1. Grant of transmission licence for HVDC project — Dispute over tariff determination modality — Regulated Tariff Mechanism under Section 62 versus Tariff Based Competitive Bidding under Section 63, Electricity Act. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38 )
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2022 Supreme(SC) 1184
SUPREME COURT OF INDIA
DHANANJAYA Y. CHANDRACHUD, CJI., A.S. BOPANNA, J.B. PARDIWALA, JJ.
The Tata Power Company Limited Transmission - Appellant
Versus
Maharashtra Electricity Regulatory Commission & Ors - Respondents
Civil Appeal No. 1933 of 2022
Decided On : 23-11-2022
Important Points
IMPORTANT POINT
Determination and regulation of tariff – Electricity Act 2003 provides States sufficient flexibility to regulate intra-state transmission systems, wherein Appropriate State Commissions possess power to determine and regulate tariff.
Determination and regulation of tariff – Electricity Act 2003 provides States sufficient flexibility to regulate intra-state transmission systems, wherein Appropriate State Commissions possess power to determine and regulate tariff.
Subject
Energy Law - Electricity Transmission and Tariff Regulation
Act Referred
ELECTRICITY ACT: S.111, S.14, S.15, S.125, S.39, S.180, S.63, S.61, S.181
MAHARASHTRA ELECTRICITY REGULATORY COMMISSION (MULTI YEAR TARIFF) REGULATIONS: Reg.8
MAHARASHTRA ELECTRICITY REGULATORY COMMISSION (MULTI YEAR TARIFF) REGULATIONS: Reg.8
Headnote
Electricity Act, 2003 – Sections 62 and 63 – Determination and regulation of tariff – Electricity Act 2003 provides States sufficient flexibility to regulate intra-state transmission systems, wherein Appropriate State Commissions possess power to determine and regulate tariff – Electricity Act 2003 seeks to distance State Governments from determination and regulation of tariff, placing such power completely within ambit of Appropriate Commissions – Provisions of Electricity Act 2003 do not prescribe one dominant method to determine tariff – Section 63 operates after bidding process has been conducted – Where tariff has already been determined through bidding, Appropriate Commission has to adopt such tariff that has been determined – Appropriate Commission cannot negate such tariff determined through bidding by using its powers under Section 62 – Electricity Act 2003 or policy framework, particularly NTP 2016 read with GoM GR dated 4 January 2019, did not make it binding upon MERC to allot HVDC project only through TBCB route. (Paras 128 and 129)
Result : Appeal dismissed.
Legal Category Hierarchy
- energy law
- administrative law
- practice and procedure
Advocates appeared:
For the Appellant(s) : Mr. Shyam Divan, Sr. Adv. Mr. Shri Venkatesh, Adv. Ms. Kanika Chugh, Adv. Mr. Nitin Saluja, AOR Mr. Suhael Buttan, Adv. Mr. Siddharth Joshi, Adv. Mr. Vineet Kumar, Adv. Mr. Anant Singh, Adv. Ms. Shivani Luthra Lohiya, Adv.
For the Respondent(s): Mr. Vikas Singh, Sr. Adv. Mr. Mahesh Agarwal, Adv. Mr. Hemant Singh, Adv. Ms. Deepa Chawan, Adv. Mr. Arshit Anand, Adv. Ms. Geetika Sharma, Adv. Mr. Harshit Singh, Adv. Mr. Mridul Chakravarty, Adv. Mr. Biju Mattam, Adv. Mr. Lakshyajit Singh Bagdwal, Adv. Ms. Lavanya Panwar, Adv. Ms. Reshma Nathani, Adv. Ms. Deepeika Kalia, Adv. Mr. Aditya Kayla, Adv. Mr. E. C. Agrawala, AOR Ms. Amita Singh Kalkal, AOR Mr. Sudhanshu S. Choudhari, AOR Mr. Mahesh P. Shinde, Adv. Ms. Rucha A. Pande, Adv. Ms. Veeraragavan M., Adv. Mr. Sachin Patil, AOR Mr. Siddharth Dharmadhikari, Adv. Mr. Aaditya A. Pande, AOR Mr. Bharat Bagla, Adv. Ms. Kirti Dadheech, Adv.
For the Appellant(s) : Mr. Shyam Divan, Sr. Adv. Mr. Shri Venkatesh, Adv. Ms. Kanika Chugh, Adv. Mr. Nitin Saluja, AOR Mr. Suhael Buttan, Adv. Mr. Siddharth Joshi, Adv. Mr. Vineet Kumar, Adv. Mr. Anant Singh, Adv. Ms. Shivani Luthra Lohiya, Adv.
For the Respondent(s): Mr. Vikas Singh, Sr. Adv. Mr. Mahesh Agarwal, Adv. Mr. Hemant Singh, Adv. Ms. Deepa Chawan, Adv. Mr. Arshit Anand, Adv. Ms. Geetika Sharma, Adv. Mr. Harshit Singh, Adv. Mr. Mridul Chakravarty, Adv. Mr. Biju Mattam, Adv. Mr. Lakshyajit Singh Bagdwal, Adv. Ms. Lavanya Panwar, Adv. Ms. Reshma Nathani, Adv. Ms. Deepeika Kalia, Adv. Mr. Aditya Kayla, Adv. Mr. E. C. Agrawala, AOR Ms. Amita Singh Kalkal, AOR Mr. Sudhanshu S. Choudhari, AOR Mr. Mahesh P. Shinde, Adv. Ms. Rucha A. Pande, Adv. Ms. Veeraragavan M., Adv. Mr. Sachin Patil, AOR Mr. Siddharth Dharmadhikari, Adv. Mr. Aaditya A. Pande, AOR Mr. Bharat Bagla, Adv. Ms. Kirti Dadheech, Adv.
Table of Contents
2. Whether Tariff Based Competitive Bidding is the dominant route for transmission licences — Applicability of National Tariff Policy and State Government Resolutions to existing versus new projects. (Para 43 , 44 )
3. Sections 62 and 63 provide alternative modalities — National Tariff Policy is a material consideration but not binding — Concurrent findings on project status are not reopenable. (Para 69 , 70 , 71 , 72 , 73 , 74 , 75 , 76 , 77 , 78 , 79 , 80 , 81 , 82 , 83 , 84 , 85 , 86 , 87 , 88 , 89 , 90 , 91 , 92 , 93 , 94 , 95 , 96 , 97 , 98 , 99 , 100 , 101 , 102 , 103 , 104 , 105 , 106 , 107 , 108 , 109 , 110 , 111 , 112 , 113 , 114 , 115 , 116 , 117 , 118 , 119 , 120 , 121 , 122 , 123 , 124 , 125 , 126 , 127 )
4. Sections 62 and 63 are alternative routes — National Tariff Policy is a material consideration, not a binding mandate — Concurrent findings of fact are final under Section 125. (Para 74 , 94 , 99 , 106 )
5. Appeal dismissed — State Regulatory Commissions directed to frame regulations under Section 181 regarding tariff determination modalities within three months. (Para 128 , 129 , 131 , 132 )
6. Is the Tariff Based Competitive Bidding (TBCB) route under Section 63 the dominant method for determining transmission tariffs?
No. Sections 62 and 63 provide alternative modalities. Section 63 is invoked after a bidding process is conducted; it does not take precedence over Section 62 at the stage of choosing the modality of tariff determination. (Para 73 , 74 , 77 )
7. Is the National Tariff Policy (NTP) binding on State Regulatory Commissions when determining tariff modalities?
The NTP is a statutory policy and a material consideration that must guide the Commission, but it is not a binding mandate that overrides the Commission's general regulatory discretion to determine tariffs. (Para 88 , 94 , 99 )
8. Can the Supreme Court reopen concurrent findings of fact recorded by a Regulatory Commission and an Appellate Tribunal in an appeal under Section 125?
No. An appeal under Section 125 of the Electricity Act is maintainable only on substantial questions of law. Concurrent findings of fact recorded by the lower fora cannot be reopened. (Para 106 )
9. Does a State Government Resolution mandating TBCB for new projects bind the State Regulatory Commission?
Not unless issued as a direction in matters of policy involving public interest under Section 108. Tariff fixation falls within the independent statutory domain of the Regulatory Commission. (Para 110 , 111 , 112 )
JUDGMENT :
Dhananjaya Y. Chandrachud, CJI.
A glossary of defined terms used in the judgment has been provided below:
| Glossary of Terms | |
| Defined Term | Definition |
| Act | Electricity Act, 2003 |
| AEMIL/second respondent | Adani Electricity Mumbai Infra Limited |
| AEML-T third respondent | Adani Electricity Mumbai Limited - Transmission |
| APTEL | Appellate Tribunal for Electricity |
| CEA | Central Electricity Authority Development Guidelines Guidelines for encouraging Competition in Development of Transmission Projects |
| DPR | Detailed Progress Report |
| EC/fifth respondent | Empowered Committee |
| FoR | Forum of Regulators |
| GoM’s GR | Government of Maharashtra’s, Government Resolution dated 04.01.2019 |
| HVDC | High Voltage Direct Current |
| HVDC Project | 1000 MW HVDC (VSC based) link between 400 kV MSETCL Kudus & 220 kV AEML Aarey EHV Station |
| MERC/first respondent | Maharashtra Electricity Regulatory Commission |
| MERC MYT Regulations | Maharashtra Electricity Regulatory Commission (Multi Year Tariff) Regulations 2019 |
| MERC MYT Amendment Regulations | Maharashtra Electricity Regulatory Commission (Multi Year Tariff) (First Amendment) Regulations 2022 |
| MoP | Ministry of Power |
| MSETCL/fourth respondent | Maharashtra State Electricity Regulatory Commission |
| NEP | National Electricity Policy |
| NTP 2006 | National Tariff Policy 2006 |
| NTP 2016 | National Tariff Policy 2016 |
| REL | Reliance Energy Ltd. |
| R-Infra | Reliance Infrastructure Limited |
| RTM | Regulated Tariff Mechanism |
| STU | State Transmission Utility |
| TBCB | Tariff Based Competitive Bidding |
| TBCB Guidelines | Tariff Based Competitive Bidding Guidelines for Transmission Service issued by the MoP dated 13.04.2006 |
| TPC-T/appellant | Tata Power Company Limited Transmission |
| VSC | Voltage Source Converter |
This judgment has been divided into the following sections to facilitate analysis:
| A. The Facts B. Proceedings before the MERC and APTEL C. The Submissions D. Regulatory Framework | |
| D. 1 Electricity Act 2003 D.2 Policy framework D. 2.1 Central D. 2.2 State Policies | |
| E. The Analysis | |
| E. 1 Section 63 : The dominant route or the alternative route E. 1.1. The value of TBCB Guidelines prescribed under Section 63 E. 2 General Regulatory Power of the Appropriate Commission E.2.1 The nature of NTP- binding or a material consideration E. 3 Value of GoM GR E. 3. 1The New- Old Conundrum E. 3. 2 Relevance of GoM GR for MERC’s Decision E. 3. 3 Relevance of GoM GR vis-à-vis MSETCL’s decision | |
| F Conclusion | |
1. APTEL, by its judgment dated 18 February 2022, dismissed an appeal under Section 111 of the Act instituted by the appellant against a decision of MERC dated 21 March 2021.
2. On 21 March 2021, MERC granted a transmission licence to AEMIL under Sections 14 and 15 of the Act for setting up a 1000 MW HVDC (VSC based) link between 400 kV MSETCL Kudus and 220 kV AEML Aarey EHV Station.
3. The appellant challenged MERC’s order before APTEL, inter alia, on the ground that the grant of the licence was not preceded by a TBCB process. TPC-T contended that the failure to adhere to a TBCB process pursuant to Section 63 was contrary to public interest and statutory mandate. APTEL dismissed the appeal. This has given rise to a statutory appeal under Section 125 of the Act.
A. The Facts
4. On 12 November 2007, MSETCL issued a communication to CEA stating, inter alia, that it was difficult to lay overhead AC lines to bring power from the new 400kV sub-station, which was required to meet Mumbai’s growing demand of power, to Mumbai’s load centres due to constraints. Hence, it was proposed that VSC based HVDC technology may be utilised to connect the new sub-station with major load centres in Mumbai through DC cab
