Punjab State Electricity Board Vs. National Thermal Power Corporation
Limited & Others [2001] Insc 539 (10 October 2001)
October
10th, 2001 JUDGE NAME:
M.B.Shah,
R.P.Sethi Shah, J.
Leave
granted.
Appellant Punjab State Electricity Board and other States Electricity
Boards have filed these appeals against the impugned judgment and order dated 7th March, 2001 passed by the High Court of Delhi
in Civil Miscellaneous No. 232 of 2001 in FAO No.131 of 2001, FAO No.159 of
2000 and FAO No.88 of 2001.
The
Central Electricity Regulatory Commission (hereinafter referred to as the
Commission), constituted under the Electricity Regulatory Commissions Act, 1998
(hereinafter referred to as the Act) by its order dated 21.12.2000 has fixed
the norms for tariff for hydro generation and inter-state transmission. That
order was challenged by the respondent National Thermal Power Corporation
Limited (hereinafter referred to as the NTPC) by filing FAO No.159 of 2000
under Section 16 of the Act before the High Court of Delhi. The High Court by
its interim order has virtually stayed the operation of the impugned order by
laying down certain conditions and by observing that it appears desirable that
all the directions issued by the Commission shall be observed to charge tariff
on the basis of the pre-existing norms. It was also observed that the NTPC
shall continue to charge tariff on the basis of pre-existing norms only so long
as the arrears up to 31st March, 2001 due against different respondents mainly
State Electricity Boards are not adjusted and the moment the arrears of NTPC
stand paid, the concerned State Electricity Board and all concerned respondents
shall be entitled to move the Court for fresh consideration. The Court also
observed that it was just an interim order and after the group for formulating
the Tariff Policy takes a decision, the Court shall be informed about the
decision taken by the group for formulating the tariff policy and the party
shall be entitled to be heard afresh. These interim directions are challenged
by the Punjab State Electricity Board (PSEB).
At the
time of hearing of these matters, learned counsel for the PSEB submitted that
the interim order passed by the High Court is, on the face of it, illegal. He
also contends that Section 16 only provides for filing of appeal but it does
not empower the High Court to stay the operation of the order which was passed
by the Commission after considering the submission as well as evaluating
various norms required for fixing the tariff.
In its
report, the Commission has observed as under:
1.4.1.
The terms and conditions as will be notified, shall, apply to all utilities
covered under Section 13(a) (b) and (c) of the ERC Act unless specifically
stated otherwise.
However,
it should be remembered that these terms and conditions shall apply wherever
cost based tariff is determined by the Commission. These terms and conditions
shall be in force for a period of 3 years effective from 1st April, 2001 and reviewable/renewable at the
discretion of the Commission.
1.4.3.
If this order creates any unfairness, or hardship, parties may approach the
Commission for redressal, within 60 days of issue in accordance with the
provisions for review as contained in Regulation 103 of the Conduct of Business
Regulation.
In para
1.5.1 the Commission has kept in view the twin objectives contained in Section
13(e) according to which tariff shall be fair to the consumers and facilitate
mobilization of adequate resources for the power sector.
In its
operative order, the Commission has observed that the normal tariff period
shall be a period of five years but shall at this stage be for a period of
three years. Finally it has observed that:
Ensuring
the financial viability of efficient and proactive utilities, would be a prime
concerned of the Commission. At the same time, safeguarding the interests of
the consumers is a major responsibility of the Commission, particularly, when
the market structure and system conditions do not support competition. The
Commission has to play a balancing role and it intends to discharge this
responsibility transparently, through a consultative mode. It expects that
participative decision making will lighten the burden of transiting to a more
efficient system, for all stakeholders.
It is
true that under Section 38(1) of the Act, the Central Commission has to
discharge its functions by taking into consideration directions issued by the
Central Government in matters of policy involving public interest. Nothing has
been pointed out to indicate that Government has issued such directions. In any
case all these questions are required to be dealt with at the time of final
hearing of the matter and at this stage, it would be difficult to hold that
prima facie, the norms prescribed by the Central Commission are arbitrary or ex
facie unjustifiable, particularly in view of Section 13(e) which inter alia
provides that its function is to aid and advise the Central Government in
formulation of tariff policy which shall be
(i) fair
to the consumer; and
(ii)
facilitate mobilization of adequate resources for the power sector.
Further,
the Commission has submitted its Report after considering all relevant material
which was placed before it and after hearing all objections raised by the
concerned parties. In view of the time frame prescribed by the Commission, if
the interim stay order continues indefinitely, the Report would become totally
nugatory. If the norms prescribed by the Commission are implemented and finally
if the appeal is allowed or norms are modified, NTPC could be appropriately
compensated.
Lastly,
it is true that section 16 only provides that any person aggrieved by the
decision or order of the Central Commission may file an appeal to the High
Court. No further procedure is prescribed under the Act and no rules are shown
to us prescribing any procedure. Learned counsel for the parties have also not
pointed out any provision in the Act or the Rules indicating that while
exercising the appellate jurisdiction, the High Court has power to grant such
interim relief. It is true that when appellate jurisdiction is conferred unless
there is a specific provision to the contrary, the jurisdiction of the
appellate authority would be of widest amplitude. In proper cases, such
authority may have jurisdiction to grant interim reliefs.
However,
this would depend upon the nature of the order passed by the competent
authority in discharge of its functions. In case of exercise of administrative
or advisory jurisdiction by the authority, there may not be any question of
granting interim stay. It is needless to point out that even if there is power
to grant interim stay, it cannot be exercised in a routine way or as a matter
of course in view of the special nature of jurisdiction conferred upon the
Commission.
However,
considering the fact that the appeal is pending before the High Court, in our
view, the aforesaid question is not required to be finally determined at this
stage because the High Court itself has observed that the matter may be placed
for further hearing after the Group for formulating the Tariff Policy takes
decision and that the parties would be entitled to be heard afresh. Similar are
the observations made by the Commission in its Report.
Hence,
in our view, this was not a fit case for grant of interim relief so as to make
the Report virtually nugatory. Further, the High Court in its impugned judgment
has observed that this is just an interim order and after the Group for
formulating the Tariff Policy takes a decision, the High Court should be
informed about the decision taken by the Group for formulating the Tariff
Policy and parties would be entitled to be heard afresh. In this view of the
matter, the impugned order passed by the High Court requires to be set aside
and the Court is requested to decide the appeals on merits as expeditiously as
possible.
In the
result, the appeals are allowed, the impugned order passed by the High Court is
set aside. There shall be no order as to costs.
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