LexINDIAN RAILWAYS versus WEST BENGAL STATE ELECTRICITY DISTRIBUTION COMPANY LIMITED & ORS.
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[2026] 5 S.C.R. 479 : 2026 INSC 464 Indian Railways v. West Bengal State Electricity Distribution Company Limited & Ors. (Civil Appeal No. 4652 of 2024) 08 May 2026 [Dipankar Datta and Satish Chandra Sharma,* JJ.] Issue for Consideration The specific issues which arise for determination are: (i) Whether the activities provided u/s.11(g) and (h) of the Railways Act pass muster of “distribution” of electricity, and whether such activities are a necessary pre-requisite to qualify as a DDL under the Act; (ii) Whether the Indian Railways, being an entity of the Central Government, falls within the ambit of “Appropriate Government” u/s.14 of the Electricity Act, 2003; (iii) Whether the Indian Railways, even if held to be a DDL under the Act, is exempt from the obligation to pay Cross-Subsidy Surcharge or additional surcharge for the grant of non-discriminatory open access as per s.42 of the Electricity Act, 2003; (iv) Whether a proposed legislation may be relied upon as an aid to statutory interpretation for addressing gaps in the existing framework, and to give effect to the parliamentary intent to remedy defects thereunder. Headnotes† Electricity Act, 2003 – ss.14, 42, 125 – Whether the Appellant- Indian Railways qualifies as a deemed distribution licensee (DDL) under the Electricity Act and if so, whether it remains liable to pay Cross-Subsidy Surcharge to different distribution licensees for availing open access in terms of s.42 of the Electricity Act: Held: Appellant does not pass muster as a deemed distribution licensee under the Act, and it can in no circumstances escape the liability from payment of cross-subsidy surcharge and additional surcharge as a consumer of electricity through open access – The Respondents are accordingly directed to compute and issue a detailed calculation of the Cross-Subsidy Surcharge and Additional * Author 480 [2026] 5 S.C.R. Supreme Court Reports Surcharge amounts outstanding qua the Appellant, disaggregated by the area of supply and the period of availing such open access. [Para 72] Electricity Act, 2003 – Railways Act, 1989 – s.11(g) and (h) – Whether the activities provided u/s.11(g) and (h) of the Railways Act pass muster of “distribution” of electricity, and whether such activities are a necessary pre-requisite to qualify as a DDL under the Act – In other words, whether the activities of the Appellant-Indian Railways fall within the purview of a distribution licensee (or a deemed distribution licensee): Held: The omission of the words “distribution” or “supply” of electricity in s.11(g) and (h) is deliberate and intentional – The legislature while framing these provisions certainly intended to empower the appellant solely to erect and operate a distribution infrastructure necessary for railway operations – The language clearly confines the purpose of these installations to the operational use of Railways and does not extend any authority to the Appellant to undertake a commercial distribution or supply of electricity, beyond the railway’s internal domain – The submission of the Appellant that it is a deemed distribution licensee, lacks any substantial basis – The statutory regime under the Electricity Act regulates the commercial supply of electricity to consumer through a licensed distribution network – The Appellant, operates a closed and self-contained electricity network which is for the purposes of meeting the operational requirements of the railway system, including traction, signalling, stations – It is only when electricity is sold or provided to consumers outside the operational domain of the railway, that the activities undertaken by the Appellant could intersect with the obligation of a distribution licensee – In the present case, the Railways is procuring electricity from the Respondent DISCOMs in various states for its own use and for consumption to its constituents. [Paras 28, 30, 31, 32] Electricity Act, 2003 – ss.2(5), 14 – Railways Act, 1989 – Constitution of India – Art.12 – Whether the Appellant-Indian Railways, being an entity of the Central Government, falls within the ambit of “Appropriate Government” u/s. 14 of the Electricity Act, 2003: Held: A plain reading of s.2(5)(a)(ii) makes it evident that the subject of the definition is the Central Government, and the term [2026] 5 S.C.R. 481 Indian Railways v. West Bengal State Electricity Distribution Company Limited & Ors “railways” appears only a
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