1. Dispute over transmission charges and compensation for delay in commissioning assets under the Electricity Act, 2003 — challenge to CERC orders via writ petition. (Para 4 , 5 , 6 , 7 , 8 )
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2025 Supreme(SC) 836
SUPREME COURT OF INDIA
J. B. PARDIWALA, R. MAHADEVAN, JJ.
Power Grid Corporation Of India Limited – Appellant
Versus
Madhya Pradesh Power Transmission Company Limited & Ors. – Respondents
Civil Appeal No. 6847 of 2025 (Arising from SLP (C) No. 7605 of 2021) With Civil Appeal No. 6848 of 2025 (Arising from SLP (C) No. 7607 of 2021)
Decided on : 15-05-2025
Important Points
The CERC possesses both regulatory and adjudicatory powers under the Electricity Act, allowing it to impose compensation for delays while retaining the framework under which such determinations are made, despite alternative remedies being available.
Subject
Electricity Law - Regulatory Jurisdiction
Act Referred
CENTRAL ELECTRICITY REGULATORY COMMISSION TERMS AND CONDITION OF TARIFF REGULATION: Reg.4(3), Reg.4(3)(ii)
CONSTITUTION OF INDIA: Art.226
ELECTRICITY ACT: S.111, S.125, S.178, S.38, S.62, S.79
CONSTITUTION OF INDIA: Art.226
ELECTRICITY ACT: S.111, S.125, S.178, S.38, S.62, S.79
Headnote
(A) Electricity Act, 2003 - Sections 62, 79, 111, and 178 - Regulatory functions of CERC - High Court validated writ petitions of respondent for CERC allegedly exceeding jurisdiction by permitting compensation claims for delay in intra-state transmission - CERC's determinations include regulatory and adjudicatory functions, affirming authority to impose charges. (Paras 66, 68)
(B) Regulatory competence - Determining tariff and granting compensation reflect CERC's dual authority under Section 79, differing from legislative power under Section 178, hence interdependent but distinct roles recognized. (Paras 37, 65)
(C) Jurisdictional error contested by respondent, claiming alternative remedies available under Section 111 to Appellate Tribunal, with High Court's admission of writ petition based on purported failure of principles of natural justice; however, substantial jurisdiction not negated on regulatory grounds observed. (Paras 11, 12, 30, 31)
(D) Conclusion found CERC's act of permitting compensation valid, reversing High Court's decision and maintaining regulatory standards for electricity tariff management. (Paras 65, 68)
(B) Regulatory competence - Determining tariff and granting compensation reflect CERC's dual authority under Section 79, differing from legislative power under Section 178, hence interdependent but distinct roles recognized. (Paras 37, 65)
(C) Jurisdictional error contested by respondent, claiming alternative remedies available under Section 111 to Appellate Tribunal, with High Court's admission of writ petition based on purported failure of principles of natural justice; however, substantial jurisdiction not negated on regulatory grounds observed. (Paras 11, 12, 30, 31)
(D) Conclusion found CERC's act of permitting compensation valid, reversing High Court's decision and maintaining regulatory standards for electricity tariff management. (Paras 65, 68)
Judgement Key Points
Key Points: - The Central Electricity Regulatory Commission (CERC) possesses both regulatory and adjudicatory powers under the Electricity Act, 2003 (!) . - The High Court erred in admitting the writ petition filed by the respondent, as the CERC's order granting liberty to claim compensation was within its regulatory powers (!) . - The CERC's power to regulate inter-state transmission and determine tariff under Section 79(1) is distinct from its power to make regulations under Section 178 (!) (!) . - The grant of compensation for delay is considered a regulatory function, aimed at filling regulatory gaps when specific regulations are absent (!) (!) . - The CERC can exercise its regulatory powers under Section 79(1) even in the absence of specific regulations under Section 178 (!) . - The determination of tariff by the CERC under Section 62 is an adjudicatory function, but other reliefs granted under Section 79(1) can be regulatory (!) (!) . - The High Court should not have entertained the writ petition as the challenge was to the exercise of jurisdiction by the CERC, for which an alternative remedy under Section 111 of the Act was available (!) (!) . - The CERC's order allowing the appellant to claim compensation for the delay was a consequence of a regulatory lacuna and not a contravention of natural justice (!) . - The appeals were allowed, setting aside the High Court's judgment and dismissing the writ petitions (!) . - The Supreme Court clarified that it did not consider the merits of whether the liability for transmission charges could be imposed on the respondent, leaving that to the Appellate Tribunal for Electricity (APTEL) if an appeal is preferred (!) .
What is the scope of the CERC’s power to regulate inter-state transmission of electricity and determine tariff for the same under clauses (c) and (d) of Section 79 (1) of the Electricity Act, 2003?
What is the nature of the CERC's function when granting compensation for delay in commissioning of transmission assets?
What are the conditions under which a writ petition can be entertained by the High Court despite the availability of an alternative remedy under Section 111 of the Electricity Act, 2003?
Legal Category Hierarchy
- administrative law
- energy law
- constitutional law
Advocates appeared:
For the Petitioner(s): Mr. M.G. Ramachandran, Sr. Adv. Mr. Shubham Arya, Adv. Ms. Poorva Saigal, Adv. Mr. Pramod Dayal, AOR Mr. Nikunj Dayal, Adv. Ms. Reeha Singh, Adv. Ms. Pallavi Saigal, Adv. Ms. Shirin Gupta, Adv. Mr. Aneesh Bajaj, Adv. Ms. Srishti Khindaria, Adv.
For the Respondent(s): Mr. Arjun Garg, AOR Ms. Kriti Gupta, Adv. Ms. Sagun Srivastava, Adv. Mr. Saaransh Shukla, Adv. M/s.Udit Kishan And Associates, AOR Mr. Sudhanshu S, Choudhari, Sr. Adv. Mr. Shirish K. Deshpande, AOR Ms. Rucha Pravin Mandlik, Adv. Mr. Mohit Goutam, Adv. Mr. Apoorv Sharma, Adv. Mr. Harish Ahmad, Adv. Ms. Pranjal Chapalgaonkar, Adv. Ms. Gautami Yadav, Adv.
For the Petitioner(s): Mr. M.G. Ramachandran, Sr. Adv. Mr. Shubham Arya, Adv. Ms. Poorva Saigal, Adv. Mr. Pramod Dayal, AOR Mr. Nikunj Dayal, Adv. Ms. Reeha Singh, Adv. Ms. Pallavi Saigal, Adv. Ms. Shirin Gupta, Adv. Mr. Aneesh Bajaj, Adv. Ms. Srishti Khindaria, Adv.
For the Respondent(s): Mr. Arjun Garg, AOR Ms. Kriti Gupta, Adv. Ms. Sagun Srivastava, Adv. Mr. Saaransh Shukla, Adv. M/s.Udit Kishan And Associates, AOR Mr. Sudhanshu S, Choudhari, Sr. Adv. Mr. Shirish K. Deshpande, AOR Ms. Rucha Pravin Mandlik, Adv. Mr. Mohit Goutam, Adv. Mr. Apoorv Sharma, Adv. Mr. Harish Ahmad, Adv. Ms. Pranjal Chapalgaonkar, Adv. Ms. Gautami Yadav, Adv.
Table of Contents
2. Respondent claims CERC lacked jurisdiction and breached natural justice; Appellant argues the existence of an efficacious alternative remedy under Section 111 of the Act, 2003. (Para 9 , 10 , 11 , 23 , 24 , 25 , 26 , 27 )
3. CERC possesses dual regulatory and adjudicatory powers; absence of Section 178 regulations does not preclude the exercise of general regulatory powers under Section 79 to fill gaps. (Para 37 , 38 , 39 , 40 , 42 , 43 , 46 , 47 , 48 , 57 , 58 , 59 , 60 , 62 , 63 )
4. Regulatory orders under Section 79 are ad hoc and appealable under Section 111, unlike general regulations under Section 178, making writ petitions generally maintainable only in exceptional cases. (Para 41 , 63 , 64 )
5. High Court judgment set aside and writ petitions dismissed — parties directed to the statutory alternative remedy before the Appellate Tribunal for Electricity. (Para 65 , 66 )
6. What is the relationship between the CERC's functions under Section 79 and its power to make regulations under Section 178 of the Electricity Act, 2003?
Section 178 empowers CERC to make general legislative regulations, while Section 79 covers administrative, regulatory, and adjudicatory functions. Orders under Section 79 must conform to Section 178 regulations if they exist, but the absence of such regulations does not preclude CERC from exercising its powers under Section 79. (Para 37 , 38 , 39 , 40 , 43 )
7. Can the CERC exercise regulatory functions through specific orders rather than general regulations?
Yes. CERC has dual functions. While Section 178 regulations have general application, Section 79 allows for ad hoc regulatory and adjudicatory orders to address specific issues between parties and fill regulatory gaps. (Para 46 , 47 , 48 , 57 , 58 )
8. Is the grant of compensation for delay in commissioning transmission assets a regulatory or adjudicatory function of the CERC?
It is a regulatory function. When CERC addresses a regulatory lacuna—such as the absence of contractual or statutory provisions for delay risks—to balance commercial principles and consumer interests, it acts in its regulatory capacity. (Para 54 , 55 , 56 , 59 , 60 , 61 )
9. When can a writ petition be maintained against CERC orders despite the availability of an alternative remedy under Section 111?
A writ petition is generally not maintainable if an efficacious alternative remedy exists (APTEL). It is only entertained in exceptional cases, such as breaches of natural justice, lack of jurisdiction, or challenges to the constitutionality of a statute. (Para 12 , 15 , 64 )
JUDGMENT :
J.B. PARDIWALA, J.
For the convenience of exposition, this judgment is divided into the following parts:
| INDEX |
| A. FACTUAL MATRIX |
| B. IMPUGNED ORDER |
| C. SUBMISSIONS ON BEHALF OF THE APPELLANT |
| D. SUBMISSIONS ON BEHALF OF THE RESPONDENTS |
| E. ISSUES FOR DETERMINATION |
| F. ANALYSIS |
| i. Relevant Provisions of the Act, 2003 |
| ii. Relationship between Sections 79 and 178 of the Act, 2003 respectively |
| iii. Regulatory and adjudicatory functions of the CERC under Section 79 |
| iv. Grant of compensation for delay on the part of a party is a regulatory function |
| G. CONCLUSION |
1. Leave granted.
2. Since the issues raised in both the captioned appeals are the same, those were taken up for hearing analogously and are being disposed by this common judgment and order.
3. These appeals arise from the Judgment and Order passed by the High Court of Madhya Pradesh, Indore Bench dated 25.02.2021, in Writ Petition No. 10845 of 2020 and Writ Petition No. 9136 of 2020 respectively, by which the High Court admitted the writ petitions filed by the Madhya Pradesh Power Transmission Company Limited (“MPPTCL”) on the ground that the Central Electricity Regulatory Commission (the “CERC”) had exercised powers beyond those vested in it as per the regulations under the ELECTRICITY ACT , 2003 (the “Act, 2003”) in passing the orders dated 21.01.2020 and 27.01.2020 in Petition No. 311/TT/2018 and Petition No. 266/TT/2018 respectively.
A. FACTUAL MATRIX
4. The appellant herein is a Government of India Undertaking constituted for the purpose of undertaking inter-state transmission of electricity. In other words, the scope of work of the appellant includes inter alia, establishing and operating transmission lines, sub-stations and other transmission assets associated with inter-State transmission of power. These include ‘bays’ and inter-connecting ‘transformers’ at sub-stations to provide inter-connection facilities. By virtue of being a central transmission utility, the appellant is a deemed transmission licensee in terms of Section 38 of the Act, 2003. The respondent no. 1 herein is the State Transmission Utility and intra-state transmission licensee in the State of Madhya Pradesh.
5. The case on hand pertains to a dispute between the appellant and respondent no. 1 in respect of the implementation of the “Western Region System Strengthening Scheme XIV (WRSS-XIV) and Western Region Strengthening Scheme XVI (WRSS-XVI)” respectively by the appellant. The transmission assets were implemented by the appellant at the Indore sub-station upon the specific request of the respondent no. 1. In this regard, the parties planned and approved the WRSS-XIV in its 37th Standing Committee Meeting on Power System Planning of Western Region held on 05.09.2014 and WRSS-XVI in the 38th Standing Committee Meeting for the Western Region on 17.07.2015.
6. According to the agreement between the parties, the respondent no. 1 was required to construct and commission the intra-state transmission line from Indore sub-station coinciding with the timeline of completion of works which were within the scope of the appellant. However, the construction and commissioning of the intra-state transmission line by respondent no. 1 was delayed. Such delay constrained the appellant to file Petition No. 311/TT/2018 and Petition No. 266/TT/2018 corresponding to WRSS-XIV and WRSS-XVI respectively, before the CERC for (i) approval of the Commercial Operation Date (the “COD”) of its transmission system, under Regulation 4(3) of the Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2014 (the “2014 Tariff Regulations”), and (ii) determination of transmission charges and billing of the tariff for the transmission facilities established by it at the Indore sub-station.
7. The CERC vide its order dated 21.01.2020, observed, inter alia, that as per the investment approval accorded to the transmission scheme on 27.01.2016, the assets
