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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

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.

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.

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.

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

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2022 Supreme(SC) 1184

SUPREME COURT OF INDIADHANANJAYA Y. CHANDRACHUD, CJI., A.S. BOPANNA, J.B. PARDIWALA, JJ.The Tata Power Company Limited Transmission - AppellantVersusMaharashtra Electricity Regulatory Commission & Ors - RespondentsCivil Appeal No. 1933 of 2022Decided On : 23-11-2022

IMPORTANT POINTDetermination 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.

Cases Referred (4)

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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 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.