LexTHE TATA POWER COMPANY LIMITED TRANSMISSION versus MAHARASHTRA ELECTRICITY REGULATORY COMMISSION AND ORS.
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A B C D E F G H 620 SUPREME COURT REPORTS [2022] 19 S.C.R. [2022] 19 S.C.R. 620 620 THE TATA POWER COMPANY LIMITED TRANSMISSION v. MAHARASHTRA ELECTRICITY REGULATORY COMMISSION AND ORS. (Civil Appeal No. 1933 of 2022) NOVEMBER 23, 2022 [DR. DHANANJAYA Y CHANDRACHUD, CJI, A. S. BOPANNA AND J. B. PARDIWALA, JJ.] Electricity Act, 2003 – ss.61-63, 86, 125, 181 – Maharashtra Electricity Regulatory Commission (MERC) issued an order granting Adani Electricity Mumbai Infra Limited (AEMIL) the transmission licence to develop the Aarey-Kudus transmission project based on High Voltage Direct Current (HVDC) technology where tariff was to be determined through the Regulated Tariff Mechanism (RTM) approach u/s.62 – Order challenged by appellant before Appellate Tribunal for Electricity (APTEL) – Appeal dismissed by APTEL – Held: Provisions of the Electricity Act 2003 do not prescribe one dominant method to determine tariff – ss.62 and 63 stipulate the modalities of tariff determination – The non-obstante clause in s.63 cannot be interpreted to mean that s.63 would take precedence over s.62 at the stage of choosing the modality to determine tariff – The criteria or guidelines for the determination of the modality of tariff determination ought to be notified by the Appropriate State Commission either through regulations u/s. 181 of the Act or guidelines u/s. 61 of the Act – In the present case, MERC has neither framed regulations nor notified guidelines prescribing the criteria or guidelines for choosing the modalities to determine tariff – Thus, MERC shall determine the tariff by exercising its general regulatory powers u/s. 86(1)(a) of the Act – MERC while exercising its general regulatory powers u/s.86(1)(a) shall be guided by the National Tariff Policy 2016, which shall be a material consideration – Further, MERC and APTEL have arrived at concurrent findings that the 1000MW HVDC Aarey-Kudus project is an ‘existing project’ for the purpose of the applicability of the GoM’s GR 2019 – Supreme Court deciding a statutory appeal u/s.125 of the Act cannot interfere with the concurrent findings on a question of fact – Nonetheless, even on an independent assessment of the facts, the HVDC project A B C D E F G H 621 is an existing project – The Electricity Act, 2003 or the policy framework did not make it binding upon MERC to allot the HVDC project only through the Tariff Based Competitive Bidding (TBCB) route – Therefore, the Regulatory Commission’s decision to grant the HVDC project u/s. 62 was within a reasonable exercise of its powers. Electricity Act, 2003 – ss.61, 181 – Framing of necessary regulations by Regulatory Commissions to put into effect the principles prescribed under the Act – All State Regulatory Commissions directed to frame Regulations u/s.181 of the Act on the terms and conditions for determination of tariff – Appropriate Commission shall be guided by the principles prescribed in s.61, which also includes the National Electricity Policy (NEP) and National Tariff Policy (NTP) – The Commissions while being guided by the principles contained in sec.61 shall effectuate a balance that would create a sustainable model of electricity regulation in the States – The Regulatory Commission shall curate to the specific needs of the State while framing these regulations – Further, the regulations framed must be in consonance with the objective of the Electricity Act 2003, which is to enhance the investment of private stakeholders in the electricity regulatory sector so as to create a sustainable and effective system of tariff determination that is cost efficient so that such benefits percolate to the end consumers. Dismissing the appeal, the Court HELD: 1. The Appropriate Commission is not mandated to adopt the tariff determined through the bidding process irrespective of the fulfilment of the statutory requirements. The Commission can reject the tariff determined through the bid if the tariff process is not (i) transparent; and (ii) in accordance with the guidelines issued by the Central Government. Thus, if the Commission does not adopt the tariff determined through bidding, and if the decision is challenged, the bidding process can be reviewed substantively (on the ground of transparency) and procedurally (on the ground of compliance with Central Government guidelines) to determine if the Commission could have exercised its discretion to determine the tariff under Section 62 while rejecting the tariff determined under Sectio
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