State electricity board retains tariff powers until commission is constituted; commission-creation provision is discretionary, not mandatory.

Section 17 of the Electricity Regulatory Commissions Act, 1998 was held to confer discretion, not a mandatory duty, on the State Government to constitute a State Electricity Regulatory Commission; accordingly, a writ of mandamus could not compel its creation. Until the Commission was established, the State Electricity Board continued to exercise tariff-setting and tariff-revision powers under the Electricity (Supply) Act, 1948. The tariff-guiding principles in Section 29 of the 1998 Act were intended to operate through the Commission and did not bind the Board before the Commission came into existence.

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Issues: (i) Whether the State Government was under a mandatory obligation to constitute a State Electricity Regulatory Commission under Section 17 of the Electricity Regulatory Commissions Act, 1998, and whether a writ of mandamus could be issued directing its constitution; (ii) whether, until the Commission was constituted, the State Electricity Board retained jurisdiction to determine and revise tariff under the Electricity (Supply) Act, 1948, and whether the tariff-guiding principles in Section 29 of the 1998 Act applied to the Board before the Commission came into existence.

Issue (i): Whether the State Government was under a mandatory obligation to constitute a State Electricity Regulatory Commission under Section 17 of the Electricity Regulatory Commissions Act, 1998, and whether a writ of mandamus could be issued directing its constitution.

Analysis: Section 3 of the 1998 Act used mandatory language for the Central Commission, whereas Section 17 employed the expressions "may" and "if it deems fit" for the State Commission. The statutory language therefore indicated discretion rather than compulsion. The scheme of the Act did not justify treating the provision as mandatory or converting it into a judicially enforceable command to create the Commission. A court could not compel the State, by mandamus, to implement such conditional legislation.

Conclusion: The provision was directory and no mandamus could be issued to compel constitution of the State Commission.

Issue (ii): Whether, until the Commission was constituted, the State Electricity Board retained jurisdiction to determine and revise tariff under the Electricity (Supply) Act, 1948, and whether the tariff-guiding principles in Section 29 of the Electricity Regulatory Commissions Act, 1998, applied to the Board before the Commission came into existence.

Analysis: The 1948 Act was not repealed by the 1998 Act, and the law did not contemplate a regulatory vacuum. The Board continued to exercise its statutory tariff-making power under Sections 49, 59 and 79(j) of the 1948 Act until the State Commission came into existence. The non obstante and tariff-guiding provisions of the 1998 Act were meant to operate through the Commission and not before its constitution. The principles in Section 29(2) were therefore not binding on the Board prior to the Commission's establishment. The Board's power to frame tariff included the power to revise tariff, and such power remained effective until displaced by the constituted Commission.

Conclusion: The Board retained jurisdiction to revise tariff until the State Commission was constituted, and the Section 29 tariff principles did not bind the Board before that event.

Final Conclusion: The reference was answered in favour of the Board on the governing questions of law, clarifying that the State Commission's constitution under the 1998 Act was discretionary and that the Board's tariff jurisdiction continued until the Commission was established.

Ratio Decidendi: Where the statute confers discretionary power to establish a regulatory commission and the successor regulatory framework has not yet come into operation through that commission, the pre-existing statutory authority continues to exercise its powers until displaced by the new body; non obstante tariff norms directed to the commission do not govern the pre-commission authority.

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