The Supreme Court ruled last week that the Andhra Pradesh Electricity Regulatory Commission can fix the tariffs for non-conventional energy produced by private ‘green’ companies. The court stated in a large batch of appeals that the commission has the jurisdiction to determine tariff “which take within its ambit the 'purchase price' for procurement of the electricity generated by the non-conventional energy developers/ generators.”
The court's order came in an appeal moved by APTRANSCO challenging an order of the appellate tribunal for electricity that held that the APERC cannot fix the tariffs for non-conventional power. The producers had contended that they cannot survive at the low tariffs fixed by the APERC. 'The court remanded the matter to the commission for fresh determination. It shall also consider whether it would be in the larger interest of the public to permit sale of generated electricity to third parties, if otherwise feasible.
Insurance claim upheld
The Supreme Court has dismissed the appeal of New India Assurance Co Ltd against the order of the National Consumer Commission which had asked it to pay compensation to Protection Manufacturers (P) Ltd. The commission had accepted the claim of the insured company which had suffered damage to plant, machinery and stock-in-process in a fire. The insurance company conducted two surveys which confirmed the loss. However, it appointed another investigator which filed six reports, all of them sliced down the loss which tallied exactly with that of the insurer. When the reports became controversial as it was “tailor-made” to the wishes of New India, late ex-Chief Justice of India, Y V Chandrachud, was requested to review the facts. He concluded that the report of the investigator who reduced the estimate of the loss was “unfounded and speculative”. New India still did not settle the claim of the firm, which then was forced to move the national commission. It asked the insurer to pay Rs 2.2 crore as damages. The insurer then approached the Supreme Court. It upheld the commission’s decision. It also stressed the New India should have approached the regulatory authority under the Insurance Act under the circumstances, instead of appointing a new investigator to get a favourable report.
Claim for incentives dismissed
The Supreme Court has dismissed the appeal of Ras Resorts & Apart Hotels Ltd, denying its claim for incentives from the administration of the Union Territory of Dadra and Nagar Haveli. It wanted to set up a hotel in Silvassa. According to the firm, the administration had promised subsidies in interest on loans in the draft seventh five year plan 1985-90 and the annual plan 1985-86. It started investing on the word of the administration. When the subsidies were denied, the firm moved the Bombay high court, which dismissed its claim. It approached the Supreme Court, which affirmed the high court decision. Its judgment stated that the subsidy proposal had failed to get the approval of the Planning Commission. “A mere proposal in the Plan that was yet to be finalised cannot be taken as an offer.”
Compensation not liable to I-T
Compensation received for delay in supplying an industrial unit is not liable to income tax as revenue receipt, the Supreme Court ruled in the case, Commissioner of Income Tax vs Saurashtra Cement Ltd. The company bought a cement plant Walchandnagar Industries under an agreement which specified damages would have to be paid if there was delay in delivery. There was delay and the amount specified was paid. The revenue authorities assessed the damages as revenue receipt, while the company maintained that it was revenue receipt.
The dispute started in 1974-75 and ended in the Supreme Court, which ruled that it was capital receipt. The revenue authorities lost their three-decade-old case before the tribunal, the Gujarat high court and the Supreme Court.
Chimney parts get Modvat credit
The Supreme Court dismissed the appeal of the central excise commissioner against the ruling of the tribunal in its claim against Rajasthan Spinning & Weaving Mills which claimed Modvat credit in respect of steel plates and MS channels used in the fabrication of chimney for diesel generating sets. The revenue authorities maintained that the concerned goods were not ‘capital goods’ eligible for the credit. The company contended that the chimney was a vital part of the unit, especially as it was essential under the pollution control laws. The Supreme Court accepted the company’s view.
Subsistence allowance upheld
A labour court should not “throw out” a petition if it carries an incorrect label or mentions a wrong provision, the Supreme Court stated while dismissing an appeal, Vijaya Bank vs Shyamal Kumar. The labour court and the Gauhati high court had granted subsistence allowance to an employee. The bank argued that the labour court had no jurisdiction as it was not notified by the appropriate government and the employee relied on wrong provisions. The bank’s appeal was dismissed with costs, and the labour court was directed to dispose of the 15-year-old case within six months.