- (1.) This is an appeal by special leave concerning tariff fixation by Delhi Electricity Reforms Commission ('DERC' for short). In this appeal, a short point which arises for consideration is : whether on the facts and circumstances of the case DERC was right in reducing the rate of depreciation from 6.69% to 3.75%.
(2.) The facts giving rise to this civil appeal are as follows. On 23.1.92 Ministry of Power ('MOP' for short) issued a notification (which was published in Official Gazette on 31.1.92) stating that a licensee shall provide for depreciation in its Annual Statement of Accounts commencing on 1.4.92 as per straight-line method in respect of asset(s), indicated in column no.1, at the rates indicated in the columns of Schedule VI to the Electricity (Supply) Act, 1948 which vests the power to stipulate the principles for depreciation in the said Ministry. A note was appended to the said Notification under which it was stated that the reference to the straight-line method in the said Notification was intended to differentiate the same from the concept of reducing balance method and not to derive rates from the fair life of the assets.
(3.) On 29.3.94, in continuation of the above Notification, MOP amended the Schedule. A bare reading of the said amendment indicates absence of linkage between the fair life of an asset and the rate of depreciation.;