Judgment :-

S.B. Sinha, J.

1. Leave granted.

INTRODUCTION

2.2. Constitutional validity of clauses (b) and (f) of Regulation 6A of the Central Electricity Regulatory Commission (Procedure, Terms and Conditions for Grant of Trading License and other related matters) (Amendment), Regulation 2006 (hereinafter referred to and called for the sake of brevity as "Amended Regulation") is the question involved herein.

3.3. It arises in the following factual matrix.

BACKGROUND FACTS The Parliament enacted Electricity Act, 2003 (hereinafter referred to as, "the said Act"). In exercise of its jurisdiction conferred by Section 178 of the said Act, the Central Electricity Regulatory Commission (for short, "CERC") made Central Electricity Regulatory Commission (Procedure, Terms and Conditions for Grant of Trading License and other related matters), Regulation 2004 (for short, "the Regulation")

Indisputably, in terms of the provisions of the said Act as also the Regulations, inter alia, license is required to be taken by a person who is desirous of dealing in inter-state trading, which in terms of Regulation 2(g) means "transfer of electricity from the territory of one State to the territory of another State by an electricity dealer".

1.4. Appellant No. 1 is a Public Limited Company incorporated and registered under the Indian Companies Act.

2.5. Pursuant to or in furtherance of the said Act and the Regulations, the appellant No. 1 herein filed an application for grant of inter-State Trading License under Category `A before CERC on 23.3.2004. CERC published a notice as regards the said application filed by the appellant No. 1 for grant of inter-state Trading License in all editions of `Indian Express, Financial Express and a vernacular daily `Jansatta. Appellant No. 1 also filed an interlocutory application seeking permission to trade in the electricity pending final disposal of its petition for grant of inter-state trading license as it had been engaged in inter-state trading of electricity prior to the commencement of the said Act. By reason of an order dated 31.3.2004, the said application was allowed. Objections filed to the appellant No.1s application for grant of license pursuant to the aforementioned notice were also rejected by an order dated 30.6.2004.

3.6. On or about 6.9.2004, CERC directed as under:

"(i) The petitioner No. 1 was qualified for the grant of Category `A license for inter-state trading in electricity for trading up to 100 million units in a year.

(ii) The CERC proposed to issue the license for inter-state trading to the petitioner No. 1 as category `A trader.

(iii) The petitioner No. 1 was directed to publish a notice under Section 15(5) of the Act. Section 15(5) of the Act reads as follows:

15. Procedure for grant of licence.

...........

.(5) Before granting a licence under section 14, the Appropriate Commission shall-

.(a) publish a notice in two such daily newspapers, as that Commission may consider necessary, stating the name and address of the person to whom it proposes to issue the licence;

.(b) consider all suggestions or objections and the recommendations, if any, of the Central Transmission Utility or the State Transmission Utility, as the case may be."

7. After the publication of notices, objections were also received as regards appellant No. 1s trading in inter-state supply of electrical energy pursuant to the aforementioned interim order. The matter was taken to High Court and interim license granted to appellant No. 1 was extended by the High Court from time to time.

Draft Regulations were published to which appellant No. 1 filed objection. The Amended Regulations were notified on 3.4.2006. By an order dated 20.8.2006, CERC rejected the application filed by the appellant No. 1 for grant of inter-state trading license opining that Regulation 6A brought in through the amended Regulation will have a retrospective effect. An appeal preferred thereagainst is pending before the Appellate Tribunal for Electricity.