TNERC's Authority in Tariff Fixation Upheld, Legal Member Emphasized for Compliance

The court held that the Tamil Nadu Electricity Regulatory Commission (TNERC) is competent to entertain and dispose of petitions without a legal member for tariff fixation, as it is a regulatory, not adjudicatory function. However, the court emphasized the necessity of a legal member in TNERC as per Supreme Court directions. Until a legal member is appointed, TNERC is restrained from issuing final orders on tariff petitions. The court directed petitioners to submit objections/suggestions to TNERC within a week, highlighting compliance with Supreme Court directives. No costs were awarded, and related petitions were closed.

---

---

Issues Involved:
1. Competency of Tamil Nadu Electricity Regulatory Commission (TNERC) to entertain petitions without a legal member.
2. Nature of tariff fixation - whether it is adjudicatory or regulatory.
3. Compliance with Supreme Court directions regarding the composition of TNERC.

Issue-wise Detailed Analysis:

1. Competency of TNERC to entertain petitions without a legal member:
The primary issue raised is whether TNERC, constituted under Section 82 of the Electricity Act, 2003, is competent to entertain and dispose of petitions filed under Section 86(1)(a) of the Act without having a person of law as one of its Members. The petitioners argued that without a legal member, the Commission lacks jurisdiction to hear tariff petitions, citing the Supreme Court decision in (2018) 6 SCC 21 (State of Gujarat and ors. v. Utility Users' Welfare Association). The respondents countered that the function of tariff fixation is regulatory, not adjudicatory, and thus does not require a legal member. The court rejected the petitioners' contention, stating that tariff fixation is not an adjudicatory function and the Commission can hear the petitions with its current composition.

2. Nature of tariff fixation - whether it is adjudicatory or regulatory:
The court examined whether tariff fixation is an adjudicatory function. It referred to the Supreme Court's decision in State of Gujarat and ors. v. Utility Users Welfare Association (2018) 6 SCC 21, which stated that the functions of the State Commission, including tariff determination, are regulatory rather than adjudicatory. The court also noted that adjudicatory functions are limited to matters prescribed in Section 86(1)(f) of the Act. The court distinguished between adjudicatory and quasi-judicial functions, concluding that tariff fixation is quasi-judicial and does not require a legal member.

3. Compliance with Supreme Court directions regarding the composition of TNERC:
Despite concluding that tariff fixation is not adjudicatory, the court acknowledged the Supreme Court's mandate that there must be a legal member in the Commission. The Supreme Court had emphasized the necessity of a legal member in its decision and subsequent orders. The court noted that the State Government failed to fill the legal member vacancy timely, which is mandatory. Consequently, the court restrained TNERC from passing final orders on the tariff petitions until a legal member is appointed. The court allowed the Commission to continue proceedings and finalize everything except the formal declaration of orders on the tariff petitions until the appointment of a legal member.

Conclusion:
The court disposed of the writ petitions, directing the petitioners to submit their objections/suggestions to the Commission within a week. The court emphasized the binding nature of Supreme Court directions and the necessity of having a legal member in TNERC for compliance with the law. The restraint on TNERC from passing final orders will remain until the legal member is appointed. No costs were awarded, and connected miscellaneous petitions were closed.

---