AI Drafter 
TaxTMI 
TaxTMI 
2010 (3) TMI 1209
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.... (ii) Whether Parliament has conferred power of judicial 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 jurisdict....
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....by rules made by the Appropriate Government under this Act; (57) "regulations" means regulations made under this Act; (59) "rules" means rules made under this Act; (62) "specified" 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 t....
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....cility and such availability of transmission facility shall be determined by the Central Transmission Utility or the State Transmission Utility, as the case may be: Provided further that any dispute regarding the availability of transmission facility shall be adjudicated upon by the Appropriate Commission. 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....
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....atch of electricity among the Regional Load Despatch Centres. (2) The constitution and functions of the National Load Despatch Centre shall be such as may be prescribed by the Central Government: Provided that the National Load Despatch Centre shall not engage in the business of trading in electricity Section 34 - Grid Standards.- Every transmission licensee shall comply with such technical standards, of operation and maintenance of transmission lines, in 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: ....
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.... of his own use. PART VI DISTRIBUTION OF ELECTRICITY Section 42 - Duties of distribution licensees and open access.- (2) The State Commission shall introduce open access in such phases and subject to such conditions, (including the cross subsidies, and other operational constraints) as may be specified within one year of the appointed date by it and in specifying the extent of open access in successive phases and in determining the charges for wheeling, it shall have due regard to all relevant factors including such cross subsidies, and other operational constraints: Provided that such open access shall be allowed on payment 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 es....
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....fied in the Schedule as they stood immediately before the appointed date, shall continue to apply for a period of one year or until the terms and conditions for tariff are specified under this section, whichever is earlier. Section 62 - Determination of tariff (1) The Appropriate Commission shall determine the tariff in accordance with the provisions of this Act for-- (a) supply of electricity by a generating company to a distribution licensee: Provided that the Appropriate Commission may, in case of shortage of supply of electricity, fix the minimum and maximum ceiling of tariff for sale or purchase of electricity in pursuance of an agreement, entered into between a generating company and a licensee or between licensees, for a period not exceeding one year 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 ceil....
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....ns and objections received from the public,-- (a) issue a tariff order accepting the application with such modifications or such conditions as may be specified in that order; (b) reject the application for reasons to be recorded in writing if such application is not in accordance with the provisions of this Act and the rules and regulations made thereunder or the provisions of any other law for the time being in force: Provided that an applicant shall be given a reasonable opportunity of being heard before rejecting his application. (4) The Appropriate Commission shall, within seven days of making the order, send a copy of the order to the Appropriate Government, the Authority, and the concerned licensees and to the person concerned. (5) Notwithstanding anything contained in Part X, the tariff for any inter-State supply, transmission or wheeling of electricity, as the case 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 d....
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.... purposes of generating or transmitting or distributing electricity; (m) advise any State Government, licensees or the generating companies on such matters which shall enable them to operate and maintain the electricity system under their ownership or control in an improved manner and where necessary, in co-ordination with any other Government, licensee or the generating company owning or having the control of another electricity system; (n) advise the Appropriate Government and the Appropriate Commission on all technical matters relating to generation, transmission and distribution of electricity; and (o) discharge such other functions as may be provided under this Act. Section 74 - Power to require statistics and returns.- It shall be the duty of every licensee, generating company or person generating electricity for its or his own use to furnish to the Authority such statistics, returns or other information relating to generation, transmission, distribution, trading and use of electricity as it 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 ....
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....nd economy in activities of the electricity industry; (iii) promotion of investment in electricity industry; (iv) any other matter referred to the Central Commission by that Government. (3) The Central Commission shall ensure transparency while exercising its powers and discharging its functions. (4) In discharge of its functions, the Central Commission shall be guided by the National Electricity Policy, National Electricity Plan and tariff policy published under section 3. Section 86 - Functions of State Commission.- (1) The State Commission shall discharge the following functions, namely:-- (a) determine the tariff for generation, supply, transmission and wheeling of electricity, wholesale, bulk or retail, as the case may be, within the State: Provided that where open access has been permitted to a category of consumers under section 42, the State Commission shall determine only the wheeling charges and surcharge thereon, if any, for the said category of consumers; (b) regulate electricity purchase and procurement process of distribution licensees including the price at which electricity shall be procured from the gen....
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....t (except under section 127) or an order made by the Appropriate Commission under this Act may prefer an appeal to the Appellate Tribunal for Electricity: Provided that any person appealing against the order of the adjudicating officer levying any penalty shall, while filing the appeal, deposit the amount of such penalty: Provided further that where in any particular case, the Appellate Tribunal is of the opinion that the deposit of such penalty would cause undue hardship to such person, it may dispense with such deposit subject to such conditions as it may deem fit to impose so as to safeguard the realisation of penalty. (2) Every appeal under sub-section (1) shall be filed within a period of forty-five days from the date on which a copy of the order made by the adjudicating officer or the Appropriate Commission is received by the aggrieved person and it shall be in such form, verified in such manner and be accompanied by such fee as may be prescribed: Provided that the Appellate Tribunal may entertain an appeal after the expiry of the said period of forty-five days if it is satisfied that there was sufficient cause for not filing it wi....
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....atistics, returns or other information under section 74; (g) any other matter which is to be, or may be, specified; (3) All regulations made by the Authority under this Act shall be subject to the conditions of previous publication. Section 178 - Powers of Central Commission to make regulations.- (1) The Central Commission may, by notification make regulations consistent with 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 following matters, namely:- (a) period to be specified under the first proviso to section 14; (b) the form and the manner of the application under sub- section (1) of section 15; (c) the manner and particulars of notice 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 alterations or amendments to be made in the licence under clause (c) of sub-section (2) of section 18;....
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....n under sub-section (3) of section 91; (zb) the rules of procedure for transaction of business under sub-section (1) of section 92; (zc) 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; (zd) the manner of service and publication of notice under section 130; (ze) any other matter which is to be, or may be specified by regulations. (3) All regulations made by the Central Commission under this Act shall be subject to the conditions of previous publication. Section 179 - Rules and regulations to be laid before Parliament.- Every rule made by the Central Government, every regulation made by the Authority, and every regulation made by the Central Commission shall be laid, as soon as may be after it is made, before each House of the Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in ma....
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....(ii) of clause (c) of section 40; (o) proportion of revenues from other business to be utilised for reducing the transmission and wheeling charges under proviso to section 41; (p) reduction of surcharge and cross subsidies under the third proviso to sub-section (2) of section 42; (q) payment of additional charges on charges of wheeling under sub-section (4) of section 42; (r) guidelines under sub-section (5) of section 42; (s) the time and manner for settlement of grievances under sub-section (7) of section 42; (t) the period to be specified by the State Commission for the purposes specified under sub-section (1) of section 43; (u) methods and principles by which charges for electricity shall be fixed under sub-section (2) of section 45; (v) reasonable security payable to the distribution licensee under sub-section (1) of section 47; (w) payment of interest on security under sub-section (4) of section 47; (x) electricity supply code under section 50; (y) the proportion of revenues from other business to be utilised for reducing wheeling charges under proviso to section 51; (z) duties of electr....
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....before that House. Section 183 - Power to remove difficulties (1) If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by order published, make such provisions not inconsistent with the provisions of this Act, as may appear to be necessary for removing the difficulty: Provided that no order shall be made under this section after the expiry of two years from the date of commencement of this Act. (2) Every order made under this section shall be laid, as soon as may be after it is made, before each House of Parliament. 8. We also quote hereinbelow the impugned Notification dated 23.1.2006 fixing trading margin for inter-State trading of Electricity, which reads as follows: "CENTRAL ELECTRICITY REGULATORY COMMISSION NOTIFICATION New Delhi, the 23rd January, 2006 No. L-7/25(5)/2003-CERC.- Whereas the Central Electricity Regulatory Commission is of the opinion that it is necessary to fix trading margin for inter-state trading of electricity. Now, therefore, in exercise of powers conferred under Section 178 of the Electricity Act, 2003 (36 of 2003), and all other powers enabling it in this behalf,....
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....sions are empowered to frame policy, in the form of regulations, as guided by the general policy framed by the Central Government. They are to be guided by the National Electricity Policy, the Tariff Policy as well as the National Electricity Plan in terms of Sections 79(4) and 86(4) after the 2003 Act (see also Section 66). In this connection, it may also be noted that the Central Government has also, in exercise of its powers under Section 3 of the 2003 Act, notified the Tariff Policy with effect from 6.1.2006. One of the primary objectives of the Tariff Policy is to ensure availability of electricity to consumers at reasonable and competitive rates. The Tariff Policy tries to balance the interests of consumers and the need for investments while prescribing the rate of return. It also tries to promote training in electricity for making the markets competitive. Under the Tariff Policy, there is a mandate given to the Regulatory Commissions, namely, to monitor the trading transactions continuously and ensure that the electricity traders do not indulge in profiteering in cases of market failure. The Tariff Policy directs the Regulatory Commissions to fix the trading margin in a mann....
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....tricity and promoting competition. 13. One of the most important features of the 2003 Act is the introduction of open access under Section 42 of the Act. Under the open access regime, distribution companies and eligible consumers have the freedom to buy electricity directly from generating companies or trading licensees of their choice and correspondingly the generating companies have the freedom to sell. 14. Section 52 of the 2003 Act deals with trading of electricity activity. Under Section 52(1), the Appropriate Commission may specify the technical requirement, capital adequacy requirement and credit worthiness for being an electricity trader. Under Section 52(2), every trader is required to discharge its duties, in relation to supply and trading in electricity, as may be specified by the Appropriate Commission. 15. The standards of performance of licensee(s) may be specified by the Appropriate Commission under Section 57 of the Act. 16. The 2003 Act contains separate provisions for the performance of the dual functions by the Commission. Section 61 is the enabling provision for framing of regulations by the Central Commission; the determination of terms and conditio....
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....ules. Secondly, under Section 177, the Central Authority is also empowered to make regulations consistent with the Act and the rules to carry out the provisions of the Act. Thirdly, under Section 178, the Central Commission can make regulations consistent with the Act and the rules to carry out the provisions of the Act. SERCs have a corresponding power under Section 181. The rules and regulations have to be placed before Parliament and the State Legislatures, as the case may be, under Section 179 and 182. The Parliament has the power to modify the rules/ regulations. This power is not conferred upon the State Legislatures. A holistic reading of the 2003 Act leads to the conclusion that regulations can be made as long as two conditions are satisfied, namely, that they are consistent with the Act and that they are made for carrying out the provisions of the Act. SUBMISSIONS: On behalf of M/s Tata Power Trading Co. Ltd.: 21. On the scheme of the 2003 Act it was submitted by Shri Harish N. Salve, learned senior counsel, that, under the said Act the Central Commission and SERCs have to frame regulations as well as pass statutory orders. The Act uses the expression "fixed" i....
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.... learned counsel, regulations cannot be framed under Section 79(1)(j) and under Section 86(1)(j) of the 2003 Act. 22. On the interpretation of Sections 178(1) and 181(1) of the 2003 Act, learned counsel submitted that where rule making powers are enumerated and there is a general delegation of power to make rules to carry out the provisions of the 2003 Act, the enumeration does not detract from the generality of the power conferred is the principle which has to be read in the context of the scheme of the 2003 Act. In this connection it was submitted that under the Act the power to frame subordinate legislation to carry out the provisions of the Act are contained in Sections 176 and 180 on Central and State Governments; in Sections 178 and 181 where power to frame regulations is conferred on Regulatory Commissions and Section 177 where the power to frame regulations is conferred on CEA. Hence, when the Central Government invokes the rule making power under Section 176(1), it cannot make rules to determine tariff since that can be done only by the appropriate Commission by virtue of Section 61 read with Section 178(2)(s). A perusal of the scheme of the 2003 Act suggests that each ....
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....PTC India Ltd. 24. Shri Vikas Singh, learned senior counsel, submitted that fixation of trading margins under normal business conditions is intrinsically contradictory and harmful to power market functioning. In this connection, it was submitted that capping of trading margin does not in any manner whatsoever control the selling price of electricity sold to Discoms. Such capping of trading margin results in relegating the electricity traders to mere commission agents. The role of electricity traders is to play a dynamic role of bringing in new products in the market which is beneficial to the consumers as well as Gencoms. However, the entire object of having electricity traders stand defeated by impugned capping of trading margins. According to the learned counsel, traders in electricity bring depth to the electricity markets. They make value additions and therefore interventions in trading by regulations should not be contrary to the letter and spirit of the Act [See Section 66]. According to the learned counsel, severe regulatory intervention like imposition of margin in a voluntary market should be resorted to only in cases of market failure. According to the learned counsel,....
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.... 28. Lastly, learned counsel for PTC adopted all the arguments of Shri Harish N. Salve, learned counsel for M/s. Tata Power Trading Company Ltd. 29. Shri Narasimha, learned counsel and Others broadly adopted the above arguments advanced on behalf of M/s. Tata Power Trading Company and PTC India Ltd., hence, the same need not be reproduced. On behalf of CERC 30. After taking us through the provisions of the 2003 Act, the National and the Tariff Policies, learned Solicitor General of India submitted that the 2003 Act contemplates three kinds of delegated legislation: (i) Under Section 176, the Central Government is empowered to make rules for carrying out the provisions of the Act. A corresponding power is given to the State Governments under Section 180. (ii) Under Section 177, the CEA is empowered to make regulations consistent with the Act and the rules made under Section 176. (iii) Under Section 178, the Central Commission may make regulations consistent with the Act and the rules generally to carry out the provisions of the Act. The corresponding power under Section 181 is conferred on SERCs. 31. The rules and the regulations have to be pl....
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....ng on high margins. Trading margin being the component of the final price paid by the consumers required regulation to protect the consumers. Competition among traders to capture the surplus power for sale resulted in rising prices. Even with a trading margin of 4 paise/unit, traders can make handsome profits. For the above reasons, Commission thought it fit to make the impugned Regulations. It was further contended that the doctrine of colourable exercise of power was not applicable to decide the validity of subordinate legislation. 34. Learned counsel lastly submitted that the power of judicial review cannot be located in Section 121 of the Act. The power under Section 121 is different from the power under Section 111. According to the learned counsel, Section 121 empowers the tribunal to act only when the Commission is guilty of inaction in carrying out its statutory functions. The power to annul a legislative act cannot be read into Section 121. Even the High Court cannot direct the Legislature to enact a law and, therefore, such power cannot be read into Section 121. In order to entertain a challenge, directly or collaterally, the tribunal must have jurisdiction which must ....
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....2 made appealable under Section 111 of the 2003 Act, though Section 61 is an enabling provision for the framing of regulations by CERC. If one takes "Tariff" as a subject- matter, one finds that under Part VII of the 2003 Act actual determination/ fixation of tariff is done by the Appropriate Commission under Section 62 whereas Section 61 is the enabling provision for framing of regulations containing generic propositions in accordance with which the Appropriate Commission has to fix the tariff. This basic scheme equally applies to subject-matter "trading margin" in a different statutory context as will be demonstrated by discussion hereinbelow. In the case of M/s Narinder Chand Hem Raj and Ors. v. Lt. Governor, Administrator, Union Territory, Himachal Pradesh and Ors. reported in (1971) 2 SCC 747, this Court has held that power to tax is a legislative power which can be exercised by the legislature directly or subject to certain conditions. The legislature can delegate that power to some other Authority. But the exercise of that power, whether by the legislature or by the delegate will be an exercise of legislative power. The fact that the power can be delegated will not make it a....
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.... licensing), adjudication upon disputes involving generating companies or transmission licensees fall under the head "mandatory functions" whereas advising Central Government on formulation of National Electricity Policy and tariff policy would fall under the head "advisory functions". In this sense, the Central Commission is the decision-making authority. Such decision-making under Section 79(1) is not dependant upon making of regulations under Section 178 by the Central Commission. Therefore, functions of Central Commission enumerated in Section 79 are separate and distinct from function of Central Commission under Section 178. The former is administrative/adjudicatory function whereas the latter is legislative. 40. As stated above, the 2003 Act has been enacted in furtherance of the policy envisaged under the Electricity Regulatory Commissions Act, 1998 as it mandates establishment of an independent and transparent Regulatory Commission entrusted with wide ranging responsibilities and objectives inter alia including protection of the consumers of electricity. Accordingly, the Central Commission is set up under Section 76(1) to exercise the powers conferred on, and in discharg....
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.... under Section 178, then, in that event, framing of terms and conditions for determination of tariff under Section 61 has to be in consonance with the regulation under Section 178. One must keep in mind the dichotomy between the power to make a regulation under Section 178 on one hand and the various enumerated areas in Section 79(1) in which the Central Commission is mandated to take such measures as it deems fit to fulfil the objects of the 2003 Act. Applying this test to the present controversy, it becomes clear that one such area enumerated in Section 79(1) refers to fixation of trading margin. Making of a regulation in that regard is not a pre- condition to the Central Commission exercising its powers to fix a trading margin under Section 79(1)(j), however, if the Central Commission in an appropriate case, as is the case herein, makes a regulation fixing a cap on the trading margin under Section 178 then whatever measures a Central Commission takes under Section 79(1)(j) has to be in conformity with Section 178. One must understand the reason why a regulation has been made in the matter of capping the trading margin under Section 178 of the Act. Instead of fixing a trading mar....
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....n is empowered under Section 61 to include depreciation as an item in the computation of tariff. However, if the rate of depreciation envisaged by the Central Commission under the 2003 Act is different from the rate(s) of depreciation prescribed under Schedule XIV of the Companies Act, 1956 then such differential rate can be prescribed under the 2003 Act only by way of regulation under Section 178 of the 2003 Act which is in the nature of subordinate legislation. It is important to note that the Companies Act, 1956 constitutes a law applicable to companies. It prescribes the format of Balance Sheet in Schedule VI. It prescribes the requirements as to Profit and Loss account vide Part II of Schedule VI. It also prescribes the rates of depreciation vide Schedule XIV. If a different rate is required to be prescribed under the 2003 Act, then it could be done only by way of subordinate legislation, which is contemplated by Regulations framed under Section 178 of the 2003 Act. Similarly, profits earned by a trading company are not only required to be presented in the manner indicated under the Companies Act but it is also required to be computed under the Income-tax Act, 1961. If such pr....
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....s with provisions relating to NBFCs. There was no regulation enacted under Section 58 on the topic, namely, NPAs. The point to be noted is, that there could be an Order/decision of a regulator under the Act even in the absence of regulations. RBI like CERC is a regulator under the 1934 Act. Under Section 45JA it is empowered to issue directions in contradistinction to its powers to enact regulations under Section 58 of the 1934 Act. Giving directions under Section 45JA need not be preceded by regulations made under Section 58, however, if in a given case, RBI/Board would have enacted a regulation on making of provision for NPAs under Section 58 then the Order of RBI under Section 45JA of the 1934 Act was required to be in conformity with the said regulations. (See the judgment of this Court in the case of M/s Southern Technologies Ltd. v. Joint Commissioner of Income Tax, Coimbatore reported in 2010 (1) SCALE 329.) 43. The above two citations have been given by us only to demonstrate that under the 2003 Act, applying the test of "general application", a Regulation stands on a higher pedestal vis-`-vis an Order (decision) of CERC in the sense that an Order has to be in conform....
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....d the Rules made thereunder to provide for all or any of the matters enumerated therein. It was argued on behalf of the appellant that the regulations must exist before a Grid Tariff can be fixed. This argument was rejected by the High Court which held that there was nothing in the 1948 Act to suggest that existence of a regulation was a pre-condition to the determination of a grid tariff. It was held that under Section 46 of 1948 Act, the Board was given a wide discretion to frame the grid tariff depending upon various factors mentioned in the Act. According to the High Court, Section 46 of the Act was a standalone provision, therefore, the grid tariff could be fixed even in the absence of the regulations provided such fixation is not inconsistent with the 1948 Act. However, it was further observed that if the Board had made regulations under Section 79 then order framing the grid tariff under Section 46(1) had to conform to such regulations. This view stood affirmed by this Court in the case of U.P. State Electricity Board, Lucknow v. City Board, Mussoorie, reported in (1985) 2 SCC 16. 46. A similar question arose for determination by this Court in the case of M/s Jagdamba Pap....
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....., reported in (1986) 4 SCC 198, the dispute was confined to the question concerning increase in the electricity tariff by the Board under the 1948 Act. The principal ground of challenge was that the Board had acted outside its statutory authority by formulating a price structure intended to yield sufficient revenue to offset not only the actual expenditure as contemplated by Section 59 of the 1948 Act but also expenditure not covered by that section. At this stage, we may point out that, in all these cases, the Supreme Court has considered tariff fixation, price fixation, security charges fixation at par. In that case, one of the submissions which found favour with the High Court, which accepted the submissions of the consumer, while striking down the impugned notification, was that in the absence of specification by the State Government, it was not open to the Board to adjust the tariffs. What was found by the Supreme Court was that although the expenditure did not fall strictly within Section 59 of the 1948 Act, the actual expenditure stood incurred to avoid the loss. Therefore, the Supreme Court gave a schematic interpretation to the 1948 Act and it held that the State Electric....
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.... regulation immune from judicial review. (Also see the judgment of this Court in Indian Express Newspapers (Bombay) Pvt. Ltd. and Ors. v. Union of India and Ors. reported in (1985) 1 SCC 641, paragraphs 75 to 79). 49. On the question of "generality versus enumeration" principle, it was further held in the case of Hindustan Zinc Ltd. (supra) that under Section 49(1) of the 1948 Act a general power was given to the Board to supply electricity to any person not being a licensee upon such terms and conditions as the Board thinks fit and the Board may for the purposes of such supply frame uniform tariffs under Section 49(2). The Board was required to fix uniform tariffs after taking into account certain enumerated factors. It was held that the power of fixation of tariffs in the Board ordinarily had to be done in the light of specified factors, however, such enumerated factors in Section 49(2) did not prevent the Board from fixing uniform tariffs on factors other than those enumerated in Section 49(2) as long as they were relevant and in consonance with the Act. To the same effect is the judgment of this Court in Shri Sitaram Sugar Co. Ltd. (supra). In that judgment also this Court h....
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....939, ("1939 Act"), as amended by Madras Act 20 of 1948, came for consideration before the Supreme Court. Section 43A conferred power on the State Government to issue "orders" and "directions", as it may consider necessary in respect of any matter relating to road transport to the State Transport Authority or a Regional Transport Authority. The meaning of the words "orders" and "directions" came for interpretation before the Supreme Court in the said case. It was held, on examination of the Scheme of the Act, that Section 43A was placed by the legislature before the sections conferring quasi-judicial powers on Tribunals which clearly indicated that the authority conferred under Section 43A was confined to administrative functions of the Government and the Tribunals rather than to their judicial functions. It was further held that the legislature had used two words in the section: (i) orders; and (ii) directions. This Court further noticed that under the 1939 Act there was a separate Chapter which dealt with making of "rules" which indicated that the words "orders" and "directions" in Section 43A were meant to clothe the Government with the authority to issue directions of administra....
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....he maintenance of the network. This maintenance is vital. In summer months grids tend to trip. In the absence of the making of the Grid Code in accordance with the Grid Standards, it is open to the Tribunal to direct CERC to perform its statutory functions of specifying the Grid Code having regard to the Grid Standards prescribed by the Authority under Section 73. One can multiply these illustrations which exercise we do not wish to undertake. Suffice it to state that, in the light of our analysis of the 2003 Act, hereinabove, the words orders, instructions or directions in Section 121 of the 2003 Act cannot confer power of judicial review under Section 121 to the Tribunal, which, therefore, cannot go into the validity of the impugned Regulations 2006, as rightly held in the impugned judgment. 55. One of the contentions raised by Shri Shanti Bhushan, learned senior counsel appearing on behalf of Calcutta Electricity Supply Company Ltd. needs to be considered. It was contended on behalf of CESC Ltd. that under Section 111 of the 2003 Act, an appeal lies only against an Order by the Appropriate Commission and not against Regulations framed by CERC under Section 178 of the 2003 Act....
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....n, appoint: Provided that different dates may be appointed for different provisions of this Act and any reference in any such provision to the commencement of this Act shall be construed as a reference to the coming into force of that provision." "Section 121. Power of Chairperson of Appellate Tribunal.- The Chairperson of the Appellate Tribunal shall exercise general power of superintendence and control over the appropriate Commission." 56. We also quote hereinbelow Sections 1 and 4 of the Electricity (Amendment) Act, 2003 (No.57 of 2003) which was brought into force on 27.1.2004: "Section 1. (2) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint. Section 4. For Section 121 of the principal Act, the following Section shall be substituted, namely:- "121. Power of Appellate Tribunal The Appellate Tribunal may, after hearing the Appropriate Commission or other interested party, if any, from time to time, issue such orders, instructions or directions as it may deem fit, to any Appropriate Commission for the performance of its statutory functions under this Act." ....
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.... Electricity (Amendment) Act, 2003 (No.57 of 2003) was brought into force by notification dated 27.1.2004. That, notification was issued under Section 1(2) of the Electricity (Amendment) Act, 2003 (No.57 of 2003). If one reads Section 1(2) of Electricity (Amendment) Act, 2003 (No.57 of 2003) with Notification dated 27.1.2004 issued under Section 1(2) of the amended Act, 2003, it becomes clear that on coming into force of the Electricity (Amendment) Act, 2003 (No.57 of 2003) all provisions amended by it also came into force. Hence, there was no requirement for a further notification under Section 1(3), consequently, Section 121 in its amended form came into force with effect from 27.1.2004. 59. Summary of Our Findings: (i) In the hierarchy of regulatory powers and functions under the 2003 Act, Section 178, which deals with making of regulations by the Central Commission, under the authority of subordinate legislation, is wider than Section 79(1) of the 2003 Act, which enumerates the regulatory functions of the Central Commission, in specified areas, to be discharged by Orders (decisions). (ii) A regulation under Section 178, as a part of regulatory framework, in....