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Rajasthan HC orders power companies to limit Special Fuel Surcharge recovery
The case revolves around Adani Powers Rajasthan Ltd and its efforts to establish a thermal power plant at Kawai in Baran district
The Rajasthan high court on Thursday barred the Ashok Gehlot government from levying special fuel surcharge on consumers and directed its recovery only up to the principal amount of ₹3,048.64 crore to be given as compensation to M/s. Adani Powers Rajasthan Ltd (APRL).
Apart from the principal amount, interest and carrying costs amounting to ₹2,947.81 crores and additional interest amounting to ₹1,442 crores will not be recovered now. If any consumer has deposited this additional amount, then the same shall be duly adjusted, the court said.
A single bench of Justice Dr. Pushpendra Singh Bhati passed the order while partially allowing hundreds of petitions. The case revolves around APRL and its efforts to establish a coal-based thermal power plant at Kawai in Baran district.
Challenges in obtaining an allocated coal block led to APRL importing coal from Indonesia, resulting in escalated costs and a subsequent request for tariff revision. Despite initial rejections, APRL’s petition before the Rajasthan Electricity Regulatory Commission (RERC) in 2018 eventually led to compensation.
The legal journey, encompassing appeals and reviews, culminated in the RERC’s order on September 1, 2022, allowing the recovery of a specified amount through a special fuel surcharge from consumers.
Passing the order, the bench said, “The court also observes that the respondent DISCOMs are the bodies of the state government and fall under the definition of ‘state’ as contained in Article 12 of the Constitution of India, and therefore, it is the duty of the state to protect the interests of the consumers. Despite the same, the respondents levied the additional cost in the name of a Special Fuel Surcharge. The Special Fuel Surcharge would have been justified had it been only on the original principal amount i.e., ₹3,048.63 crores, but the surcharge as imposed herein is not justified in law.”
Ramit Mehta, the counsel for one of the petitioners, said the surcharge was imposed because of the financial burden suffered by the DISCOMs over the payment of ₹7,438.58 crore to ARPL.
“During the process of making such recovery, the amount, if any, already recovered towards the special fuel surcharge from the consumers by the respondents, the same shall be duly adjusted. The respondent DISCOMs shall be accordingly free to proceed to recover the respective original principal amounts from the consumers under the head of special fuel surcharge, strictly in accordance with this judgment,” the bench said.
