Page No.# 1/13 GAHC010022712024 2025:GAU-AS:11020 THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH) Case No. : WP(C)/682/2024 K D IRON AND STEEL COMPANY A PARTNERSHIP FIRM REGISTERED UNDER THE INDIAN PARTNERSHIP ACT, 1932, HAVING ITS PRINCIPAL PLACE OF BUSINESS AT 6TH FLOOR, SRI KAMAKHYA TOWER, BEHIND SOHUM SHOPEE, CHRISTIAN BASTI, G.S.ROAD, GUWAHATI- 781005 AND HAVING ITS FACTORY/INDUSTRIAL UNIT AT INTEGRATED INFRASTRUCTURE DEVELOPMENT CENTRE (IIDC), VILL BORSHIL, SOTSHIL, P.O. MARANJANA, RANGIA, ASSAM, BEING REPRESENTED BY MR. BINOD KUMAR GOENKA, S/O- SHRI MANGILAL GOENKA, AGE ABOUT 57 YEARS, RESIDENT OF SHUBHAM BUILDWELL, R.G.BARUAH ROAD, GUWAHATI, KAMRUP (M), ASSAM- 781005 VERSUS ASSAM POWER DISTRIBUTION COMPANY LIMITED AND 3 ORS REPRESENTED BY ITS MANAGING DIRECTOR, ASSAM POWER DISTRIBUTION COMPANY LIMITED, BIJULEE BHAWAN, A.T.ROAD, GUWAHATI- 781001 2:MANAGING DIRECTOR ASSAM POWER DISTRIBUTION COMPANY LIMITED BIJULEE BHAWAN A.T.ROAD GUWAHATI- 781001 3:THE GENERAL MANAGER (TARIFF REGULATORY CELL) ASSAM POWER DISTRIBUTION COMPANY LIMITED BIJULEE BHAWAN A.T.ROAD GUWAHATI- 781001 4:ASSAM ELECTRICITY REGULATORY COMMISSION Page No.# 2/13 DULY REPRESENTED BY ITS CHAIRPERSON A.S.E.B CAMPUS DWARANDHAR SIX MILE G.S.ROAD GUWAHATI KAMRUP (M) ASSAM- 78102 Advocate for the Petitioner : MR G N SAHEWALLA, MS K SARMA,MR H K SARMA,MR M SAHEWALLA,MD ASLAM Advocate for the Respondent : SC, APDCL, MR S P DAS (r-4) Linked Case : WP(C)/720/2024 K D IRON AND STEEL COMPANY (PREVIOUSLY KNOWN AS M/S B R METALLICS) A PARTNERSHIP FIRM REGISTERED UNDER THE INDIAN PARTNERSHIP ACT 1932 HAVING ITS PRINCIPAL PLACE OF BUSINESS AT 6TH FLOOR SRI KAMAKHYA TOWER BEHIND SOHUM SHOPEE CHRISTIAN BASTI G.S.ROAD GUWAHATI- 781005 AND HAVING ITS FACTORY/INDUSTRIAL UNIT AT INTEGRATED INFRASTRUCTURE DEVELOPMENT CENTRE (IIDC) VILL BORSHIL SOTSHIL P.O. MARANJANA RANGIA ASSAM BEING REPRESENTED BY MR. BINOD KUMAR GOENKA S/O- SHRI MANGILAL GOENKA AGE ABOUT 57 YEARS RESIDENT OF SHUBHAM BUILDWELL R.G.BARUAH ROAD GUWAHATI KAMRUP (M) ASSAM- 781005 Page No.# 3/13 VERSUS ASSAM POWER DISTRIBUTION COMPANY LIMITED AND 3 ORS REPRESENTED BY ITS MANAGING DIRECTOR ASSAM POWER DISTRIBUTION COMPANY LIMITED BIJULEE BHAWAN A.T.ROAD GUWAHATI- 781001 2:MANAGING DIRECTOR ASSAM POWER DISTRIBUTION COMPANY LIMITED BIJULEE BHAWAN A.T.ROAD GUWAHATI- 781001 3:THE GENERAL MANAGER (TARIFF REGULATORY CELL) ASSAM POWER DISTRIBUTION COMPANY LIMITED BIJULEE BHAWAN A.T.ROAD GUWAHATI- 781001 4:ASSAM ELECTRICITY REGULATORY COMMISSION DULY REPRESENTED BY ITS CHAIRPERSON A.S.E.B CAMPUS DWARANDHAR SIX MILE G.S.ROAD GUWAHATI KAMRUP (M) ASSAM- 781022 ------------ For the Petitioner(s) : Mr. G. N. Sahewalla, Sr. Advocate : Mr. H. K. Sarma, Advocate For the Respondent(s) : Mr. K. P. Pathak, SC, APDCL : Mr. S. P. Das, Advocate BEFORE HONOURABLE MR. JUSTICE DEVASHIS BARUAH Date of Hearing : 18.08.2025, 19.08.2025 Page No.# 4/13 Date of Judgment : 19.08.2025 JUDGMENT AND ORDER (ORAL) Heard Mr. G. N. Sahewalla, the learned senior counsel assisted by Mr. H. K. Sarma, the learned counsel appearing on behalf of the petitioner in both the writ petitions. Mr. K. P. Pathak, the learned counsel appears on behalf of the APDCL and Mr. S. P. Das, the learned counsel appears on behalf of the respondent No.4. 2. The petitioner herein has approached this Court by filing two writ petitions taking into account that the petitioner is aggrieved by the imposition of FPPPA in respect to the two meters which the petitioner's establishments are connected with. The dispute pertains to the application of the Fuel and Power Purchase Price Adjustment and the imposition thereof in terms with the Assam Electricity Regulatory Commission (Fuel and Power Purchase Price Adjustment Formula) Regulations, 2010 (for short, “the Regulations of 2010”). CASE OF THE PETITIONER: 3. The petitioner herein is a partnership firm carrying on business of manufacturing of M/S TMT Bar at the Integrated Infrastructural Development Centre, Rangia. The petitioner’s factory is connected with two electrical meters bearing Consumer Nos.080000001897 and 080000001898. Page No.# 5/13 4. It is the case of the petitioner that in terms with Regulations of 2010 which have been amended vide the Assam Electricity Regulatory Commission Fuel and Power Purchase Price Adjustment Formula) Regulations, 2010 (Amendment 2012), the Fuel and Power Price Adjustment (for short, ‘FPPPA’) is to be implemented in terms with Regulation 5 of the Regulations of 2010. 5. The petitioner herein has assailed the notice dated 27.05.2023 whereby the FPPPA surcharge was included in the bill dated 12.06.2023 for the bill period 01.05.2023 to 31.05.2023 though, the notice dated 27.05.2023, categorically mandated that the rates mentioned therein shall be levied for the next three months with effect from June, 2023. 6. Mr. G. N. Sahewalla, the learned Senior Counsel appearing on behalf of the Petitioner drawing the attention to Regulation 5.5 submitted that each control period shall be a quarter year, i.e. three months and the computation of the FPPPA surcharge has to be made by the Distribution Licensee for the quarter which shall be charged from the first of the next quarter. The learned Senior counsel therefore submitted that on the basis of the said notice dated 27.05.2023, the FPPPA surcharge could have been charged only from the month of June to August, 2023 and not for the period of May, 2023. The learned Senior counsel further drawing the attention to the notice dated 29.09.2023 made a similar submission that the said FPPPA surcharge has to be charged for the months of October, November and December, 2023 and not for the month of September, 2023 as have been done vide the bill dated 11.10.2023, which is the bill period for 01.09.2023 to 30.09.2023. Page No.# 6/13 The learned Senior counsel with all fairness submitted that for the bill period from 01.09.2023 to 30.09.2023, the FPPPA surcharge shall be on the basis of the notice dated 27.05.2023 and not on the basis of notice dated 29.09.2023. 7. The learned Senior counsel reiterates his submission in respect to the other electrical meter which is the subject matter in WP(C) No.720/2024. The learned counsel submitted that in respect of the bill dated 12.06.2023 pertaining to the meter number 080000001898 for the period from 01.05.2023 to 31.05.2023, the FPPPA charge could not have been levied on the basis of the notice stated 27.05.2023. Further to that, in respect to the bill dated 11.10.2023 for the same meter, the FPPPA charge could not have been levied on the basis of the notice dated 29.09.2023. Rather the FPPPA charge could have been levied on the basis of the notice dated 27.05.2023. 8. Mr. K. P. Pathak, the learned Standing counsel appearing on behalf of the APDCL submitted that the imposition of the Fuel and Power Purchase Price Adjustment (FPPPA) is a necessary economic instrument to ensure that the Distribution Licensee like APDCL are able to recover uncontrollable and unforeseen variation in fuel and power procurement costs. He submitted that these costs are dynamic, subject to market fluctuations and not factored into the base tariff. The learned Standing counsel further submitted that without such adjustment, the financial viability of the licensee could be severely affected, ultimately impairing its capacity to maintain uninterrupted power supply, investment in infrastructure, and meet regulatory obligations. Page No.# 7/13 9. The learned Standing counsel further submitted that as per the provision of Regulation 5.1 of the Regulation of 2010, the FPPPA is an incremental energy charge which is recoverable in proportion to the energy consumption and would be forming a part of the energy bill to be served on monthly or any other periodical basis. Referring to the case of the Petitioner, the learned counsel submitted that the Petitioner is a postpaid consumer and the electricity charges for the particular month are computed and bills are generated only at the end of the month. The learned Standing counsel further submitted that the contention that the impugned notices dated 27.05.2023 and 29.09.2023 amounts to retrospective levy is misconceived and untenable inasmuch as, in commercial power supply arrangements, billing for energy consumption always operates in arrears. The learned counsel further submitted that in terms of the provisions of Regulation 5.5 of the Regulation of 2010, the FPPPA surcharge was computed and billed on deferred basis with consumption in one quarter being billed in the subsequent quarter based on data availability from generators and power suppliers. The FPPPA surcharge for the control period comprising from January to March, 2023 was computed in accordance with Regulation 5.5 of the Regulations of 2010. The relevant bills and the data for this quarter became available in April, 2023. However, vide Retail Tariff Order dated 29.03.2023, the Respondent No.4 revised the Retail Tariff for financial year 2023-24, effective from 01.04.2023 and subsumed the then prevailing FPPPA of Rs.0.50 per kilowatt into the base tariff. 10. Under such circumstances, without regulatory clarity, the Respondent APDCL were refrained from levying FPPPA for consumption during the month Page No.# 8/13 of April, 2023. Thereafter, in order to resolve such ambiguity, the Respondent APDCL sought clarification from the Respondent No.4 whether FPPPA could be levied for prior consumption in the light of the tariff revision. The Respondent APDCL, was informed by the Respondent No.4 that such levy could be issued in terms with the Regulations of 2010 and a formal communication to that effect was issued on 30.05.2023. It was further submitted that due to the aforesaid ambiguity, the FPPPA calculated for the month of January to March were levied from May and in fact, the Petitioner was given a deferment of a month (April) for levy of the revised FPPPA which was calculated for the control period of January to March. 11. The learned Standing counsel further submitted that the petitioner has already obtained the benefit of change in the fuel and power purchase prices during the control period of January to March, besides also getting a waiver for the month of April cannot be permitted to object to the levy of surcharge in the subsequent months. It was further submitted that the FPPPA for the next control period April to June, 2023 was revised and notified by APDCL vide notice dated 29.09.2023 with effect from August i.e. only after completion of a period of three months of implementation of the previous rate of FPPPA so that no consumer is unduly affected and the mandate of Regulation 5.5 of the Regulations of 2010 for levy of the revised FPPPA for a period of three consecutive months is duly complied with. In addition to that, the learned Standing counsel submitted that the petitioner has an alternative remedy in terms with Regulation 5.16 of the Regulations of 2010. ANALYSIS AND DETERMINATION: Page No.# 9/13 12. The Regulations of 2010 were made in terms with Section 61(d), 62(4), 86(1)(b), Sub-Section (1) of Section 181, Clause (zp) of Sub-Section (2) of Section 181 of the Electricity Act, 2003 whereby the Assam Electricity Regulatory Commission have been empowered to make the regulations. From a perusal of the said Regulations, more particularly, Regulation 5.1, it is apparent that the FPPPA which is the fuel and power purchase price adjustment surcharge has to be recovered in the form of an incremental energy charge in proportion to the energy consumption and would be forming a part of the energy bill to be served on monthly or any other periodical basis. The manner in which the FPPPA surcharge would be calculated has been specifically dealt with in Regulation 4. Regulation 5.2 and 5.3 provides that the Distribution Licensee upon being informed by the generating company about the FPPPA charge incurred shall recover it from the end consumers. There is no denial to the fact that the FPPPA charge is an amount leviable in terms of the Regulation of 2010 with effect from 10.04.2012 in terms of Regulation 5.4 of the Regulation of 2010. 13. A further reading of Regulation 5.2 and Regulation 5.3 stipulates as to how the formula for fixation of the FPPPA charge is to be applied and in the circumstance, the FPPPA charge exceeds 25% of the variable component of the tariff, there is a requirement for the Distribution Licensee to file a petition to the Respondent No.4 for recovery of the charges over the specified cap and the same can be only recovered after the Respondent No.4’s scrutiny and directives. 14. It is also very pertinent to take note of that Regulation 5.3 which Page No.# 10/13 empowers the Respondent No.4 upon reconciliation of the relevant details provided by the generating company at the end of each quarter to carry out reconciliation and if during reconciliation it is found that there is any discrepancy, the Respondent No.4 has been empowered to issue appropriate directives for making adjusted in the next quarter. 15. In the above perspective, this Court finds it pertinent to take note of Regulation 5.5 which is the bone of contention. The said Regulation being relevant is reproduced herein under, “5.5. Each control period shall be a quarter year i.e. 3 months. Accordingly, Distribution Licensee shall compute and adjust the amount as Fuel and Power Purchase Surcharge. Thus FPPPA surcharge for a quarter shall be charged from the first month of next quarter.” 16. From a perusal of the above quoted Regulation 5.5 of the Regulations of 2010, it would be seen that every control period shall be a quarter year i.e. three months. It is further seen that the Distribution Licensee have been obligated to compute and adjust the amount as Fuel and Power Purchase Surcharge and thus FPPPA surcharge for a quarter shall be charged from the first month of the next quarter. From a reading of the said Regulation 5.5, it also appears that the computation of the FPPPA surcharge for the control period of 3 months has to be charged only from the first month of the next quarter or in other words, for the period for which the computation as regards the FPPPA surcharge is made cannot be charged for the said period. As an illustration, if the control period is for the months of January to March, the Distribution Licensee is obligated to compute the FPPPA surcharge for Page No.# 11/13 the period from January to March and charge the same from the first month of the next quarter i.e. April of the next quarter. 17. This Court further takes note of Regulation 5.10 of the Regulations of 2010 which empowers the Distribution Licensee to include a prior period expense for recovery in subsequent quarters, if it can be proved to the satisfaction of the AERC that the details of expenses claimed were not available for reasons beyond the control of the Distribution Licensee at the time of filing. Regulation 5.13 of the Regulation of 2010 further stipulates that any calculation and levy of the FPPPA charge shall be subject to scrutiny of the Commission and the Commission shall make available the calculation of the licensee or generating company for inspection by any person. The licensee of the generating company shall refund or recover as the case may be, any difference of such surcharge already recovered by it and approved by the Commission. Regulation 5.16 stipulates that in case of any dispute, an appropriate petition in accordance with the Assam Electricity Regulatory Commission (Conduct of Business) Regulations, 2004 as amended from time to time or any statutory or re-enactment thereof shall be made before the Commission. It is on the basis of Regulation 5.16, the learned Standing counsel appearing on behalf of the Respondent APDCL submitted that the Petitioner ought to have approached the Respondent No.4 rather than approaching this Court. 18. In the backdrop of the above analysis of Regulation 5 which relates to the implementation of the formula as mandated in Regulation 4 of the Regulation of 2010, it appears from a reading of the notice dated 27.05.2023 Page No.# 12/13 as well as 29.09.2023 that the rate so stipulated therein as the FPPPA rate shall be chargeable in the next quarter. For the sake of clarity, in respect to the notice stated 27.05.2023, the rate mentioned pertaining to the FPPPA would be charged from the month of June, 2023 onwards and until any change is being carried out by issuance of separate notices. However, while applying the said notice dated 27.05.2023 in respect to both the meters of the Petitioner, the FPPPA charge have been included for the bill period 01.05.2023 to 31.05.2023 vide bills dated 12.06.2023, which in the opinion of this Court is not only contrary to Regulation 5.5 but also contrary to the notice dated 27.05.2023. 19. Further to that, the notice dated 29.09.2023 as well as the rates mentioned therein has to be applied for the period from October onwards, and not for the bill period of September. Therefore, the bills which have been issued on 11.10.2023 in respect to both the meters of the Petitioner, for the bill period 01.09.2023 to 30.09.2023 could not have included the FPPPA charge at the rate so fixed by the notice dated 29.09.2023. 20. Accordingly, this Court therefore disposes of both the writ petitions with the following observations and directions: (i) The bill dated 12.06.2023 in respect to the Consumer Nos. 080000001897 and 080000001898 for the bill period 01.05.2023 to 31.05.2023 could not have included the FPPPA charge as fixed by the notice dated 27.05.2023. Page No.# 13/13 (ii) The bills dated 11.10.2023 in respect to the Consumer Nos. 080000001897 and 080000001898 for the bill period 01.09.2023 to 30.09.2023 could not have incorporated the FPPPA charge on the basis of notice dated 29.09.2023 and taking into account the admitted stand of the Respondents that after the notice dated 27.05.2023 till 29.09.2023 there was no fixation of FPPPA charge by issuance of any notice, the FPPPA which ought to have been charged in respect to the bills dated 11.10.2023 should have been charged on the basis of the rates fixed as per the notice dated 27.05.2023. (iii) This Court further directs that on the basis of the above observations, the Petitioner would be entitled to certain refunds in respect to the bills dated 12.06.2023 for the bill period of 01.05.2023 to 31.05.2023 and the bills dated 11.10.2023 for the bill period from 01.09.2023 to 30.09.2023 in respect to both the meters of the Petitioner and said amounts shall be adjusted against the future dues of the Petitioner. (iv) This Court grants the liberty to the Respondent APDCL to take appropriate steps in terms with Regulation 5.10 of the Regulations of 2010 to seek any recovery, if so permitted by the respondent No.4. JUDGE Comparing Assistant