DIPAK MISRA, CJ

The petitioners, as pro-bono publico, have preferred this writ petition under Article 226 of the Constitution of India for issue of a writ of mandamus commanding the Delhi Electricity Regulatory Commission (for short „the Commission?), the respondent No.2 herein, to issue the tariff order approved by it on 28th/29th April, 2010 and pass such other order/orders as may be deemed fit in the facts and circumstances of the case.

2. It is profitable to note here that various assertions have been made with regard to the issues relating to the finalization of the tariff by the Commission under the provisions of the Electricity Act, 2003 (for brevity „2003 Act?), the illegality committed by the Government of National Capital Territory of Delhi (GNCTD) in asking the Commission not to issue the tariff and further how the consumers have been affected by the non-issuance of the tariff order. In the course of the pendency of the writ petition, there was impleadment of certain respondents, namely, BSES Yamuna Power Ltd., BSES Rajdhani Power Ltd. and North Delhi Power Ltd. At the commencement of the hearing, the question that crept up was whether the State Government could have interdicted in the affairs of the Commission in the manner it had done in exercise of the power under Section 108 of the 2003 Act. When the said debate was on, this Court sought the assistance of the learned Attorney General for India and the learned counsel for the parties acceded that the said issue should be decided first. 3. This Court, on 18th February, 2011, after referring to the various citations in the field, came to hold as follows: - “20. Regard being had to the aforesaid pronouncement of law in the field, the justifiability and the legal substantiality of the communication made by the State has to be tested. As is demonstrable the State is entitled to change or alter economic policies and the said decision has to be in public interest. In the case at hand, the nature of directions issued by the State Government has a different contour. To appreciate the controversy in proper perspective it is necessitous to reproduce the communication sent by the State Government to the Commission: “The Secretary, Delhi Electricity Regulatory Commission, Viniyamak Bhawan, Shivalik, Malviya Nagar, New Delhi - 10 017 Sir, Through separate representations to the Government, the three distribution companies, BRPL, NDPL and BYPL have raised the issue of severe cash flow constraints affecting their ability to purchase power in 2010-11. A copy of this representation is enclosed. They have broadly drawn the attention of the Government on the following issues: 1. Ability to supply power contingent on Cost Reflective Tariff.

2. Precarious Financial Position on Discoms.

3. Accumulation of revenue gaps beyond sustainable levels.

4. Continuation of the practice of assuming higher surplus for tariff fixation.

5. Power purchase cost/quantum.

6. Continuous recourse to addition debt to finance operations, and

7. Critical need to additional financing. The issues raised by the Discoms are very serious and needs to be examined thoroughly so that the sustainable model of tariff setting as prescribed under section 61 and 62 of the Electricity Act is not jeopardized. Further, the National Tariff Policy at clause No. 5.3(h)-4 has prescribed that uncontrollable costs should be recovered speedily to ensure that the future consumers are not burdened with the past costs. It is felt that non-true-up of the account of the year 2009-2010 where quantum of uncontrollable costs were very high, would mean that future consumers would be burdened with the interest cost of the year 2009- 2010 which goes against the above quoted clause of National Tariff Policy.

As the issues raised by the Distribution Companies as well as the issue of burdening future consumers with past liabilities are issues

which are very serious in nature, the Government in exercise of its power under section 86(2)(iv) dir