These appeals arise from a judgment and order of the High Court of Madhya Pradesh, Indore Bench, dated 25.02.2021, which admitted writ petitions filed by Madhya Pradesh Power Transmission Company Limited (MPPTCL). The High Court had concluded that the Central Electricity Regulatory Commission (CERC) had exercised powers beyond those vested in it by the Electricity Act, 2003, in passing its orders dated 21.01.2020 and 27.01.2020.
The appellant, Power Grid Corporation of India Limited, is a Government of India Undertaking involved in inter-state transmission of electricity. The dispute pertains to the implementation of the “Western Region System Strengthening Scheme XIV (WRSS-XIV)” and “Western Region Strengthening Scheme XVI (WRSS-XVI)”. The transmission assets were to be commissioned at the Indore sub-station, and the respondent (MPPTCL) was the State Transmission Utility and intra-state transmission licensee.
There was a delay in the commissioning of the intra-state transmission line by MPPTCL. The CERC, in its order dated 21.01.2020, noted the time-overrun and attributed the entire time-overrun of certain assets to MPPTCL. The scheduled Commercial Operation Date (COD) was 27.07.2018, but the actual power flow dates show delays ranging from 37 to 131 days for various assets4. While CERC approved the COD as per Regulation 4(3)(ii) of the 2014 Tariff Regulations, it did not condone the time-overrun and did not allow compensation to the appellant for the delay from the Scheduled COD up to the newly determined COD6. The CERC effectively held that the transmission charges would be borne by MPPTCL from the COD determined under Regulation 4(3)(ii), up to one day before actual charging of the downstream system.
MPPTCL challenged CERC’s orders before the High Court, contending there was no provision in the 2014 Tariff Regulations for compensatory transmission charges and that CERC committed a jurisdictional error by holding the appellant could claim compensation from MPPTCL. MPPTCL also argued that their agreement had effectively re-written the terms regarding compensation5. The High Court admitted the writ petitions, considering whether the CERC’s actions were beyond its powers.
Law Involved
The key legislation is the Electricity Act, 2003. Specific sections of the Act are central to the dispute:
Section 61: Deals with tariff regulations, allowing the Appropriate Commission (CERC) to specify terms and conditions for tariff determination.
Section 62: Pertains to the determination of tariff, outlining the scope for the Appropriate Commission in setting tariffs.
Section 79: Enumerates the functions of the Central Commission, including to regulate the tariff, determine tariff, issue licenses, and adjudicate disputes.
Section 111: Provides for an appeal to the Appellate Tribunal for Electricity (APTEL) against an order made by an adjudicating officer or the Appropriate Commission.
Section 178: Empowers the Central Commission to make regulations consistent with the Act.
The Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2014 (referred to as “2014 Tariff Regulations”), particularly Regulation 4(3), are also relevant.
The judgment significantly relies on the Supreme Court’s previous rulings to distinguish between regulatory and adjudicatory functions of the CERC:
PTC India Limited v. Central Electricity Regulatory Commission (2010) 4 SCC 6037…: This case delineates the separate and distinct nature of CERC’s regulatory and adjudicatory functions.
Energy Watchdog v. CERC (2017) 14 SCC 802327: This judgment further clarifies the scope of regulatory powers under Section 79(1).
Whirlpool Corporation v. Registrar of Trademarks (1998) 8 SCC 19…: Cited regarding the maintainability of writ petitions despite alternative remedies in cases of breach of natural justice, fundamental rights, vires challenge, or lack of jurisdiction.
Reasoning
The Supreme Court’s reasoning focused on the nature of the CERC’s function when dealing with the delay and associated compensation:
Jurisdiction of High Court: The Court first addressed whether the High Court was justified in entertaining the writ petition, given the availability of an alternative remedy before the APTEL under Section 111 of the Act. It reiterated that a writ petition is maintainable only in specific circumstances, such as a breach of natural justice, violation of fundamental rights, or a challenge to the vires of a statute or delegated legislation, or where the impugned order is without jurisdiction. The High Court had admitted the writ petition primarily on the ground that CERC had acted beyond its vested powers.
Regulatory vs. Adjudicatory Functions: The core of the analysis revolved around the dichotomy between the regulatory powers (Section 178) and adjudicatory/decision-making powers (Section 79) of the CERC. The Court heavily relied on its previous ruling in PTC India (supra), which established that while Section 178 governs general application regulations, Section 79 encompasses both mandatory and advisory functions, including adjudication of disputes.
Compensation for Delay as Adjudicatory Function: The Court reasoned that the granting of compensation for delay on the part of a party is an adjudicatory function, not merely a regulatory one concerning tariff determination21…. When the CERC, in its orders, attributed the time-overrun to MPPTCL but then refused to grant compensation, it was essentially making a determination on the liability for delay and its financial implications. This decision, although linked to tariff determination, required the application of principles of natural justice and judicial consideration, falling within its adjudicatory remit under Section 79(1).
Lack of Regulatory Lacuna: The Court found that there was no “regulatory lacuna” in the 2014 Tariff Regulations that would prevent CERC from deciding on the compensation for delay. The CERC’s decision not to grant compensation was a consequence of a regulatory determination, implying that the regulation was insufficient to address such a scenario. However, the Court asserted that if the CERC undertakes to determine tariff under Section , it must act within its capacity as a regulator and ensure that the order reflects the true nature thereof . The CERC’s orders in this case were found to be a regulatory lacuna within the 2014 Tariff Regulations, as they granted liberty to the aggrieved appellant to claim compensation from the defaulting party, which is a consequence of a regulatory lacuna.
High Court’s Error: The Supreme Court concluded that the High Court committed an “egregious error” in finding that the CERC was not adjudicating the issue of delay between the parties but was only regulating the consequences of delay in commissioning42. This view failed to appreciate that in such a situation, CERC was empowered to impose transmission charges on the party responsible for the delay, acting in an adjudicatory capacity4243. The High Court’s decision to admit the writ petitions, given the availability of an appeal to APTEL for adjudicatory matters, was deemed incorrect .
Holding
The Supreme Court allowed the appeals .
The Court held that the High Court committed an egregious error in its judgment dated 25.02.2021. The Supreme Court concluded that CERC’s orders regarding the delay in commissioning and the determination of who bears the transmission charges for the delay were within its powers and functions under the Electricity Act, 2003, and constituted an adjudicatory function. Therefore, the High Court should not have entertained the writ petitions given that an alternative remedy (appeal to APTEL) was available for such adjudicatory matters, and there was no occasion for the High Court to admit the writ petition.
Power Grid Corporation Of India Limited V. Madhya Pradesh Power Transmission Company Limited And Others
Supreme Court: 2025 INSC 697: (DoJ 15-05-2025)