This judgment does NOT re-fix the tariff for 2009-2014 itself and does NOT decide the Sinking Fund question afresh on merits. It decides only that the review was impermissible and restores the Appellate Tribunal's first-instance order dated 17 May 2019; the tariff consequences follow from that restored order.
- Case
- Damodar Valley Corporation v. Maithan Alloys Limited & Ors.
- Court
- Supreme Court of India
- Decision
- Citation
- 2026 INSC 1178
- Bench
- J.B. Pardiwala; K. Vinod Chandran
- Judgment by
- K. Vinod Chandran
- Case numbers
- Civil Appeal No. 11106 of 2024
- Outcome
- Civil appeal allowed with costs. The Appellate Tribunal's review decision is set aside, the Tribunal's order dated 17 May 2019 is restored, and costs of Rs. 2,00,000 on the first respondent and Rs. 1,50,000 on the Steel Authority of India Limited are payable to Damodar Valley Corporation within one month, failing which interest at 18% per annum applies.
Review set aside as illegal and in breach of judicial discipline
The Supreme Court has set aside an Appellate Tribunal for Electricity review decision that, five years after the original order, reopened the question whether Damodar Valley Corporation's Sinking Fund contribution could be factored into its tariff.
A Bench of Justice J.B. Pardiwala and Justice K. Vinod Chandran, with Justice Chandran writing, called the review clearly illegal, totally misplaced and in blatant breach of judicial discipline, and a violation of Article 141 of the Constitution, which makes the Supreme Court's decisions binding on all courts and tribunals.
The Court restored the Tribunal's first-instance order dated 17 May 2019, imposed costs of Rs. 2,00,000 on the first respondent and Rs. 1,50,000 on the Steel Authority of India Limited, payable to Damodar Valley Corporation within one month, failing which interest at 18% per annum applies, and allowed the appeal with costs in addition to those exemplary costs.
Tariff for 2009-2014 and the Sinking Fund question
The case concerned Damodar Valley Corporation's tariff for 2009 to 2014, fixed by the Central Electricity Regulatory Commission under the Electricity Act, 2003, the Damodar Valley Corporation Act, 1948, and the Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2009.
The contested item was the Sinking Fund, a portion of profits appropriated for redeeming bonds issued by the Corporation. The same question, for the earlier period from 1 April 2006 to 31 June 2009, had already been considered and upheld by the Supreme Court in Bhaskar Shrachi Alloys Limited v. Damodar Valley Corporation, (2018) 8 SCC 281, which treated the Sinking Fund as an expense permissible in tariff determination.
For the subsequent period, the Commission passed an order in 2013, and the Appellate Tribunal, in appeals filed by consumers, upheld the Commission's order by its own reasoning and on the binding precedent of Bhaskar Shrachi. No appeal was filed from that Tribunal order to the Supreme Court. Instead, one of the appellants before the Tribunal filed a review, which remained pending for five years and was disposed of by the impugned order in 2024.
The review order proceeded on the premise that the Tribunal had earlier not considered whether allowing both depreciation of assets and the Sinking Fund conferred a double benefit, and ruled that the Corporation could claim only one of the two elements, either the Sinking Fund contribution or depreciation, as a pass-through in tariff. It also recorded that the specific issue had escaped the Supreme Court's notice as well.
Could review displace a settled order on a new double-benefit theory?
The issue was whether the Tribunal, in review, could revisit its 2019 order on the ground that it had not considered the alleged double benefit of depreciation plus Sinking Fund, notwithstanding that the Sinking Fund question had been settled by the Supreme Court for the earlier period and the 2019 order itself rested on that precedent.
Damodar Valley Corporation objected that a five-year-old order was being reviewed after the binding precedent had been noticed, while the respondents contended that depreciation plus Sinking Fund gave the Corporation an illegal enrichment at consumers' expense, since bond-funded capital assets already earned depreciation.
Review corrects only an error apparent; it is not an appeal
The Court restated the settled limits of review, drawing on State of West Bengal v. Kamal Sengupta, (2008) 8 SCC 612, which construed the review power under Section 22(3)(f) of the Administrative Tribunals Act, 1985, in pari materia with Section 122(f) of the Electricity Act, 2003.
An error apparent on the face of the record must be evident per se and must not require detailed examination or a long process of reasoning; an order cannot be corrected merely because it is erroneous in law or because a different view could have been taken, and a tribunal in review cannot sit in appeal over its own judgment.
The culled principles include that review is confined to the grounds in Order XLVII Rule 1 of the Code of Civil Procedure, that an error discovered only through long reasoning is not an error apparent, that an erroneous order cannot be corrected in the guise of review, and that a decision cannot be reviewed on the basis of a subsequent judgment or on material that was not available at the time of the initial decision.
The review fell outside every recognised ground
The Court found that the Tribunal had gone, in its own apologetic phrase, haywire in allowing the review when the very same issue for the earlier years had been settled by the Supreme Court in Bhaskar Shrachi, on the basis of which the original Tribunal order had been passed.
The impugned review decision did not fall under any of the principles culled from Kamal Sengupta. The Court emphasised that the hierarchy of courts thrives on the sanctity of appellate and supervisory decisions being given due weight, and that Article 141 is a constitutional imprimatur ensuring the highest court's decisions are followed, without which there would be mayhem; finality and closure, it said, are the expedient need in litigation.
The Court also observed with consternation that no appeals had been filed from the earlier order, that one appellant before the Tribunal had filed for review and waited five years to get it heard, which it found to be clearly an abuse of process of law, and that a public sector undertaking claiming to be a Maharatna company had willingly participated in canvassing for an order passed in breach of judicial discipline and had sought intervention, having been ill-advised.
2019 order restored; costs on review petitioner and intervenor
The Court set aside the impugned review decision and restored the Appellate Tribunal's order at first instance dated 17 May 2019, which had upheld the Commission's tariff order including the Sinking Fund as a permissible expense.
It imposed a cost of Rs. 2,00,000 on the first respondent for the abuse of process, and a cost of Rs. 1,50,000 on the Steel Authority of India Limited for its intervention in support of the review order. Both sums are payable to Damodar Valley Corporation within one month from 30 October 2026, failing which interest at 18% per annum applies. The appeal was allowed with costs in addition to those exemplary costs, and pending applications stood rejected.
BANTHRY ANALYSISFor law students: review, precedent, and finality
This judgment is a compact statement of why review is narrow: it exists to correct errors that stare at the face of the record, not to give a losing party a second appeal or to let a tribunal reconsider a question the Supreme Court has already answered for the same parties on the same issue.
Note the Article 141 dimension. The Tribunal's suggestion that the point had escaped even the Supreme Court's notice could not justify disregarding Bhaskar Shrachi; if a coordinate Bench's decision were thought to contain an error, the course the Court itself identifies is a reference to a larger Bench in a properly constituted appeal, not a review that rewrites the earlier order.
The costs orders are also instructive: one punishes the review petitioner for a five-year abuse of process, the other marks the Court's disapproval of an intervenor that lent its weight to sustaining an order in breach of judicial discipline.
READING PROMPTSQuestions for a closer reading
- Why could the Appellate Tribunal not use review to hold that depreciation and Sinking Fund together confer a double benefit?
- What does Article 141 require of a tribunal when the Supreme Court has already decided the same issue for an earlier period?
- On what basis did the Court impose costs on both the review petitioner and the intervening public sector undertaking?
