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Electricity & Energy LawSupreme Court of India

Punjab State Electricity Board v. Powergrid Corporation of India

Civil Appeal · Neutral citation not assigned (Civil Appeal No. 5133 of 2006)Decided 24 Feb 2016
Civil Appeal No. 5133 of 2006
Justice Kurian Joseph · Justice Rohinton Fali Nariman

Background

Powergrid Corporation had, in an earlier tariff computation, mistakenly applied depreciation on equity (a component on which depreciation is not legally chargeable). It later corrected this error going forward. Punjab State Electricity Board, as a counterparty affected by the correction, appealed against the correction being carried out.

Decision Breakdown

The Supreme Court held that there is no dispute that depreciation cannot be charged on equity, and what the respondent did was simply correct an acknowledged computational mistake: a mistake that, notably, had also been corrected in subsequent years without objection. Despite finding the appellant's counsel's submissions "very persuasive" to listen to, the Court found no legal merit in the appeals once the substance was examined, and dismissed both connected appeals with no order as to costs.

Lesson Learnt

Correcting an acknowledged arithmetic or computational error (here, wrongly charging depreciation on equity) is not something a court will undo merely because a party finds the correction inconvenient: a persuasive argument still needs a sound legal basis to succeed.

Punjab State Electricity Board v. Powergrid Corporation of India – Legal Case Shots | LegalAware