Tribunal has gone haywire: Supreme Court slams APTEL for ignoring binding precedent

The Supreme Court on Friday set aside an order of the Appellate Tribunal for Electricity (APTEL) which reviewed and reversed the tribunal's own five-year-old decision on an issue already settled by the top court.

A Bench of Justices JB Pardiwala and K Vinod Chandran said that such a decision, which amounted to gross breach of judicial discipline, raised serious doubts in the mind of the bench about the independence of the tribunal.

"It is not often, but we do come across orders akin to the one impugned, which is in blatant breach of judicial discipline and in clear violation of Article 141 of the Constitution of India. It raises serious doubts in our minds about independence vis-à-vis accountability," the Court said.

Invoking Justice Benjamin Cardozo, the Court said a judge "is not a knight-errant roaming at will in pursuit of his own ideal of beauty or of goodness."

However, here "we have a Tribunal 'innovating at pleasure'," the bench said.

The Court was hearing an appeal by the Damodar Valley Corporation (DVC) against the review order.

In 2019, APTEL upheld DVC's tariff for 2009 to 2014, including recovery of contributions to a sinking fund for redeeming bonds. It relied on the Supreme Court's 2018 judgment in Bhaskar Shrachi Alloys.

Respondent Maithan Alloys did not file an appeal but sought review. Five years later, APTEL held that DVC could claim either the sinking fund or depreciation on bond-funded assets, not both.

DVC opposed the belated review. Maithan Alloys and intervenor Steel Authority of India Limited (SAIL) alleged a double benefit to DVC at the cost of consumers.

The Court rejected the double benefit plea. It held that Section 40 of the DVC Act and Regulation 43 of the 2009 CERC Tariff Regulations permit recovery of the sinking fund through tariff alongside depreciation.

APTEL had said the issue escaped the top court's notice. The Bench said such an issue "had to be agitated before this Court in a properly constituted appeal, if at all."

"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 Court said.

Calling the review clearly illegal, totally misplaced and blatantly in breach of the principles of judicial discipline," the Court went on to stress the binding force of its decisions.

"Our judicial system with the hierarchy of Courts thrives on the sanctity of the decisions of the appellate, revisional and supervisory jurisdictions to be given due weightage. 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. We are conscious of the criticism that the Supreme Court's decisions are supreme not because it is infallible but only because it is the final Court. However, finality and closure is the expedient need in litigation," it said.

The Court noted that no appeal was filed against the 2019 order. Instead, Maithan Alloys filed a review and waited five years to get it heard. The Court termed this to be "clearly an abuse of process of law" and imposed costs of ₹2 lakh on the company.

It also imposed costs of ₹1.5 lakh on SAIL.

The Court said that a Public Sector Undertaking, which claims to be a Maharatna Company, willingly participated in the attempt to canvas for upholding an order passed clearly in breach of judicial discipline and violating Article 141 of the Constitution of India.

"The Public Sector Undertaking has been ill-advised," the Court added.

The costs are to be paid to DVC within a month, failing which interest at 18 percent per annum will apply. APTEL's original order of May 17, 2019 was restored.

Damodar Valley Corporation was led by Senior Advocates Vikas Singh and Abhishek Manu Singhvi, assisted by SKV Law Offices, lead by Shri Venkatesh (Founding Partner), Ashutosh K Srivastava (Partner), Priya Dhankhar (Associate Partner), Nihal Bhardwaj (Counsel) and Adarsh Singh (Associate).

Advocate Rajiv Yadav appeared for Maithan Alloys.

Senior Advocate Rajiv Shakdher appeared for SAIL.

[Read Judgment]