APTEL Replaces 6% Interest on DPS Refund with SBI Prime Lending Rate in Tata Steel vs DVC Dispute
APTEL set aside JSERC's 6% interest award on delayed payment surcharge refund, directing DVC to pay interest at SBI Prime Lending Rate on AMG bill surcharges recovered from Tata Steel.
The Appellate Tribunal for Electricity (APTEL), New Delhi, on 29 May 2026 set aside a portion of an order passed by the Jharkhand State Electricity Regulatory Commission (JSERC) that had directed Damodar Valley Corporation (DVC) to refund delayed payment surcharge (DPS) recovered on Additional Minimum Guarantee (AMG) bills at an interest rate of only 6% per annum. The Tribunal, comprising Officiating Chairperson Ms. Seema Gupta and Judicial Member Mr. Virender Bhat, held that the applicable interest rate should instead be the SBI Prime Lending Rate prevailing from time to time. The decision turned on the correct reading of Section 62(6) of the Electricity Act, 2003 and the inapplicability of two specific clauses of the JSERC Electricity Supply Code Regulations, 2015 to the facts of this case.
The Dispute Before the Tribunal
Tata Steel Ltd, a licensee and procurer of electricity from DVC through 33 kV and 132 kV connections, has been supplied electricity by DVC since 1954. In May 2002, DVC raised two AMG bills totalling Rs 37.57 crore for the year 2001–2002. Tata Steel requested payment in six equal instalments without levy of DPS on those instalments. DVC initially accepted the instalment arrangement but subsequently refused to waive DPS on payments made in instalments.
Tata Steel cleared the pending bills within three days of receiving DVC's refusal. DVC nonetheless raised a DPS bill of Rs 77.60 lacs on account of the instalment payments. Tata Steel contended that this DPS amount was adjusted by DVC against the monthly advance payments Tata Steel had been making to DVC from July 2004 onwards.
Tata Steel approached JSERC. The State Commission, by its order dated 24 July 2019 in Case No. 06 of 2005–06, held that DVC was not entitled to levy DPS on AMG bill payments made in instalments and directed that the DPS realised be adjusted or paid to Tata Steel along with interest at 6% per annum within ninety days.
Tata Steel challenged that order before APTEL in Appeal No. 179 of 2021, originally on two grounds. During the hearing, senior counsel for Tata Steel conceded that the first issue — the permissibility of levying DPS on fuel surcharge bills — no longer survived in view of a judgment of the Jharkhand High Court in LPA No. 305 of 2015 and connected matters. The appeal therefore proceeded only on the second issue: whether 6% per annum was an adequate rate of interest on the DPS refund.
DVC's Preliminary Objection: No DPS Was Ever Paid
Before APTEL, DVC raised a threshold contention that Tata Steel had neither pleaded nor demonstrated that any DPS amount was actually paid to DVC. DVC pointed to its reply dated 26 November 2021, in which it had specifically asserted that no DPS payment was made by Tata Steel, and argued that this assertion was not denied in Tata Steel's rejoinder dated 28 April 2022.
APTEL rejected this line of argument. The Tribunal noted that before JSERC, DVC had never disputed receipt or adjustment of DPS amounts. On the contrary, DVC had made categorical submissions before the State Commission that it had adjusted the outstanding surcharge on AMG charges against the advance monthly payments made by Tata Steel from July 2004. The Tribunal extracted the relevant passage from the impugned order, in which DVC's counsel had stated that “DVC had to adjust outstanding Interest/Surcharge against the advance monthly payments made by the petitioner from the month of July 2004.”
APTEL held that DVC's present stance before the Tribunal — that no DPS was realised and therefore the rate of interest was irrelevant — ran contrary to the position it had taken before the State Commission. Accepting such a plea would require the Tribunal to adjudicate the very existence and quantum of DPS to be refunded, a question that was not in issue before the Commission. The Tribunal also applied the settled principle that in appellate proceedings, a respondent cannot raise a new contention not urged before the first instance forum. The Tribunal accordingly confined itself to the rate of interest question.
The Competing Regulatory Provisions
Tata Steel argued that the JSERC Electricity Supply Code Regulations, 2015 expressly required that any refund of excess payment carry interest at the same rate at which DPS is leviable. It relied on Clause 10.7.4 of those Regulations, which provides that where a consumer has paid any excess amount on account of a disputed bill, the distribution licensee shall pay interest at a rate equivalent to the delayed payment surcharge on the excess amount from the date of payment until refund or adjustment. Tata Steel contended that this translated to an interest rate of 24% per annum.
JSERC, appearing as Respondent No. 1, countered that Clause 10.7.4 sits within Clause 10.7, which is headed “Billing in case of disputed Bills.” Under that clause, the process requires the consumer to register a complaint, the licensee to assign a complaint number, and if the complaint is found correct, a revised bill to be issued. None of those steps had occurred here. Tata Steel had not registered any billing complaint, no complaint number was assigned, and no revised bill was generated. JSERC also pointed to Clause 10.6, which governs advance payment of bills and provides for interest at the SBI Savings Bank account rate on outstanding advance deposits.
APTEL agreed with JSERC that Clause 10.7.4 was inapplicable. The present dispute did not arise from a disputed bill in the regulatory sense. There was no complaint, no complaint number, and no revised bill. The Tribunal equally found that Clause 10.6 did not apply, since the issue was not about an outstanding advance deposit but about DPS levied on AMG instalment payments that the State Commission had found to be impermissible.
The Tribunal also considered Tata Steel's reliance on the Supreme Court's judgment in Rajnesh Sharma v. Business Park, 2025 SCC OnLine SC 2061, where the Court had granted parity in interest rates to a plot buyer facing inordinate delay in possession by a builder. APTEL declined to apply that ratio. The Court in Rajnesh Sharma had acted on the peculiar facts of a consumer dispute involving delayed possession of immovable property and reciprocal contractual obligations. The present case involved no such delayed possession or comparable reciprocal obligations, and the factual substratum was materially distinct.
Section 62(6) of the Electricity Act, 2003
Having found neither regulatory clause directly applicable, APTEL turned to Section 62(6) of the Electricity Act, 2003. That provision states that if any licensee or generating company recovers a price or charge exceeding the tariff determined under that section, the excess amount shall be recoverable by the person who paid it along with interest equivalent to the bank rate.
The Tribunal equated DVC's recovery of DPS on AMG bills — which the State Commission had found impermissible — with a recovery of charges exceeding the applicable tariff within the meaning of Section 62(6). Drawing on that provision and applying what it described as the interest of justice, APTEL held that the SBI Prime Lending Rate, applicable from time to time, was the appropriate rate for the refund of DPS realised on AMG charges.
The State Commission had not referred to any regulation when it fixed 6% per annum in the impugned order. APTEL found that rate inadequate in the absence of any regulatory basis for it.
Order
APTEL set aside the impugned order of JSERC dated 24 July 2019 on the interest rate issue. It directed that DVC pay interest at the SBI Prime Lending Rate applicable from time to time on the DPS realised on AMG charges, from the date of realisation until the amount is paid to Tata Steel or adjusted in its bills.
Appeal No. 179 of 2021 and all pending interlocutory applications, if any, were disposed of accordingly. The judgment was pronounced in open court on 29 May 2026.