Tariff regulation under special statute requires consumer hearing, commission-led pricing, and restrained appellate review of expert findings.

Consumer participation under the 1998 tariff framework was recognised as a controlled statutory right, and the High Court was wrong to deny hearing and representation. The State Commission, not the licensee, was the tariff-determining authority, and Schedule VI of the 1948 Act did not operate as the sole code; the later statute required a broader, consumer-oriented assessment. In statutory appeal, the High Court had to show restraint and could interfere with expert tariff findings only for perversity, lack of evidence, or legal error. The Commission was not strictly bound by the CEA's cost figures or audited accounts, while cross-subsidy could not be continued contrary to the statute and ad hoc tariff fixation for 2002-03 lacked material basis.

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Issues: (i) whether consumers had a statutory right of hearing and representation before the State Commission and in appeal under the 1998 Act; (ii) whether the High Court, while hearing a statutory appeal under Section 27, could invalidate the Commission's Regulations or exercise writ jurisdiction; (iii) whether the State Commission or the licensee was the authority to determine tariff and whether Schedule VI to the 1948 Act alone controlled tariff fixation; (iv) the permissible scope of appellate interference by the High Court in factual and technical tariff matters; (v) whether the Commission was bound by the CEA's determination of Budge-Budge project cost, the audited accounts, and the full claimed T&D losses; and (vi) whether the High Court was right in directing continuation of cross-subsidy and fixing tariff for 2002-03 without material.

Issue (i): whether consumers had a statutory right of hearing and representation before the State Commission and in appeal under the 1998 Act;

Analysis: The statutory scheme contemplated consumer participation. The Act required the Commission to safeguard consumer interests, authorise representation of consumers, ensure transparency, and frame regulations governing hearings. The State rules required public notice and hearing before tariff fixation, and the regulations permitted regulated participation by consumer associations and groups. The right was therefore not open-ended, but a controlled statutory right.

Conclusion: The consumers had a statutory right to be heard, and the High Court erred in denying them participation.

Issue (ii): whether the High Court, while hearing a statutory appeal under Section 27, could invalidate the Commission's Regulations or exercise writ jurisdiction;

Analysis: The Regulations were framed under delegated legislative power and had statutory force. A tribunal or appellate forum created by statute cannot question the vires of the provisions under which it functions. The High Court, while acting under Section 27, could not invoke Articles 226 and 227 suo motu to strike down the Regulations in the absence of a separate writ challenge.

Conclusion: The High Court lacked jurisdiction to invalidate the Regulations in the statutory appeal, and its view on writ power was incorrect.

Issue (iii): whether the State Commission or the licensee was the authority to determine tariff and whether Schedule VI to the 1948 Act alone controlled tariff fixation;

Analysis: The 1998 Act created an expert, autonomous State Commission and expressly entrusted tariff determination to it. The Commission had to be guided by the old Act's principles where applicable, but also by the additional statutory factors in Section 29. The old Schedule VI did not displace the later special enactment. The Commission had to harmonise the incorporated principles of the earlier regime with the broader consumer-oriented objectives of the 1998 Act.

Conclusion: The State Commission alone was the tariff-determining authority, and Schedule VI was not the sole governing code.

Issue (iv): the permissible scope of appellate interference by the High Court in factual and technical tariff matters;

Analysis: Although the appeal under Section 27 was wide, the High Court, dealing with an expert body's findings, was expected to interfere only when the Commission's decision was perverse, unsupported by evidence, or based on misreading of evidence. The appellate court was not to substitute its own subjective assessment merely because another view was possible.

Conclusion: The High Court was required to exercise restraint and could not freely supplant the Commission's expert findings.

Issue (v): whether the Commission was bound by the CEA's determination of Budge-Budge project cost, the audited accounts, and the full claimed T&D losses;

Analysis: The CEA's project-cost determination was relevant and carried strong evidentiary value, but it was not automatically binding on the tariff regulator. The Commission had to consider it with due weight and could differ only for good reasons. Similarly, audited accounts and expenditures described as properly incurred under the earlier statute were not conclusive under the 1998 Act, because the Commission had to consider efficiency and consumer interests. On T&D losses, the Commission's approach of allowing substantial but reduced losses was preferred over both extremes, though the exact percentages required adjustment on the facts.

Conclusion: The Commission was not bound as a matter of law by the CEA finding or the audited accounts, but the High Court was right to interfere where the Commission had departed from the CEA cost without acceptable reasons; on T&D losses, the Commission's approach was partly upheld with modified figures.

Issue (vi): whether the High Court was right in directing continuation of cross-subsidy and fixing tariff for 2002-03 without material;

Analysis: The Act rejected undue preference and required the State Government, not other consumer classes, to bear any subsidy it chose to provide. Continuation of a pre-existing cross-subsidy structure contrary to the statute was impermissible. As to 2002-03, there was no factual basis before the High Court to fix an ad hoc tariff, and the matter needed reconsideration by the Commission under the statutory procedure.

Conclusion: The High Court's direction on cross-subsidy was erroneous, and its ad hoc tariff for 2002-03 could not stand.

Final Conclusion: The statutory appeal scheme under the 1998 Act required consumer participation, Commission-led tariff determination, and restrained appellate review by the High Court. The impugned judgment was therefore set aside in substantial part, and the tariff matters were remitted to the Commission for fresh determination in accordance with law and the directions issued.

Ratio Decidendi: Where a later special statute entrusts tariff fixation to an expert regulatory commission and incorporates earlier tariff principles as only one component of the governing framework, the commission must apply the statutory scheme as a whole, and a High Court exercising only statutory appellate jurisdiction cannot strike down the commission's regulations or substitute its own expert assessment absent perversity or legal error.

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