# Indian Railways v. West Bengal State Electricity Distribution Company Limited & Ors

- **Citation:** 2026 INSC 464
- **Court:** Supreme Court of India
- **Decided:** 2026-05-08
- **Case number:** Civil Appeal No. 4652 of 2024
- **Bench:** Dipankar Datta, Satish Chandra Sharma
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/indian-railways-v-west-bengal-state-electricity-distribution-company-limited-ors-39365
- **Pages:** 43

## Headnote

The specific issues which arise for determination are: (i) Whether
the activities provided u/s.11(g) and (h) of the Railways Act pass
muster of "distribution" of electricity, and whether such activities
are a necessary pre-requisite to qualify as a DDL under the Act;
(ii) Whether the Indian Railways, being an entity of the Central
Government, falls within the ambit of "Appropriate Government"
u/s.14 of the Electricity Act, 2003; (iii) Whether the Indian Railways,
even if held to be a DDL under the Act, is exempt from the
obligation to pay Cross-Subsidy Surcharge or additional surcharge
for the grant of non-discriminatory open access as per s.42 of the
Electricity Act, 2003; (iv) Whether a proposed legislation may be
relied upon as an aid to statutory interpretation for addressing gaps
in the existing framework, and to give effect to the parliamentary
intent to remedy defects thereunder.
Headnotes†
Electricity Act, 2003 - ss.14, 42, 125 - Whether the AppellantIndian Railways qualifies as a deemed distribution licensee
(DDL) under the Electricity Act and if so, whether it remains
liable to pay Cross-Subsidy Surcharge to different distribution
licensees for availing open access in terms of s.42 of the
Electricity Act:
Held: Appellant does not pass muster as a deemed distribution
licensee under the Act, and it can in no circumstances escape the
liability from payment of cross-subsidy surcharge and additional
surcharge as a consumer of electricity through open access - The
Respondents are accordingly directed to compute and issue a
detailed calculation of the Cross-Subsidy Surcharge and Additional
* Author
480
[2026] 5 S.C.R.
Supreme Court Reports
Surcharge amounts outstanding qua the Appellant, disaggregated
by the area of supply and the period of availing such open access.
[Para 72]
Electricity Act, 2003 - Railways Act, 1989 - s.11(g) and (h) -
Whether the activities provided u/s.11(g) and (h) of the Railways
Act pass muster of "distribution" of electricity, and whether
such activities are a necessary pre-requisite to qualify as a
DDL under the Act - In other words, whether the activities
of the Appellant-Indian Railways fall within the purview of
a distribution licensee (or a deemed distribution licensee):
Held: The omission of the words "distribution" or "supply" of
electricity in s.11(g) and (h) is deliberate and intentional - The
legislature while framing these provisions certainly intended to
empower the appellant solely to erect and operate a distribution
infrastructure necessary for railway operations - The language
clearly confines the purpose of these installations to the operational
use of Railways and does not extend any authority to the Appellant
to undertake a commercial distribution or supply of electricity,
beyond the railway's internal domain - The submission of the
Appellant that it is a deemed distribution licensee, lacks any
substantial basis - The statutory regime under the Electricity Act
regulates the commercial supply of electricity to consumer through
a licensed distribution network - The Appellant, operates a closed
and self-contained electricity network which is for the purposes
of meeting the operational requirements of the railway system,
including traction, signalling, stations - It is only when electricity
is sold or provided to consumers outside the operational domain
of the railway, that the activities undertaken by the Appellant could
intersect with the obligation of a distribution licensee - In the present
case, the Railways is procuring electricity from the Respondent
DISCOMs in various states for its own use and for consumption
to its constituents. [Paras 28, 30, 31, 32]
Electricity Act, 2003 - ss.2(5), 14 - Railways Act, 1989 -
Constitution of India - Art.12 - Whether the Appellant-Indian
Railways, being an entity of the Central Government, falls
within the ambit of "Appropriate Government" u/s. 14 of the
Electricity Act, 2003:
Held: A plain reading of s.2(5)(a)(ii) makes it evident that the

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[2026] 5 S.C.R. 479 : 2026 INSC 464
Indian Railways
v.
West Bengal State Electricity Distribution Company
Limited & Ors.
(Civil Appeal No. 4652 of 2024)
08 May 2026
[Dipankar Datta and Satish Chandra Sharma,* JJ.]
Issue for Consideration
The specific issues which arise for determination are: (i) Whether
the activities provided u/s.11(g) and (h) of the Railways Act pass
muster of "distribution" of electricity, and whether such activities
are a necessary pre-requisite to qualify as a DDL under the Act;
(ii) Whether the Indian Railways, being an entity of the Central
Government, falls within the ambit of "Appropriate Government"
u/s.14 of the Electricity Act, 2003; (iii) Whether the Indian Railways,
even if held to be a DDL under the Act, is exempt from the
obligation to pay Cross-Subsidy Surcharge or additional surcharge
for the grant of non-discriminatory open access as per s.42 of the
Electricity Act, 2003; (iv) Whether a proposed legislation may be
relied upon as an aid to statutory interpretation for addressing gaps
in the existing framework, and to give effect to the parliamentary
intent to remedy defects thereunder.
Headnotes†
Electricity Act, 2003 - ss.14, 42, 125 - Whether the AppellantIndian Railways qualifies as a deemed distribution licensee
(DDL) under the Electricity Act and if so, whether it remains
liable to pay Cross-Subsidy Surcharge to different distribution
licensees for availing open access in terms of s.42 of the
Electricity Act:
Held: Appellant does not pass muster as a deemed distribution
licensee under the Act, and it can in no circumstances escape the
liability from payment of cross-subsidy surcharge and additional
surcharge as a consumer of electricity through open access - The
Respondents are accordingly directed to compute and issue a
detailed calculation of the Cross-Subsidy Surcharge and Additional
* Author
480
[2026] 5 S.C.R.
Supreme Court Reports
Surcharge amounts outstanding qua the Appellant, disaggregated
by the area of supply and the period of availing such open access.
[Para 72]
Electricity Act, 2003 - Railways Act, 1989 - s.11(g) and (h) -
Whether the activities provided u/s.11(g) and (h) of the Railways
Act pass muster of "distribution" of electricity, and whether
such activities are a necessary pre-requisite to qualify as a
DDL under the Act - In other words, whether the activities
of the Appellant-Indian Railways fall within the purview of
a distribution licensee (or a deemed distribution licensee):
Held: The omission of the words "distribution" or "supply" of
electricity in s.11(g) and (h) is deliberate and intentional - The
legislature while framing these provisions certainly intended to
empower the appellant solely to erect and operate a distribution
infrastructure necessary for railway operations - The language
clearly confines the purpose of these installations to the operational
use of Railways and does not extend any authority to the Appellant
to undertake a commercial distribution or supply of electricity,
beyond the railway's internal domain - The submission of the
Appellant that it is a deemed distribution licensee, lacks any
substantial basis - The statutory regime under the Electricity Act
regulates the commercial supply of electricity to consumer through
a licensed distribution network - The Appellant, operates a closed
and self-contained electricity network which is for the purposes
of meeting the operational requirements of the railway system,
including traction, signalling, stations - It is only when electricity
is sold or provided to consumers outside the operational domain
of the railway, that the activities undertaken by the Appellant could
intersect with the obligation of a distribution licensee - In the present
case, the Railways is procuring electricity from the Respondent
DISCOMs in various states for its own use and for consumption
to its constituents. [Paras 28, 30, 31, 32]
Electricity Act, 2003 - ss.2(5), 14 - Railways Act, 1989 -
Constitution of India - Art.12 - Whether the Appellant-Indian
Railways, being an entity of the Central Government, falls
within the ambit of "Appropriate Government" u/s. 14 of the
Electricity Act, 2003:
Held: A plain reading of s.2(5)(a)(ii) makes it evident that the
subject of the definition is the Central Government, and the term
[2026] 5 S.C.R.
481
Indian Railways v. West Bengal State Electricity Distribution
Company Limited & Ors
"railways" appears only as a relative reference, and a subjectmatter that triggers the application of the Central Government -
Insofar as the provision does not extend that the Railways itself
is the Appropriate Government, it only expands the scope of the
term to include the Central Government in matters relating to
railways - It is also a well-settled principle of law that the mere
classification of an instrumentality or agency as "State" u/Art.12
of the Constitution of India does not automatically render it as an
"Appropriate Government" - Appellant operates as a functionary of
the Central Government - It is evident that the nominal, pervasive,
administrative as well as fiscal control of the Appellant lies in
the clutches of the Central Government - The scheme of the
Electricity Act makes it clear that a distribution licensee is under
the statutory obligation to supply electricity to its consumers within
its area of supply - Notably, the Appellant's electrical infrastructure
including traction sub-stations, overhead catenary systems, and
25kV alternating current systems, exists entirely for captive selfconsumption for traction purposes and not for supply to third
party consumers - Therefore, the deemed status as attached
to the Military Engineering Services (MES) is not by virtue of it
being a government entity, but it is a governmental entity that
actually performs the function of distribution within the meaning
and scope of the Electricity Act - It is apparent on the face of
record that the Appellant has no such analogous relationship with
any consumer, and its claim to the deemed distribution licensee
status fails at the very threshold - For the limited purpose of this
analysis, the Appellant is regarded as falling within the ambit of
"Appropriate Government" u/s. 2(5)(a) of the Act, but the observation
carries no determinative consequence for the relief sought by the
Appellant - Nominal virtue, however firmly established, cannot
substitute for the substantive functions that the statute demands.
[Paras 40, 43, 45-48, 50]
Electricity Act, 2003 - s.42 - Railways Act, 1989 - Whether
the Indian Railways, even if held to be a deemed distribution
licensee under the Act, is exempt from the obligation to pay
Cross-Subsidy Surcharge or additional surcharge for the grant
of non-discriminatory open access as per s.42 of the Act:
Held: The Appellant is a consumer within the meaning and scope of
s.2(15) of the Electricity Act - It purchases electricity exclusively for
its own use and supplies it to no one but its own constituents - Thus,
482
[2026] 5 S.C.R.
Supreme Court Reports
like any other consumer, Cross-Subsidy Surcharge and Additional
Surcharge are applicable to the Appellant - In arguendo, even if
the Railways is treated as a deemed distribution licensee (DDL),
its procurement of electricity through open access exclusively for
its own consumption renders it a consumer for that purpose - An
entity, like the Railways in the present case, would be liable to pay
Cross-Subsidy Surcharge and Additional Surcharge if it procures
electricity through open access. [Paras 57, 58]
Electricity Act, 2003 - Electricity (Amendment) Bill, 2014 - Draft
Electricity (Amendment) Bill, 2025 - Railways Act, 1989 -
Whether a proposed legislation may be relied upon as an aid
to statutory interpretation for addressing gaps in the existing
framework, and to give effect to the parliamentary intent to
remedy defects thereunder.
Held: In the present case, the legislative history of the Electricity
Act reflects that previous proposals in 2014 and 2018 had sought to
confer the statutory status of a licensee in favour of the Appellant,
seeking to save it from the binding statutory obligations of paying
Cross-Subsidy Surcharge and additional surcharge - The language
used in the Draft Electricity (Amendment) Bill, 2025 is clear and
simple, to address the existing burden of Cross-Subsidy Surcharge
payable by the Appellant by exempting them from payment of
cross-subsidy and surcharges, within the next five years - In the
present case, the very fact that such legislative actions to exempt
the Appellant from payment of Cross-Subsidy Surcharges have
been proposed to be taken, indicate a coherent, consistent, and
current legislative intent about the absence of such exemption under
the prevailing statute - This absence further implies that even by
adopting a purposive construction to the prevailing statute, such an
exemption cannot be read into the statute - It is a settled canon
of statutory interpretation that a legislative casus omissus cannot
be supplied by a judicial interpretative process - Be that as it may,
the proposed legislative framework in the present case explicates
that the legislative intent of the Parliament under the Electricity
Act was not to exempt the Appellant from the obligations under
the Electricity Act - More so, it puts the controversy to rest as the
Appellant, procuring electricity for its own use and consumption,
is an industrial consumer and for availing open access, it is liable
to pay Cross-Subsidy Surcharge and additional surcharge, like
any other consumer. [Paras 61, 67, 69]
[2026] 5 S.C.R.
483
Indian Railways v. West Bengal State Electricity Distribution
Company Limited & Ors
Case Law Cited
Steel Authority of India Ltd. & Ors. v. National Union
Waterfront Workers & Ors. [2001] Supp. 2 SCR 343 : (2001) 7
SCC 1 - relied on.
General Manager, Northern Railways rep. by Union of India v.
Chairman, Uttar Pradesh State Electricity Board & Ors. [2012]
2 SCR 416 : (2012) 3 SCC 329; Sesa Sterlite Limited v. Orissa
Electricity Regulatory Commission & Ors. [2014] 13 SCR 426 :
(2014) 8 SCC 444; Board of Control for Cricket in India v. Kochi
Cricket Pvt. Ltd. & Ors. [2018] 2 SCR 829 : (2018) 6 SCC 287;
Union of India & Anr. v. Sri Ladulal Jain [1964] 3 SCR 624 : 1963
SCC Online SC 133; Central Bank of India v. State of Kerala &
Ors. [2009] 3 SCR 735 : (2009) 4 SCC 94; Sri Venkataramana
Devaru & Ors. v. State of Mysore & Ors., 1957 SCC OnLine
SC 138; K.C. Ninan v. Kerala State Electricity Board & Ors.
[2023] 9 SCR 637 : (2023) 14 SCC 431; Commissioner of Sales
Tax v. Madhya Pradesh Electricity Board (1961) 1 SCC 200;
Sukhdev Singh & Ors. v. Bhagatram Sardar Singh Raghuvanshi
& Anr. [1975] 3 SCR 619 : (1975) 1 SCC 421; Ajay Hasia
& Ors. v. Khalid Mujib Sehravardi & Ors. [1981] 2 SCR 79 :
(1981) 1 SCC 722; Kalpana Mehta v. Union of India [2018]
4 SCR 1 : (2018) 7 SCC 1; Vodafone International Holdings
B.V. v. Union of India & Anr. [2012] 1 SCR 573 : (2012) 6 SCC
757 - referred to.
Anuj Kumar Agarwal v. Registrar of Cooperative Societies & Ors.,
2024 SCC OnLine Del 5087; Ganv Bhavancho Ekvott v. South
Western Railways, 2022 SCC OnLine Bom 7184; Union of India
(Western Railway) v. MCGM, 2017 SCC OnLine Bom 9424; Goa
Foundation & Anr. v. Konkan Railway Corporation & Ors., AIR 1992
Bom 471; Village Panchayat of Velsao v. Ministry of Railways,
2022 SCC OnLine Bom 3526 - referred to.
List of Acts
Electricity Act, 2003; Railways Act; Electricity Act, 1910; Government
of India (Allocation of Business), Rules, 1961; Government of
India (Transaction of Business) Rules, 1961; Constitution of India;
Draft Electricity Amendment Bill, 2025; Sale of Goods Act, 1930;
Electricity (Amendment) Act, 2025.
484
[2026] 5 S.C.R.
Supreme Court Reports
List of Keywords
Electricity; Deemed Distribution Licensee (DDL); Consumer;
Distribution Licensee; Cross-Subsidy Surcharge (CSS); Additional
Surcharge (AS); Open Access; Captive Consumption; Indian
Railways; Section 11(g) and (h) of Railways Act; Appropriate
Government; Cross-Subsidy Surcharge; Additional surcharge;
Proposed legislation; Parliamentary intent; Section 14 of the
Electricity Act, 2003; Section 2(3) of Electricity Act, 2003; Article
12 of Constitution; Section 2(5)(a) of Electricity Act, 2003; Section
42 of Electricity Act, 2003.
Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4652 of 2024
From the Judgment and Order dated 12.02.2024 of the Appellate
Tribunal for Electricity at New Delhi in AN Nos. 276 of 2015, 320
of 2018, 114 and 133 of 2020, 73 and 213 of 2021 and AN Nos.
170 and 343 of 2019
With
Civil Appeal No(s). 4653-4659 of 2024
Appearances for Parties
Advs. for the Appellant(s):
Tushar Mehta, Solicitor GeneraL,Ms. Aishwarya Bhati, S.D. Sanjay,
A.S.Gs., M.G. Ramachandran, Sr. Adv., Pulkit Agarwal, Ms. Srishti
Khindaria, Ms. Ritika Singhal, Ms. Poornima Singh, Nithin Pavaluri,
Koney Rama Mohan Rao, Gaurang Bhushan, Madhav Sinhal,
Mrs. Sansriti Pathak, Mrs. Bani Dikshit, Bhuvan Kapur, Siddharth
V. Thakur, Amrish Kumar.
Advs. for the Respondent(s):
Lokesh Sinhal, Sr. A.A.G., Shekhar Raj Sharma, A.A.G., Pitambar
Acharya, Advocate General, Maninder Singh, Sajan Poovayya,
Parag Tripathi, G Umapathy, C.s. Vaidyanathan, Gaurav Agrawal,
Jaideep Gupta, Sanjay Sen, G. Umapathy, C.A. Sundaram, Sanjay
Sen, Sr. Advs., Prabhas Bajaj, Rithvik Mathur, Priyanshu Tyagi,
Harsh Chauhan, Ms. Priyanka Bhatt, Rishabh Yadav, Ms. Ishita
Jain, Anand Kumar Shrivastava, Shivam Sinha, Ravi Nair, Mudassir,
Palash Maheshwari, Sindhura N Swamy, Ms. Suparna Srivastava,
Ms. Surbhi Gupta, Hitakshi Jain, Ms. Bhairavi, S. K. Verma, Aditya
[2026] 5 S.C.R.
485
Indian Railways v. West Bengal State Electricity Distribution
Company Limited & Ors
Singh-1, Gaurav Khanna, Siddharth Mittal. Aniket Prasoon, Ronak
Shankar Agarwal, Ms. Pratiksha Chaturvedi, Vinit Kumar, Adarsh
Kumar Bhardwaj, Shubham Singh, Ashok Kumar Tripathi, Sarthak
Pathak, Umesh Kumar Shukla, Gajendra Singh Negi, Mrs. Srabani
Mukherjee, Shekhar Banerjee, Md Shah Minhajuddin, Md Adil Khan,
Subhro Prokas Mukherjee, Shri Venkatesh, Ms. Kanika Chugh,
Suhael Buttan, Shryeshth Ramesh Sharma, Ms. Priya Dhankhar,
Vineet Kumar, Nikunj Bhatnagar, Nitin Saluja, Anup Kumar,
Ms. Gauri Subramanium, Mrs. Shruti Singh, Mrs. Neha Jaiswal,
Ms. Achint Priya, Ms. Arshi, Shivam Kumar, Sabarish Subramanian,
S. Vallinayagam, Veshal Tyagi, Riddhi Bose, Ms. Racheeta Chawla,
Ms. Rishi Agarwal, Ms. Sampriti Baksi, Vishnu Unnikrishnan,
Arijit Maitra, Ms. Mandakini Ghosh, Ms. Neha Dabral, Shivansh
Baghel, Vikas Upadhyay, Ms. Ankita Kashyap, Ranveer Singh,
Shiva Narang, Ms. Sunieta Ojha, Ms. Gargi Kumar, Anand K
Ganesan, Nikunj Dayal, Amal Nair, Ms. Devyani Prasad, Sandeep
Kumar Mahapatra, Ms. Mrinmayee Sahu, Sugam Kumar Jha,
Sreedas Kp, Ms. Sakshi Mittal, Srisatya Mohanty, Rutwik Panda,
Ms. Nikhar Berry, Ms. Anshu Malik, Dhananjaya Mishra, Vignesh
Adithiya, V.M.Eashwar, Bharadwaj S., Ms. Pratiti Rungta, Sumit
Pragal, Prashant Singh, Shivankur Shukla, Ms. Amita Singh Kalkal,
Samar Vijay Singh, Nikunj Gupta, Ms. Sabarni Som, Aman Dev
Sharma, Sarthak Arya, Ms. Nidhi Narwal, Ms. Srishti Jain, Rahul
Khurana, B. Chandra Sekaran, Amit Shrivastava, Dhruv Raman
Singh, Abhishek Kumar, Nived Veerapaneni, Ms. Shubham Mudgil,
Ms. Mandakini Ghosh, Zafar Inayat, Ms. Rohini Musa, Abhishek
Gupta, Rajat Gupta, M/s Trilegal, K. Parameshwar, Udit Gupta,
Vyom Chaturvedi, Ms. Sneha Singh, Ms. Pragya Gupta, Ms.
Veda Singh, Prasad Hegde, N. Sai Kaushal, M/S. Udit Kishan
and Associates.
Judgment / Order of the Supreme Court
Judgment
Satish Chandra Sharma, J.
1.
This is a batch of statutory Appeals under Section 125 of the Electricity
Act, 2003 (for short, hereinafter referred to as, "The Electricity Act")
assailing the common judgment and order dated 12.02.2024 passed
by the Appellate Tribunal for Electricity at New Delhi, ("APTEL"), in
486
[2026] 5 S.C.R.
Supreme Court Reports
Appeal Nos. 276/2015, 320/2018, 114/2020, 73/2021, 213/2021,
170/2019, 343/2019 and 133/2020.
2.
By the said judgment, APTEL has set aside the Order dated
05.11.2015 passed by the Central Electricity Regulatory Commission
("CERC") in Petition No. 197/MP/2015 along with connected appeals
arising from Orders passed by other State Electricity Regulatory
Commissions ("SERCs").
3.
The proceedings before APTEL were contested by multiple Distribution
Companies (DISCOMS) and SERCs, including the West Bengal State
Electricity Distribution Company Ltd. (WBSEDCL), Odisha Electricity
Regulatory Commission (OERC), Kerala State Electricity Regulatory
Commission (KSERC), Madhya Pradesh Electricity Regulatory
Commission (MPERC), Rajasthan Electricity Regulatory Commission
(RERC), Maharashtra Electricity Regulatory Commission (MERC),
Haryana Electricity Regulation Commission (HERC), Punjab State
Electricity Regulatory Commission (PSERC), as against the Indian
Railways, the Appellant herein.
4.
The controversy pertained to common issues: (i) whether Indian
Railways qualifies as a deemed distribution licensee (DDL) under
the third proviso to Section 14 of the Electricity Act; and (ii) if so,
whether it remains liable to pay Cross-Subsidy Surcharge to different
distribution licensees for availing open access in terms of Section 42
of the Electricity Act. Five out of the eight State Electricity Regulatory
Commission (SERCs) had held that the Indian Railways is not a DDL
("DDL") in terms of the third proviso to Section 14 of the Electricity Act.
Factual matrix
5.
The facts in the case are undisputed and are succinctly mentioned
as under:
5.1. The Appellant, Indian Railways vide Letter dated 17.03.2015
to the Maharashtra State Electricity Transmission Co. Ltd.
("MSETCL") sought grant of connectivity for procuring 100
MW power from Gujarat Urja Vikas Nigam ("GUVNL") for 16
traction substations of the Central and Western railways through
inter-state open access in terms of the Electricity Act. MSETCL
refused to grant connectivity and directed the Indian Railways
to obtain an appropriate order from the competent commission
regarding its status as a DDL.
[2026] 5 S.C.R.
487
Indian Railways v. West Bengal State Electricity Distribution
Company Limited & Ors
5.2. The Appellant approached the CERC by way of a petition, interalia seeking declaration that the Indian Railways is entitled to
the grant of open access for the power to be procured from
the Generating Station through the Inter-State Transmission
System ("ISTS") of Central Transmission Utility and Intra-State
Transmission System of the States (viz. Maharashtra, Gujarat,
Jharkhand and West Bengal), to its facilities, i.e., traction points
and network of the Indian Railways, and direct that the Indian
Railways in its capacity as an authorised entity to distribute
and supply electricity is a separate participating entity, like any
other State entity notified by the Commission for the purposes
of scheduling and dispatch of electricity. The petition was filed
against the backdrop of the Letter No-25/19/2004-R&R dated
06.05.2014 issued by the Ministry of Power, Government of
India1 which clarified that the Appellant i.e. the Indian Railways
is a deemed licensee under the third proviso to Section 14 of
the Electricity Act and for all purposes thereunder. It was urged
by the Appellant that:
(a) Firstly, it is a DDL under Section 14 of Electricity Act,
and that being a Department of the Ministry of Railways,
Government of India, the Appellant qualifies as the
"Appropriate Government" and therefore has the deemed
licensee status under the third proviso to Section 14 of
the Electricity Act. Reliance was placed on Letter dated
06.05.2014 issued by the Ministry of Power, Government
of India that clarified that "Railways is a deemed licensee
under the third proviso to Section 14 of the Electricity
Act". It contended that the deeming fiction in the proviso
confers upon it, the status of a DDL and by virtue thereof
shall be subject to benefits and/or privileges emanating
therefrom. It was their unilateral assertion that as regards
the grant of open access, a DDL shall be granted nondiscriminatory open access without the obligation to pay
Cross-Subsidy Surcharge and the Additional Surcharge
under the Electricity Act; and
1
Letter No-25/19/2004-R&R dated 06.05.2014 issued by the Ministry of Power, Government of India
488
[2026] 5 S.C.R.
Supreme Court Reports
(b) Secondly, it operates the rail systems in India as per the
provisions of the Railways Act ("Railways Act"), which
constitutes a complete code in itself and overrides the
provisions of the Electricity Act by virtue of the non-obstante
provision in Section 11 of the Railways Act and Section
173 of the Electricity Act. Therefore, its operations are
independent of its status under the Electricity Act, and it
is entitled to distribute and supply electricity under Section
11 of the Railways Act.
5.3. The West Bengal State Electricity Distribution Company Ltd.
("WBSEDCL") impleaded as a party before the CERC vide
Order dated 12.10.2015, challenged the maintainability of the
Petition filed by the Appellant on the grounds that, since no
application for open access had been filed in the respective
States, and that the process for the grant of inter-state open
access as per the extant regulations had not been necessarily
complied with, therefore, the question of dispute with respect
to the open access did not arise.
5.4. The CERC vide Order dated 05.11.2015 observed that Section
11(g) of the Railways Act authorizes the Railway Administration
"to erect, operate or repair any electric traction equipment,
power supply and distribution installation in connection with
the working of the railway." It held that the use of terms "power
supply and distribution installations" indicates that the Railway
Administration is entrusted with the function of establishing
and operating a distribution network for supply of power to the
various railway installations. Placing reliance on the judgment of
General Manager, Northern Railways rep. by Union of India
v. Chairman, Uttar Pradesh State Electricity Board & Ors.2
and the Letter dated 06.05.2014 issued by the Ministry of Power,
it further held that Indian Railways was authorised under the
Railways Act to undertake transmission and distribution activities
with relation to its operations. Accordingly, the CERC held:
(a) Indian Railways/Appellant is an authorised entity under the
Railways Act for carrying out transmission and distribution
activities for ensuring supply of power in connection with
2
(2012) 3 SCC 329
[2026] 5 S.C.R.
489
Indian Railways v. West Bengal State Electricity Distribution
Company Limited & Ors
the working of the railways, without having to obtain a
license from the appropriate Commission.
(b) Being an authorized entity, it shall be entitled for grant of
open access in connection with the working of the Railways,
as per provisions applicable to a distribution licensee.
(c)
It is a DDL under the third proviso to Section 14 of Act
and is bound by the terms and conditions for a licensee as
specified under Section 16. Hence, no separate declaration
to this effect was required.
5.5. Aggrieved by the observations of the CERC, the WBSEDCL
filed Appeal no. 276/2015 before the Appellate Tribunal.
Subsequently, seven appeals as enlisted hereunder were filed by
the Appellant and relevant distribution companies (DISCOMS),
challenging Orders by the respective SERCs on the identical
issue. The following Appeals were heard together by the APTEL:
WBSEDCL v. CERC & Ors;
Appeal No. 276/2015
CERC Order dated 05.11.2025
Held: Indian Railways is a DDL
under the third proviso to Section
14 of the Electricity Act.
Indian Railways v. MERC & Ors.;
Appeal No. 343/2019
MERC Order dated: 05.04.2019.
Held: Indian Railways is a DDL.
Indian Railways v. Kerala State
Electricity Board Limited & Ors.;
Appeal No. 73 of 2021
KSERC Order dated: 12.12.2019.
Held: Indian Railways is a DDL and
was directed to pay charges as
applicable for open access.
Punjab State Power Corporation
Ltd v. PSERC & Ors.; Appeal No.
320 of 2018
PSERC Order dated: 28.02.2018.
Held: Indian Railways is not a DDL.
Indian Railways v. Odhisa Power
Transmission Corporation Ltd &
Ors; Appeal No. 114 of 2020
OERC Order dated: 25.02.2020.
Held: Indian Railways is not a DDL.
Indian Railways v. MP Poorv
Kshetra Vidyut Vitran Company
Ltd & Ors.; Appeal No. 213 of
2012
MPERC order dated: 05.05.2021.
Held: Indian Railways is not a DDL.
490
[2026] 5 S.C.R.
Supreme Court Reports
Indian Railways v. Jaipur Vidyut
Vitaran Nigam Ltd & Ors.; Appeal
No. 170 of 2019
RERC Order dated: 23.04.2019.
Held: Indian Railways is not a DDL.
Indian Railways v. Dakshin
Haryana BijliVitran Nigam Ltd
& Ors.; Appeal No. 133 of 2020
HERC Order dated: 17.06.2020.
Held: Indian Railways is not a DDL.
5.6. At the outset, APTEL passed an interim Order dated 16.12.2015
in favour of the Appellant, whilst prima facie observing that:
(a) By virtue of Section 11 of the Railways Act, the Appellant
appears to have full authority to undertake distribution
and supply of electricity. Section 11 cannot be given a
restricted meaning in light of the decision in Northern
Railways (supra);
(b) The power to erect, maintain and operate traction
equipment, lines, power supply and distribution installation
under the said provision necessarily implies the use of
such equipment to distribute and supply electricity;
(c)
The decision in Sesa Sterlite Limited v. Orissa Electricity
Regulatory Commission & Ors.3, which laid an emphasis
upon a distribution licensee to operate and maintain a
distribution system and supply power to consumers, is not
applicable to the Appellant herein as Section 173 of the
Electricity Act makes it clear that in case of inconsistencies
in the Railways Act, the latter shall prevail over the
Electricity Act;
(d) The relief sought by the Railways was for the grant of open
access through the Inter-State Transmission Network of
the Central Transmission Utility, to which it is entitled on
a non-discriminatory basis. For this reason, the Petition
before the CERC was maintainable despite the absence
of any independent applications to State Transmission
Utilities or distribution licensees. The distribution licensees
of various States were also held to be not necessary or
proper parties to the said petition.
3
(2014) 8 SCC 444
[2026] 5 S.C.R.
491
Indian Railways v. West Bengal State Electricity Distribution
Company Limited & Ors
5.7. Vide its Final Judgment and Order ("Impugned Judgment")
dated 12.02.2024, however, APTEL rejected the claim of the
Appellant to be recognised as a deemed distribution licensee
within the ambit of the third proviso to Section 14 of the Electricity
Act. It further held that since the entire electricity received by
the Railways is consumed for its own use and its constituents,
it is liable to pay Cross-Subsidy Surcharge and Additional
Surcharge to the respective distribution licenses as any other
consumer under Section 42 of the Electricity Act. The following
are the key observations by APTEL:
(a) Appellant cannot be held to be a DDL, insofar as it does not
distribute electricity. A distribution licensee defined under
Section 2(17) of the Electricity Act must (i) operate and
maintain a distribution system, and (ii) supply electricity to
consumers in its area of supply. The distribution installation
and electric traction of the Appellant is not a distribution
system within Section 2(19) of the Electricity Act, insofar as
a distribution system must connect the delivery point on a
transmission line to the point of connection or installation of
the consumer. Locomotives, signal equipment, and station
facilities are constituents of the Appellant itself and do not
qualify as consumers within the meaning of Section 2(15) of
the Electricity Act. Thus, the Appellant itself is a consumer.
It receives electricity at its traction sub-stations (TSSs)
from distribution licensees, supply authorities, and then
conveys it to locomotives, stations and other installations
within its operational domain. Conveyance of electricity
within this internal network is for the own consumption of
the Appellant and does not constitute distribution.
(b) The Clarificatory Letter dated 06.05.2014 issued by the
Ministry of Power, relied upon by the Appellant is an
administrative directive under Section 107 of the Electricity
Act, and is not mandatory in nature.
(c)
The statutory powers granted to the Railways administration
under Section 11 of the Railways Act are confined to the
construction and maintenance of railway works for running
railway operations. Mere establishment of distribution
installation does not authorise the Appellant to qualify as
a DDL and supply electricity to consumers.
492
[2026] 5 S.C.R.
Supreme Court Reports
(d) In light of the decision in Sesa Sterlite (supra), even if the
Appellant was treated as a DDL or transmission licensee
and seeks to avail open access, it is still liable to pay
Cross-Subsidy Surcharge and additional surcharge as
the electricity procured by it, is for its own consumption
and operation.
(e) The contents of the 31st Report of the Parliamentary
Standing Committee on Energy dated 19.12.2002 reflect
that the Appellant had sought exemption from the obligations
of distribution licensees under Sections 12, 42, and 47 of
the Electricity Act. The request by the Appellant seeking
such an exemption itself demonstrates that it was well
aware that Section 2(31)(c) read with Section 11(g) & (h)
of the Railways Act did not absolve it from obtaining a
distribution license and/or discharging the obligations of
a distribution licensee under the Electricity Act.
6.
Aggrieved, the Appellant has approached this Court challenging
the legality and correctness of the Impugned Judgement of APTEL
dated 12.02.2024. The captioned Appeal was accompanied by IA no.
80269/2024 seeking stay of the Judgment under challenge passed
by APTEL. Vide Order dated 06.05.2024, this Court had directed that
subject to the final adjudication of the present Appeals, the Appellant
shall not be required to pay either the Cross-Subsidy Surcharge or
Additional Surcharge to the distribution licensees, and it was made
clear that the open access shall not be denied to the Appellant for
that reason.
Submissions on behalf of Railways
7.
Mr. M.G. Ramachandran, learned Senior Counsel for the Appellant
challenged the observations of APTEL as unsustainable in law for
the following reasons:
(a) It is the case of the Appellant that it is vested with the statutory
authority under Section 11 read with Section 2(31)(c) of the
Railways Act, to lay down an electrical system, including
a transmission and distribution system within its area of
operation. The authority under the Railways Act expressly
includes executing all necessary works, including laying down
an electric distribution system over the length and breadth of
[2026] 5 S.C.R.
493
Indian Railways v. West Bengal State Electricity Distribution
Company Limited & Ors
the country, and extends to the activities of conveying electricity
necessary for use at different places, points, and purposes for
the operations of the railways, which cannot be interfered with
by the operation of the Electricity Act.
(b) Section 11 of the Railways Act begins with a non-obstante clause,
and the statutory power thereunder is absolute in nature. Placing
reliance on the decision of Northern Railways (supra), it is
contended that APTEL erred in distinguishing that the authority
under Section 11 was confined only to transmission and not
distribution. The Appellant submits that Northern Railways
(supra) authoritatively laid down that the act of constructing
its transmission lines, and drawing power from external power
sources, falls within the statutory domain of the Railways Act.
(c)
Section 11 has an overriding effect, and several High Courts
across the country have observed that the Railways Act
consolidates the law and is not a mere regulatory statute.4 It is
contended that enactments such as the Environment Protection
Act have no application over works undertaken by the Railways
in exercise of the powers under Section 11 of the Railways
Act. Learned Senior Counsel submits that APTEL made a fatal
error in construing Section 11 and other allied provisions of the
Railways Act, with reference to the Act.
(d) Reliance was passionately placed on Ganv Bhavancho
Ekvott v. South Western Railways5 whereby the High Court
had held that the Southern Railway (SWR) and the Rail Vikas
Nigam Limited (RVL) were not under any statutory compulsion
to obtain environmental clearances or any building permission
from authorities and agencies under the other legislations.
It was held that the exemption for railway administration to
execute the works of construction and maintenance of railway
is conferred by the non-obstante clause which has an overriding
effect on all other laws except for the Railways Act6 and the
legislation referred to in Section 11 itself. The Appellant herein
4
Ganv Bhavancho Ekvott v. South Western Railways, 2022 SCC OnLine Bom 7184.
5
Ganv Bhavancho Ekvott (supra)
6
Union of India (Western Railway) v. MCGM, 2017 SCC OnLine Bom 9424; Goa Foundation & Anr. v.
Konkan Railway Corporation & Ors., AIR 1992 Bom 471; Village Panchayat of Velsao v. Ministry of
Railways, 2022 SCC OnLine Bom 3526.
494
[2026] 5 S.C.R.
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submitted that power under section 11 is thus unfettered and
unqualified, and the status of the Appellant under the Electricity
Act is inconsequential, insofar as the authority to distribute
electricity is independently conferred under the Railways Act.
The non-obstante clause under Section 11 of the Railways
Act implies that the powers under the provision are exclusive.
Section 173 of the Electricity Act further settles the dispute by
providing that, in the event of any inconsistencies, only the
Railways Act shall prevail.
(e) The Railways Act is a complete code in itself. The statute
expressly authorises the Appellant to lay down a "distribution
installation" for the operation of railways. By their very nature,
such installations are intended for the purpose of distribution,
thereby implying that the Appellant is statutorily empowered
to distribute electricity. Since this power flows directly from the
parent statute, no separate authorization or license under any
other law is required.
(f)
Without prejudice, the Appellant is a DDL as per the third
proviso to Section 14 of the Electricity Act. Being an entity
of the Central Government, the Appellant is an Appropriate
Government within the definition of Section 2(5) and is therefore
exempt from obtaining a license in terms of the third proviso
to Section 14 of the Electricity Act. Further, electric traction
equipment, power supply systems, and distribution installation
used for the purposes of, or in connection with a railway, fall
within the statutory definition of railways under Section 2(31) of
the Railways Act. Thus, distribution of electricity is an inherent
function of the Appellant.
(g) Although the term "distribution" is not defined under the Railways
Act or under the Electricity Act, in the ordinary and natural sense,
the term "distribute" means spreading of goods anywhere by
whatever means, and in the context of the present case, it would
mean any activity that involves the conveyance of electricity from
one point to another for use at different locations. Accordingly,
any activity involving the conveyance of electricity from one
source to another would fall within the ambit of "distribution."
It is argued that in the context of railways, the conveyance of
electricity from traction and non-traction substations through
[2026] 5 S.C.R.
495
Indian Railways v. West Bengal State Electricity Distribution
Company Limited & Ors
wires and associated electrical systems to points of end use
does not merely amount to transmission or consumption in its
area of operation, but constitutes "distribution of electricity"
within the meaning and scope of the Electricity Act.
(h)
Section 2(70) that defines "supply" as the sale of electricity, is not
a licensed activity under the Electricity Act. Under the previous
regime of the Indian Electricity Act, 1910, its Section 3 specifically
provided for the grant of a license to a person for the supply of
energy within a specified area, along with the laying of electric
supply lines for the conveyance and transmission of energy.
(i)
The statutory scheme of the Electricity Act consciously departed
from this position and distinguishes the two terms of "distribution"
and "supply". The present statutory framework under the
Electricity Act reflects a deliberate legislative shift by excluding
"supply of electricity" as a licensed activity, while retaining the
licensing requirement for "distribution", thereby maintaining a
clear distinction between the two activities. It is submitted that
the distinction has been overlooked by APTEL, as it held that
the Appellant cannot claim the status of a DDL under Section
14 of the Act, as it is not in the business of selling electricity to
consumers, and is only an end user of electricity. Being an entity
of the Central Government, it is an Appropriate Government and
has the status of a DDL as per the third proviso to Section 14 of
the Electricity Act. Section 2(5)(a) of the Electricity Act contains
no restriction that the reference to the Central Government should
be only with the references to the activities of other agencies,
supervised or regulated by the Central Government.
8.
Ms. Aishwarya Bhati, learned ASG appearing for the Union of India,
submitted that:
(a) The Indian Railways is integrated with the Central Government,
and qualified as the "Appropriate Government" under Section
2(5)(a)(ii), of insofar as:
(i)
Railways is a union subject in terms of the Seventh
Schedule of the Constitution of India;
(ii)
Rail Budget is part of the General Budget, and its receipts
and expenditure form part of the Annual Financial
Statement under Article 11;
496
[2026] 5 S.C.R.
Supreme Court Reports
(iii) Revenue generated by the Railways is credited to the
Consolidated Fund of India, confirming its status as a
departmentally run undertaking of the Union.
(b) The Government of India (Allocation of Business), Rules, 1961
and the Government of India (Transaction of Business) Rules,
1961 further reflect the sovereign status of the Ministries of
the Government of India. It is argued that the fiscal identity of
the Ministry of Railways is inseparable from the Union of India
and the national exchequer. The status of the Appellant flows
from the sovereign executive power of the Union under Article
73 of the Constitution.
9.
Based on the aforesaid submissions, learned senior counsels urged
this Court to allow the Appeal and set aside the Impugned Judgment
of APTEL, and further grant non-discriminatory open access to the
Appellant, recognizing its status as a DDL in terms of the third proviso
to Section 14 of the Electricity Act.
Submissions on behalf of Respondents
10. Per contra, it has been asserted by the Respondents' DISCOMS
that the Indian Railways is not a DDL under the Electricity Act. It is
submitted that the Appellant is misconstruing Section 11 read with
Section 2(31) of the Railways Act to contend that it is authorized
to distribute electricity. As per the said contention, the statutory
framework under the Railways Act, only empowers the Appellant
to consume electricity for its own use, and does not extend to the
supply of electricity to consumer.
11. The DISCOMS were represented by learned Senior Counsels Mr.
C.A. Sundaram, Mr. Vaidyanathan, Mr. Maninder Singh, Mr. S.
Poovayya, Mr. Parag Tripathi, appearing on behalf of their respective
Respondents.