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2024 Supreme(All) 800
IN THE HIGH COURT OF ALLAHABAD
VIVEK CHAUDHARY, OM PRAKASH SHUKLA, JJ.
U.P.Power Corporation Limited Thru M.D.- Appellant
Versus
Central Electricity Regulatory Commission Thru Secy. And Anr. – Respondents
Writ - C No. - 7368 of 2006
Decided on : 16-05-2024
Advocate Appeared:
For the Petitioner: D.D. Chopra, Divyam Krishna, Shailesh Verma
For the Respondent: I B Singh, Madhumita Bose, Rekha Nigam
IMPORTANT POINT
Regulations framed under a statute must not conflict with the provisions of that statute; any such conflicting regulation is deemed ultra-vires.
Headnote:
REGULATION - ELECTRICITY TARIFF - Electricity Act, 2003 - Sections 61, 62(6), 178 - The court examined the conflict between Regulation 5A of the Central Electricity Regulatory Commission (CERC) and Section 62(6) of the Electricity Act, 2003. It highlighted that while Section 62(6) mandates interest at the bank rate for excess charges, Regulation 5A stipulates a fixed interest rate of 6%. The court interpreted that regulations must align with the principal legislation and declared Regulation 5A ultra-vires to the extent it contradicts Section 62(6), influencing the decision to quash the regulation.
Fact of the Case:
Uttar Pradesh Power Corporation Limited (UPPCL) filed a writ petition against the Central Electricity Regulatory Commission (CERC) and NTPC Limited, challenging Regulation 5A of the CERC Tariff Regulations, 2006, which mandated a fixed interest rate of 6% for excess tariff charges, claiming it was inconsistent with Section 62(6) of the Electricity Act, 2003.
Finding of the Court:
The court found that Regulation 5A conflicted with Section 62(6) of the Electricity Act, which specifies that interest on excess charges should be at the bank rate. The court emphasized that regulations must not contradict the principal legislation and declared Regulation 5A ultra-vires.
Issues: Whether Regulation 5A of the CERC Tariff Regulations, 2006 is ultra-vires to Section 62(6) of the Electricity Act, 2003 due to its provision for a fixed interest rate of 6% instead of the bank rate.
Ratio Decidendi: The court established that regulations made under a statute must conform to the provisions of that statute and cannot contradict it. The principle that delegated legislation must be consistent with the enabling Act was reinforced, leading to the conclusion that Regulation 5A was invalid as it conflicted with Section 62(6).
Final Decision: The writ petition was allowed, and Regulation 5A was declared ultra-vires and quashed to the extent it provided for a fixed interest rate contrary to the provisions of the Electricity Act, 2003.
JUDGMENT :
1. Heard Sri D.D. Chopra, learned Senior Advocate, assisted by Sri Shailesh Verma, learned counsel representing the UPPCL-petitioner, Ms. Madhumita Bose, learned counsel for respondent no.1-CERC and Ms. Rekha Nigam, learned counsel for respondent no.2-NTPC.
2. Present writ petition is filed by Uttar Pradesh Power Corporation Limited (UPPCL) against the Central Electricity Regulatory Commission (CERC) and NTPC Limited. Though, number of reliefs are sought in the present writ petition, however, Sri D.D. Chopra, learned Senior Counsel for the petitioner confines his prayer to relief 'ia' of the writ petition only and states that he is not pressing any other relief except the aforesaid relief 'ia'. The relief 'ia' of the writ petition reads under:-
"ia. Issue an appropriate writ, order or direction in the nature of certiorari quashing Regulation 5A of Central Electricity Regulatory Commission (Terms and Conditions of Tariff) (First Amendment), Regulations, 2006 (the impugned regulations) be declaring it to be ultra-vires and not consistent with the provisions of Electricity Act, 2003 only to the extent the same provides for payment of simple interest at 6% per annum."
3. Learned counsel for petitioner states that Regulation 5A of Central Electricity Regulatory Commission (Terms and Conditions of Tariff) (First Amendment), Regulations, 2006 (hereinafter referred to as 'Regulations of 2006') is directly in conflict with Section 62(6) of the Electricity Act, 2003 (hereinafter referred to as 'Act of 2003').
4. Opposing the same, both the counsel for respondents submit that there is no illegality in the regulations.
5. Section 61 of the Electricity Act provides that appropriate commission shall, subject to the provision of this Act, specify the terms and conditions for the determination of tariff. Section 62 of the Electricity Act, 2003 reads as follows:-
"62. Determination of tariff.—(1) The Appropriate Commission shall determine the tariff in accordance with the provisions of this Act for—
(a) supply of electricity by a generating company to a distribution licensee: Provided that the Appropriate Commission may, in case of shortage of supply of electricity, fix the minimum and maximum ceiling of tariff for sale or purchase of electricity in pursuance of an agreement, entered into between a generating company and a licensee or between licensees, for a period not exceeding one year to ensure reasonable prices of electricity;
(b) transmission of electricity;
(c) wheeling of electricity;
(d) retail sale of electricity:
Provided that in case of distribution of electricity in the same area by two or more distribution licensees, the Appropriate Commission may, for promoting competition among distribution licensees, fix only maximum ceiling of tariff for retail sale of electricity.
(2) The Appropriate Commission may require a licensee or a generating company to furnish separate details, as may be specified in respect of generation, transmission and distribution for determination of tariff.
(3) The Appropriate Commission shall not, while determining the tariff under this Act, show undue preference to any consumer of electricity but may differentiate according to the consumer's load factor, power factor, voltage, total consumption of electricity during any specified period or the time at which the supply is required or the geographical position of any area, the nature of supply and the purpose for which the supply is required.
(4) No tariff or part of any tariff may ordinarily be amended, more frequently than once in any financial year, except in respect of any changes expressly permitted under the terms of any fuel surcharge formula as may be specified.
(5) The Commission may require a licensee or a generating company to comply with such procedures as may be specified for calculating the expected revenues from the tariff and charges which he or it is permitted to recover.
(6) If any licensee or a generating company recovers a price or charge exceed
