CIC: DERC has a mandate to inform the people while formulating the tariff; DERC to put up information in simple language so that a common man can understand & respond, before inviting the views from public as per the scheme & procedure of Tariff fixation
11 May, 2015FACTS:
2. This Commission has issued the following order on 17-4-2015: _
1. “The Commission admits this complaint and issues notice to the respondents and directs them to extend the date of receiving objections from the consumers to a convenient date after disclosing the information under section 4(1)[c] of the RTI Act as requested by the complainant.
2. The Commission also directs complainant to dispatch the copies of the complaint along with the enclosures to the respondents.”
3. Both the parties made their submissions.
4. The complainant Mr. Anil Sood, a social activist from Chetna organization, filed RTI application on 12-2-2013 seeking information on Distribution Transformer Wise negative losses in respect of BRPL, BYPL, TPDDL for the year 2011-12. The respondent authority replied that the Commission considered Division-wise DT-wise losses in respect of BRPL, BYPL and TPDDL for 2011-12 and observed that comprehensive analysis of the losses in respect of DTs which record high losses while taking the energy supplied from the DTs will be submitted for further directions of the Commission. The Complainant says that till date the respondent authority did not analyze the DT-wise losses and informed him.
5. The complainant filed another RTI on 10-11-2014 which was replied on 23-3-2015 and 4-3-2015 regarding the capitalization of fixed assets. The complainant is questioning how the respondent authority have done the capitalization of fixed assets leading to revenue gap of Rs.20,000 crores.
6. The Complainant has explained the urgency involved in the issue and requested for admitting the complaint immediately out of turn saying that today (17-4-15) is the last day for filing objections by the consumers. There is utmost urgency and necessity, there was no sufficient time to issue Show Cause Notice to the respondent, hence to pass an ex-parte directive to them to defer the proceedings on inviting suggestions and holding public hearing till the time the CIC hears this case. The Complainant contended before the CIC that if the DERC applies the tariff fixation without disclosing the complete information and hearing the objections it would cause irreparable loss to the consumer in the capital city of Delhi and will result in undue benefits to the DISCOMs. When the CIC questioned the complainant, why he has not filed this complaint earlier, he explained that he did not receive any response to the complaints made to the Chief Secretary, Principal Secretary (Power), GNCTD on 6-4-2015.
7. As I found merit in the contention and urgency, I have admitted the complaint and issued notice to the respondents and directed them on 17th April 2015, to extend the date of receiving objections from the consumers to a convenient date after disclosing the information under section 4(1 )[c] of the RTI Act as requested by the complainant. The case was posted on 6th May 2015.
8. The DERC approached the Delhi High Court seeking intervention, saying: The respondent no. 4 (Complainant before CIC) raised multiple (and other unintelligible) queries from the petitioner (Delhi Electricity Regulatory Commission set up under the Electricity Act 2003) to regulate the electricity sector in Delhi as given in Section 86 of the said Act. Apparently, unsatisfied by the queries, respondent No. 4 (instead of going in appeal before First Appellate Authority went directly to Chief Information Commission (CIC) under Section 18 of the RTI Act, 2005. Vide impugned orders dated 17.04.2015 the CIC, inter alia, ordered the petitioner to postpone its public hearings of the tariff fixation of the Distribution Companies (DISCOMs) of Delhi. It is submitted that the CIC has no powers at all to make such orders as have the effect of impacting the functioning of another statutory body such as the petitioner. The only orders CIC could legally pass is imposition of penalty and recommendation for disciplinary action against the PIO. By directing the DERC to postpone its public hearing in the ongoing statutory annual tariff determination exercise (a quasi-judicial function), CIC has clearly exercised powers not vested in it by the law and hence liable to be quashed. The tariff fixation exercise being time bound, the present writ petition seeks intervention of the Hon’ble Court”. (Text of the synopsis of WP filed by DERC).
9. The Hon’ble High Court in its order dated 30.4.2015 mentioned “both counsels i.e, counsel for the petitioner and respondent no. 4 (complainant before CIC) are agreed that they will appear before he CIC on 6.5.2015 and directed CIC to hear both parties and then pass a final order in the matter, the CIC will conclude the hearing on or before 08.05.2015,... counsel for DERC assured the court that in the meanwhile the date for public hearing will be deferred”.
10. Accordingly, both parties appeared before me on 6.5.2015, I have heard both parties.
Contention of complainant
11. Besides filing a written submission, the complainant orally submitted that the Executive Summary placed by the DERC does not have the prudence check of capital assets of some DISCOMs. He claimed that prudence check was not done for the past four years. He pointed out contradictions and anomalies in DERC disclosure and that the huge revenue gap amounting to Rs.19505 crore was not explained. Mr Anil Sharma, Charted Accountant presented that the BSES DISCOMs diluted their investments reducing it to 21 per cent and their balance sheets were not signed by the members of Delhi Government though their names were typed. He also submitted that these two companies took huge loans from banks mortgaging assets without the permission of DERC. Reduction in fuel charges was not reflected anywhere in the summary given by the DERC.
12. In his written submission the complainant Mr. Anil Sood stated that Information to be suo motto disclosed by DERC under section 4(1)(c) Every public authority shall publish all relevant facts while formulating important policies or announcing the decisions which affect public; Every public authority shall publish all relevant facts while formulating important policies or announcing the decisions which affect public; Every public authority shall publish all relevant facts while formulating important policies or announcing the decisions which affect public; Every public authority shall publish all relevant facts while formulating important policies or announcing the decisions which affect public; Every public authority shall publish all relevant facts while formulating important policies or announcing the decisions which affect public; of RTI Act, that impacts the decision making of tariff fixation in Delhi was not in public domain. The complainant submitted:
a) Prudence Check of R & M and A& G has not been carried out from the year 2004-05 onwards till date.
b) Consultant PWC had not submitted a comprehensive report highlighting the major anomalies by it during the course of Prudence Check and they were asked to submit the same to DERC (internal note dated 18th April, 2012 of DERC).
c) During the Prudence Check sessions the consultant intimated that it did not have the information in documentary form (internal note dated 20th April, 2012 of DERC). Vide its letter dated 25th April, 2012 DERC requested the consultant to submit its report.
d) Prudence Check/making presentation to the DERC was not in the list of deliverables. They have not kept the record of Prudence Check observations.
e) DISCOMs shifted the burden of doing Prudence Check to the staff of the DERC (internal note dated 9th May, 2012 of DERC). This is against terms of References/deliverables (internal note dated 9th May, 2012 of DERC).
f) DERC has not disclosed under section 4(1)(c) Every public authority shall publish all relevant facts while formulating important policies or announcing the decisions which affect public; Every public authority shall publish all relevant facts while formulating important policies or announcing the decisions which affect public; Every public authority shall publish all relevant facts while formulating important policies or announcing the decisions which affect public; Every public authority shall publish all relevant facts while formulating important policies or announcing the decisions which affect public; Every public authority shall publish all relevant facts while formulating important policies or announcing the decisions which affect public; of the RTI Act, 2005 the cost of litigation incurred by the DISCOMs on contesting the issue of Audit of DISCOMS by CAG before Hon’ble Supreme Court of India, and the cost of litigation incurred by the DISCOMs on contesting the issue of order passed by CIC holding DISCOMS as Public Authorities before Hon’ble High Court of Delhi, that would impact the tariff fixation;
g) There is a demand of Income Tax amounting to Rs. 327 crores for the year 2009-2010 at Page 367 and 390 of the ARR Petition. The Respondents are jointly and severally guilty for non disclosure under section 4(1)(c) Every public authority shall publish all relevant facts while formulating important policies or announcing the decisions which affect public; Every public authority shall publish all relevant facts while formulating important policies or announcing the decisions which affect public; Every public authority shall publish all relevant facts while formulating important policies or announcing the decisions which affect public; Every public authority shall publish all relevant facts while formulating important policies or announcing the decisions which affect public; Every public authority shall publish all relevant facts while formulating important policies or announcing the decisions which affect public; of the RTI Act, 2005 the Income of Rs.1200 Crores (App.), that would definitely impact the order of tariff fixation;
h. The DERC has not granted permission for creation of charge on assets acquired through Bank loans and therefore is guilty of non disclosure under section 4(1)(c) Every public authority shall publish all relevant facts while formulating important policies or announcing the decisions which affect public; Every public authority shall publish all relevant facts while formulating important policies or announcing the decisions which affect public; Every public authority shall publish all relevant facts while formulating important policies or announcing the decisions which affect public; Every public authority shall publish all relevant facts while formulating important policies or announcing the decisions which affect public; Every public authority shall publish all relevant facts while formulating important policies or announcing the decisions which affect public; of the RTI Act, 2005. (Page -380 - Para G)
i. Complainant questioned how carrying cost was being allowed by way of surcharge in the absence of Physical verification of assets. He also stated that DERC did not address the issue of Negative loss records which could cause huge loss to consumers and give undue gains to Discoms, which is in violation of the Electricity Act, 2003, National Tariff Policy 2005 and National Electricity Policy 2005. The DERC is yet to instruct DISCOMS to install separate neutral as provided under BIS rather responsibility has been shifted on Consumers.
13. The Complainant alleged that the GNCT of Delhi and DERC are just sitting with the folded hands and have left everything to Consultants and DISCOMS. He prayed the CIC to direct DERC to disclose all the facts impacting decision making on ARR Petitions filed by the DISCOMS, Invite suggestions from consumers at large on the disclosures by the Respondents. He claimed that all respondents are responsible for non-disclosure of information which they were supposed to disclose suo motu under Section 4(1)© of RTI Act. He also requested for initiating penal action.
Contention of DERC
14. Mrs Jayasree Raghuman, Secretary, DERC stated that the order of the CIC was complied with and assured to provide para-wise remarks to the complainant. Entire petitions of DISCOMs along with balance sheets were placed on official website and the summary is just ‘information’ and not admission of DISCOMs statements. She has also cleared that nothing was written off and DERC did not permit creation of any charge on the Government assets. She claimed that decision was yet to be taken by the DERC and they had not suppressed any information. She also explained that pendency of physical verification of assets would not cause any harm to consumer interests, as the DERC reserves its power to impose penalty of withdrawing 15 per cent of the value. Mrs Jayasree claimed that they could not be asked to create information under RTI. The complainant insisted that DERC should frame issues for the convenience of the ordinary people who cannot understand thousands of pages and hundreds of tables given by bulky balance sheets or proposals of DISCOMs. The complainant stated that the DERC being a quasi judicial body should frame issues in the beginning itself. He contended that it was the duty of DERC to simplify the technical information before seeking the views of people. Mr. Anil Sood stated that the power secretary, the Chief Secretary and DERC should not sit with folded hands but to protect the interests of consumers. Secretary DERC said that framing of issues was neither practice nor legal requirement.
15. Mrs Jayshree Raghuraman, Secretary of DERC submitted a short reply dated 6th May 2015 stating that contents of the complaint were wrong and denied. The reply slams the complaint as a sheer abuse of the process of law. Briefly the contentions in the written submission are as follows:
a) Complaint is completely baseless on facts and untenable in law.
b) Complainant was a member of previous State Advisory Committee and as such made several queries, which the DERC was bound to answer strictly under RTI Act. In March 2015 the term of complainant was not extended.
c) His complaints/emails were addressed and replied. DERC assumed he was satisfied as he did not file appeal. The complainant has raised many complaints and grievances which are not related to providing information, the CIC need not bother for unrelated issues by misleading and misrepresentation of facts.
d) It is not required to create information or interpret information or to solve problems of applicants or to furnish reply to hypothetical questions.
e) All the petitions filed by DISCOMs for tariff with the Commission were uploaded on the website http://www.derc.gov.in/. and to facilitate responses and comments of the general public and stakeholders uploaded executive summary, which is collation of major issues of the DISCOMs petitions. The complaint wants that the DERC should upload ‘issues’ instead of summary. This is a value judgment peculiar to the complainant and this is not ‘information’ under RTI Act. He cannot compel to analyze or express is own opinion beforehand or in a way which, in the opinion or requirement of the complainant is better or convenient.
f) There is no actionable default by the PIO in answering the complainant
g) Commission cannot compel to give the information. opinions and analysis which are not part of official record. nor can he ask for information or data otherwise available in public domain of a particular format of his own requirement.
h) There is complete compliance with Section 4(1 )(c) of RTI Act by the DERC. The procedure for tariff fixation of the DISCOMs includes ARR petitions filed by DISCOMs. their scrutiny and suggestions to cure defects. if any. after which petition is admitted. placed in public domain. for better understanding by the public at large is summarized and item wise information about claims and proposal is provided in executive summary. which is also placed on website. hard copies are also provided on demand. public at large is informed through advertisements in national and local newspapers of different languages, comments and views are invited from public, and then public hearing is conducted, views of which are analyzed by the DERC and replies of DISCOMs are added, tariff order is issued, any person aggrieved by the said tariff order may challenge same under s 111 of Electricity Act before Hon’ble Appellate Tribunal for Electricity. The Tariff fixation process has to be completed within 120 days.
i) The CIC may not have the required jurisdiction and authority to interdict the performance of the statutory, quasi judicial functions of another statutory authority as in the present case.
j) The complaint is devoid of merit and hence be dismissed.
16. After agreeing before the Delhi High Court to appear before CIC, the DERC filed the above written submission contending that CIC may not have required jurisdiction. The direction of Delhi High Court to CIC to hear the case has already answered this point. Hence this contention does not stand.
17. I consider that the complainant has brought out a very important issue that complete information should be put in public domain before seeking the views from the members of the public in easy and accessible form. The complaint did not reflect any personal or selfish interest of the complainant and neither he nor his association an adversary to the DERC, which fact was agreed to by the Secretary of DERC. The contentions submitted by Mrs Jay Raghuraman and other officers of DERC and Complainant make it clear that there is larger public interest of protecting the interests of the consumers at large in the complaint and it will assist DERC in collecting informed views from the people in general.
18. The complainant submitted: “Despite taking on record the issue of Negative losses as communicated to the Complainant vide letter No.F.9(35)/DERC/RTI- 1504/2012-13/6340 dated 11th March 2013 till date Commission has not acted upon to address the issue of Negative loss recorded by the Division wise - Distribution Transformers wise, which causing huge losses to the Consumers and gain to DISCOMS, which is in violation of the Electricity Act, 2003, National Tariff Policy 2005 and National Electricity Policy 2005. The DERC is yet to instruct DISCOMS to install separate neutral as provided under BIS rather responsibility has been shifted on Consumers”. Complainant stated that the CERC cannot simply dump entire petition of DISCOM for tariff fixation on the people and expect common men to analyze around 750 tables and hundreds of pages of the petitions.
19. The complainant asks the DERC to disclose before going for public hearing on the basis of executive summary of tariff applications of DISCOMs on impact of negative losses, prudence checks, physical verification of assets, impact of equity dilution by DISCOMs etc. The complainant asked why the DERC cannot make a comprehensive note, frame issues and answer these doubts for the benefit of the people.
20. Mrs Jayshree Raghuraman said that it was never a practice in DERC to frame issues for tariff fixation. They generally prepare executive summary of petitions and place them on website along with full text of the petitions for tariff filed by DERCs. Answering the contentions of Mr Anil Sharma, chartered accountant on behalf of complainant, Mrs Jayshree stated that nothing was written off, and DERC never permitted any asset to be mortgaged by the DISCOMs. Mr Anil Sharma wanted the information about permission given to DISCOMs to create charge or mortgage the assets for bank loans, as they took several loans from banks. Since no decision was taken, no such information would be liable. She also explained that if the DISCOMs chose to raise loans, the DERC had nothing to do with those loans. Having explained several aspects sought by the complainant, Mrs. Jayshree has agreed to explain some other issues raised by the complainant before seeking the public views on the petitions for the tariff.
21. I find that the DERC representatives were forthcoming to explain certain issues sought by the complainant. I also find that DERC answered some of the doubts of the complainant as referred above. I also noticed that the DERC agreed and was ready to perform its statutory duty to explain points raised by the complainant. Hence, I find no need to initiate penal proceedings by issuing a show cause notice.
22. Mrs Jayshree has contended that Section 4(1)[c] could not be attracted in their case as they have not taken any decision so far. Mrs Jayshree argued that since they have not taken any decision they need give any information. I cannot agree with this argument, because this provision of voluntary disclosure very clearly mandates to “publish all relevant facts while formulating important policies”. The Electricity Act also mandates to give information before inviting the peoples’ views.
23. Section 4(1)(c) Every public authority shall publish all relevant facts while formulating important policies or announcing the decisions which affect public; Every public authority shall publish all relevant facts while formulating important policies or announcing the decisions which affect public; Every public authority shall publish all relevant facts while formulating important policies or announcing the decisions which affect public; Every public authority shall publish all relevant facts while formulating important policies or announcing the decisions which affect public; Every public authority shall publish all relevant facts while formulating important policies or announcing the decisions which affect public; says: “publish all relevant facts while formulating important policies or announcing the decisions which effect the public”.
24. In this context DERC has initiated the process of formulating tariff policy, during which one of the important requirements is that they should place the information inviting the views and objections of public at large and stakeholders according to Part VII “Tariff” of Electricity Act, 2003.
25. It is relevant to refer to important provisions of Electricity Act, 2003, here.
“Section 61. (Tariff regulations): The Appropriate Commission shall, subject to the provisions of this Act, specify the terms and conditions for the determination of tariff,
and in doing so, shall be guided by the following, namely:-.. (c) the factors which would encourage competition, efficiency, economical use of the resources, good performance and optimum investments; (d) safeguarding of consumers' interest and at the same time, recovery of the cost of electricity in a reasonable manner; (e) the principles rewarding efficiency in performance; (i) the National Electricity Policy and tariff policy:
Section 62. (Determination of tariff): --- (1) The Appropriate Commission shall determine the tariff in accordance with the provisions of this Act for - (a) supply of electricity by a generating company to a distribution licensee: (2) The Appropriate Commission may require a licensee or a generating company to furnish separate details, as may be specified in respect of generation, transmission and distribution for determination of tariff. (3) The Appropriate Commission shall not, while determining the tariff under this Act, show undue preference to any consumer of electricity but may differentiate according to the consumer's load factor, power factor, voltage, total consumption of electricity during any specified period or the time at which the supply is required or the geographical position of any area, the nature of supply and the purpose for which the supply is required. (5) The Commission may require a licensee or a generating company to comply with such procedures as may be specified for calculating the expected revenues from the tariff and charges which he or it is permitted to recover. (6) If any licensee or a generating company recovers a price or charge exceeding the tariff determined under this section, the excess amount shall be recoverable by the person who has paid such price or charge along with interest equivalent to the bank rate without prejudice to any other liability incurred by the licensee.
Section 63. (Determination of tariff by bidding process): Notwithstanding anything contained in section 62, the Appropriate Commission shall adopt the tariff if such tariff has been determined through transparent process of bidding in accordance with the guidelines issued by the Central Government.
(2) Every applicant shall publish the application, in such abridged form and manner, as may be specified by the Appropriate Commission.
Section 86. (Functions of State Commission): --- (1) The State Commission shall discharge the following functions, namely: - (a) determine the tariff for generation, supply, transmission and wheeling of electricity, wholesale, bulk or retail, as the case may be, within the State: Provided that where open access has been permitted to a category of consumers under section 42, the State Commission shall determine only the wheeling charges and surcharge thereon, if any, for the said category of consumers;
(3) The State Commission shall ensure transparency while exercising its powers and discharging its functions.”
26. I would like to refer to the preamble of the Electricity Act, 2003: “An Act ...for taking measures conducive to promoting competition therein, protecting interest of consumers. rationalization of electricity tariff, ensuring transparent policies regarding subsidies, promotion of efficient and environmentally benign policies ”
The DERC has been constituted under this Act.
27. Thus Section 86(3) of this Act mandates transparency saying “the State Commission shall ensure transparency while exercising its powers and discharging its functions”. This provision gives right to information to the people as to the complete facts and circumstances forming basis for exercising powers and discharging its functions. Section 86(4) is equally important as that says: “In discharge of its functions, the State Commission shall be guided by the National Electricity Policy, National Electricity Plan and Tariff Policy published under Section 3”. The information which the DERC has to furnish before the views of the public are invited is the ‘information’ under Section 2(f) “information” means any material in any form, including records, documents, memos, e-mails, opinions, advices, press releases, circulars, orders, logbooks, contracts, reports, papers, samples, models, data material held in any electronic form and information relating to any private body which can be accessed by a public authority under any other law for the time being in force; of RTI Act, 2005 and hence CIC can direct the DERC to provide the same to the complainant and public. Hence, the allegation of the DERC that CIC was illegally interfering is not legally tenable.
28. The thrust of the complaint is the ‘executive summary’ which is the information given by the Commission to the people at large to express their views on, was in contradiction to the National Electricity Policy, etc.
29. It is not legally correct to say that DERC would give information after decision is taken, as it has a mandate to inform the people while formulating the tariff because DERC is seeking their objections and views, which cannot be given without complete information. It appears that because of this wrongful understanding of Section 4(1)(c) Every public authority shall publish all relevant facts while formulating important policies or announcing the decisions which affect public; Every public authority shall publish all relevant facts while formulating important policies or announcing the decisions which affect public; Every public authority shall publish all relevant facts while formulating important policies or announcing the decisions which affect public; Every public authority shall publish all relevant facts while formulating important policies or announcing the decisions which affect public; Every public authority shall publish all relevant facts while formulating important policies or announcing the decisions which affect public; , the DERC was under impression that it need not give information now, which generated this complaint before CIC. Under Section 4(1)© of RTI Act read with relevant provisions of Electricity Act referred above, the DERC has a responsibility to provide complete information to clarify about the tariff fixation because that straight away impacts the millions of consumers in capital Delhi. Section 64(3) of Electricity Act mandates the DERC to publish the application, in such abridged form and manner as may be specified by the Commission. This complaint before CIC is about the manner in which the application for tariff need to be analyzed and the form in which it shall be published. Agreeing with the DERC that it was not their practice to frame issues out of application, I would like to say that DERC has to specify how information has to be formulated before it is disclosed to the public at large. The CIC require the public authority to consider the issues raised in this hearing and keeping in view of these issues specify the form of information which the DISCOMs have to submit exercising their power under Section 64(3) of Electricity Act. I further direct DERC, in discharge of its duty of disclosure under RTI and Electricity Act, to explain to the public on the points raised by complainant referred above in Paragraph 12 from (a) to (i) along with the impact of those factors on interests of consumers’ vis-a-vis the profits of the DISCOMs, so that people and stakeholders can provide their views or objections based on complete understanding based on this information to be provided by DERC.
30. Hence, I require the DERC to put up information in simple language so that a common man can understand and respond, with analysis and explanations before inviting the views and objections from the public as per the scheme and procedure of Tariff fixation, with a copy to the complainant and this Commission, as soon as possible, within not more than one week from date of receipt of this order, and complete the process of tariff fixation as per their procedure. With above observations, the complaint is finally disposed of.
Sd/-
(M Sridhar Acharyulu) Information Commissioner
Citation: Anil Sood v. DERC in CIC/SA/C/2015/000092