LexTORRENT POWER LIMITED versus U.P. ELECTRICITY REGULATORY COMMISSION & ORS
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[2025] 7 S.C.R. 693 : 2025 INSC 838 Torrent Power Limited v. U.P. Electricity Regulatory Commission & Ors. (Civil Appeal No. 23514 of 2017) 14 July 2025 [J.B. Pardiwala* and R. Mahadevan, JJ.] Issue for Consideration i) Whether any individual can invoke the jurisdiction of a State Electricity Regulatory Commissions (ERC) on the plea of public interest. In other words, whether an ERC has the jurisdiction to consider matters in public interest; ii) Whether the Act, 2003 confers jurisdiction on the State ERCs to consider and adjudicate the efficacy of a distribution franchisee agreement entered between a distribution licensee and a distribution franchisee. In other words, whether ERCs have the jurisdiction to review the functioning of a distribution licensee to supply the electricity through a franchisee. Headnotes† Electricity Act, 2003 – s.2(15), s.2(17), s.2(27), seventh proviso to s.14, s.82, s.86, s.107, s.108, s.111, s.128, s.129, s.130, s.181, Part VII – Whether the Electricity Regulatory Commission has the jurisdiction to consider matters in public interest: Held: Sections 107 and 108 respectively of the Act, 2003 mandate the ERCs to be guided by directions in matters of policy involving public interest as the Central/State Government may give to it in writing – Electricity being a natural resource that vests in the State, the provisions of the Act, 2003 keep consumers’ interest at the core of all processes that are sought to be governed under the Act, 2003 namely, generation, transmission and distribution of electricity – The ERCs, being creatures of a statute, derive their jurisdiction and powers from the provisions of that statute i.e., the Act, 2003 – Therefore, it would not be permissible for them to exercise powers not expressly vested in them – As a principle of law, the ERCs are not competent to entertain a matter on the singular ground of public interest. [Paras 37, 38, 43, 56] * Author 694 [2025] 7 S.C.R. Supreme Court Reports Electricity Act, 2003 – s.128 – The respondent no.4 had preferred a petition before the UPERC, questioning the legality, validity and propriety of the Distribution Franchisee Agreement dated 18.05.2009 and Supplementary Agreement dated 17.03.2010 respectively (together referred to as the “DFA”) entered and executed between the appellant (distribution franchisee) and the respondent no.3 (distribution licensee) – Respondent no.4 prayed for an investigation u/s.128 of the Act, 2003 against the respondent nos.2 and 3 as well as the appellant – Whether the petition filed by the respondent no.4 u/s.128 of the Act, 2003 was maintainable in law: Held: The respondent no.4, though, has levelled serious allegations against the respondent no.2 and the appellant, yet has not provided any reasons or documentation in respect of how the appellant and respondent no.2 are in violation of tariff orders – Further, even the Expert Committee Report dated 09.01.2017 does not shed any light on how tariff orders are being contravened by the appellant – What is discernible is that unless some satisfactory grounds are given for initiating an investigation, a petition or an application u/s.128 cannot be held to be maintainable – The ERCs are required to consider matters in public interest wherever mandated by the Act, 2003, i.e., in matters relating to tariff determination, procurement of power processes, and utility/licensee management which requires safeguarding of consumer interest alongside the commercial principles – This Court is, therefore, of the considered view that in the present case, the petition of the respondent no.4 filed u/s.128 does not fulfill the parameters of satisfaction required under the said Section. [Paras 67, 68] Electricity Act, 2003 – ss.16, 18, 19, 20, 128 – Whether the ERCs have the jurisdiction to review the functioning of a distribution licensee to supply electricity through a franchisee: Held: An ERC may not directly regulate a franchisee, it exercises regulatory oversight over the distribution licensee’s functions and duties, including the process of a distribution licensee delegating some of its functions and activities to a franchisee – Further, Sections 16, 18, 19 and 20 of the Act, 2003 respectively, prescribe that the ERC can stipulate/review the terms and conditions under [2025] 7 S.C.R. 695 Torrent Power Limited v. U.P. Electricity Regulatory Commission & Ors. which a distribution licensee may delegate it
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