Case Note & Summary
The Supreme Court allowed the appeals filed by Power Grid Corporation of India Limited against the judgment of the Madhya Pradesh High Court, which had admitted writ petitions challenging the orders of the Central Electricity Regulatory Commission (CERC) granting compensation for delay in commissioning of transmission assets. The dispute arose from the implementation of Western Region System Strengthening Schemes (WRSS-XIV and WRSS-XVI) at the Indore sub-station. The appellant, a central transmission utility, was required to commission inter-state transmission assets, while the respondent, Madhya Pradesh Power Transmission Company Limited (MPPTCL), was to construct intra-state transmission lines. Due to delays by the respondent, the appellant filed petitions before the CERC for approval of Commercial Operation Date (COD) and determination of transmission charges. The CERC approved the COD but allowed the appellant to claim compensation from the respondent for the period prior to COD. The respondent challenged this order before the High Court, which admitted the writ petitions on the ground that the CERC had exceeded its powers under the Electricity Act, 2003 and the 2014 Tariff Regulations. The Supreme Court held that the CERC, in exercise of its regulatory functions under Section 79 of the Act, has the power to grant compensation for delay, even if not specifically provided in the regulations framed under Section 178. The Court distinguished the decision in PTC India Limited v. CERC, stating that the regulatory functions under Section 79 are not subordinate to the regulations under Section 178. The Court also noted that the High Court should not have entertained the writ petition when the CERC's order was within its jurisdiction and the challenge was on merits, especially when an alternative remedy under Section 111 was available. The Supreme Court set aside the High Court's order and restored the CERC's orders, allowing the appeals.
Headnote
A) Electricity Law - Regulatory Powers of CERC - Section 79 of Electricity Act, 2003 - Compensation for Delay - The CERC, in exercise of its regulatory functions under Section 79, has the power to grant compensation for delay in commissioning of transmission assets, even if not specifically provided in the Tariff Regulations framed under Section 178. The High Court erred in holding that the CERC exceeded its jurisdiction by allowing compensation. (Paras 21-55) B) Electricity Law - Relationship between Sections 79 and 178 - Section 79 and Section 178 of Electricity Act, 2003 - The regulatory functions under Section 79 are not subordinate to the regulations under Section 178; the CERC can exercise its regulatory powers to fill gaps in the regulations. The decision in PTC India Limited v. CERC (2010) 4 SCC 603 was distinguished. (Paras 31-40) C) Electricity Law - Alternative Remedy - Section 111 of Electricity Act, 2003 - The availability of an alternative remedy under Section 111 does not bar the High Court's jurisdiction under Article 226, but the High Court should not entertain a writ petition when the CERC's order is within its jurisdiction and the challenge is on merits. (Paras 11-20) D) Electricity Law - Compensation for Delay - Regulatory Function - The grant of compensation for delay on the part of a party is a regulatory function of the CERC under Section 79, and the CERC can direct payment of transmission charges from the COD determined under Regulation 4(3)(ii) of the 2014 Tariff Regulations. (Paras 41-55)
Issue of Consideration
Whether the Central Electricity Regulatory Commission (CERC) has the power to grant compensation for delay in commissioning of transmission assets under its regulatory functions under Section 79 of the Electricity Act, 2003, and whether such power is subject to the regulations framed under Section 178 of the Act.
Final Decision
The Supreme Court allowed the appeals, set aside the High Court's judgment and order dated 25.02.2021, and restored the CERC orders dated 21.01.2020 and 27.01.2020. The Court held that the CERC has the power to grant compensation for delay under its regulatory functions under Section 79 of the Electricity Act, 2003, and such power is not subordinate to the regulations under Section 178.
Law Points
- Regulatory functions of CERC under Section 79 of Electricity Act
- 2003
- Relationship between Sections 79 and 178 of Electricity Act
- Compensation for delay in commissioning of transmission assets
- Alternative remedy under Section 111 of Electricity Act
- Jurisdiction of High Court under Article 226
