funds established under Section 40 to be treated as expenditure recoverable through tariffs.
The court found that the earlier Supreme Court judgment had already addressed the relevant treatment of depreciation and sinking fund contributions. The Tribunal could not reopen the matter merely by presenting the double-benefit argument differently.
Expressing strong disapproval of the review order, the Court observed:
“We cannot but observe that the Tribunal has gone haywire; we are apologetic for the expression but we find no substitute to express our angst in allowing the review, that too, when the very same issue, for the earlier years, was settled by this Court in Bhaskar Shrachi Alloys Limited, based on which, the original order was passed by the Tribunal.”
The Bench emphasised that a review is not an opportunity to reconsider a case as though hearing an appeal. It relied on the principles laid down in State of West Bengal v. Kamal Sengupta (2008), which explain that an apparent error must be evident from the record rather than discovered through extensive reasoning.
The Court further stressed the constitutional importance of following its binding decisions under Article 141. It stated:
“As far as Article 141 is concerned it’s a Constitutional imprimatur which ensures the decisions of the highest court of the land to be followed, without which there will be mayhem.”
The Bench held that APTEL’s review decision breached judicial discipline and exceeded the permissible limits of review jurisdiction.
Allowing DVC’s appeal, the Supreme Court set aside the Tribunal’s review order and restored its original judgment dated May 17, 2019. It imposed costs of ₹2 lakh on Maithan Alloys Limited and ₹1.5 lakh on Steel Authority of India Limited, directing both amounts to be paid to DVC within one month.
Failure to pay within that period would attract interest at 18% per annum.
Case Details
Case Title: Damodar Valley Corporation v. Maithan Alloys Limited & Ors.
Case Number: Civil Appeal No. 11106 of 2024
Judges: Justice J.B. Pardiwala and Justice K. Vinod Chandran
Decision Date: October 30, 2026
