25. We are convinced that the petitioner has a vested right to claim incentive based on the Central Government’s notification dated 16.12.1997 as fully explained in para 27 herein.  With the establishment of the Commission, the jurisdiction of the Central Government to notify any component of tariff, including the incentive, has ceased to exist.  The vested rights of the petitioner cannot be defeated by abolition of the forum responsible for enforcement of its rights and the substitution of that forum by another forum. The exercise of jurisdiction to adjudicate and notify the rights of the petitioner accruing in its favour prior to establishment of the Commission cannot be construed as giving retrospective effect to the Regulatory Commissions Act.  We are fortified in our conclusions by  the observations of the Supreme Court in New India Insurance Company Vs. Smt. Shanti Misra AIR 1976 SC 237 that:

“It is well-established proposition that such a change of law operates retrospectively and the person has to go to the new forum even  if his  cause  of  action  or  right of action accrued prior to  the change of forum.  He will have a vested right of action, but now a vested right of forum.  If by express words the new forum is made available only to causes of action arising after the creation of the forum, then the retrospective operation of law is taken away.  Otherwise, the general rule is to make it retrospective”.

26. Accordingly, we decide that the Commission has jurisdiction to exercise the same powers as were exercisable by the Central Government on the question of determination of incentive for use of the inter-State transmission system, before its establishment.  The Commission can therefore exercise jurisdiction for notifying incentive for the period prior to its establishment.  While dealing with issue (a) above, we have already expressed our view to adopt the norms and principles notified by the Central Government.

Issue No. (d):

Whether any vested right accrued in favour of the petitioner to claim incentive for the year 1997-98 and 1998-99 based on notification issued by the Central Government in December 1997 and subsequent notifications issued from time to time in respect of different regions.

27. We have already noticed that the notification dated 16.12.1997 is valid and it was within the powers of the Central Government to prescribe tariff norms for the transmission systems operated by the petitioner, though the individual tariff notifications issued by the Central Government after establishment of the Commission were held to be ultra vires.  However as a matter of expediency, we have already decided to accept the terms of the notification.  The notification dated 16.12.1997 provides for payment of incentive by the beneficiaries beyond 95% Availability.  In our opinion, by virtue of the said notification dated 16.12.1997, a right to incentive accrued in favour of the petitioner.  As held by the Supreme Court, in (1974)2 SCC 387, “a right is an averment of entitlement arising out of legal rules.  A legal right may be defined as an advantage or benefit conferred upon a person by a rule of law”.  According to Black’s Law Dictionary right means

“a power, privilege or immunity guaranteed under a constitution, statutes or decisional laws or claimed as a result of long usage.  In a narrower signification, an interest or title in a object of property, a just and legal claim to hold, use or enjoy it, or to convey o donate it, as he may please.  A legally enforceable claim of one person against another, it being withheld from him or not in his possession.  In this sense “right” has the force of “claim” and is  properly expressed by the Latin “Jus”

28. Again, in Black’s Law Dictionary, the “vested right” is defined as under:-

“In constitutional law, rights which have so completely and definitely accrued to or settled in a person that they are not subject to be defeated or cancelled by the act of any other private person, and which it is right and equitable that the Government should recognize and protect, as being lawful in themselves, and settled according to the then current rules of law, and of which the individual could not be deprived arbitrarily without  injustice, or of which he could not justifiably  be deprived otherwise then by the established methods of procedure and for the public welfare.  Such interests as cannot be interfered with by retrospective laws; interests which it is proper for state to recognise and protect and of which individual cannot be deprived arbitrarily without injustice.  Immediate or fixed right to present or future enjoyment and one that does not depend on an event that is uncertain.  A right complete and consummated and of such character that it cannot be divested without the consent of the person to whom it belongs, and filed or established, and no longer open to controversy”

29. The   respondents   who  have   filed   their   written    submissions  on  the preliminary legal issues have denied accrual of any rights in favour of the petitioner for incentive, since it has not been notified by the Government prior to the establishment of the Commission.

30. The tariff norms and principles notified by the Central Government on 16.12.1997 are held to be validly made and the notification incorporates the principles for payment of incentive by the beneficiaries.  In our opinion, right is vested in favour of the petitioner to claim incentive on fulfillment of the conditions laid down therein. We may take notice that the respondents have been making payments for all other components based on the notification issued by the Central Government and as such the right to incentive also vest with the petitioner. For this conclusion as aforesaid, we draw sustenance from a decision of the Supreme Court in C.I.T. Vs Shah Sadiq and Sons (1987) 3 SCC 516

“In view of Section 6 (c) of the General Clauses Act a right which had accrued and had become vested continued to be capable of being enforced notwithstanding the repeal of the statute under which the right accrued unless the repealing statute took away such right expressly or impliedly. Whatever rights are expressly saved by the ‘savings’ provision stand saved. But, that does not mean that rights which are not saved by the ‘savings’ provision are extinguished or stand ipso facto terminated by the mere fact that a new statute repealing the old statute is enacted."

31. There is nothing in the Regulatory Commissions Act to divest the petitioner of the benefits or advantages accruing in its favour by virtue of operation of the notifications issued by the Central Government. Thus we hold that the petitioner has a vested right to claim incentive.  The basis of tariff norms and principles notified by the Central Government in terms of the notification dated 16.12.1997  have been adopted by us  as a matter of expediency for the earlier period in accordance with the opinion of Attorney General. In the light of this finding, we may note that the grievances aired by the respondents for considering higher Availability for incentive, for lowering the rate of incentive and rate of return on the capital do not survive since we shall be following the criteria laid down in the notification dated 16.12.97 for the purposes of determining the admissibility of incentive in these petitions.

Issue No. (f):

Whether the claim for incentive preferred by the petitioner for the years 1997-98 and 1998-99 based on principles/assumptions notified by the Central Government could be extended beyond July, 1998, when the Commission was constituted.

32. According to the petitioner, the principles/parameters notified by the Central Government are valid up to 31.3.2002.  The Commission has not yet notified its own tariff norms and principles.  Therefore, the principles laid down by the Central Govt. shall continue to govern the payment of incentive till such time these are replaced by the norms laid down by the Commission.  However, it has been contended on behalf of the respondents, the principles/assumptions notified by the Central Government cannot be applied beyond July, 1998 since the principles regarding the tariff determinations, including claim for incentive, are to be framed by the Commission for the period beyond July, 1998.

33. We have already recorded that the Commission is vested with power to notify the tariff norms.  However, the process for notification has not yet completed and, therefore, their notification is likely to take  some more time.  Until that time, for the purpose of continuity it is essential that the principles laid-down by the Central Government are followed by the Commission.  The view we have taken is in conformity with the opinion of the learned Attorney General.

Issue No. (h):

Whether the petitioner could file the petitions for incentive over-looking the provisions of the agreement entered into with the beneficiaries.

34. At the hearing, it was pointed out by some of the respondents that the petitioner had entered into an agreement with them, which, inter alia, stipulates that before forwarding the tariff proposal to the Government of India, the petitioner would ensure prior consultation with them. It has been stated on behalf of the petitioner that as per the agreement, the transmission tariff and terms and conditions for the power to be transmitted by the petitioner shall be as per the norms notified by Ministry of Power/CERC.  It is the contention of the petitioner that it has approached the Commission in accordance with these terms of the agreements.  The respondents have, on the other hand contended that no such petition can be filed over-looking the provisions of the agreement entered into by the petitioner with the beneficiaries. This issue was framed in the above background.

35. Under  the  Regulatory  Commissions Act, the   Commission  is  conferred with jurisdiction in respect of the matters covered by these petitions.  Therefore, the petitioner’s filing of these petitions conform to the legal provisions.  In our opinion, no prejudice whatsoever has been caused to the respondents by petitioner’s, approaching the Commission without prior consultation with the respondents.  The proceedings before the Commission afford opportunity to the parties to interact among themselves and encourage mutual consultation, without affecting merits of their case. The process does not cause any prejudice to the respondent.    This contention raised on behalf of some of the respondents merit rejection and we accordingly reject it.

36. On the question of certification of Availability   Shri R.K. Madan, Director, POWERGRID, agreed at the hearing on 14.12.99  that this  should be done by REBs.  He also conceded that the procedure for determination of Availability may also be devised by REBs.

37. These petitions were listed for final hearing on 31.3.2000. It was noted  that the procedure in regard to determination of availability is under consideration of CEA. In view of the contentions raised on behalf of the parties we have directed CEA to finalise the procedure for certification of Availability by REBs. Meanwhile, the respondents had been directed to pay 50% of the claim of the petitioner in these petitions.   The procedure for certification of REB as and when received shall be reacted upon by the parties if not already done, before the REBs are directed to certify on the actual availability. Thereafter the incentives, if any, shall be determined by the Commission.   With this the preliminary issues are disposed of and the petitions shall be kept pending for final disposal in due course.

New Delhi,
Dated 19.062000