# Jaipur Vidyut Vitran Nigam Ltd. & Ors v. MB Power (Madhya Pradesh) Limited & Ors

- **Citation:** 2024 INSC 23
- **Court:** Supreme Court of India
- **Decided:** 2024-01-08
- **Case number:** Civil Appeal No. 6503 of 2022
- **Bench:** B. R. Gavai, Prashant Kumar Mishra
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/jaipur-vidyut-vitran-nigam-ltd-ors-v-mb-power-madhya-pradesh-limited-ors-37494
- **Pages:** 64

## Headnote

State Commission held that the tariffs offered by the L-4 and L-5
bidders were not aligned to the prevailing market prices. In appeal
by L-5, APTEL held that the State Commission had to necessarily
adopt the tariff and had no power to consider whether the tariff was
aligned to market prices. Impugned judgment of the High Court
relying on the said judgment of the APTEL and the earlier orders
of this Court concluded that applying the test of "filling the bucket",
the procurers were bound to take supply from the respondent No.1
at the rates quoted by it and it had a right to supply power since
there was a gap of 300 MW between the power procured by the
procurers and the ceiling of 906 MW determined by this Court. High
Court whether justified in issuing mandamus directing the appellants
to take supply of 200 MW power from the respondent No.1 at the
rates quoted by it. Power of the State Commission to go into the
question as to whether the prices quoted are market aligned or not
and to take into consideration the aspect of consumers' interest.
Headnotes
Electricity Act, 2003 - ss.63, 86 - Rajasthan Rajya Vidyut
Prasaran Nigam Limited (RVPN) filed Petition before the State
Commission seeking approval for procurement of 1000 MW
of power by a competitive bidding process - RFP was issued
- Eventually, in consonance with the LoI, PPAs were signed
with the L-1, L-2 and L-3 bidders - State Commission held that
the quantum of only 500 MW power was liable to be approved
considering the demand in the State as recommended by the
EAC and it approved the tariff quoted by the L-1 to L-3 bidders
- Appeals filed by L-2 and L-3 bidders before APTEL, allowed
- Challenged by the appellants - Subsequently, Civil Appeals
were filed by L-5 bidder also- Disposing of the appeals, State
Commission was directed to go into the issue of approval for
adoption of tariff with regard to L-4 and L-5 bidders- Further,
910
[2024] 1 S.C.R.
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vide order dtd.19.11.18, State Commission was directed to
go into the issue of adoption of tariff - State Commission
held that the tariffs offered by the L-4 and L-5 bidders were
not aligned to the prevailing market prices - Appeal filed by
L-5 bidder, allowed by APTEL - Writ petition was filed by the
respondent No.1 - Allowed by impugned judgment:
Held: Unlike s.62 r/w ss.61 and 64, under the provisions of s.63,
the appropriate Commission does not "determine" tariff but only
"adopts" tariff already determined u/s.63 - Such "adoption" is only
if such tariff has been determined through a transparent process
of bidding, and this transparent process of bidding must be in
accordance with the guidelines issued by the Central Governments
- s.86(1)(b) gives ample power to the State Commission to regulate
electricity purchase and procurement process of distribution
licensees - It also empowers the State Commission to regulate
the matters including the price at which electricity shall be procured
from the generating companies, etc. - Further, orders relied upon
by the APTEL, specifically the order dtd. 19.11.2018, clarified
that the State Commission was to decide the tariff u/s.63 having
regard to the law laid down both statutorily and by this Court - As
such, the State Commission was bound to take into consideration
the Bidding Guidelines notified by the Central Government, and
specifically clause 5.15 thereof - State Commission justified in
considering the Clause 5.15 of the Bidding Guidelines which
specifically permits to reject all price bids if the rates quoted are
not aligned to the prevailing market prices - APTEL grossly erred
in holding that the State Commission has no power to go into the
question, as to whether the prices quoted are market aligned or not
and also not to take into consideration the aspect of consumers'
interest - It cannot be read from the orders of this Court that the
State Commission was bound to accept the bids as quoted by
the bidders till the bucket was filled - No such directio

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* Author
[2024] 1 S.C.R. 909 : 2024 INSC 23
Jaipur Vidyut Vitran Nigam Ltd. & Ors.
v.
MB Power (Madhya Pradesh) Limited & Ors.
(Civil Appeal No. 6503 of 2022)
08 January 2024
 [B. R. Gavai* and Prashant Kumar Mishra, JJ.]
Issue for Consideration
State Commission held that the tariffs offered by the L-4 and L-5
bidders were not aligned to the prevailing market prices. In appeal
by L-5, APTEL held that the State Commission had to necessarily
adopt the tariff and had no power to consider whether the tariff was
aligned to market prices. Impugned judgment of the High Court
relying on the said judgment of the APTEL and the earlier orders
of this Court concluded that applying the test of "filling the bucket",
the procurers were bound to take supply from the respondent No.1
at the rates quoted by it and it had a right to supply power since
there was a gap of 300 MW between the power procured by the
procurers and the ceiling of 906 MW determined by this Court. High
Court whether justified in issuing mandamus directing the appellants
to take supply of 200 MW power from the respondent No.1 at the
rates quoted by it. Power of the State Commission to go into the
question as to whether the prices quoted are market aligned or not
and to take into consideration the aspect of consumers' interest.
Headnotes
Electricity Act, 2003 - ss.63, 86 - Rajasthan Rajya Vidyut
Prasaran Nigam Limited (RVPN) filed Petition before the State
Commission seeking approval for procurement of 1000 MW
of power by a competitive bidding process - RFP was issued
- Eventually, in consonance with the LoI, PPAs were signed
with the L-1, L-2 and L-3 bidders - State Commission held that
the quantum of only 500 MW power was liable to be approved
considering the demand in the State as recommended by the
EAC and it approved the tariff quoted by the L-1 to L-3 bidders
- Appeals filed by L-2 and L-3 bidders before APTEL, allowed
- Challenged by the appellants - Subsequently, Civil Appeals
were filed by L-5 bidder also- Disposing of the appeals, State
Commission was directed to go into the issue of approval for
adoption of tariff with regard to L-4 and L-5 bidders- Further,
910
[2024] 1 S.C.R.
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vide order dtd.19.11.18, State Commission was directed to
go into the issue of adoption of tariff - State Commission
held that the tariffs offered by the L-4 and L-5 bidders were
not aligned to the prevailing market prices - Appeal filed by
L-5 bidder, allowed by APTEL - Writ petition was filed by the
respondent No.1 - Allowed by impugned judgment:
Held: Unlike s.62 r/w ss.61 and 64, under the provisions of s.63,
the appropriate Commission does not "determine" tariff but only
"adopts" tariff already determined u/s.63 - Such "adoption" is only
if such tariff has been determined through a transparent process
of bidding, and this transparent process of bidding must be in
accordance with the guidelines issued by the Central Governments
- s.86(1)(b) gives ample power to the State Commission to regulate
electricity purchase and procurement process of distribution
licensees - It also empowers the State Commission to regulate
the matters including the price at which electricity shall be procured
from the generating companies, etc. - Further, orders relied upon
by the APTEL, specifically the order dtd. 19.11.2018, clarified
that the State Commission was to decide the tariff u/s.63 having
regard to the law laid down both statutorily and by this Court - As
such, the State Commission was bound to take into consideration
the Bidding Guidelines notified by the Central Government, and
specifically clause 5.15 thereof - State Commission justified in
considering the Clause 5.15 of the Bidding Guidelines which
specifically permits to reject all price bids if the rates quoted are
not aligned to the prevailing market prices - APTEL grossly erred
in holding that the State Commission has no power to go into the
question, as to whether the prices quoted are market aligned or not
and also not to take into consideration the aspect of consumers'
interest - It cannot be read from the orders of this Court that the
State Commission was bound to accept the bids as quoted by
the bidders till the bucket was filled - No such direction can be
issued by this Court de hors the provisions of ss.63 and 86(1)(b)
and the Bidding Guidelines - Since the decision-making process
adopted by the Bid Evaluation Committee approved by the State
Commission, was in accordance with the law laid down by this
Court, the same ought not to have been interfered with by the
APTEL - High Court could not have issued a mandamus to the
instrumentalities of the State to enter into a contract harmful to the
public interest inasmuch as, if the power was to be procured by
the procurers at the rates quoted by the respondent No.1, which
was even higher than the rates quoted by the L-5 bidder, then the
[2024] 1 S.C.R.
911
Jaipur Vidyut Vitran Nigam Ltd. & Ors. v.
MB Power (Madhya Pradesh) Limited & Ors.
State would have to bear financial burden in thousands of crore
rupees, which in turn would have passed on to the consumers
- Impugned judgment quashed and set aside - Cost imposed.
[Paras 67, 71, 73-75, 78, 83, 104, 105]
Electricity - Competitive Bidding Guidelines notified by the
Government of India u/s.63 - Respondent No.1 contended
that the procurer is bound to accept all the bids emerged in
a competitive bidding process once the bidding process was
found to be transparent and in compliance with the Bidding
Guidelines:
Held: If the contention is to be accepted it will do complete violence
to clause 5.15 of the Bidding Guidelines itself - If that view is
accepted, the DISCOMS will be compelled to purchase electricity
at a much higher rate as compared with other suppliers - The
said higher rate will be passed on to the consumers - As such,
accepting the contention of the respondent No.1 would result in
adversely affecting the interests of the consumers and, in turn,
would be against the larger public interest. [Para 77]
Electricity Act, 2003 - s.63 - General Clauses Act - s.13(2)
- "all", "any" - Principle of literal interpretation - Principle
of purposive construction - "all" used in clause 5.15 of
the Bidding Guidelines r/ws.86(1)(b) - Competitive Bidding
Guidelines notified by the Government of India u/s.63 - It was
contended that the power under clause 5.15 of the Bidding
Guidelines can be exercised only when the bidding process
is found to be not in compliance with the Bidding Guidelines
and is not transparent in respect of all the bidders and not in
respect of some of the bidders is concerned:
Held: The contention is without substance - Words "all" or "any" will
have to be construed in their context taking into consideration the
scheme and purpose of the enactment - What is the meaning which
the legislature intended to give to a particular statutory provision
has to be decided by the Court on a consideration of the context
in which the word(s) appear(s) and in particular, the scheme and
object of the legislation - The word "all" used in clause 5.15 of
the Bidding Guidelines, read with the legislative policy for which
the Electricity Act was enacted and r/ws.86(1)(b), will have to be
construed to be the one including "any" - Applying the principle of
literal interpretation, the evaluation committee/BEC would be entitled
to reject only such of the price bids if it finds that the rates quoted
912
[2024] 1 S.C.R.
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by the bidders are not aligned to the prevailing market prices - It
does not stipulate rejection of all the bids in the bidding process
- If the contention that clause 5.15 of the Bidding Guidelines will
come into play, which permits the Evaluation Committee to reject
"all" price bids and not "any" one of them is accepted, it will lead
to absurdity - The Court, while interpreting a particular provision,
will have to apply the principles of purposive construction - Such
an interpretation would result in defeating one of the main objects
of the enactment, i.e., protection of the consumer. [Paras 84, 87,
88 and 91]
Interpretation of Statutes - Principle of purposive construction
- Discussed.
Electricity Act, 2003 - ss.62, 63, 79(1)(b):
Held: The non-obstante clause advisedly restricts itself to s.62,
there is no reason to put s.79 out of the way altogether - Either
u/s.62, or 63, the general regulatory power of the Commission
u/s.79(1)(b) is the source of the power to regulate, which includes
the power to determine or adopt tariff - ss.62 and 63 deal with
"determination" of tariff, which is part of "regulating" tariff - In a
situation where the guidelines issued by the Central Government
u/s.63 cover the situation, the Central Commission is bound by
those guidelines and must exercise its regulatory functions, albeit
u/s.79(1)(b), only in accordance with those guidelines. [Para 68]
Alternate remedy - Electricity Act, 2003 - Constitution of
India - Article 226 - Judicial review - Scope:
Held: The Electricity Act is an exhaustive code on all matters
concerning electricity - Under the Electricity Act, all issues dealing
with electricity have to be considered by the authorities constituted
under the said Act - The State Electricity Commission and the
APTEL have ample powers to adjudicate in the matters with
regard to electricity - These Tribunals are tribunals consisting of
experts having vast experience in the field of electricity - In the
present case, the High Court erred in directly entertaining the writ
petition when the respondent No.1-the writ petitioner before the
High Court had an adequate alternate remedy of approaching the
State Electricity Commission - Although, availability of an alternate
remedy is not a complete bar in the exercise of the power of judicial
review by the High Courts but, recourse to such a remedy would
be permissible only if extraordinary and exceptional circumstances
are made out - While exercising its power of judicial review, the
[2024] 1 S.C.R.
913
Jaipur Vidyut Vitran Nigam Ltd. & Ors. v.
MB Power (Madhya Pradesh) Limited & Ors.
Court can step in where a case of manifest unreasonableness or
arbitrariness is made out - There was not even an allegation with
regard to that effect - In such circumstances, recourse to a petition
under Article 226 of the Constitution of India in the availability of
efficacious alternate remedy under a statute which is a complete
code in itself was not justified. [Paras 93-95]
Contract - Award of contract, a commercial transaction -
Judicial Scrutiny - Scope:
Held: The award of a contract, whether by a private party or by
a public body or the State is essentially a commercial transaction
- In arriving at a commercial decision, considerations which are
paramount are commercial considerations - State can choose its
own method to arrive at a decision - It can fix its own terms of
invitation to tender and that is not open to judicial scrutiny - State
can enter into negotiations before finally deciding to accept one of
the offers made to it - Price need not always be the sole criterion
for awarding a contract - State may not accept the offer even
though it happens to be the highest or the lowest - However, the
State, its corporations, instrumentalities and agencies are bound
to adhere to the norms, standards and procedures laid down
by them and cannot depart from them arbitrarily - Though that
decision is not amenable to judicial review, the court can examine
the decision-making process and interfere if it is found vitiated by
mala fides, unreasonableness and arbitrariness - Only when the
Court comes to a conclusion that overwhelming public interest
requires interference, the court should intervene. [Para 102]
Case Law Cited
PTC India Limited v. Central Electricity Regulatory
Commission, Through Secretary [2010] 3 SCR 609 :
(2010) 4 SCC 603; Vivek Narayan Sharma and others
v. Union of India and others [2023] 1 SCR 1 : (2023)
3 SCC 1 - followed.
Energy Watchdog v. Central Electricity Regulatory
Commission and others [2017] 3 SCR 153 : (2017)
14 SCC 80; GMR Warora Energy Limited v. Central
Electricity Regulatory Commission (CERC) & Ors. [2023]
8 SCR 183 : 2023 SCC Online SC 464 - relied on.
R.Viswanathan and others v. Rukn-ul-Mulk Syed Abdul
Wajid since deceased and others [1963] 3 SCR 22 :
914
[2024] 1 S.C.R.
Digital Supreme Court Reports
AIR 1963 SC 1; Deccan Paper Mills Company Limited
v. Regency Mahavir Properties & Ors. [2020] 13 SCR
427 : (2021) 4 SCC 786; Tata Power Company Limited
Transmission v. Maharashtra Electricity Regulatory
Commission & Ors. [2022] 19 S.C.R. 620 : 2022 SCC
Online 1615; Tata Cellular v. Union of India [1994]
2 Suppl. SCR 122 : (1994) 6 SCC 651; Rajasthan
Housing Board and another v. G.S. Investments and
another [2006] 7 Suppl. SCR 868 : (2007) 1 SCC 477;
Laxmikant and others v. Satyawan and others [1996] 3
SCR 532 : (1996) 4 SCC 208; Reliance Infrastructure
Limited v. State of Maharashtra and others [2019] 1 SCR
886 : (2019) 3 SCC 352; Radha Krishan Industries v.
State of Himachal Pradesh and others [2021] 3 SCR
406 : (2021) 6 SCC 771; South Indian Bank Ltd. and
others v. Naveen Mathew Philip and another [2023] 4
SCR 18 : 2023 SCC OnLine SC 435; Air India Ltd. v.
Cochin International Airport Ltd. and others [2000] 1
SCR 505 : (2000) 2 SCC 617 - referred to.
List of Acts
Electricity Act; RERC (Power Purchase & Procurement Process
of Distribution Licensee) Regulations 2004; Constitution of India;
General Clauses Act.
List Keywords
Electricity; State Electricity Regulatory Commission; Appellate
Tribunal for Electricity; Bid Evaluation Committee; Request for
Proposal; Power Purchase Agreement; Reduction of quantum of
power; Test of filling the bucket; Tariffs not aligned to the prevailing
market prices; Consumers' interest; Competitive Bidding Guidelines/
Process; Approval for adoption of tariff; Determination of tariff
by bidding process; Functions of State Commission; Functions
of Central Electricity Regulatory Commission; Bid Evaluation
Committee; Mandamus; Contract harmful to the public interest;
Interpretation of Statutes; Principle of literal interpretation; Principle
of purposive construction; Determination of tariff, Regulating
tariff; Alternate remedy; Judicial review; Unreasonableness
or arbitrariness; Award of contract; Commercial transaction;
Commercial considerations; Judicial Scrutiny.
[2024] 1 S.C.R.
915
Jaipur Vidyut Vitran Nigam Ltd. & Ors. v.
MB Power (Madhya Pradesh) Limited & Ors.
Case Arising From
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 6503 of 2022.
From the Judgment and Order dated 20.09.2021 of the High Court
of Judicature for Rajasthan Bench at Jaipur in D.B. Civil Writ Petition
No.14815 of 2020.
With
Civil Appeal Nos. 6502 of 2022 And 4612 of 2023.
Appearances for Parties
P. Chidambaram, Sr. Adv., Anand K Ganesan, Amal Nair, Ms. Shivani
Verma, Nitin Saluja, Nikunj Dayal, Ms. Kritika Khanna, Advs. for the
Appellants.
Vikramjit Banerjee, A.S.G., Dr. A.M. Singhvi, Prag Tripathi, C.S.
Vaidhyanathan, Sr. Advs., Atul Shanker Mathur, Mahesh Agarwal,
Rishi Agrawala, Vaibhav Mishra, Dr. Rajeshwar Singh, Avishkar
Singhvi, Ms. Priya Singh, Prabal Mehrotra, Shubhankar, Ankur
Saigal, Karan Verma, Apoorv Agarwal, E. C. Agrawala, Atul Shankar
Mathur, Buddy Rangnathan, Umang Katariya, Ms. Mishika Bajpai,
Ms. Apoorva Agrawal, Sidharth Seem, M/s. Khaitan & Co., Jayant
Mohan, Zoheb Hossain, P.V. Yogeshwaran, Siddhartha Sinha, Ms.
Megha Saxena, Aditya Kashyap, Ms. Vanshja Shukla, Nring C.
Zeliang, Gurmeet Singh Makker, Saurabh Mishra, Ms. Prerna Singh,
Guntur Prabhakar, Ravi Kishore, Guntur Pramod Kumar, Umesh
Kumar Khaitan, Advs. for the Respondents.
Judgment / Order of the Supreme Court
Judgment
B. R. Gavai, J.
CIVIL APPEAL NO. 6503 OF 2022 AND CIVIL APPEAL NO. 6502
OF 2022
1.
These appeals challenge the judgment and order dated 20th September
2021, passed by the Division Bench of the High Court of Judicature
for Rajasthan, Bench at Jaipur, in D.B. Civil Writ Petition No. 14815
of 2020, thereby allowing the said writ petition filed by MB Power
(Madhya Pradesh) Limited (hereinafter referred to as "MB Power"),
respondent No.1 herein. By the impugned judgment and order, the
916
[2024] 1 S.C.R.
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High Court held that the respondent Nos. 1 to 5 therein (appellants
herein and the State of Rajasthan) are bound to purchase a total of 906
MW electricity from the successful bidders. It, therefore, directed the
writ petitioner- MB Power (respondent No.1 herein) and respondent
No.7 - PTC India Ltd. (hereinafter referred to as "PTC India") in the
said writ petition (respondent No.2 in the present appeals) to supply
200 MW electricity to the respondents therein (appellants herein)
within the limit of 906 MW. It also directed the writ petitioner-MB Power
and PTC India, respondent No.7 in the said writ petition, to file an
appropriate application before the respondent Nos. 1 to 5 in the said
writ petition, within two weeks from the date of the order, complying
with the necessary requisite conditions, including bank guarantee
etc., as required in terms of the Request for Proposal (hereinafter
referred to as "the RFP"). It further directed the respondent Nos. 1
to 5 in the said writ petition, for issuance of Letter of Intent ("LoI"
for short) in respect of bid filed through PTC India for supplying 200
MW power from the power generating station of the writ petitioner
i.e. MB Power at levelized tariff of Rs.5.517/Kwh, being in terms of
their bid qualified by the Bid Evaluation Committee ("BEC" for short)
and ranked L-7. It further directed the respondents No.1 to 5 in the
said writ petition, to immediately within two weeks thereafter, execute
the Power Purchase Agreement ("PPA" for short) with PTC India for
procuring 200 MW power from the power generating station of MB
Power, and then to start procuring power in accordance with law.
As an interim measure, it directed that the tariff to be actually paid
by the procurer-respondents before it, shall be the interim tariff i.e.
Rs.2.88 per unit, as specified by this Court in its interim order dated
28th September 2020, passed in I.A. No.83693 of 2020 in Civil Appeal
No.2721 of 2020. It further held that the final adoption of tariff to be
paid to PTC India (respondent No.7 before it) under the PPA shall
be subject to the final outcome of the said Civil Appeal No. 2721 of
2020, pending before this Court.
BRIEF FACTS:
2.
The facts leading to the filing of these two appeals, as mentioned
in Civil Appeal No. 6503 of 2022, are as under:
2.1 The Government of India vide Notification dated 19th January
2005, notified the Competitive Bidding Guidelines (hereinafter
referred to as "the Bidding Guidelines") under Section 63 of the
[2024] 1 S.C.R.
917
Jaipur Vidyut Vitran Nigam Ltd. & Ors. v.
MB Power (Madhya Pradesh) Limited & Ors.
Electricity Act, 2003 (hereinafter referred to as "the Electricity
Act"). The objective of the said Bidding Guidelines is for
introduction of competition and protection of consumer interest.
2.2 On 21st September 2009, Rajasthan Rajya Vidyut Prasaran
Nigam Limited (hereinafter referred to as "RVPN") filed Petition
No.205 of 2009 before the Rajasthan Electricity Regulatory
Commission (hereinafter referred to as "the State Commission")
seeking approval for procurement of 1000 MW of power by a
competitive bidding process.
2.3 On 28th May 2012, RVPN issued an RFP, inviting sellers to
participate in the competitive bidding for procurement of 1000
MW under the Bidding Guidelines.
2.4 In the month of February 2013, bids were received from the
bidders.
2.5 On 4th April 2013, based on the preliminary evaluation of the
non-financial bids by the BEC, 7 bidders were declared as
qualified for opening of the financial bids. The respondent
No.1-MB Power herein was not a bidder in the above process.
Respondent No.2-PTC India herein had submitted a bid for 1041
MW, which it was to procure from five different generators. PTC
India is a power-trading licensee company, which had procured
the bid document after depositing a Bid Bond.
2.6 In the various meetings held between 17th April 2013 and 22nd
April 2013, the BEC had placed the bids received in ascending
order, from lowest to the highest tariff as follows:
Rank
Qualified
Bidder Name
Levelized Tariff
(Rs/kWh)
Capacity
Offered
Cumulative
Capacity
Offered
Average
Cumulative
Tariff
(Rs/ kWh)
L-1
PTC - Maruti
Clean Coal
and Power
Limited
4.517
195
195
4.517
L-2
PTC - DB
Power Limited
4.811
311
506
4.698
918
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L-3
LPL - Lanco
Babandh
Power Limited
4.943
100
606
4.738
L-4
PTC - Athena
Chhattisgarh
Power Ltd
5.143
200
806
4.839
L-5
SKS Power
Generation
(Chhattisgarh)
Limited
5.300
100
906
4.890
L-6
LPL - Lanco
Vidarbha
Thermal
Power Limited
5.490
100
1006
4.949
L-7
PTC - MB
Power
(Madhya
Pradesh) Ltd.
5.517
200
1206
5.043
L-8
KSK
Mahanadi
Power
Company
Limited
5.572
475
1681
5.193
L-9
Jindal Power
Limited
6.038
300
1981
5.321
L-10
LPL - Lanco
Amarkantak
Power Ltd
7.110
100
2081
5.407
2.7 In the 216th Meeting of the Board of Directors of RVPN, it
was decided to take an opinion from the BEC as to whether
negotiations should be held to reduce tariff keeping in view of
the long-term impact and quantum of the amounts involved.
2.8 On 4th June 2013, the BEC gave its opinion that since the rates
quoted vary considerably, negotiations could be held with the
bidders.
2.9 Vide Resolution dated 4th June 2013, the Board of the RVPN
decided to hold negotiations with the qualified bidders.
2.10 In the negotiations, the following offers were received:
[2024] 1 S.C.R.
919
Jaipur Vidyut Vitran Nigam Ltd. & Ors. v.
MB Power (Madhya Pradesh) Limited & Ors.
"
 •
L-1/Maruti Clean Coal & Power Ltd. offered an
additional capacity of 55 MW, aggregating to a total
of 250 MW.
 •
L-2/DB Power Limited, inter-alia, agreed to provide
additional quantum of power to the tune of 99 MW,
aggregating to a total of 410 MW.
 •
Similarly, L-3/Lanco Power Ltd. offered an additional
capacity of 250 MW, aggregating to a total of 350 MW."
2.11 The Board of Directors of the RVPN, in its meeting held on 27th
September 2013, directed that, LoI be issued in favour of the
L-1, L-2 and L-3 bidders as under, subject to the approval of
the State Commission while adopting the tariff.
"S.
No.
Bidder
Quoted
Tariff
(Rs. /
kWh)
Capacity
offered in
Bid (MW)
Additional
Capacity
Offered
(MW)
1
M/s PTC India Ltd
(through developer M/s
Maruti Clean Coal and
Power Limited)
4.517
195
55
2
M/s PTC India Ltd (through
their developer M/s DB
Power Limited)4.811
4.811
311
99
3
M/s Lanco Power Limited
(Generation Source - M/s
Lanco Babandh Power
Limited)
4.892
100
250
Total
606
404
G. Total (A+B)
1010 MW"
2.12 In consonance with the LoI, on 1st November 2013, PPAs were
signed with the L-1, L-2 and L-3 bidders. Thereafter, RVPN
filed Petition No.431 of 2013 before the State Commission
under Section 63 of the Electricity Act read with clause 5.16
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[2024] 1 S.C.R.
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of the Bidding Guidelines for adoption of tariff for purchase
of long-term base load power of 1000 MW (±10%) as quoted
by the successful bidders (being L-1, L-2 and L-3) under the
Case-I bidding process.
2.13 The Energy Assessment Committee ("EAC" for short),
constituted by the Government of Rajasthan pursuant to
Regulation 3 of the Power Procurement Regulations, in its
4th meeting held on 29th January 2014, recommended that
there was no requirement for long term procurement of 1000
MW (±10%) power under Case-I for which PPAs had been
executed and tariff adoption petition had been filed before the
State Commission.
2.14 In the meantime, the L-4 and L-5 bidders filed Writ Petitions
being CWP No. 19437 of 2013 and CWP No.18699 of 2013
respectively, before the High Court, seeking to strike down
the negotiations process and the higher quantum awarded
to L-1, L-2 and L-3 bidders.
2.15 The High Court vide judgment dated 7th February 2014, refused
to entertain the writ petitions and relegated the parties to the
State Commission. The said order dated 7th February 2014
came to be challenged by the L-4 and L-5 bidders by way
of writ appeals being DB Special Appeals (Writ) Nos. 538 of
2014 and 604 of 2014. The said appeals also came to be
dismissed by the High Court vide judgment and order dated
18th April 2014.
2.16 Subsequently, in its 5th meeting held on 21st May 2014, the
EAC recommended that as against the quantum of 1000 MW
power, for which PPAs had been executed and tariff adoption
petition had been filed, a demand of 600 MW power ought to
be considered, on account of availability of power from various
sources and to meet future contingencies.
2.17 The Government of Rajasthan, therefore, vide its letter dated
25th July 2014, issued to the RVPN, approved the purchase of
a quantum of 500 MW power on long term basis as against
the quantum of 1000 MW for which PPAs had already been
executed.
[2024] 1 S.C.R.
921
Jaipur Vidyut Vitran Nigam Ltd. & Ors. v.
MB Power (Madhya Pradesh) Limited & Ors.
2.18 On the basis of the decision/recommendation of the EAC
and the direction issued by the Government of Rajasthan,
RVPN filed an application under Regulation 7 of the RERC
(Power Purchase & Procurement Process of Distribution
Licensee) Regulations 2004 (hereinafter referred to as "RERC
Regulations 2004") in Petition No.431 of 2013, to bring on
record the EAC decision/recommendation and the Government
of Rajasthan approval. In the said application, inter alia, it
was prayed for adoption of tariff and approval of the reduced
quantum of 500 MW of power to be purchased as against the
original 1000 MW of power for which PPAs had already been
executed with the successful bidders.
2.19 Vide order dated 22nd July 2015 in Petition No.431 of 2013,
the State Commission held that the quantum of only 500 MW
power was liable to be approved considering the demand in
the State as recommended by the EAC. The State Commission
also approved the tariff quoted by the L-1 to L-3 bidders.
2.20 Aggrieved by the reduction of quantum by the State
Commission, the L-2 and L-3 bidders preferred appeals
before the learned Appellate Tribunal for Electricity (hereinafter
referred to as "the learned APTEL") being Appeal Nos. 235 of
2015 and 191 of 2015 respectively.
2.21 Two separate appeals were also preferred by the L-4 and
L-5 bidders, being Appeal No. 264 of 2015 and Appeal No.
202 of 2015 respectively, wherein apart from challenging the
reduction of quantum by the State Commission from 1000
MW to 500 MW, the increase in quantum granted to the L-1,
L-2 and L-3 bidders was also challenged.
2.22 Vide order dated 2nd February 2018, the learned APTEL allowed
the Appeal Nos. 191 of 2015 and 235 of 2015, filed by the L-3
and L-2 bidders, holding that the reduction of quantum by the
State Commission from 1000 MW to 500 MW was incorrect. It,
therefore, directed the State Commission to pass consequential
orders for approving the PPAs for the L-2 and L-3 bidders for
the higher quantum which was negotiated.
2.23 The order of the learned APTEL dated 2nd February 2018,
was challenged by the present appellants before this Court by
922
[2024] 1 S.C.R.
Digital Supreme Court Reports
way of Civil Appeal Nos. 3481-3482 of 2018, on the ground
that the RFP quantum cannot be restored from 500 MW to
1000 MW. Subsequently, Civil Appeal Nos. 2502-2503 of 2018
also came to be filed by L-5 bidder- SKS Power Generation
(Chhattisgarh) Limited (hereinafter referred to as "SKS Power"),
on the ground that the State Commission could not have
permitted the procurement of higher quantum by the L-2 and
L-3 bidders.
2.24 Vide order dated 25th April 2018, the said Civil Appeals were
disposed of by this Court, upholding the decision of the learned
APTEL, setting aside the reduction of quantum of procurement
from 1000 MW to 500 MW after the bidding process was
over. However, this Court held that the decision of the learned
APTEL on the quantum to be procured from individual bidders
was liable to be reversed and that the quantum originally
offered by the bidders in the bidding process has to be taken
into consideration and increase in quantum by means of
negotiation was not permissible. Insofar as L-4 and L-5 bidders
are concerned, since the tariff quoted was not considered at
any stage by either the procurer, or by RVPN or by the State
Commission, this Court directed the State Commission to go
into the issue of approval for adoption of tariff with regard to
L-4 and L-5 bidders.
2.25 Subsequent to the judgment and order dated 25th April 2018,
passed by this Court, the BEC came to a finding that the
tariffs quoted by the L-4 and L-5 bidders were not aligned to
the prevailing market prices.
2.26 In the meantime, vide order dated 19th November 2018, this
Court, on an application filed by RVPN, directed the State
Commission to go into the issue of adoption of tariff in terms
of Section 63 of the Electricity Act and the law laid down by
this Court under the said provision.
2.27 Vide order dated 26th February 2019, the State Commission
held that the tariffs offered by the L-4 and L-5 bidders were
not aligned to the prevailing market prices.
2.28 Being aggrieved by the same, SKS Power (L-5 bidder)
challenged the above order dated 26th February 2019 before
the learned APTEL by way of Appeal No.224 of 2019.
[2024] 1 S.C.R.
923
Jaipur Vidyut Vitran Nigam Ltd. & Ors. v.
MB Power (Madhya Pradesh) Limited & Ors.
2.29 Vide the judgment and order dated 3rd February 2020, the
learned APTEL allowed the appeal of the L-5 bidder - SKS
Power and held that the State Commission had to necessarily
adopt the tariff, and had no power to consider whether the
tariff was aligned to market prices.
2.30 Aggrieved by the same, the present appellants have filed Civil
Appeal No. 1937 of 2020 and Civil Appeal No.2721 of 2020.
Initially, the present appeals were tagged along with the said
appeals. However, vide order dated 10th October 2023, the
same have been de-tagged.
2.31 On an interlocutory application being I.A. No.83693 of 2020
filed by L-5 bidder-SKS Power in Civil Appeal No. 2721 of 2020,
an interim order 28th September 2020, came to be passed by
this Court, holding that the L-5 bidder was entitled to supply
power to the appellants at the tariff of Rs.2.88 per unit.
2.32 It appears that subsequently thereafter on 14th December 2020,
a writ petition being Writ Petition No. 14815 of 2020 came to
be filed by the respondent No.1-MB Power before the High
Court, seeking following relief:
"(a) Issue appropriate Writ or order or direction in the
nature of declaration or certiorari or any other writ
or direction declaring Rule 69(2)(b) of the RTPP
Rules as ultra vires Article 14, 19(1)(g) and 21 of
the Constitution of India as well as Section 63 of
the Electricity Act, 2003;
(b) Issue appropriate Writ or order or direction in the
nature of mandamus directing the Respondent
Nos. 1-4 to immediately issue a Letter of Intent in
favour of the Petitioner, sign the power Purchase
Agreement with the Petitioner as per its bid tariff,
take steps for adoption of tariff of the Petitioner and
immediately commence supply of power;
(c)
Pass such further order(s) as this Hon'ble Court may
deem fit and proper in the facts and circumstances
of the instant case in the interest of justice."
924
[2024] 1 S.C.R.
Digital Supreme Court Reports
2.33 In the appeals filed by the present appellants, i.e., Civil
Appeal Nos. 1937 of 2020 and 2721 of 2020, respondent
No.1-MB Power filed an application for impleadment, on
the ground that the issue of role of the State Commission
in adoption of tariff being decided by this Court in the said
appeals would have an impact on the writ petition filed by it
before the High Court.
2.34 Vide order dated 19th April 2021, this Court directed the said
application for impleadment to be considered at the stage of
hearing of the said appeals.
2.35 By the impugned judgment and order, the said writ petition
filed by MB Power has been allowed by the High Court in
terms of the aforesaid directions.
2.36 Hence the present appeals.
CIVIL APPEAL NO. 4612 OF 2023
3.
This appeal filed by Rajasthan Urja Vikas Nigam Limited (hereinafter
referred to as "RUVNL") challenges the order dated 1st June 2023,
passed by the learned APTEL, whereby the learned APTEL has
stayed the operation of the order dated 31st March 2023, passed by
the State Commission in Petition No.RERC-2097 of 2023.
4.
The facts, in brief, leading to the filing of Civil Appeal No.4612 of
2023, are as under:
4.1 In the year 2022, the RUVNL had proposed the procurement of
294 MW of power on long term basis and for that purpose had
filed Petition No.2017 of 2022 before the State Commission.
4.2 Vide order dated 2nd November 2022, the State Commission
rejected the procurement of power on long term basis.
4.3 Thereafter, considering the assessment and requirement of
power, the RUVNL filed Petition No.RERC-2097 of 2023 before
the State Commission, seeking approval for procurement of
160 MW of power on medium term basis i.e., for a period of 5
years and not for 25 years on long term basis.
[2024] 1 S.C.R.
925
Jaipur Vidyut Vitran Nigam Ltd. & Ors. v.
MB Power (Madhya Pradesh) Limited & Ors.
4.4 Vide order dated 31st March 2023, the State Commission granted
approval to the distribution licensees in the State of Rajasthan
for procurement of 160 MW round-the-clock fuel agnostic power
on medium term basis by way of a competitive bidding process.
4.5 Aggrieved thereby, the respondent No.1 herein, i.e., MB Power
(Madhya Pradesh) Limited filed Appeal No. 466 of 2023 before
the learned APTEL against the order dated 31st March 2023
passed by the State Commission, along with I.A. No.1004 of
2023 for the stay of the order.
4.6 Vide impugned order dated 1st June 2023, the learned APTEL
stayed operation of the order passed by the State Commission
and directed that in the bidding process for procurement of 160
MW of power on medium term basis the bid shall neither be
finalized nor shall any Letter of Intent be issued pursuant to
the opening of the bids.
4.7 Aggrieved thereby, the RUVNL has filed the present appeal.
5.
Vide order dated 26th September 2023, this Court had permitted the
appellant to proceed further with the tender process for procurement
of 160 MW of power for 5 years on the basis of model bidding
documents for medium term procurement.
6.
Vide order dated 10th October 2023, this Court had been informed
that pursuant to the aforesaid order dated 26th September 2023,
bids had been opened and the lowest bid was at Rs.5.30 per unit.
As a result, this Court had clarified that the pendency of the present
appeal would not come in the way of the appellant in finalizing the
tender and executing power purchase agreement with the successful
bidders and the appellant would be at liberty to do so in order to
overcome the difficulty of power shortage.
7.
The order of the learned APTEL dated 1st June 2023 basically relies
on the judgment of the Division Bench of the High Court of Judicature
for Rajasthan, bench at Jaipur, passed in D.B. Civil Writ Petition No.
14815 of 2020, which is a subject matter of challenge in Civil Appeal
Nos. 6503 of 2022 and 6502 of 2022. As such, the result of Civil
Appeal No.4612 of 2023 would depend upon the outcome of Civil
Appeal Nos. 6503 of 2022 and 6502 of 2022.
926
[2024] 1 S.C.R.
Digital Supreme Court Reports
SUBMISSIONS OF THE APPELLANTS
8.
We have heard Shri P. Chidambaram, learned Senior Counsel
appearing for the appellants, and Dr. A.M. Singhvi and Shri
C.S. Vaidyanathan, learned Senior Counsel appearing for the
respondents.
9.
Shri Chidambaram, at the outset, submits that the writ petition, filed
by the respondent No.1-MB Power, was not maintainable before
the High Court in its original jurisdiction under Article 226 of the
Constitution of India. It is submitted that, if the respondent No.1-MB
Power had any grievance, it could have either approached the State
Commission or the learned APTEL.
10. He submits that this Court in the case of PTC India Limited v. Central
Electricity Regulatory Commission, Through Secretary1 has held
that the Electricity Act is an exhaustive code on all matters concerning
electricity. The Electricity Act provides for the forum for adjudication
of all disputes between a generator and the procurer/licensee. As
such, the respondent No.1-MB Power, if had any grievance, ought
to have filed an application before the State Commission or the
learned APTEL and it could not have approached the High Court
directly in its writ jurisdiction.
11. Shri Chidambaram further submitted that though L-1 to L-5 bidders
have continuously been litigating their grievances from 2013
onwards, the respondent No.1-MB Power, since it was not shortlisted, had taken no steps from 2013 onwards. It is submitted that,
as a matter of fact, the bid of L-7 bidder was returned and on 6th
January 2015, the Bid Bond bank guarantee was also directed to
be not extended. Still, it kept silent for about 6 years. He further
submits that even after the judgment and order was passed by
this Court on 25th April 2018, respondent No.1-MB Power did not
take any steps for about two years, and for the first time, on 14th
December 2020, it filed a writ petition before the High Court. As such,
it is clear that the respondent No.1-MB Power had acquiesced the
direction by the appellants dated 6th January 2015 not to renew the
Bid Bond bank guarantee. Shri Chidambaram, therefore, submits
that the writ petition was liable to be dismissed on the ground of
delay and laches itself.
1
[2010] 3 SCR 609 : (2010) 4 SCC 603=2010 INSC 146
[2024] 1 S.C.R.
927
Jaipur Vidyut Vitran Nigam Ltd. & Ors. v.
MB Power (Madhya Pradesh) Limited & Ors.
12. Shri Chidambaram further submits that the term "successful bidder"
has been defined in the RFP. It is submitted that the bidder(s)
selected by the procurer/authorized representative, pursuant to the
RFP for supply of power by itself or through the project company
as per the terms of the RFP, and to whom a LoI has been issued,
can only be termed as the "successful bidder". Since no LoI was
issued to the respondent No.1-MB Power, it could not be construed
as a "successful bidder".
13. Shri Chidambaram submits that the theory of "filling the bucket", as
put forth by the respondent No.1-MB Power, has no basis either in
the RFP or in the Bidding Guidelines. It is further submitted that the
said theory is a dangerous proposition inasmuch as, it is expected
that the procurer would be obliged to accept the bids of lower ranked
financial bids, irrespective of the exorbitant tariff quoted by them.
Shri Chidambaram has given an illustration to that effect that, if in
a bid to procure 1000 MW, 2 bidders can be put forward as stalking
horses who would bid lower tariffs and are ranked as L-1 and L-2.
Thereafter, L-3 onwards can quote exorbitant tariffs which are not
aligned to market prices. He submits that this specious theory of
"filling the bucket", which would oblige the procurer to go to the last
bidder, irrespective of their tariffs being completely exorbitant, is very
dangerous. It is submitted that, in any case, clause 3.5.12 of the
RFP enables the procurer to reject any bid where the quoted tariff
is not aligned to market prices.
14. Shri Chidambaram further submits that the directions issued by this
Court vide order dated 25th April 2018, were specifically restricted
to L-1 to L-5 bidders, which were litigating. It is submitted that the
contention of the respondent No.1-MB Power that the order of this
Court dated 25th April 2018 was an order in rem is erroneous.
15. Relying on the judgment of this Court in the case of R. Viswanathan
and others v. Rukn-ul-Mulk Syed Abdul Wajid since deceased
and others2, Shri Chidambaram submits that the judgment in rem
settles the destiny of the res itself.