TaxTMI 
TaxTMI 
2010 (3) TMI 1209
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....ial review on the Appellate Tribunal for Electricity under Section 121 of the 2003 Act? (iii) Whether capping of trading margins could be done by the CERC ("Central Commission") by making a Regulation in that regard under Section 178 of the 2003 Act? FACTS: 5. In this batch of civil appeals, appellants had challenged the vires of the Central Electricity Regulatory Commission (Fixation of Trading Margin) Regulations, 2006 as null and void before the Appellate Tribunal for Electricity and had prayed for quashing of the said Regulations. The Tribunal, however, dismissed the appeals holding that its jurisdiction was restricted by the limits imposed by the parent Statute, i.e., the Electricity Act, 2003. By the impugned judgment, the Tribunal held that the appropriate course of action for the appellants is to proceed by way of judicial review under the Constitution. 6. In view of the importance of the question, the matter was referred by a three-Judge Bench of this Court to the Constitution Bench. While making reference to the Constitution Bench, the question formulated was - "whether the Tribunal has jurisdiction to decide the question as to the validity of the Regulations framed....
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....ied" means specified by regulations made by the Appropriate Commission or the Authority, as the case may be, under this Act; (64) "State Commission" means the State Electricity Regulatory Commission constituted under sub-section (1) of section 82 and includes a Joint Commission constituted under sub-section (1) of section 83; (71) "trading" means purchase of electricity for resale thereof and the expression "trade" shall be construed accordingly; (76) "wheeling" means the operation whereby the distribution system and associated facilities of a transmission licensee or distribution licensee, as the case may be, are used by another person for the conveyance of electricity on payment of charges to be determined under section 62; PART II NATIONAL ELECTRICITY POLICY AND PLAN Section 3 - National Electricity Policy and Plan (1) The Central Government shall, from time-to-time, prepare the National Electricity Policy and tariff policy, in consultation with the State Governments and the Authority for development of the power system based on optimal utilisation of resources such as coal, natural gas, nuclear substances or materials, hydro and renewable sources of energy. (4) The Au....
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.... Section 11 - Directions to generating companies.- (1) The Appropriate Government may specify that a generating company shall, in extraordinary circumstances operate and maintain any generating station in accordance with the directions of that Government. Explanation:--For the purposes of this section, the expression "extraordinary circumstances" means circumstances arising out of threat to security of the State, public order or a natural calamity or such other circumstances arising in the public interest. (2) The Appropriate Commission may offset the adverse financial impact of the directions referred to in sub- section (1) on any generating company in such manner as it considers appropriate. PART IV LICENSING Section 12 - Authorised persons to transmit, supply, etc., electricity- No person shall-- (a) transmit electricity; or (b) distribute electricity; or (c) undertake trading in electricity, unless he is authorised to do so by a licence issued under section 14, or is exempt under section 13. Section 14 - Grant of licence.- The Appropriate Commission may, on an application made to it under section 15, grant a licence to any person-- (a) to transmit electricity ....
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....n accordance with the Grid Standards, as may be specified by the Authority. Section 37 - Directions by Appropriate Government.- The Appropriate Government may issue directions to the Regional Load Despatch Centres or State Load Despatch Centres, as the case may be, to take such measures as may be necessary for maintaining smooth and stable transmission and supply of electricity to any region or State Section 38 - Central Transmission Utility and functions.- (1) The Central Government may notify any Government company as the Central Transmission Utility: Provided that the Central Transmission Utility shall not engage in the business of generating of electricity or trading in electricity: Provided further that the Central Government may transfer, and vest any property, interest in property, rights and liabilities connected with, and personnel involved in transmission of electricity of such Central Transmission Utility, to a company or companies to be incorporated under the Companies Act, 1956 (1 of 1956) to function as a transmission licensee, through a transfer scheme to be effected in the manner specified under Part XIII and such company or companies shall be deemed to be tra....
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....of a surcharge in addition to the charges for wheeling as may be determined by the State Commission: Provided further that such surcharge shall be utilised to meet the requirements of current level of cross subsidy within the area of supply of the distribution licensee: Provided also that such surcharge and cross subsidies shall be progressively reduced in the manner as may be specified by the State Commission: Provided also that such surcharge shall not be leviable in case open access is provided to a person who has established a captive generating plant for carrying the electricity to the destination of his own use: Provided also that the State Government shall, not later than five years from the date of commencement of the Electricity (Amendment) Act, 2003 (57 of 2003) by regulations, provide such open access to all consumers who require a supply of electricity where the maximum power to be made available at any time exceeds one megawatt. Section 52 - Provisions with respect to electricity trader.- (1) Without prejudice to the provisions contained in clause (c) of section 12, the Appropriate Commission may, specify the technical requirement, capital adequacy requirement ....
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....ar to ensure reasonable prices of electricity; (b) transmission of electricity; (c) wheeling of electricity; (d) retail sale of electricity: Provided that in case of distribution of electricity in the same area by two or more distribution licensees, the Appropriate Commission may, for the promoting competition among distribution licensees, fix only maximum ceiling of tariff for retail sale of electricity. (2) The Appropriate Commission may require a licensee or a generating company to furnish separate details, as may be specified in respect of generation, transmission and distribution for determination of tariff. (3) The Appropriate Commission shall not, while determining the tariff under this Act, show undue preference to any consumer of electricity but may differentiate according to the consumer's load factor, power factor, voltage, total consumption of electricity during any specified period or the time at which the supply is required or the geographical position of any area, the nature of supply and the purpose for which the supply is required. (4) No tariff or part of any tariff may ordinarily be amended, more frequently than once in any financial year, except in....
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....ase may be, involving the territories of two States may, upon application made to it by the parties intending to undertake such supply, transmission or wheeling, be determined under this section by the State Commission having jurisdiction in respect of the licensee who intends to distribute electricity and make payment therefor. (6) A tariff order shall, unless amended or revoked, continue to be in force for such period as may be specified in the tariff order. PART IX CENTRAL ELECTRICITY AUTHORITY Section 73 - Functions and duties of Authority.- The Authority shall perform such functions and duties as the Central Government may prescribe or direct, and in particular to-- (a) advise the Central Government on the matters relating to the national electricity policy, formulate short-term and perspective plans for development of the electricity system and co-ordinate the activities of the planning agencies for the optimal utilisation of resources to subserve the interests of the national economy and to provide reliable and affordable electricity for all consumers; (b) specify the technical standards for construction of electrical plants, electric lines and connectivity to the ....
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.... may require and at such times and in such form and manner as may be specified by the Authority. Section 75 - Directions by Central Government to Authority.- (1) In the discharge of its functions, the Authority shall be guided by such directions in matters of policy involving public interest as the Central Government may give to it in writing. (2) If any question arises as to whether any such direction relates to a matter of policy involving public interest, the decision of the Central Government thereon shall be final. PART X REGULATORY COMMISSIONS Section 76 - Constitution of Central Commission.- (1) There shall be a Commission to be known as the Central Electricity Regulatory Commission to exercise the powers conferred on, and discharge the functions assigned to, it under this Act. Section 79 - Functions of Central Commission.- (1) The Central Commission shall discharge the following functions, namely:-- (a) to regulate the tariff of generating companies owned or controlled by the Central Government; (b) to regulate the tariff of generating companies other than those owned or controlled by the Central Government specified in clause (a), if such generating compani....
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.... from other sources through agreements for purchase of power for distribution and supply within the State; (c) facilitate intra-State transmission and wheeling of electricity; (d) issue licences to persons seeking to act as transmission licensees, distribution licensees and electricity traders with respect to their operations within the State; (e) promote cogeneration and generation of electricity from renewable sources of energy by providing suitable measures for connectivity with the grid and sale of electricity to any person, and also specify, for purchase of electricity from such sources, a percentage of the total consumption of electricity in the area of a distribution licensee; (f) adjudicate upon the disputes between the licensees and generating companies and to refer any dispute for arbitration; (g) levy fee for the purposes of this Act; (h) specify State Grid Code consistent with the Grid Code specified under clause (h) of sub-section (1) of section 79; (i) specify or enforce standards with respect to quality, continuity and reliability of service by licensees; (j) fix the trading margin in the intra-State trading of electricity, if considered, necessary; ....
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....rs thereon as it thinks fit, confirming, modifying or setting aside the order appealed against. (4) The Appellate Tribunal shall send a copy of every order made by it to the parties to the appeal and to the concerned adjudicating officer or the Appropriate Commission, as the case may be. (5) The appeal filed before the Appellate Tribunal under sub-section (1) shall be dealt with by it as expeditiously as possible and endeavour shall be made by it to dispose of the appeal finally within one hundred and eighty days from the date of receipt of the appeal: Provided that where any appeal could not be disposed of within the said period of one hundred and eighty days, the Appellate Tribunal shall record its reasons in writing for not disposing of the appeal within the said period. (6) The Appellate Tribunal may, for the purpose of examining the legality, propriety or correctness of any order made by the adjudicating officer or the Appropriate Commission under this Act, as the case may be, in relation to any proceeding, on its own motion or otherwise, call for the records of such proceedings and make such order in the case as it thinks fit. PART XVIII MISCELLANEOUS Section 177....
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....ansmission charges and a surcharge under sub-clause (ii) of clause (d) of sub-section (2) of section 38; (k) reduction of surcharge and cross subsidies under second proviso to sub-clause (ii) of clause (d) of sub- section (2) of section 38; (l) payment of transmission charges and a surcharge under sub-clause (ii) of clause (c) of section 40; (m) reduction of surcharge and cross subsidies under the second proviso to sub-clause (ii) of clause (c) of section 40; (n) proportion of revenues from other business to be utilised for reducing the transmission and wheeling charges under proviso to section 41; (o) duties of electricity trader under sub-section (2) of section 52; (p) standards of performance of a licensee or class of licensees under sub-section (1) of section 57; (q) the period within which information to be furnished by the licensee under sub-section (1) of section 59; (r) the manner for reduction of cross-subsidies under clause (g) of section 61; (s) the terms and conditions for the determination of tariff under section 61; (t) details to be furnished by licensee or generating company under sub-section (2) of section 62; (u) the procedures for calculatin....
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....th this Act and the rules generally to carry out the provisions of this Act. (2) In particular and without prejudice to the generality of the power contained in sub-section (1), such regulations may provide for all or any of the following matters, namely:-- (a) period to be specified under the first proviso to section 14; (b) the form and the manner of application under sub- section (1) of section 15; (c) the manner and particulars of application for license to be published under sub-section (2) of section 15; (d) the conditions of licence under section 16; (e) the manner and particulars of notice under clause (a) of sub-section (2) of section 18; (f) publication of the alterations or amendments to be made in the licence under clause (c) of sub-section (2) of section 18; (g) levy and collection of fees and charges from generating companies or licensees under sub-section (3) of section 32; (h) rates, charges and the term and conditions in respect of intervening transmission facilities under proviso to section 36; (i) payment of the transmission charges and a surcharge under sub-clause (ii) of clause (d) of sub-section (2) of section 39; (j) reduction of surcharge....
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....n before the State Commission and the fee payable therefor under sub- section (1) of section 64; (zh) issue of tariff order with modifications or conditions under sub-section (3) of section 64; (zi) the manner by which development of market in power including trading specified under section 66; (zj) the powers and duties of the Secretary of the State Commission under sub-section (1) of section 91; (zk) the terms and conditions of service of the secretary, officers and other employees of the State Commission under sub-section (2) of section 91; (zl) rules of procedure for transaction of business under sub-section (1) of section 92; (zm) minimum information to be maintained by a licensee or the generating company and the manner of such information to be maintained under sub-section (8) of section 128; (zn) the manner of service and publication of notice under section 130; (zo) the form of and preferring the appeal and the manner in which such form shall be verified and the fee for preferring the appeal under sub-section (1) of section 127; (zp) any other matter which is to be, or may be, specified. (3) All regulations made by the State Commission under this Act shall be....
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....n exhaustive Code on all matters concerning electricity. It provides for "unbundling" of SEBs into separate utilities for generation, transmission and distribution. It repeals the Indian Electricity Act, 1910, the Electricity (Supply) Act, 1948 and the Electricity Regulatory Commissions Act, 1998. The 2003 Act, in furtherance of the policy envisaged under the Electricity Regulatory Commissions Act, 1998 ("1998 Act"), mandated the establishment of an independent and transparent regulatory mechanism, and has entrusted wide ranging responsibilities with the Regulatory Commissions. While the 1998 Act provided for independent regulation in the area of tariff determination; the 2003 Act has distanced the Government from all forms of regulation, namely, licensing, tariff regulation, specifying Grid Code, facilitating competition through open access, etc. 10. Section 3 of the 2003 Act requires the Central Government, in consultation with the State Governments and the Authority, to prepare National Electricity Policy as well as Tariff Policy for development of the power system based on optimum utilization of resources. The Central and the State Governments are also vested with rule-making ....
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....any licensee or consumer or a person engaged in generation of electricity in accordance with the regulations specified. Section 2(62) defines the term "specified" to mean specified by regulations made by the Appropriate Commission or the Authority under the 2003 Act. Under Section 2(71), the word "trading" is defined to mean purchase of electricity for resale thereof. 12. Under the 2003 Act, power generation has been de-licensed and captive generation is freely permitted, subject to approval as indicated in Sections 7, 8 and 9 of the Act. However, under Section 12, a licence has been provided as a pre-condition for engaging in transmission or distribution or trading of electricity. Therefore, licensees are granted by the Appropriate Commission under Section 14 of the Act on applications made under Section 15. Section 16 provides power to the Appropriate Commission to specify any general or specific conditions which shall apply either to a licensee or to a class of licensees. Under Section 18, the Appropriate Commission is also vested with the power to amend the licence as well as to revoke it in certain stipulated circumstances, if public interest so requires (see Section 19). Und....
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....becomes clear that the Appropriate Commission shall determine the actual tariff in accordance with the provisions of the Act, including the terms and conditions which may be specified by the Appropriate Commission under Section 61 of the said Act. Under the 2003 Act, if one reads Section 62 with Section 64, it becomes clear that although tariff fixation like price fixation is legislative in character, the same under the Act is made appealable vide Section 111. These provisions, namely, Sections 61, 62 and 64 indicate the dual nature of functions performed by the Regulatory Commissions, viz, decision-making and specifying terms and conditions for tariff determination. 18. Section 66 confers substantial powers on the Appropriate Commission to develop the relevant market in accordance with the principles of competition, fair participation as well as protection of consumers' interests. 19. Under Sections 111(1) and 111(6) respectively, the Tribunal has appellate and revisional powers. In addition, there are powers given to the Tribunal under Section 121 of the 2003 Act to issue orders, instructions or directions, as it may deem fit, to the Appropriate Commission for the performan....
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....hat such regulations may be licensee- specific or generic. At the same time, under Section 62 read with Section 64 refers to determination of tariff in accordance with the provisions of the Act for supply of electricity by Gencoms, transmission of electricity, wheeling and trading of electricity. Applying the Cynamide principle [1987(2)SCC720] of administrative law, such tariff Order would be characterized as delegated legislation yet under Section 111 of the 2003 Act it is made appealable to the Appellate Tribunal. According to the learned counsel, "price fixation" is ordinarily "legislative" and not "adjudicatory" in character and yet under the 2003 Act tariff fixation is by Order and subject to appeal under Section 111. According to the learned counsel, use of different expressions in the Act implies different meanings. For example, in Section 79 the expressions used are "regulate", "determine", "adjudicate", "specify" and "fix". Where the function of the Commission under Sections 79 and 86 require framing of regulations, the Act has used the expression "specified" as defined. Therefore, according to the learned counsel, the word "fix" in Section 79(1)(j) must mean to pass an ap....
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....e 2003 Act. In this connection, learned counsel further submitted that the powers envisaged under Section 121 are distinct from the appellate and revisional powers under Section 111(3) and under Section 111(6). A plain reading of Section 121 establishes that the Tribunal has the power to issue orders, instructions and directions to guide the Commission in the due performance of its statutory function; that the said power to issue instructions, orders and directions would include the power to frame or modify the regulations made by the first tier regulatory authority, particularly in cases where the Tribunal is satisfied that the regulation framed is either not consistent with the provisions of the Act or does not result in due performance of the duty or functions entrusted to the Commission under the 2003 Act. In the light of the provisions of Sections 111 and 121 of the 2003 Act, learned counsel urged, that, even in an appeal under Section 111 if the question of validity of delegated legislation arises, the tribunal can consider the vires and ignore a Rule which is ultra-vires the rule-making power. The fact that there is no power in the tribunal to annul the regulation cannot den....
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.... to argue that the Authority which is the creature of the Statute cannot question the vires of the statute, in the latter case, the Authority is not the creature of the Regulation framed by itself, hence the sanctity given to the former is far greater than the sanctity to the latter. 26. According to the learned counsel, that, the right to appeal is a substantive right and the same cannot be taken away by a device, i.e., by framing a regulation instead of simply passing an order as to denude the Appellant of its right of Appeal. In this connection, learned counsel urged that the Appellate Tribunal can hear the appeal against the regulation being the function of the Commission and can examine the sanctity of the regulation if the same is framed beyond the power of the commission to do so. In other words, if the Commission is entitled to adjudicate upon a matter, it does not have the authority under the Act to give its decision the colour of a regulation so as to denude the Tribunal of its authority under Section 111. According to the learned counsel, since the impugned regulation relegates the trading licensee to a commission agent the same is ultra vires Section 66 of the 2003 Act....
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....nate legislation and pronounce it as ultra vires. Of course, according to the learned counsel, it is open to the Parliament to expressly give to a Tribunal the power to consider the validity of subordinate legislation. However, such conferment has to be express and unambiguous, which is not there in this case. 32. According to the learned counsel, the mere fact that Section 79(1)(j) uses the word "fix" and the mere fact that the other provisions use the word "specify" does not lead to the conclusion that the Central Commission could not have issued the Trading Margin Regulations 2006 as contended by the appellants herein. The learned counsel further urged that the general power to frame regulations is not limited or controlled by enumeration of topics on which regulations may be framed. In this connection, it was submitted that a holistic reading of the Act leads to the conclusion that regulations can be made as long as they are consistent with the Act and that they are made for carrying out the provisions of the Act. The Act recognizes the need to regulate trading in electricity [See Sections 52(2), 53(1)(a), 57, 60, 178(2)(d), (o), (p) and (y)]. 33. Learned counsel further subm....
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....ory context to determine whether a court or a tribunal hearing a case has jurisdiction to rule on a defence based upon arguments of invalidity of subordinate legislation or administrative act under it. There are situations in which Parliament may legislate to preclude such challenges in the interest of promoting certainty about the legitimacy of administrative acts on which the public may have to rely. 37. On the above analysis of various sections of the 2003 Act, we find that the decision-making and regulation-making functions are both assigned to CERC. Law comes into existence not only through legislation but also by regulation and litigation. Laws from all three sources are binding. According to Professor Wade, "between legislative and administrative functions we have regulatory functions". A statutory instrument, such as a rule or regulation, emanates from the exercise of delegated legislative power which is a part of administrative process resembling enactment of law by the legislature whereas a quasi-judicial order comes from adjudication which is also part of administrative process resembling a judicial decision by a court of law. [See Shri Sitaram Sugar Co. Ltd. v. Union o....
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.... all grounds on which administrative action may be questioned such as non-application of mind, taking irrelevant matters into consideration etc. The subordinate legislation is, however, beyond the reach of administrative law. Thus, delegated legislation - otherwise known as secondary, subordinate or administrative legislation - is enacted by the administrative branch of the government, usually under the powers conferred upon it by the primary legislation. Delegated legislation takes a number of forms and a number of terms - rules, regulations, by-laws etc; however, instead of the said labels what is of significance is the provisions in the primary legislation which, in the first place, confer the power to enact administrative legislation. Such provisions are also called as "enabling provisions". They demarcate the extent of the administrator's legislative power, the decision-making power and the policy making power. However, any legislation enacted outside the terms of the enabling provision will be vulnerable to judicial review and ultra vires. 39. Applying the abovementioned tests to the scheme of 2003 Act, we find that under the Act, the Central Commission is a decision-mak....
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.... making of a regulation under Section 178 is not a pre-condition to the Central Commission taking any steps/measures under Section 79(1). As stated, if there is a regulation, then the measure under Section 79(1) has to be in conformity with such regulation under Section 178. This principle flows from various judgments of this Court which we have discussed hereinafter. For example, under Section 79(1)(g) the Central Commission is required to levy fees for the purpose of the 2003 Act. An Order imposing regulatory fees could be passed even in the absence of a regulation under Section 178. If the levy is unreasonable, it could be the subject matter of challenge before the Appellate Authority under Section 111 as the levy is imposed by an Order/decision making process. Making of a regulation under Section 178 is not a pre-condition to passing of an Order levying a regulatory fee under Section 79(1)(g). However, if there is a regulation under Section 178 in that regard then the Order levying fees under Section 79(1)(g) has to be in consonance with such regulation. Similarly, while exercising the power to frame the terms and conditions for determination of tariff under Section 178, the Co....
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.... (Terms and Conditions of Tariff) Regulations, 2004. The said Regulations have been made under Section 178 of the 2003 Act. Regulation 15 deals with various components of tariff. It includes Advance Against Depreciation ("AAD" for short). Regulations 21(1)(ii) and 38(ii) deal with computation of depreciation including AAD. Recently, this concept of AAD came for consideration before this Court in the case of National Hydroelectric Power Corporation Ltd. v. CIT reported in 2010 (1) SCALE 5. AAD was suggested by the Central Commission as part of the tariff in order to overcome the cash flow problems faced by Central Power Sector Utilities for meeting loan repayment obligations. The important point to be noted is that although under Section 61 of the 2003 Act the Central Commission is empowered to specify AAD as a condition for determination of the tariff, the Central Commission in its wisdom thought it fit to bring in the concept of AAD by enacting a regulation under Section 178 giving the benefit of AAD across the board to all Central Power Sector Utilities. In other words, instead of giving the benefit of AAD on a case to case basis under Section 61, the Central Commission decided t....
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.... in order to regulate the financial system of the country. Section 45JA, however, is confined to Chapter III B. However, under Section 58, which falls in Chapter IV, dealing with general provisions, the Board of Directors of RBI are given the power to make regulations consistent with the 1934 Act to provide for all matters for which provision is necessary. The principle of "generality versus enumeration" is also applicable to Section 58 of RBI Regulations because under Section 58(2) there is a list of topics enumerated on which regulations could be made. In other words, Section 58 (1), (2) of the 1934 Act is similar to Section 178 (1), (2) of the 2003 Act. Recently, before the Division Bench of this Court, the question arose, inter alia, as to the accounting treatment to be given by NBFCs accepting deposits from the public in the context of provision to be made for Non Performing Assets ("NPAs"). An Order was passed by RBI under Section 45JA of the 1934 Act stating that although provision for doubtful debts is required to be reduced from the assets' side of the balance sheet under the provisions of the Companies Act, 1956, for proper disclosure under the 1934 Act, such a provis....
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....s ("PPA") had to be modified and aligned with the said Regulations. In other words, the impugned Regulation makes an inroad into even the existing contracts. This itself indicates the width of the power conferred on CERC under Section 178 of the 2003 Act. All contracts coming into existence after making of the impugned Regulations 2006 have also to factor in the capping of the trading margin. This itself indicates that the impugned Regulations are in the nature of subordinate legislation. Such regulatory intervention into the existing contracts across-the-board could have been done only by making Regulations under Section 178 and not by passing an Order under Section 79(1)(j) of the 2003 Act. Therefore, in our view, if we keep the above discussion in mind, it becomes clear that the word "order" in Section 111 of the 2003 Act cannot include the impugned Regulations 2006 made under Section 178 of the 2003 Act. 44. We may usefully refer to some decisions relevant in the context. 45. In the case of City Board, Mussoorie v. State Electricity Board and Ors., reported in AIR (58) 1971 Allahabad 219, the matter arose under Electricity (Supply) Act, 1948 ("1948 Act"). Under that Act, Grid....
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....trary to the existing contract between the Board and the consumers. This argument was rejected by this Court which held that what apply to the tariff fixation would equally apply to the security. Section 49(1) of the 1948 Act clearly indicated that the Board may supply electricity to any person upon such terms and conditions as the Board thinks fit. It was held that since the contract between the consumer and the Board contemplated enhancement of security charges as a condition of supply of electricity, it was not open to the appellants to say that such enhancement cannot take place without regulations being framed under Section 79. This judgment is important from another angle also. It indicates that regulations under Section 79 of 1948 Act were to be in the nature of subordinate legislation, therefore, all contracts had to be in terms of such regulations. In the present case also, if one examines the terms and conditions of the licences, power to fix trading margin is expressly contemplated by such terms. The said judgment further held that the Board is a statutory authority and has to act within the framework of the 1948 Act. If the act of the Board is not in consonance or in br....
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....on 59 of the 1948 Act. Section 59 of that Act gave power to the Board to lay down general principles for Board's finance. It was also contended that the tariff revision was made without prior consultation with the State Electricity Consultative Council as required by Section 16(5) of the 1948 Act. It was held by this Court that even in the absence of general principles being specified under Section 59 of that Act, it was open to the Board to generate a surplus in order to carry on the business in a more efficient and economic manner. Following the judgment in the case of S.N. Govinda Prabhu (supra), it was held that even in the absence of prior consultation with the State Electricity Consultative Council as required by Section 16(5), it was open to the Board which was vested with the power of tariff fixation to make an upward revision of tariff. In other words, specification by making rules or regulations was not a pre-condition for upward revision of tariff. It was observed that, if in a given case, it is found that such upward revision was arbitrary, then under the judicial review jurisdiction it was open to the courts to strike down such upward revision as arbitrary under Ar....
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....sued under that section amounts to a piece of subordinate legislation, which has a general application in the sense that even existing contracts are required to be modified in terms of the impugned Regulations. These Regulations make an inroad into contractual relationships between the parties. Such is the scope and effect of the impugned Regulations which could not have taken place by an Order fixing the trading margin under Section 79(1)(j). Consequently, the impugned Regulations cannot fall within the ambit of the word "Order" in Section 111 of the 2003 Act. 52. Before concluding on this topic, we still need to examine the scope of Section 121 of the 2003 Act. In this case, appellant(s) have relied on Section 121 to locate the power of judicial review in the Tribunal. For that purpose, we must notice the salient features of Section 121. Under Section 121, there must be a failure by a Commission to perform its statutory function in which event the Tribunal is given authority to issue orders, instructions or directions to the Commission to perform its statutory functions. Under Section 121 the Commission has to be heard before such orders, instructions or directions can be issued....
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....eld that such orders and directions would cover only an administrative field of the officers concerned and therefore such orders and directions do not regulate the rights of the parties. Such orders and directions cannot add to the considerations/topics prescribed under Section 47 of the 1939 Act on the basis of which an adjudicating authority is empowered to issue or refuse permits, as the case may be. 54. Applying the tests laid down in the above judgment to the present case, we are of the view that, the words "orders", "instructions" or "directions" in Section 121 do not confer power of judicial review in the Tribunal. It is not possible to lay down any exhaustive list of cases in which there is failure in performance of statutory functions by Appropriate Commission. However, by way of illustrations, we may state that, under Section 79(1)(h) CERC is required to specify Grid Code having regard to Grid Standards. Section 79 comes in Part X. Section 79 deals with functions of CERC. The word "grid" is defined in Section 2(32) to mean high voltage backbone system of interconnected transmission lines, sub-station and generating plants. Basically, a grid is a network. Section 2(33) de....
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....003 issued under Section 1(3) of the 2003 Act by which the Central Government had fixed 10.6.2003 as the date on which Sections 1 to 120 and Sections 122 to 185 were brought into force, however, Section 121 was not brought into force till Notification dated 27.1.2004, which brought into force Electricity (Amendment) Act 2003 (No.57 of 2003) came to be issued. According to the learned counsel, Section 4 of the Electricity (Amendment) Act, 2003 (No.57 of 2003) which was brought into force on 27.1.2004 merely provided for substitution of the original Section 121 with new Section 121, without issuance of a further notification under Section 1(3) of the original Electricity Act, 2003. According to the learned counsel, there is a difference between substituting a dormant Section in an Act and in bringing a substituted section into force which has not been done in this case and, therefore, Section 121, although being part of the statute, is not brought into force, till today. To answer the above contention, we need to quote Section 1(3) and also Section 121 of the original Electricity Act, 2003 which was not brought into force though, as stated above, Sections 1 to 120 and Sections 122 to....
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....o-day activities of the Commission by the Chairperson of the Tribunal. Therefore, Section 121 was amended by Electricity (Amendment) Act, 2003 (No.57 of 2003) which is also quoted hereinabove and which amendment Act came into force from 27.1.2004. In our view, by necessary implication of the coming into force of the Electricity (Amendment) Act, 2003 (No.57 of 2003) all provisions amended by it also came into force, hence, there is no requirement for a further notification under Section 1(3), particularly when Section 121 in its amended form has come into force w.e.f. 27.1.2004. In this connection, it may be seen that Section 121 of the original Act stood substituted by Amendment Act No.57 of 2003. Substitution of a provision results in repeal of the earlier provision and its replacement by the new provision. Substitution is a combination of repeal and fresh enactment. [See: Principles of Statutory Interpretation by G.P. Singh, 11th Edn., p. 638]. Section 121 of the original Electricity Act, 2003 was never brought into force. It was substituted by new Section 121 by Amendment Act No.57 of 2003 which was brought into force by a notification dated 27.1.2004. Substitution, as stated ab....