Point of Law: The term "tariff" includes within its ambit not only fixation of rates but also rules and regulations relating to it. If one reads S. 61 with S. 62 of 2003 Act, it becomes clear that Appropriate Commission shall determine actual tariff in accordance with provisions of Act, including the terms and conditions which may be specified by Appropriate Commission under Section 61 of said Act.

JUDGMENT :

Every once in a while, an unsuspecting judge opens a case file, only to find himself dragged into an unfathomable ocean of technical gobbledygook. This is one such case, and an attempt at its resolution has had me delve into the privileged domain of electrical engineers, mercifully, with able assistance from the learned Senior Counsel, and their enthusiastic and erudite instructing counsel, appearing on either side.

The brief facts:

The State owned Distribution Licensee under the Electricity Act, 2003 (hereinafter referred to as the ‘2003 Act’) is the petitioner in this writ petition that questions the legality of the Central Electricity Regulatory Commission (Sharing of Inter-State Transmission Charges & Losses) Regulations, 2020 (hereinafter referred to as the ‘2020 Regulations’). The petitioner argues that the impugned Regulations, by changing the basis for the sharing of inter-state transmission charges and losses from the one that obtained under the earlier Regulations of 2010, has strayed away from the objectives stipulated under the National Tariff Policy as also the provisions of the Electricity Act. It is also their case that the impugned Regulations discriminate against the petitioner and similarly situated Distribution Licensees in the Southern Region of our country, as they are forced to shoulder a heavy financial burden on account of the changed sharing criteria adopted in the said Regulations.

2. The respondent Regulatory Commission refutes the arguments of the petitioner by referring to the scheme of the 2003 Act that portrays it as a complete code with respect to all matters concerning electricity, including the development of a national grid, ensuring optimal of the transmission network to promote efficient utilization of generation and transmission assets in the country; attracting the required investments in the transmission sector, providing adequate returns and transmission tariff framework with the objective of promoting effective utilization of all assets across the country and accelerated development of new transmission capacities that are required keeping the projected demand and generation in the years to come. Reference is made to the provisions of the 2003 Act to demonstrate that the Commission has been vested with the powers to specify the terms and conditions for determination of tariff as also to make regulations, inter alia, for the levy and collection of fees and charges from generating companies or transmission utilities or licencees. In the discharge of its functions, the Commission is stated to be guided by the National Electricity Policy and the Tariff Policy that requires it, inter alia, to formulate a national transmission tariff framework that would be sensitive to distance, direction and related to quantum of flow.

3. Referring to the challenge in the writ petition to the ‘2020 Regulations’, it is stated that the said sharing regulations are an improvement upon the earlier regulations of 2010, and that the changes were necessitated on account of the recommendations made by the Bakshi Committee Task Force, as modified by the Jha Committee that was constituted to implement the recommendations of the former. Inasmuch as the changes were made after consulting the various stakeholders and considering their objections to the draft proposals, it is argued that the petitioner cannot challenge the 2020 Regulations because it gives effect to a policy decision, the merit or wisdom of which will not ordinarily be reviewed by this Court in exercise of its power of judicial review under Article 226 of the Constitution of India.

The Statutory Framework:

Before proceeding to consider the issues and the rival submissions, it would be apposite to notice the statutory framework under the Electricity Act, 2003, particularly with reference to the role envisaged for the CERC thereunder. The scope and analysis of the 2003 Act has been succinctly laid out in paragraphs 17 to 28 of the judgment of the Supre