' NOOR-UL-HAQ N. QURESHI, J.--- Since all the above captioned Intra-Court Appeals/Writ Petitions involve common question of law and facts, therefore, the same are being decided through this consolidated judgment.
2. The above Intra-Court Appeals are directed against the impugned Judgment dated 24-10-2012 passed by learned Single Judge-inChambers allowing 550 Writ Petitions, preferred against levy of Fuel Adjustment Charges.
3. Brief facts; for the disposal of instant Intra-Court Appeals, are that appellants are the Electricity/Distribution Companies, created in consequence of unbundling of WAPDA Power Wing into segment of generation, transmission and distribution to be regulated by National Electric Power Regulatory Authority (herein referred to as NEPRA) and are discharging the function of distribution of electricity in the entire respective licensed territories. The appellants under the National Electric Power Regulatory Authority (Tariff Standards and Procedure Rules), 1998; submitted tariff petitions for determination of its consumer-end tariff for the financial year 2010- 2011 to NEPRA. Accordingly, notices were issued to the public through proclamation in newspaper and letters were also issued to stakeholders. During proceedings and after thorough discussion, following mechanism on account of variation in Common Pool Generation Energy Cost was settled:- ' Monthly Fuel Adjustments 5.2.5. The existing practice with respect to the adjustments on account of variation in CPGenE (energy cost component of PPP) on monthly basis would continue.
This adjustment would be reflected in the consumers' monthly bill as Fuel Adjustment Charge. This adjustment would be calculated as per mechanism given in Annex-I. Annex-I as mentioned above contains the entire mechanism for fuel price adjustment and forms an integral part of the Tariff Determination by NEPRA.
4. The above tariff determination was sent to the Federal Government for Notification, which was accordingly done and it attained finality. The tariff determination duly notified reference values for every month on the basis of which, the tariff was determined and notified through Notification containing the same and in pursuance thereof, bills were sent to the consumers.
5. Thereafter various writ petitions were filed challenging the notifications of Fuel Price Adjustment for various months, in which, requests for suspension of such adjustment for subsequent months were also sought. On 24-10-2012 through a consolidated short order (reasons were recorded later on), all writ petitions on the above subject were allowed to the effect stated therein. Feeling aggrieved, the appellants have preferred these Intra-Court Appeals challenging impugned judgment/order dated 24-10-2012.
6. On the other hand, there are 35-writ petitions filed by different petitioners/companies against issuance of notice dated 4-4-2013 by the National Accountability Bureau for payment of amount due on account of the electricity consumed. The petitioners have prayed that impugned notices dated above may very kindly be set aside, as the same could not have been issued treating the petitioners as defaulter in view of the fact that retrospective recovery of 'Fuel Adjustment Charges' has been declared unconstitutional through short Order dated 24-10-2012, as well as detailed judgment passed by the learned single Judge-in-Chambers and pendency of the appeal, the same could not have been issued.
7. Learned Counsel for the appellant (LESCO) Mr. Munawar-us-Salam, Advocate argued that LESCO is an electricity distribution and structure of supply of electricity is in three stages i.e. (1) Generation (GENCOs), (2) Transmission (NTDC) and (3) Distribution (DISCOs). According to NEPRA Act NEPRA is to determine the tariff at which GENCOs sell electricity to NTDC, NTDC, to DISCOs and DISCOs to the consumer. It is contended that tariff is determined in 3 stages; (1) Tariff for GENCOs, (2) Tariff of NTDC and (3) Tariff of DISCOs. Tariff of DISCOs includes the first two tariffs and adds to it a small component of Distribution Margin. Fuel prices, and adjustment thereof, is a component for the first two stages and is passed on in the same manner to the DISCOs. Thus Fuel Price variation is the difference between actual and reference fuel cost component.
8. It is further argued that the consumers were charged on the basis of revenue requirements duly assessed by NEPRA and notified by the Federal Government, which have not been challenged at any forum. It is also contended that on account of the instant litigation, the revenue amounting to billions of Rupees in respect of Fuel Price Adjustment for the year ended 30th June, 2012 and 30th June, 2011 has been affected and failure to pay the same would result in less generation and further load management/load-shedding and levy of fuel surcharge on consumers is not arbitrary and violative of the Constitution. In this regard, learned counsel relied upon case-laws reported in 2007 PLC (C.S.) 157; 2006 SCMR 1163; 2009 SCMR 1169, PLD 1987 SC 145; 2002 CLC 971; 2001 YLR 539, PLD 1971 Lah. 462, PLD 1976 SC 254, 1996 CLC 1090, 1997 SCMR 641 and 2009 CLC 1343.
9. It is next contended that NEPRA under section 31(4) of NEPRA Act, has the power to issue notification for Fuel Adjustment and Notification issued after notice, depicts that power was exercised transparently. It is mandate of NEPRA to determine the actual price of energy after adding or reducing the Actual Fuel Price in Reference Fuel costs. If the actual fuel cost is less than the Reference Cost, the NEPRA reduces the Reference Fuel cost for the respective month and provides credit to the customer and if the actual Fuel Cost is more than the Reference Fuel Cost, it increases the same. He relied upon case-laws reported in 2010 SCMR 517, 2010 YLR 2872 and PLD 2013 Lahore 182.
10. It is submitted that the learned Single Judge has erred in law by not appreciating the facts and the reasons mentioned in Paragraph 16 and the findings recorded at (ii) of the Impugned judgment are not sustainable as per section 31(2) of NEPRA Act and Rule 17(3)(i) of the Tariff Standard and Procedure Rules, 1998. Learned counsel further contended that the notifications were issued by the DESCO in consequence of the Tariff Determination of NEPRA, which was not challenged before any forum. At the time of consumption, the respondents/petitioners were aware of the fact that the bills for electric powers are being issued on the basis of Reference Fuel Cost Component and the same shall be adjusted as per duly notified formula on the basis of differential with the Actual Fuel Cost Component, therefore, the principles of retroactivity, vested rights and past and closed transaction are not applicable to the instant matter. Reliance has been made on following case-laws reported in PLD 1971 Lah. 462, 1996 CLC 1090, 2010 YLR 2872, PLD 2013 Lahore 182, PLD 1993 Kar. 578; PLD 1978 Lahore 867, PLD 2011 Lahore 61, AIR 1981 Orissa 13, PLD 1965 Lah. 147, 2003 CLD 1299, 1988 SCMR 715, PLD 1970 SC 514, 1992 SCMR 2430 and PLD 2003 Kar.
174. ll. It is next submitted that the reasons mentioned in Paragraph 17 and the findings recorded at (ii) of the impugned Judgment are not sustainable on the basis of following grounds.
(1) That no element/factor of mismanagement, bad governance, inefficiency, theft, inability to recover across the board as alleged is included or added in either the Reference Fuel Cost Component or the Actual Fuel Cost.
(ii) That the Fuel Adjustment Charge is limited to the mechanism specified in the Tariff Determination.
(iii) That the concept of Reference Fuel Cost Component and the rationale thereof as well as the basis for determination of the Actual Fuel Cost Component.
(iv) That the impugned judgment does not specify the time period for notifications prior to September, 2011 and post such period.
(v) That the impugned judgment reads "may" as "shall".
(vi) It was acknowledged that the starting point for the period of seven days is not clear. 1n- such circumstances legal error was committed by applying the declaration of law to event prior thereto in a retrospective manner. Vii) It is trite law that declaration of law is always prospective in nature and cannot affect past matter, the application of the declaration of law to past matter vide the impugned Judgment is not sustainable.
12. In support of his contentions, reliance has been placed by learned counsel on following case- laws reported in PLD 2004 SC 25, AIR 1963 SC 274, AIR 2005 SC 137, 1993 SCMR 73, PLD 1974 SC 134, 2010 PTD 1159, 2011 SCMR 420, 2000 SCMR 1305, 2002 CLD 1018; 2002 CLD 557, 2002 CLD 1170, 2001 SCMR 1001, PLD 2007 Lah. 269, AIR 1998 Cal. 216, PLD 1990 Lah. 9, PLD 1976 Kar. 261, PLD 1971 SC 481, PLD 1961 SC 145, 1998 CLC 206, 1988 CLC 2127, PLD 1976 Kar. 79, 2010 PTD 1159, 2012 PTD 396 and 2012 PTD 377.
13. Learned counsel for the FESCO, Sh. Muhammad Ali, Advocate, mentioned that since the matter revolves common grounds of law and facts, the titled ICA is being adjudicated as the main case.
That DISCOS cannot charge more than allowed by NEPRA who even determines the Upper limit of the Technical Losses and denies the adjustment of tariff on ground of additional/extra Technical Losses/Line Losses/ Theft etc.
14. He further contended that the Tariff includes the Price of Fuel which is the Variable Component liable to be adjusted after recording of actual consumption, therefore, at stage of Determination of Tariff, NEPRA determines a Reference Price on the basis of expected load requirement and nature of available fuel at the relevant time/month. This Reference Price forms the basis of the Bill.
15. He further argued that in Para No.14 of the impugned judgment, the learned Single Judge in Chambers had framed four issues. By the decision of Issue No.1 the learned Court accepted the contentions of the appellants by declaring that the law of Fuel Price Adjustment is intra vires and since the respondents have not challenged this decision, the same has attained finality.
16. It is further argued that the legal objections against the maintainability of petitions have not been considered in the impugned judgment.
17. It is further contended that respondents have earlier approached the honourable Lahore High Court, Lahore on similar questions of law. However, after the modification of interim orders in December, 2011 by the Hon'ble Lahore High Court, the respondents approached this Court. As such, these petitions are barred under principle of res sub judice.
18. It is further argued that the contract between a consumer and electricity distributor is a private contract, containing its own terms and conditions, which provide a variable tariff and the consumers, have agreed to such tariff being applicable to them. Therefore, they cannot, at this stage, question the basis for supply of electricity.
19. It was next contended that the respondents have failed to specify as to which cost, other than the fuel, has been allowed as FPA by NEPRA and though reference has been given to Additional/Dissenting Notes of a Member of NEPRA, yet no notice of it has been taken by the Court that claim based on such cost was denied by NEPRA to be passed on to,,the end Consumers.
20. It is submitted that the decision lacks the appreciation to the effect that Proviso of section 34 is only directory in nature without penalty for non-observance as the cost of the fuel is to be paid to the Power Producers/Fuel Suppliers and cannot be denied for any reason.
21. Similar issue has already been adjudicated by the Hon'ble Lahore High Court, which continued up to the Hon'ble Supreme Court of Pakistan and finally determined. The NEPRA and the modus operandi of Fuel Price Adjustment has been upheld. The monthly price adjustment is in vogue since 2008, which is being paid by the respondents/ petitioners without any objection, therefore, now they cannot agitate again and again on a new monthly determination, unless some illegality committed by the NEPRA. Other factual aspects are not amenable to writ jurisdiction. The respondents/petitioners have mainly based their claims upon factual controversy, which could only be determined after elaborate sifting of the material by adducing evidence, which is not permissible under writ jurisdiction. Our attention was drawn towards admitted fact of inviting objections from public-at-large when no one raised any objection on the impugned notification after final determination by the NEPRA, as such, fully applicable cannot be said to have been issued with retrospective effect. No vested right accrued in favour of the respondents/petitioners, therefore, their claim for legitimate expectancy is devoid of merit.
22. Learned counsel emphasized that Fuel Adjustment is a part of tariff and pre agreed between the parties concerned. As per section 31(4) of the Act, 1997, the NEPRA is vested with the powers to determine the Fuel Price Adjustment in the settled tariff. Since this exercise has been done with application of law in view of direction of Hon'ble Lahore High Court it cannot be called in question, since penal consequences have not been provided in the said law, it should be considered as mandatory not directory.
23. It is pointed out that the Fuel Adjustment Charges have been introduced to be as surcharges, therefore, under no circumstances, it could be termed as surcharge. It is rather a pre-agreed amount to be paid by the supplier as per agreement of supply of energy, the revision of price ensures uniformity of the price. Articles 18 and 19 of the Constitution of Islamic Republic of Pakistan stipulate qualification prescribed by law and regulations of any trade or procession can be made by the licensing authority.
24. Since nobody appeared for domestic consumers nor any petition preferred, we invited both the learned counsel for parties to provide such guidance, to which they referred relevant portion of the judgment pronounced by the Hon'ble Lahore High Court in Writ Petition No.26524 of 2011 and expressed that same protect rights of the consumers. The case of "M. Daud Khan and 20 others v.
Government of West Pakistan and 2 others (PLD 1971 Lahore 462)" was referred in support of arguments.
25. It is stated that the impugned judgment is based on surmises and conjectures thus not sustainable. In support of his contentions, he relied upon the following case-laws:--- ' PLD 1983 SC 693; 2000 SCMR 1001; 2000 SCMR 1305; 2007 SCMR 1776; PLD 1971 Lahore 462; 1996 CLC 1090; 1997 SCMR 641; 2010 YLR 2872; PLD 2013 Lahore 182 and PLD 2012 SC 132.
26. Mr. Asad Jan, Advocate learned counsel for PESCO, Mr. Khaliq-uz-Zaman, Advocate Supreme Court counsel for IESCO, Syed Kazim Hussain Kazmi, Advocate Supreme Court for GEPCO, Mr. Muhammad Muneer Paracha Advocate Supreme Court and Numan Muneer Paracha, Advocate for HESCO, and Syed Mummtaz Ali Zaidi Advocate for MEPCO also adopted the arguments of learned counsel for the LESCO and FESCO.
27. Learned counsel for NEPRA Mr. Shamshadullah Cheema Advocate Supreme Court with Muhammad Shafique Legal Advisor NEPRA while submitted report in pursuance of the decision of Hon'ble Lahore High Court mainly emphasized that NEPRA, being Regulatory Authority, has got absolute powers to determine the electricity tariff. All the concerned were provided opportunity of hearing before passing the final order. As per procedure prescribed by the rules, the method is to be determined annually, but in view of the direction of Hon'ble Lahore High Court for monthly determination, the NEPRA conducts such exercise month-wise.
28. It is pointed out that none of the respondents ever challenged the method of determination, which being the decree of Civil Court as defined by section 40 of Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997 has got binding effect. Since it has not been challenged, it attained finality. The respondents/petitioners, therefore, cannot agitate such method, which is basic foundation. Lastly, he argued that the impugned determination in Writ Petitions being made after hearing the parties, examining the record and data submitted by the applicant, the lame excuse of unheard is totally vague in nature as notice published in newspapers sufficiently provided invitation to all consumers.
29. Conversely, Mr. Muhammad Anum Saleem Advocate, learned counsel for the respondents argued that Fuel Price Adjustment is violative of Articles 4, 9, 18, 23 and 24 of the Constitution; therefore, the same is liable to be struck down as being unconstitutional. The dissenting notes of Vice-Chairman, NEPRA proves that FCA contains line losses; theft, staff bonus, E-duty, corruption set off and inefficiency of generation units, which are in violation of section 31(2) of NEPRA Act, that during audit conducted by NEPRA, it has been observed that cost of energy provided by some generation companies is booked on estimated basis and no verification is done, that section 31(2) of the NEPRA Act protects the consumers against monopolistic and oligopolistic prices, squarely applicable to the case of WAPDA (being a single producer and having a Monopoly). He further argued that the respondents have the right to claim Electricity as an Occupier under section 43 of the Electricity Act, 2003.
30. It is further argued that the retrospective demand of surcharge from the consumers is the worst kind of exploitation. It is further contended that demand of Fuel Adjustment Charges as arrears with retrospective effect has been declared as unconstitutional and against the principles of natural justice by the superior courts.
31. That NEPRA being the regulatory authority has not performed legal duties and has failed to consider the most important facts as pointed out by Mr. Shauket Ali Kundi, the member of authority, in his dissenting notes. It is further argued that contract executed between Consumer and WAPDA, who is a single producer by Monopoly, WAPDA has charged the bills not as per consumption.
32. The NEPRA has no power provided by law to re-determine the tariff under the garb of Fuel Adjustment Charges. Likewise DISCO has no power to claim the amount in addition after recovery of the costs for consumed energy, nor such direction could be issued by the NEPRA to recover such difference of redetermination after about 4/5/6/7 months as observed by the learned Single Judge in Chambers in para 17 of the judgment, which is elaborated in Tabular forms at page 60, that in pursuance of the notice, if consumer has not approached, the NEPRA is under obligation to examine and hold a detailed inquiry about the data and other evidence relied by DISCO claiming such Fuel Price as operational charges. NEPRA with cogent reason decided the issue, but NEPRA every time ignored the dissenting view of Vice-Chairman, which responded on material issue favouring the consumers.
33. The consumers after consuming the energy making its full payment are not supposed to pay more against the past and closed transaction being a vested right accrued in their favour. Such levy of subsequent determination with retrospective effect is contrary to the fundamental rights of the consumers. It being legitimate expectation that they will not be burdened with additional amount and not supported to pay, but afterwards, it was surprisingly imposed. Finally it was requested for maintaining the judgment passed by the learned Single Judge in Chambers being on sound legal and factual aspects. In support of his claim, he relied upon the following case-laws reported in:--- ' Muhammad Yasin v. Federation of Pakistan (PLD 2012 SC 132,1, Baz Muhammad Kakar v. Federation of Pakistan (PLD 2012 SC 923), Mehram AU v. Federation of Pakistan (PLD 1998 SC 1445), Liaqat Hussain v. Federation of Pakistan (PLD 1999 SC 504), Civil Aviation Authority v. Union of Civil Aviation Employees (PLD 1997 SC 781), Elahi Cotton Mills Ltd. v. Federation of Pakistan (PLD 1997 SC 582), Pir Sabir Shah v. Shad Muhammad Khan (PLD 1995 SC 66), Federation of Pakistan v. Shaukat Ali Mian (PLD 1999 SC 1026), Wattan Party v. Federation of Pakistan (PLD 2006 SC 697), Muhammad Mubeen- us-Salam v. Federation of Pakistan (PLD 2006 SC 602), Muhammad Nasir Mahmood v. Federation of Pakistan (PLD 2009 SC 107), All Pakistan Newspapers Society v. Federation of Pakistan (PLD 2012 SC 1), 2011 PLC (C.S.) 1076, Bank of Punjab v. Haris Steel Industries (PLD 2010 SC 1109), Nikhil Mazmudar v.
Superintending Engineer 2010 INDLAW Cal. 744, Chameli Singh v. State of U.P. 1995 Indlaw SC 888 at paragraph 8, Molay Kumar v. Chairman, West Bengal Elec., Distr. Co. Etc. 2007 INDLAW Cal 133, Munir Hussain Bhatti V. Federation of Pakistan (PLD 2011 SC 407), Watan Party v. Federation of Pakistan (PLD 2012 SC 292), Rana Aamer Raza Ashfaq v. Dr. Minhaj Ahmad Khan (2012 SCMR 6), Government of Balochistan v. Azizullah Memon (PLD 1993 SC 341), Shaheen Cotton Mills v. Federation of Pakistan (PLD 2011 Lahore 120), Shehla Zia v. WAPDA (PLD 1994 SC 693), (1999 SCMR 1379), Zafar Ali Shah v.
Parvez Musharraf (2000 SCMR 1137 (Supreme Court)), Messrs Hudaibya Paper Mills Ltd. v. NAB (PLD 2012 Lah. 515), Ch. Muhammad Nazir Cheema v. Mujahid Sher Dil DCO (2012 CLC 764).
34. Ch. Mushtaq Ahmed Kamboh, Mian Mehmood Rashid, Muhammad Naveed Chughtai, Khalid Nawaz Ghumman, Sadequain Gardner, Rana Ali Akbar, Malik Najam Ayub, Muhammad Nawaz, Ch. Muhammad Tahir Mahmood, Mr. Zulqarnain Hamid, Rana Sajid Rasool, Mr. Muhammad Siddique Qazi, Mian Muhammad Hussain Chotiya, Mr. Muhammad Siddique Mehmood, Mr. Shahid Rasool, A.
Ammar Sehri, Ch. Mumtaz-ul-Hassan, Ahmad Bilal, Mustafa Kamal, Adnan Ahmad, Muhammad Mohsin Virk, Abdul Waheed, Waheed Zafar Advocates also adopted the argument of learned counsel for the respondents Mr. M. Anum Salem Advocate.
35. Arguments heard and record perused.
36. Following issues for determination were formulated at the time of passing of impugned judgment.---
(i) Whether proviso to section 3114) of the NEPRA Act, 1997 is ultra vires to the Constitution?
(ii) Whether Fuel Adjustment Surcharge can be levied and demanded with retrospective effect?
(iii) Whether on expiry of stipulated period of 15 days, provided under section 31(4) of the NEPRA Act, Authority vests with power to levy and demand Fuel Adjustment Surcharge as part of tariff?
(iv) Whether scope of Fuel Adjustment Surcharge can be expanded/ enhanced to provide cover to the elements/factors of mismanagement, bad governance, inefficiency, theft, inability to recover across the board?
(v) Whether already determined Tariff can be varied in the name of fuel adjustment?
37. Reply to point No.1, thereto was nothing found against the Constitution for issuance of declaration as ultra vires, therefore, same needs not be discussed.
38. The perusal of other issues and the relevant paragraphs, the question arises as to whether Fuel Adjustment Charge is a Surcharge, or operational cost and whether it can be levied or charged with retrospective effect? This is a core issue and basis of the whole findings. The relevant abstract of the findings to the said core issue is as follows:--- "The writ petitioners contended that the notifications with respect to the Fuel Price Adjustment retrospective in nature, therefore, same cannot be recovered. Since on payment of bill on electric consumed, the matter become a past and close transaction, the vested right of the petitioner cannot be subsequently altered."
39. The reasoning of the impugned judgment at page-16 are referred below:---
(a) Tax and surcharge can be demanded by the Government, but the question is whether any taxpayer can be taken by surprise and require to adjust cost of any product which had already been reached to consumer? Answer to this question is a big NO.
(b) Constitution of Pakistan does not allow any sort of exploitation or permit economic and social wrongs.
(c) The authority of NEPRA for the purposes of adjustment is limited to 15 days.
(d) NEPRA is empowered to allow interim levy subject to final determination.
(e) Section 31(2) of NEPRARA Act which are mandatory requirements of law obligates NEPRA to protect interest of consumers,
(f) Retrospective demand of surcharge from consumers is worst kind of exploitation.
40. First of all, the applicability of section 31 of NEPRA Act and its legal assessment is viewed in its prospective. Section 31 with its provisos is imitated hereinbelow:-- "Tariff: (1)--- As Soon as may be, but not later than six months from the commencement of this Act, the Authority shall determine and prescribe procedures and standards for determination, modification or revision of rates, charges and terms and conditions for the generation of electric power transmission, interconnection, distribution services and power sales to consumers by licensees and until such procedures and standards are prescribed, the Authority shall determine, modify or revise such rates, charges and terms and conditions in accordance with the directions issued by the federal government.
(2) The Authority while determining the standards referred to in subsection (1) shall
(a) Protect consumers against monopolistic and oligopolistic prices;
(b) Keep in view the research, development and capital investment programs costs of licensees;
(c) Encourage efficiency in licensees operations and quality of service;
(d) Encourage economic efficiency in the electric power industry;
(e) Keep in view the economic and social policy objective of the Federal Government; and
(f) Determine tariff so as to eliminate exploration and minimize economic distortion.
(3) The procedures established under subsection (1) shall include--
(a) Time frame for decisions by the Authority on tariff applications;
(b) Opportunity for customers and other interested parties to participate meaningfully in the tariff approval process; and
(c) Protection for refund, if any. To customers while tariff decision is pending.
(4) Notification of the Authority's approved tariff, rates, charges and other term and conditions for the supply of electric power services by generation, transmission and distribution companies shall be made, in the official gazette by the federal government upon the intimation by the Authority: ' Provided that the federal government may, as soon as may be, but not later than 15 days of receipt of Authority's intimation, require the Authority to consider its determination of such tariff, rates, charges and, other terms and condition whereupon the Authority shall, within 15 days, determine these anew after reconsideration and intimate the same to the federal government: ' Provided further that the Authority may, on a monthly basis and not later than a period of 7 days, make adjustments in the approved tariff on account of any variation in the fuel charges and, policy guidelines as the federal government may issue and, notify the tariff so adjusted in the official Gazette.
(5) Each distribution company shall pay to the Federal Government such, surcharge as the Federal Government, from time to time, notify in respect of each unit of electric power sold to the consumers and any amount paid under this subsection shall be considered as a cost incurred by the distribution company to be included in the tariff determined by the Authority."
41. Subsection (1) confers powers upon the Authority to determine, modify or revise the rates, charges, terms and conditions in accordance with the direction issued by the Federal Government.
Subsection (2) emphasis determining the standards by the Authority referred to in subsection (1), which includes protect consumers against monopolistic and oligopolistic prices and keeping in view the research, development and capital investment programs costs of licensees, encourage efficiency in licensees operations and quality of service, encourage in the electric power industry, keeping in view the economic and social policy objective of the Federal Government and to determine tariff so as to eliminate exploitation and minimize economic distortion.
42. Subsection (3) depicts establishment of the procedure under subsection (1) of subsection (3) to frame time for decision by the Authority on receiving tariff application, opportunity for interested parties to participate in the approval of tariff process meaningfully and taxation for refund to consumers during pendency of the decision.
43. Subsection (4) empowers the Authority for issuing notification of approved tariff, rates, charges and other terms and conditions, for supply of electric power services by generation, transmission and distribution companies shall be made in the official Gazette by the Federal Government upon the intimation by the Authority.
44. The plain reading of subsection (4) provides no time scale for issuance of the notification, but the Authority with regard to tariff, rates, charges and other term and conditions when approves tariff, it shall be made in the official Gazette by the Federal Government on intimation. Intimation communicated by the Authority, Proviso (2) of subsection (4) prescribed guidance with regard to the Federal. Government by using "may as soon as may" to consider the determination, of such tariff, rates, charges and other terms and Conditions for re-consideration and intimate the same to the Federal Government, such time scale of 15 days in the Federal Government to determine and issue guidelines to determine after intimation as required by subsection (4) of section 31.
45. Again proviso (3) provides a firm view with regard to guideline as Federal Government may issue to notify the tariff, so adjusted and not later than a period of seven days of making adjustment in the approved tariff.
46. From the bare perusal of the above proposition of law, we are of the firm view that no time scale with regard to the issuance of notification provided by subsection (4) and its proviso while determining tariff with Fuel Adjustment Charges as an operational price being an addition to the cost of generation.
47. Another very important fact, which is required to be considered that no penal clause is provided by the entire section 31 leading towards the firm view that same being directory not mandatory.
48. The very important aspect, which is required to be specified here is that NEPRA in its report has shown the variation of the cost of the power generation, which somewhere reduces and somewhere exceeds month-wise. The cost of generation when reduces, the consumers were adjusted in the bill of next month. Such detailed report is submitted hereunder:--- MonthsJuly, 2011August, 2011September, 2011 Approved Actual Fuel Costs (CPPA)Rs.6.42 kWhRs.6.66 kWhRs.5.67 kWh Determined Reference Fuel Cost (FY 201 MonthsJuly, 2011August, 2011September, 2011 Approved Actual Fuel Costs (CPPA)Rs.6.42 kWhRs.6.66 kWhRs.5.67 kWh Determined Reference Fuel Cost (FY 2010-11) Note: This reference fuel cost expired on June, 30, 2011. It is clearly mentioned on NEPRA determination that 'Determination for FY 2010-11"Rs.4.35 kWhRs.3.60 kWhRs.3.86 kWh NEPRA allowed increaseRs.2.04 kWhRs.3.04 kWhRs.1.76 kWh 0-11) Note: This reference fuel cost expired on June, 30, 2011. It is clearly mentioned on NEPRA determination that 'Determination for FY 2010-11"Rs.4.35 kWhRs.3.60 kWhRs.3.86 kWh NEPRA allowed increaseRs.2.04 kWhRs.3.04 kWhRs.1.76 kWh
49. We have carefully considered the material including a table not disallowed the claim by DISCO and NTDC during hearing for Fuel Price Adjustment on monthly basis, details whereof are given below with the dissenting note of Mr. Shaukat Kundi:--- Month Reason Amount disallowed April, 2011No disallowance.
May, 2011NTDC transmission losses claimed at 3.61%, against determined losses of 2.50%. Hence, claim was restricted to 2.50%.Rs.0.0720/kWh June, 2011Energy purchased from Tavanir Iran. Adjustment claimed, but WPPO representative unable to substantiate the same. Withheld till complete information is provided. NTDC transmission losses claimed at 3.61 %, against determined losses of 2.50%.
Hence, claim was restricted to 2.50%.Rs.57.88 million, having an impact of Rs.0.0063/kWhRs.0.072 kWh July, 2011NTDC transmission losses claimed at 3.01% against determined losses of 2.50%. Hence, claim was restricted to 2.50%Rs.0.0334/kWh August, 2011While allowing cost of energy purchased from small, captive or new captive power plants, Gadoon Textile Mills Ltd. was disallowed as it was not a licensee of NEPRA NTDC transmission losses claimed at 2.75%, against determined losses of 2.50%. Hence claim was restricted to 2.50%Rs.94,977,949, having an impact of Rs.0.0100/kWhRs.0.017/kWh September, 2011Gadoon Textile Mills Ltd. disallowed again as it was not a licensee of NEPRA. CPPA claimed miscellaneoussupplemental charges of Rs.113.556 million (which included energy payment invoices of 4 IPPs). The amount verified by CPPA was Rs.72.988 Million.
However, documentaryevidenceprovided only for Rs.11.968 Million. Remaining claim was set aside by NEPRA. In light of Supreme Court judgment on RPP's fuel cost of Gulf, Karkey and Naudero-I were set aside and disallowed. NTDC transmission losses claimed at 3.04% against determined losses of 2.50%. Hence, claim was restricted to 2.50%Rs.98,201,558, havinganimpactof Rs.0.0113/kWh Rs.61.020 million, having an impact of Rs.0.0139/kWhRs.1,129.523 million, having an impact of Rs.0.0779/kWh Rs.0.0338/kWh October, 2011Gadoon Textile Mills Ltd. disallowed against, as it was not a licensee of NEPRA RPP fuel cost set aside and disallowed. Commentators appeared in the hearings on behalf of various consumers including Rashid Law Associates, Afzal and Afzal Advocates and Corporate Counselors, Pakistan Steel Melters Association, Islamabad Steel Mills Association, Haripur Chamber of Commerce and Industry, and Hattar Industrialists Association. In paragraph 7, it is clearly recorded that there is 'absolutely no dispute raised by any of the commentators as to the wrong application of the formula for adjustments or the cost of fuel charges---.'
In paragraph 8, the matter of '7 days' has also been discussed and explained.Rs.114.826 millionRs.1,460.802 million.
November, 2011Gadoon Textile Mills Ltd. disallowed again, as it was not a licensee of NEPRA RPP fuel cost set aside and disallowed. Commentators appeared in the hearings on behalf of various consumers, including Rashid Law Associates, Afzal and Afzal Advocates and Corporate Counselors, Pakistan Steel Melters Association, Islamabad, Steel Mills Association, Haripur Chamber of Commerce and Industry, and Hattar Industries Association in paragraph 7 it is clearly recorded that there is absolutely no dispute raised by any of the commentators as to the wrong application of the formula for adjustments or the cost of fuel charges---.'
In paragraph 8, the matter of '7 days' has also been discussed and explained.Rs.12.654 millionRs.1,402.568 million December, 2011Gadoon Textile Mills Ltd. disallowed again, as it was not a licensee of NEPRA. RPP fuel cost set aside and disallowed. NTDC transmission losses claimed at 2.67%, against determined losses of 2.50%. Hence, claim was restricted to 2.50%. Commentators appeared in the hearings on behalf of various consumers including Rashid Law Associates, Afzal and Afzal Advocates and Corporate Counselors, Pakistan Steel Melters Association, Islamabad Steel Mills Association, Haripur Chamber of Commerce and Industry, and Hattar Industrialists Association. In paragraph 7, it is clearly recorded thatthereis'absolutelyno dispute raised by any of the commentators as to the wrong application of the formula for adjustments or the cost of fuel charge...' In paragraph 8, the matter of '7 days' has also been discussed and explained.Rs.121.105 millionRs.1,245.398Amount not mentioned.
January, 2012Gadoon Textile Mills disallowed again, as it was not a licensee of NEPRA RPP fuel cost set aside and disallowed.
NTDC transmission losses claimed at 3.85% against determined losses of 2.50%. Hence, claim was restricted to 2.50%. Commentators appeared in the hearings on behalf of various consumers, including Rashid Law Associates, Afzal and Afzal Advocates and Corporate Counselors, Pakistan Steel Melters Association, Islamabad Steel Mills Association, Haripur Chamber of Commerce and Industry, and Hattar Industralists Association, in paragraph 7, it is clearly recorded that there is absolutely no dispute raised by any of the commentators as to the wrong application of the formula for adjustments or the cost of fuel charges---'
In paragraph 8, the matter of '7 days' has also been discussed and explained.Rs.128,802 millionRs.1,222.958Rs.763.40 million.
February, 2012CPPA claimed total of Rs.1,091.50 million, from small, captive and new captive power plants. Details provided only for Rs.699.63 million. Remaining was set aside and disallowed. RPP fuel cost set aside and disallowed. NTDC transmission losses claimed at 2.89%, against determined losses of 2.50%. Hence, claim was restricted to 2.50%.Rs.391.87 millionRs.697.104 million. Rs.165.560 million.
March, 2012CPPA claimed total of Rs.1,016.80 million from small captive and new captive power plants. Details provided only for Rs.485.12 million. Remaining was set aside and disallowed. RPP fuel cost set aside and disallowed. NTDC transmission losses claimed at 76%, against determined losses of 2.50%. Hence, claim was restricted to 2.50%.
Note of Mr. Shaukat Ali Kundi: The thrust of Mr. Kundi's note is that the generation companies are generatingRs.531.68 millionRs.833.447 million Rs.157.87 million power in an inefficient manner, and in this regard various things have been pointed out, which are not relevant for the present purpose. However, in paragraph 6, an observation has been made, the relevant extract is as below:-- NEPRA had conducted a study to ascertain the losses incurred by the three GENCOs on account of higher heat rates and higher auxillary consumption. The committee assigned to carry out the study determined that the accumulated losses on account of the above stated two heads in the three GENCOs was around Rs.25.874 billion during the year 2007-2008. Although NEPRA has not allowed these losses to be passed on to the electricity consumers, however, these losses are being borne by the respective Companies and their 100% shareholder, i.e. Government of Pakistan.' Emphasis added.
50. It is surprising to note that the amount disallowed in hearing for reasons mentioned therein was not objected by any of the respondents.
51. This infers that for the disallowed amount consumers i.e. The respondents/petitioners were fully satisfied, which too is related to the Fuel Adjustment Charges.
52. Another important aspect, which has not been denied by any of the respondents that number of petitions were withdrawn from Lahore High Court on different dates by stating that their petitions have been accepted by Islamabad High Court. Some of the details have been provided by the learned Counsel for the appellants, which neither disputed nor, any explanation thereto has been furnished by any of the respondents. Provided details which are not complete nor any other respondents disclosed such fact as to whether he was petitioner before the Hon'ble Lahore High Court or not, the relevant details are reproduced:--- Serial No.Islamabad High Court Lahore High Court
1. W.P.No.650/12 Sitara Chemical Industries W.P.No.11161-11
2. W.P.No.724/12 Maple Leaf Cement Limited W.P.No.19708-11
3. W.P.No.727/12 Madina Steel Industries. W.P.No.18531-12 W.P.No.16662-11
4. W.P.No.730/12 D.G. Khan Cement Company, 903/12 W.P. No.19086-11 W.P.No.19088-11
5. W.P.No.735/12 Fawad Textile MillsW.P:No.21187-11 W.P.No.29154-11 W.P.No.28768-11
6. W.P.No Fatima Enterprises 748/12, 810/12:W.P.No.4070-12 W.P.No.1740-12 W.P.No.6948-12
7. W.P.No. Pioneer Cement Ltd. 764/12,1523/12 W.P.No.23646-11 W.P.No.23626-11
8. W.P.No. Thal Limited 772/12 W.P.No.853-12
9. W.P.No.Reliance Weaving 788/12, 789/12 W.P.No.1877-12
10. W.P.No. Harmain Mills 793/12 W.P.No.12470-12
11. W.P.No. Malik Ice Factory 801/12 W.P.No.6796-12
12. W.P.No. Allah Wasaya Spinning Mills W.P.No.19390-11
13. W.P.No. Acro Textile Mills 902/12 W.P.No.8716/12
14. W.P.No. Capital Steel Mills 972/12 W.P.No.16813-11
15. W.P.No. Riaz Bottlers Pvt. Ltd 983/12, 1847/12 W.P.No.23493-11 16.W.P.No. Malik Board and Paper Industries 994/12, 2774/12W.P.No.25602-11
17. W.P.No. Asia Spinning Mills 997/12 W.P.No.22746-11
18. W.P.No. Allah Wasaya Textile 999/12, 1856/12 W.P.No.19388-11, 19391-11
19. W.P. No.Atas Paper Pvt. 1007/12 W.P.No.23579-11
20. W.P.No. Messrs Sarwar Rubber Industries 1018/12 W.P. No.25891-11
21. W.P. No. Model Town Cooperative Society 1034/12 W.P. No.18750-11
22. W.P.No. Omer Tissue Pvt. Ltd. 1035/12 W.P.No.28603-11, 23578-11
23. W.P.No. MLW Industries Pvt. Ltd.1040/12W.P.No.24197-11, 28604-11, 25597-11, 24196-11, 25597-11
24. W.P.No. Muhammad Shafiq 1041/12 W.P.No.5086-12
25. W.P.No. Qadri Brothers 1042/12 W.P.No. 26187-11
26. W.P.No. Qureshi Wool Industries 1043/12 W.P.No.29161-11, 26364-11
27. W.P.No. Qadri Engineering Pvt. Ltd. 1044/12 W.P.No.28596-11
28. W.P.No.1060/12 Messsrs Anmool Paper Mills W.P.No.26056-11
29. W.P.No.1072/12, 1628/12 Messrs THREE STAR HOSIERY W.P.No.28734-11, 28735-11
30. WP.No.1087/12 LESSEE OF LASANI COLD STORAGE W.P.No.29103-11, 25982-11
31. W.P.No.1096/12, 2731/12 Messrs QADRIA BOARD MILLS W.P.No.23627-11, 26209-11
32. WP.No.1163/12 Muhammad Saeed, ETC. W.P.No.26531,-11, 24233-11, 24366-11
33. W.P.No.1180 Messrs NEW HAFIZ STEEL FURNACE ETC. W.P.No 23853-11
34. W.P. No.1366/12 AL-HAMD CORP. W.P. No.18518-11
35. W.P.No.1373/12 ALI HAQ SPINNING MILLS LTD. W.P.No.23421-11
36. W.P.No.1402/12 ACRO TEXTILE MILLS LTD. W.P.No.8716-12
37. W.P.No.1438/12 Messrs SITARA CHEMICAL W.P.No.11161-11
38. W.P.No.1449/12 Messrs MARRAL FIBRE MILL W.P.No.3934-12
39. W.P.No.1456/12 Messrs NABEEL PAPER & BOARD MILLS W.P.No.23861-11
40. W.P.No.1501/12 Messrs RAFIQUE SPINNING MILLS W.P.No.26688-11
41. W.P.No.1575/12 MUHAMMAD AKRAM W.P.No.5083-12 42.W.P.No.1627/12, 1070/12 MESSRS DANDOT CEMENT CO.
ETC.W.P.No.26862-11
43. W.P.No.1688/12 RELIANCE WEAVING W.P.No.1877-12 44.W.P.No.1850/12 Messrs MALIK BOARD AND PAPER INDUST.W.P.No.25602-11
45. W.P.No.1852/12 Messrs QADRIA BOARD MILLS W.P.No.26209-11. 23628-11 46.W.P.No.1879/12, 2310/12, 2996/12, 2728/12, 273/12, 3478/12 Messrs OMAR TISSUE MILLSW.P.No.25883-11
47. W.P.No.1905/12 Messrs CHOT1 TEXTILE MILLS ETC. W.P.No.10311-12
48. W.P.No.1928/12 Messrs ALI STEEL INDUSTRIES ETC. W.P.No.29312-11
49. W.P.No.1937/12 Messrs NIZAMI WIRE INDUSTRIES W.P.No.25594-11
50. W.P.No.1955/12 HABIBUR REHMAN ETC. W.P.No.5345-12
51. W.P.No.1965/12 THAL LTD. W.P.No.853-12
52. W.P.No.1990/12 D.G. KHAN CEMENT W.P.No.19088-11
53. W.P.No.1995/12 Messrs FAWAD TEXTILE W.P.No.29154-11, 21187-11, 28768/11
54. W.P.No.1996/12 Messrs SITARA CHEMICAL W.P.No.11161-11
55. W.P.No.2015/12 Messrs PIONEER CEMENT LTD. W.P.No.23646-11, 23626/11
56. W.P.No.2017/12 FATIMA ENTERPRISES W.P.No.1740-12
57. W.P.No.2023/12 RELIANCE WEAVING W.P.No.1877-12
58. W.P.No.2230/12 Messrs ALI RIASAT STEEL INDUSTRIES W.P. No.17378-11
59. W.P.No.2301/12 MUHAMMAD SHAFIQ W.P.No.5086-12 60.W.P.No.230/12 Messrs MALIK BOARD AND PAPER INDUSTRIESW.P.No.25602-11
61. W.P.No.2314/12 Messrs PAK STEEL INDUSTRY W.P.No.18651-11
62. W.P.No.2335/15 Messrs UMAIR STEEL INDUSTRY W.P.No.29006-11
63. W.P.No.2337/12, 2997/12 Messrs QADRIA BOARD MILLSW.P.No.26209-11, 23627/11 64.W.P.No.2343/12 Messrs AL-KARAM PAPER MILLS PVT.
LTD.W.P.No.25450-11
65. W.P.No.2366/12 Messrs ANMOOL PAPER MILLS W.P.No.26056-11
66. W.P.No.2418/12 FAISAL ASAD TEXTILE MILLS W.P.No.6991-12, 4006-12
67. W.P.No.2439/12 ACRO TEXTILE MILLS LTD. W.P.No.8716-12
68. W.P.No.2445/12 Messrs AL-KHAIR CNG W.P.No.1587-12
69. W.P.No.2050/12 Messrs SANGHA CNG W.P.No.10906-12, 6815-12
70. W.P.No.2056/1 BISMILLAH ICE FACTORY W.P.No.3777-12
71. W.P.No.2507/12 PEER KABEER FLOOR MILLS W.P.No.10908-12
72. W.P.No.2513/12 FATIMA ENTERPRISES W.P.No.4070-12, 1740-12
73. W.P.No.2648/12 Messrs KOHINOR TEXTILE MILLS LIMITEDW.P.No.12195-12
74. W.P.No.2649/12 Messrs FAWAD TEXTILE MILLS W.P.No.21187-11
75. W.P.No.2651/12 Messrs MAPLE LEAF CEMENT FACTORY W.P.No.19708-11
76. W.P.No.2682/12 Messrs ALI RIASAT STEEL INDUSTRIES W.P.No.17378-11
77. W.P.No.2706/12 GOLDEN TEXTILE MILLS LTD. W.P.No.6448-12
78. W.P.No.2721/12 Messrs SAYID PAPER MILLS W.P.No.28606-11
79. W.P.No.2729/12 Messrs MLW INDUSTRIES PVT. LTD. W.P.No.28604-11 80.W.P.No.2730/12 Messrs MALIK BOARD AND PAPER MILLS ETC.W.P.No.28608-11
81. W.P.No.2745/12 M. ASIF STEEL INDUSTRIES W.P.No.26407-11
82. W.P.No.2746/12 Messrs TARIQ STEEL W.P.No.18650-11
83. W.P.No.2762/12 Messrs SHAHEEN PAPER W.P.No.25748-11
84. W.P.No.2787/12 Messrs GARNADA TEXTILE MILLS W.P.No.9460-12
85. W.P.No.2803/12 Messrs AL-MADINA PACKAGES W.P.No.6827-12
86. W.P.No.2804/12 KONI PEX PLOT No.22 W.P.No.8340-12
87. W.P.No.2805/12 FAZAL UR REHMAN GHEE MILLS W.P.No.3746-12, 8198/12, 6666-12
88. W.P.No.2821/12 IFTIKHAR AHMAD W.P.No.3743-12, 6664-12
89. W.P.No.2822/12 Messrs FATIMA ENTERPRISES LTD. W.P.No.6948-12 90 W.P.No.2994/12 Messrs SAYID PAPER MILLS PVT. LTD. W.P.No.25596-11
91. W.P.No.2995/12 Messrs MLW INDUSTREIS PVT. LTD.W.P.No.28604-11, 25597/11, 24196/11, 24197/11
92. W.P.No.3004/12 Messrs REHMAT STEEL MILLS W.P.No.23704-11
93. W.P.No.3013/12 Messrs SIDDIQUE LEATHER WORKS W.P.No.23154-11
94. W.P.No.3014/12 ABDUL JABBARW.P.No.23866-11, 28442-11, 28459-11, 25963-11
95. W.P.No.3016/12 Messrs CIT STEEL UAE W.P.No.18935-11
96. W.P.No.3028/12 TATA TEXTILE W.P.No.854-12
97. W.P.No.3052/12 ABDULLAH TEXTILES MILLS W.P.No.8045-12
98. W.P.No.3067/12 Messrs BABA FAREED STEEL W.P.No.20566-11
99. W.P.No.3469/12 ABDULLAH TEXTILE MILLS W.P.No.8045-12
100. W.P.No.3480/12 Messrs SAYID PAPER MILLS W.P.No.28606-11
101. W.P.No.3515/12 Messrs TANVEER SPINNING W.P.No.23489-11
102. W.P.No.3545/12 SHAHZAD TEXTILE MILLS LIMITED W.P.No.6447-12
103. W.P.No.3590/12 MUHAMMAD SHARIF ETC. W.P.No.5286-12
53. Para. No.3 of the decision of Hon'ble Lahore High Court in Writ Petition No.26524 of 2011, Pakistan Flour Mills Association v. WAPDA and others is reported for ready reference.
"A number of petitions were withdrawn by the respective petitioners on different dates that Islamabad High Court on 24-10-2012 has accepted petitions, however, the petitioners of petitions detailed in Annex "A" argued their petitions on merits."
54. Such an aspect when highlighted with no plausible explanation furnished in this regard leads to the view that respondents/petitioners by concealing such fact of the pendency of their writ petitions got a relief from the learned Single Judge in Chambers while preferring writ petitions.
Which their conduct cannot be encouraged, but same being considered as adverse on their part having not approached the Court with clean hands. Same also suffer from res sub judice.
55. The respondents/petitioners were enjoying stay obtained from the Hon'ble Lahore High Court, after its modification, they challenged it before the Hon'ble Supreme Court, seeking no relief, they turned towards this Court by filing new petitions, and that too without mentioning the facts in their petitions. They continue to enjoy penedency till they got the decision from this Court (Islamabad High Court) in writ petitions. Therefore, we observe that findings of learned Single Judge in Chambers might have been based on such misguidance rendered by the respondents/petitioners, which influenced the impugned decision pronounced. The other findings of the learned Single Judge in Chambers are based upon retrospectivity, which in our view is not well-founded as discussed above and are based upon a misguidance feature or improper assistance rendered, therefore, same cannot be supported.
56. Earlier issue raised in the writ petitions have been severely called in question before the Hon'ble Lahore High Court as mainly the respondents companies having their bases in Punjab and same were agitated upto the Hon'ble Supreme Court and very core issue has already been decided with regard to the tariff, its time and monthly variation. The same cannot be permitted to be reactive on the basis of same observations.
57. So far the issue raised by the appellants that the basic decision of determining the tariff as a formula by the Authority on a decision by tribunal setup under section 11 of the Act XL of 1997 is deemed to be a decree of a Civil Court under the Code of Civil Procedure. Same has not been challenged at any stage of the proceedings before any forum. Earlier round of litigation does not indicate about calling in question of such decree, which was initially passed. Since the points raised have not been controverted, therefore, presumed to be existing in favour of the appellants.
In this regard, section 40 of Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997 is reproduced hereunder:--- "40 Enforcement of orders of the Authority.--- The Authority's determination on decisions by tribunals set up under section 11 of this Act shall be deemed to be decree of civil court under the Code of Civil Procedure, 1908."
58. For the life lime, the domestic consumers, both the parties referred relevant paragraphs of the decision of Hon'ble Lahore High Court based upon sound reasoning therefore, the same being a guideline is required to be followed by the authorities concerned.
59. As far as the concern of future guidelines is concerned, the NEPRA required the safe and vigilant system to strengthen for achieving better results in favour of consumers to protect them against monopolistic and oligopolistic prices.
60. From the general complexion, it appears that NEPRA being Regulatory Authority on one end acts as such in between GENCOs, NTDC and DISCOs and on the other end, the Regulatory Authority simultaneously performs as bridge in between the consumers and the rest three entities. The NEPR4, with such heavy burden of responsibilities, has to act, strictly in accordance with law, particularly to protect the rights of consumers as well as other stakeholders, who are involved in generation, supply and distribution know as 'Power Sector'.
61. Misappropriation takes place possibly the three stages of generation, supply and distribution.
62. First of all, we would like to point out the expected possibilities of misappropriation on the part of transmission. NTDC being a single buyer from GENCOs purchases it and onward sells to DISCOs through transmission lines. Transmission lines of electricity over 500 KV and 220 KV, which in ordinary course cannot be used to supply at such voltage level, but large consumers/customers are running a heavy mechanism which supply through 220-KV transmission lines. With the collusion of such large consumers, that theft can be pocketed. The said misappropriation can be tracked by examining losses shown by the NTDC. When electricity is transmitted through electricity conductors, certain amount is lost in the form of heat generated by the conductors called technical losses, which cannot be avoided. Higher the voltage level, the lower is technical losses.
Loss of electricity as a result of theft and poor recording practices is called non-technical losses, which can be controlled by the network company being NTDC or DISCOs.
63. Electric meters are required to be installed at all major points of electricity supply. GENCOs when supplied through meters, which provide an account of how much electricity they injected in the system. The NTDC receives electricity from GENCOs at the sub-station, supplied to DISCOs, electric meters record the amount of electricity supplied to DISCOs. Such transmission losses could be calculated as total electricity received from GENCOs minus the total electricity supplied to DISCOs. Transmission losses reported by NTDC should be compared with world benchmark values for transmission losses. The losses should be provided as percentage of electricity supplied into the system. If NTDC reports higher tosses than such benchmarks values, which indicates that some misappropriation is taking place.
64. Under such circumstances, NTDC is required to provide opinion of international expert, who may conduct detailed load flow analysis to suggest that high losses are the result of poor design of transmission lines rather than misappropriation by NTDC.
65. Similar to transmission distribution losses should also be calculated within some international benchmark on the part of distribution. Distribution losses are higher than transmission losses often due to long low voltage feeders. If such losses exceed 12.5% threshold, it is very likely that misappropriation is taking place, which is likely to be electricity theft due to collusion between the customers and DISCOs staff. In Pakistan, DISCOs often refer to poor law enforcement as major excuse for them to be not able to recover revenue from customers in certain areas. In this regard, example of KESC after its privatization can be given. It continuously reduced losses despite existing in most troubled region of Pakistan. Yet allow DISCOs for lawless areas, the DISCOs should be required to install check meters to provide a complete summary of identification of areas and consequently a complete account of technical and non-technical areas. For example DISCOs should provide the following account:---
(I) Total electricity received from NTD = A
(2) Total electricity sold (from billing records) = B
(3) Net % losses = C = (A-B)/A
(4) Breakdown of energy supplied to various areas A =ES1 +ES2+ES3 +ES4...
' Whereas ES1, ES2, ES3 =Electricity supplied to areas 1, 2, 3.... And so on, The DISCO can measure ES1, ES2, ES3 by installing energy meters on substations/feeders that are supplying areas 1, 2, 3 ....
(5) From billing records, DISCO can find out the total amount of electricity sold in Area 1=Rs. 1 (6). Hence the % losses for Area 1 would be = (ES1-RS1)/ES1
(7) Such reporting will provide if DISCO makes sincere efforts to recover its revenue or just turning a blind eye to, theft. For example, if percentage loss of some area is 40%, which is a relatively peaceful area and law enforcement can easily be implemented, it would mean that DISCO is involved in electricity theft by large households using several air-conditioners.
(8) In contrast if the loss for unpeaceful area somewhere in Pakistan are 40%, this could be allowed to DISCO, as it might be very difficult for DISCO to do disconnection, for non-payment and illegal connections.
(9) It is worth-noting that cost of check metering only a small fraction of total cost of electricity losses, so it is cost beneficial for the DISCO, to install, check meters to monitor each area separately, and make each area manager responsible for loss reduction.
(10) It is also worth-noting that corrupt staff of DISCOs must be given strong warnings to ensure security of such meters or the concerned officials could be prosecuted and sent to jails making them disqualified to hold their positions after serving their time.
' Generation is the most complex segment of power industry to identify and curb misappropriation.
Nonetheless, enforcement of appropriate monitoring and reporting systems and comparing performances against world benchmarking can identity misappropriation.
66. The next issue is that the fuel provided to the Companies is being used for other purposes, therefore, NEPRA Authorities are directed to keep vigilant over such drains by checking weekly or fortnightly supply and power generation by the respective GENCOs according to their power producing capacity. Likewise, such vigilance be kept over NTDC for receiving and onward dispatching energy to respective DISCOs. The DISCOs be also put to strict vigilance of receiving power and onward distribution. In case of lapses on their part, the concerned officer/official of the DISCOs should be put to task with iron hands of law. On holding responsibility for lapses on their part, they should be proceeded in accordance with law to minimize the theft. Likewise the corruption should be dealt with strictly in accordance with law.
67. Under the circumstances, we are of the view that the material aspects have been skipped from the learned Single Judge in Chambers, therefore, the judgment is not based upon sound reasoning. The material placed on record, leads to the conclusion that the Fuel Adjustment Charges are not additional charges only, but are based upon Fuel Consumption cost, which can be adjusted every month by increasing or by decreasing on the basis of actual cost of fuel consumption.
68. As far as the applicability of Fuel Adjustment Charges with retrospective effect is concerned, record does not reflect that the charges were made with retrospective effect and they were included in the bills as current charges.
69. In view of above discussion, the Intra-Court Appeals are allowed and in consequence thereof, impugned judgment dated 24-10-2012 is set aside. Resultantly, all the writ petitions are dismissed.
Likewise writ petitions mentioned at Serial No.392 to 424 in view of above findings are dismissed, with no order as to costs.
70. . Impugned judgment set aside. Writ petitions dismissed.