Sinking Fund and Depreciation Both Permissible in DVC Tariff; Review Contrary to Precedent Violates Article 141

KanoonHQ Legal Gazette · AI-generated brief from the source linked below. How briefs are made

Published 31 October 2026

Case: Not stated in source
Court: Supreme Court of India
Statutes: Constitution of India — s.141
Source: SCC Times

Bottom Line Up Front (BLUF)

The Supreme Court ruled that both Sinking Fund contributions and depreciation are permissible components of the Damodar Valley Corporation's (DVC) electricity tariff. The Court held that reopening an issue previously settled by a binding precedent violates Article 141 of the Constitution of India.

Ratio Decidendi · Legal Principle Established

Both Sinking Fund contributions and depreciation can be simultaneously included in the electricity tariff calculation. A review petition that reopens an issue settled by a binding precedent of the Supreme Court violates Article 141 of the Constitution of India.

Practice & Procedural Impact for Advocates

Advocates should ensure that review petitions do not attempt to re-litigate issues already settled by binding Supreme Court precedents. Litigants in tariff-setting matters should be aware that both Sinking Fund and depreciation are valid cost components.

Key Legal Takeaways

1Sinking Fund contributions and depreciation are both permissible in DVC electricity tariffs.
2Reopening settled issues in review petitions violates Article 141 of the Constitution.
3Binding precedents must be respected in subsequent proceedings.

The Legal Issue The Supreme Court addressed two primary legal issues: first, whether the Damodar Valley Corporation (DVC) could include both Sinking Fund contributions and depreciation as components in its electricity tariff; and second, whether a review petition could permissibly reopen an issue that had already been settled by a binding precedent of the Supreme Court.

Court's Reasoning The Supreme Court held that both Sinking Fund contributions and depreciation are permissible components for calculating the DVC's electricity tariff. The Court's reasoning implies that these two financial mechanisms serve distinct purposes and are not mutually exclusive in the context of tariff determination. On the procedural aspect, the Court found that reopening an issue previously settled by a binding precedent amounted to a violation of Article 141 of the Constitution of India. Article 141 mandates that the law declared by the Supreme Court is binding on all other courts within the territory of India, thereby precluding re-examination of settled legal positions in review proceedings.

What Follows This ruling clarifies the permissible components for electricity tariff calculation for DVC, allowing for the inclusion of both Sinking Fund contributions and depreciation. Furthermore, it reinforces the principle of stare decisis and the binding nature of Supreme Court precedents under Article 141, indicating that attempts to re-litigate settled issues in review petitions will not be entertained.