IMPORTANT POINT
Section 121 of Electricity Act, 2003 is not only in a sense revisional but also supervisory in character.

JUDGMENT

Dr. Arijit Pasayat, J.—

1. In these appeals and special leave petition, challenge in each case is to the order passed by the Appellate Tribunal for Electricity (in short the ‘Tribunal’). Challenge before the Tribunal was to the order/decision dated 23.1.2006 of the Central Electricity Regulatory Commission (in short the ‘CERC’) and the Central Electricity Regulatory Commission (Fixation of Trading Margin) Regulations, 2006 (in short the ‘Regulations’) published in the Gazette of India on 27.1.2006. The Tribunal by the impugned judgment held that it has no jurisdiction to deal with the matter. For this purpose the Tribunal placed reliance on a three-Judge Bench decision of this Court in West Bengal Electricity Regulatory Commission v. CESC Ltd.1 (2002 (8) SCC 715). The conclusion in the said decision was to the effect that the High Court sitting as an Appellate Court under Section 27 of the Electricity Regulatory Commission Act, 1998 (in short ‘1998 Act’) has no jurisdiction to go into the validity of the Regulations. It was ultimately held that there is weighty authority for the proposition that a Tribunal which is a creature of the statute cannot question the vires of the provisions under which it functions.

2. Questioning correctness of the said view the present appeals have been filed. It has been contended that the decision in West Bengal Electricity case (supra) has no application to the present case. The Regulations have been framed under Section 178 of the Electricity Act, 2003 (in short ‘2003 Act’). It is pointed out that there is conceptual difference between the provisions which have relevance, as contained in 1998 Act and 2003 Act. Section 121 of 2003 Act gives ample power to the Tribunal to deal with the matter. The fixation of tariff is conceptually and contextually different from fixation of trading margin. With reference to Sections 61 and 62 of 2003 Act it is pointed out that the former relates to “tariff regulations” and later relates to “determination” of tariff.

3. Therefore, there is no question of dealing with trading margin. Section 66 deals with the issue of development of market including trading. Section 79 deals with functioning of CERC. Section 111 deals with appellate Tribunal. Section 121 confers supervisory powers on the Tribunal of statutory functions. Section 121 has power to issue orders, instructions and directions. It is not only in a sense revisional but also supervisory in character. Its jurisdiction encompasses all aspects relating to statutory functions under the Act. Section 79(1)(j) deals with fixation of trading margin. It is the stand of the appellants that this can be done by an order and not by a Regulation. With reference to Section 178(2)(y) it is submitted that power is given to prescribe the manner by which development of market in power sector including trading can be prescribed. Said provision has to be read alongwith Sections 60, 61 and 62. There is significantly no reference to Section 79.

4. Learned counsel for the respondents on the other hand submitted that the Tribunal is a creature of the statute and therefore cannot go into the validity or legality of the Regulations and, therefore, the view of the Tribunal is correct.

5. At this juncture, it is to be noted that sub-section (3) of Section 79 talks of transparency. Section 79 deals with functioning of CERA and Section 178 deals with power to make Regulations. In terms of Section 179, the Regulations have to be placed before the Parliament and, therefore, have statutory flavor.

6. It is also to be noted that in West Bengal Electricity case (supra) in para 102 the need for having an expert body was highlighted and that appears to be the basis for enacting Section 121 in the 2003 Act.

7. In Clariant International Ltd. and Anr. v. Securities & Exchange Board of India2 (2004 (8) SCC 524) certain observations have relevance. Paras 27, 33, 34, 42, 51 and 52 read as follows:

“27. In Kruger v. Commonwealth of Australia