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2026 Supreme(Online)(Chh) 17713

IN THE HIGH COURT OF CHHATTISGARH AT BILASPUR
Ramesh Sinha, CJ, Bibhu Datta Guru, J
Jindal Steel Limited – Appellant
Versus
Chhattisgarh State Electricity Regulatory Commission – Respondent
WA No. 379 of 2026

Advocates:
For the Appellants/Petitioners: Gopal Jain, Abhimanyu Bhandari, Ashish Shrivastava, Divya Chaturvedi, Bhaskar Payashi, Saransh Shaw, Jai Dhanani, Pranav Sood, Pankhuri Gupta, Kriti Sharma, Rahul Ambast
For the Respondents: Adhiraj Surana, Raj Kumar Mehta, Himanshi Andley, Varun Sharma

Regulatory determinations resulting in adverse financial liability for a specific entity without affording that entity an opportunity to be heard violate the principles of natural justice, rendering such orders void ab initio. Concluded contracts cannot be unilaterally reopened to recover payments based on ex-parte regulatory findings.

Headnote:(A) Electricity Act, 2003 - Sections 32, 33, 62, 64, 86(1)(f), 94, 120(2)(f) and 125 - Constitution of India - Articles 14, 19(1)(g) and 21 - Principles of natural justice - Audit alteram partem - Tariff determination and true-up proceedings - Generating company - Recovery of amounts paid under contract - Writ jurisdiction - An assessment resulting in adverse financial consequences upon an identifiable contracting party necessitates the observance of natural justice, even if the proceedings are quasi-legislative in character. (Paras 30, 41, 43 and 46)

(B) Natural Justice - Audi alteram partem - Violation of - A defect at the initial stage regarding lack of hearing cannot be cured at the appellate stage. An ex-parte decision is void ab initio. Administrative authorities must ensure effective hearing to prevent arbitrary decisions. (Paras 41, 42 and 48)

(C) Contract Law - Concluded transactions - Doctrine of estoppel - A party to a valid, subsisting, and fully performed contract who has made payments without protest cannot unilaterally seek to reopen concluded transactions or recover monies based on subsequent regulatory findings to which the other party was not a privy. (Paras 13, 33 and 45)

(D) Open Access - Grid discipline - Technical feasibility - In the absence of crystallized and adjudicated liability, mere disputed claims cannot be used as a ground to deny transmission access. (Paras 16 and 47)

Facts of the case:
An appeal was preferred against the dismissal of a writ petition challenging a demand notice for the refund of alleged excess payments made for power supplied under several power purchase agreements. The appellant, a generator, was not impleaded in tariff true-up proceedings where adverse financial findings were recorded, which the distribution licensee then used to raise a demand notice and deny open access rights.

Findings of Court:
The court held that the tariff orders and consequential demand notices were illegal as they were passed in violation of the principles of natural justice. The appellant was a necessary party who should have been afforded an opportunity to be heard before imposing a liability of such magnitude. The court rejected the argument that public notices in tariff proceedings satisfy the requirement of natural justice for specific recovery actions against a private entity.

Issues: Whether findings recorded in tariff true-up proceedings can be enforced against a generator who was not a party; whether the denial of open access based on a disputed claim is permissible; and whether a concluded contract can be retrospectively reopened through regulatory findings.

Ratio Decidendi: Where a regulatory body's decision results in direct and severe pecuniary consequences for a specific party, the proceedings must be treated as quasi-judicial qua that entity. Failure to implead and hear such a party renders the resulting order non-est and void ab initio, and such a violation of the rule of audi alteram partem cannot be cured by the mere availability of an alternative remedy or the legislative nature of the overarching tariff process.

Result: Writ appeal allowed; impugned order of the single judge and the demand notice set aside; matter remitted to the regulatory commission for fresh adjudication after affording opportunity of hearing to the appellant.

C.A.V Judgment

Per Ramesh Sinha , Chief Justice

1 Heard Mr. Gopal Jain and Mr. Abhimanyu Bhandari, and Mr. Ashish Shrivastava, learned Senior Advocates, assisted by Ms. Divya Chaturvedi, Mr. Bhaskar Payashi, Mr. Saransh Shaw, Mr. Jai Dhanani, Mr. Pranav Sood and Ms. Pankhuri Gupta, Ms. Kriti Sharma and Mr. Rahul Ambast, learned counsel for the appellants. Also heard Mr. Adhiraj Surana, learned counsel for the respondent No. 1/Chhattisgarh State Electricity Regulatory Commission (for short, the Commission), as well as Mr. Raj Kumar Mehta, Ms. Himanshi Andley and Mr. Varun Sharma, learned counsel for the respondents No. 2 and 3/Power Companies.

2 Challenge in this appeal is to the order dated 30.03.2026 passed by the learned Single Judge in WP(C) No. 1927/2016 by which the petition filed by the writ petitioners/appellants was dismissed. The appellants have prayed for the following relief(s):

“10.1 Admit the present Appeal and set aside the Impugned Judgment dated 30.03.2026 issued by the Ld. Single Judge of this Hon'ble Court in Writ Petition (Civil) No. 1927/2016; 10.2 Declare that Appellant No.1 is not liable to refund INR 153.55 Crores to the Chhattisgarh State Power Distribution Company Ltd. in relation to the power supplied to it for FY 2011-12 or for any subsequent tariff period;

10.3 Quash the demand notice dated 07.07.2016 issued by Respondent No. 2/CSPDCL, upon the Appellant No.1 demanding refund of INR 153.55 Cores;

10.4 Quash the letter dated 21.07.2016 issued by the Chhattisgarh State Power Distribution Company Limited;

10.5 Quash the letter dated 25.07.2016 issued by Chhattisgarh State Power Transmission Company Limited;

10.6 Declare that Respondents cannot take any other coercive measures/actions in the pursuance of aforesaid demand or letter(s)or take any fresh steps denying No Objection Certificate for grant of Short Term Open Access permission in pursuance of the Impugned Judgment, Tribunal Judgment or the Tariff Order passed in relation to the power supplied by the Appellant No.1 to the Respondent No.2 for FYs 2011-12 and 2012-13; and

10.7 Pass any such other Order or Orders as this Hon'ble Court may deem fit and proper in facts of the present case.”

3 The appellant No. 1 is a Company incorporated under the Companies Act, 1956 and is engaged in the business of manufacture of sponge iron/ steel, generation of power etc. It is primarily engaged in manufacturing steel and for this purpose, it has established its Captive Power Plant (for short, the CPP) and is a Generating Company within the meaning of Section 2(8) of the Electricity Act and has a Captive Generating Plant at Patrapali village in Raigarh District, initially with a capacity of 265.7 MW which was enhanced to the capacity of 325.7 MW. The respondent No. 1 is the Chhattisgarh State Electricity Regulatory Commission which was constituted by the Government of Chhattisgarh vide Notification No. 3190/S/E/2002, dated 23.08.2002 read with Notification No. 432/R/352/03, dated 11.05.2004 and discharges functions enjoined upon it under Section 86 of the Electricity Act, 2003 (for short, the Act of 2003). The respondent No. 2/CSPDCL is the successor Company of Chhattisgarh State Electricity Board (for short, the CSEB) and a Government of Chhattisgarh undertaking. Respondent No. 3/CSPTCL is also a successor Company of CSEB and the transmission utility in the State of Chhattisgarh and became functional w.e.f 01.01.2009. It also acts as the State Load Despatch Centre for the State of Chhattisgarh.

4 The writ petition was filed challenging the judgment dated 26.05.2016 passed by the Appellate Tribunal for Electricity (for short, the Appellate Tribunal) in Appeal Nos. 41 and 67 of 2015 {CSPDCL v. CSERC}, demand notice dated 07.07.2016 issued by the respondent No. 2/CSPDCL seeking refund of Rs. 153.55 Crores, letter dated 31.07.2016 issued by the respondent No. 2/CSPDCL refusing the appellant No. 1, a No Objection Certificate (for short, the NoC) for grant of Open Access for supp

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2026 Supreme(Online)(Chh) 17713

IN THE HIGH COURT OF CHHATTISGARH AT BILASPURRamesh Sinha, CJ, Bibhu Datta Guru, JJindal Steel Limited – AppellantVersusChhattisgarh State Electricity Regulatory Commission – RespondentWA No. 379 of 2026

Cases Referred (1)

IN THE HIGH COURT OF CHHATTISGARH AT BILASPUR
Ramesh Sinha, CJ, Bibhu Datta Guru, J
Jindal Steel Limited – Appellant
Versus
Chhattisgarh State Electricity Regulatory Commission – Respondent
WA No. 379 of 2026