The main legal point established is that the State Commission has the authority to regulate electricity purchase from generating companies under Section 86 of the Electricity Act, 2003.

This writ petition has been moved under Article 226 and 227 of the Constitution of India against the order dated 19th March 2004 whereby Uttaranchal Jal Vidyut Nigam Ltd. (petitioner) and respondent No.2, namely, Uttaranchal Power Corporation Ltd. have been directed by the Uttaranchal Electricity Regulatory Commission (respondent No.1) to lay down terms and conditions of sale of electricity by the petitioner to the respondent No.2 within 30 days and to conclude power purchase agreement in this regard.

2. The question raised by means of this writ petition is whether respondent No.1 has power to give the directions as contained in the impugned order dated 19th March 2004 (copy of which is annexed as Annexure- "P-1" to this writ petition).

3. Heard learned counsel for the parties.

4. Under Section 63 and 64 of U.P. Reorganization Act, 2000, Central Government has power to issue directions regarding functioning of the Corporations' of State of Uttar Pradesh and State of Uttaranchal dealing in the generation and distribution of power. Annexure- "P-2" is the copy of the order dated 5th November 2001 issued by the Government of India under sub section (4) of Section 63 of U.P. Reorganization Act, 2000 read with Section 64 of said Act whereby it has been ordered in paragraph NO.3 of said order that the State of Uttar Pradesh shall have the first right of purchase in respect of surplus power left over from the power generated by the units of Uttaranchal Jal Vidyut Nigam Ltd. after meeting the consumption requirements of Uttaranchal. Annexure- "P-1", the impugned order of respondent No. 1 i.e. Uttaranchal Electricity Regulatory Commission appears to have been passed in pursuance of the said order of the Central Government to the petitioner and respondent No.2.

5. Learned counsel for the petitioner argued that the respondent No.1 has only quasi judicial power over the matters referred to it and it cannot on its own motion give any directions as contained in the impugned order as Uttaranchal Jal Vidyut Nigam Ltd. (petitioner) is not a licensee. However, in our opinion, the contention of the learned counsel for the petitioner has no force as Section 86 of the Electricity Act, 2003 empowers the State Regulatory Commission in this regard. Section 86 of the Electricity Act, 2003 is reproduced as under:

86. Functions of State Commission.- (1) The State Commission shall discharge the following functions, namely :-

(a) determine the tariff for generation, supply, transmission and wheeling of electricity, wholesale, bulk or retain, as the case may be, within the State:

Provided that where open access has been permitted to a category of consumers under Section 42, the State Commission shall determine only the wheeling charges and surcharge thereon, if any, for the said category of consumers;

(b) regulate electricity purchase and procurement process of distribution licensees including the price at which electricity shall be procured from the generating companies or licensees or from other sources through agreements for purchase of power for distribution and supply within the State;

(c) facilitate intra-State transmission and wheeling of electricity;

(d) issue licences to persons seeking to act as transmission licensees, distribution licensees and electricity traders with respect to their operations within the State;

(e) promote cogeneration and generation of electricity from renewable sources of energy by providing suitable measures for connectivity with the grid and sale of electricity to any person, and also specify, for purchase of electricity from such sources, a percentage of the total consumption of electricity in the areas of distribution licensee;

(f) adjudicate upon the dispute between the licensees and generating companies and to refer any dispute for arbitration;

(g) levy fee for the purpose of this Act;

(h) specify State Grid Code consistent with the Grid Code specified under clause (h) of sub-section (1) of section 79;

(i) spe