LexPOWER GRID CORPORATION OF INDIA LIMITED versus MADHYA PRADESH POWER TRANSMISSION COMPANY
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[2025] 5 S.C.R. 2062 : 2025 INSC 697 Power Grid Corporation of India Limited v. Madhya Pradesh Power Transmission Company Limited & Ors. (Civil Appeal No. 6847 of 2025) 15 May 2025 [J.B. Pardiwala* and R. Mahadevan, JJ.] Issue for Consideration (i) Whether the CERC, while exercising its functions u/s.79(1) of the Electricity Act, 2003, is circumscribed by statutory regulations enacted u/s.178 of the Act, 2003; (ii) Whether the CERC exercises regulatory or adjudicatory functions u/s.79 of the Act, 2003. In other words, what is the scope of the CERC’s power to regulate inter-state transmission of electricity and determine tariff for the same under clauses (c) and (d) of s.79(1); (iii) Whether the grant of compensation by the CERC for the delay vide the orders dated 21.01.2020 and 27.01.2020 respectively, is a regulatory or adjudicatory function and to what extent are the principles of natural justice applicable to the exercise of such functions; (iv) Whether the High Court was justified in admitting the writ petition filed by the respondent no. 1 herein challenging the order dated 21.01.2020 of the CERC when there existed an alternative remedy u/s.111 of the Act, 2003. Headnotes† Electricity Act, 2003 – ss.79, 178 – Relationship between ss.79 and 178 of the Act, 2003: Held: A perusal of the provisions laying down the functions of the CERC indicates that the statutory authority is enjoined with the task of regulation as well as adjudication of several aspects of the generation, transmission and distribution of electricity – S.79 of the Act, 2003 enumerates the functions of the CERC which includes the dual functions of regulation and adjudication – S.178, on the other hand, empowers the CERC to enact regulations by notification thereby delegating to the body, the power of legislating statutory regulations under the Act, 2003 – The aforesaid two provisions * Author [2025] 5 S.C.R. 2063 Power Grid Corporation of India Limited v. Madhya Pradesh Power Transmission Company Limited & Ors. indicate that the CERC functions as both, decision-making and regulation-making authority u/ss.79 and 178 respectively – However, while the authority exercising both these functions is one and the same, it is a settled position of law that the functions by themselves are separate and distinct – The functions u/s.79 are administrative or adjudicatory whereas those u/s.178 are legislative – A regulation u/s.178 is of general application to the entirety of a particular subject matter as opposed to regulation on a case-to-case basis which may be done by the CERC u/s.79 – Therefore, making of a regulation u/s.178 has the effect of interfering with and overriding existing contractual relationships between the regulated entities – On the other hand, the orders u/s.79 have to be confined to the existing statutory regulations and do not have the effect of altering the terms of contract between the specific parties before the CERC. [Paras 37, 38, 40] Electricity Act, 2003 – ss.79, 178 – The CERC vide its orders dated 21.01.2020 and 27.01.2020 respectively imposed the liability of payment of compensation for delay onto the respondent no. 1 – Correctness: Held: It is the case of the respondent no. 1 that by doing so, the CERC did not act in conformity with the 2014 Tariff Regulations which do not provide for payment of transmission charges by a party to whom the delay is attributable – In considered view of this Court, the said argument does not hold any water – This Court’s dictum in PTC and Energy Watchdog respectively settles the law in this regard and the absence of a regulation u/s.178 does not preclude the CERC from exercising its powers u/s.79(1) to make specific regulations or pass orders between the parties before it.[Para 43] Electricity Act, 2003 – s.79 – Regulatory and adjudicatory functions of the CERC: Held: The regulatory powers provided to the CERC u/s.79 are of ad hoc nature and are required to be exercised by the CERC in context of the specific circumstances of the parties before it – The rationale for provision of such ad hoc powers by the Act, 2003 is to ensure that regulatory gaps, if any, that may be discovered on a case-to-case basis, are filled or removed – Therefore, there is no doubt that the CERC is enabled to exercise its regulatory powers by way of orders u/s. 79 and the purview of s.79 is not limited to 2064 [2025] 5 S.C.R. Supreme Court Reports only adjudi
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