# Power Grid Corporation of India Limited v. Madhya Pradesh Power Transmission Company Limited & Ors

- **Citation:** 2025 INSC 697
- **Court:** Supreme Court of India
- **Decided:** 2025-05-15
- **Case number:** Civil Appeal No. 6847 of 2025
- **Bench:** J.B. Pardiwala, R. Mahadevan
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/power-grid-corporation-of-india-limited-v-madhya-pradesh-power-transmission-38712
- **Pages:** 44

## Headnote

(i) Whether the CERC, while exercising its functions u/s.79(1) of
the Electricity Act, 2003, is circumscribed by statutory regulations
enacted u/s.178 of the Act, 2003; (ii) Whether the CERC exercises
regulatory or adjudicatory functions u/s.79 of the Act, 2003. In
other words, what is the scope of the CERC's power to regulate
inter-state transmission of electricity and determine tariff for the
same under clauses (c) and (d) of s.79(1); (iii) Whether the grant
of compensation by the CERC for the delay vide the orders
dated 21.01.2020 and 27.01.2020 respectively, is a regulatory
or adjudicatory function and to what extent are the principles
of natural justice applicable to the exercise of such functions;
(iv) Whether the High Court was justified in admitting the writ
petition filed by the respondent no. 1 herein challenging the order
dated 21.01.2020 of the CERC when there existed an alternative
remedy u/s.111 of the Act, 2003.
Headnotes†
Electricity Act, 2003 - ss.79, 178 - Relationship between ss.79
and 178 of the Act, 2003:
Held: A perusal of the provisions laying down the functions of the
CERC indicates that the statutory authority is enjoined with the
task of regulation as well as adjudication of several aspects of the
generation, transmission and distribution of electricity - S.79 of the
Act, 2003 enumerates the functions of the CERC which includes
the dual functions of regulation and adjudication - S.178, on the
other hand, empowers the CERC to enact regulations by notification
thereby delegating to the body, the power of legislating statutory
regulations under the Act, 2003 - The aforesaid two provisions
* Author
[2025] 5 S.C.R.
2063
Power Grid Corporation of India Limited v. Madhya Pradesh
Power Transmission Company Limited & Ors.
indicate that the CERC functions as both, decision-making and
regulation-making authority u/ss.79 and 178 respectively - However,
while the authority exercising both these functions is one and the
same, it is a settled position of law that the functions by themselves
are separate and distinct - The functions u/s.79 are administrative
or adjudicatory whereas those u/s.178 are legislative - A regulation
u/s.178 is of general application to the entirety of a particular subject
matter as opposed to regulation on a case-to-case basis which may
be done by the CERC u/s.79 - Therefore, making of a regulation
u/s.178 has the effect of interfering with and overriding existing
contractual relationships between the regulated entities - On the
other hand, the orders u/s.79 have to be confined to the existing
statutory regulations and do not have the effect of altering the
terms of contract between the specific parties before the CERC.
[Paras 37, 38, 40]
Electricity Act, 2003 - ss.79, 178 - The CERC vide its orders
dated 21.01.2020 and 27.01.2020 respectively imposed the
liability of payment of compensation for delay onto the
respondent no. 1 - Correctness:
Held: It is the case of the respondent no. 1 that by doing so, the
CERC did not act in conformity with the 2014 Tariff Regulations
which do not provide for payment of transmission charges by a
party to whom the delay is attributable - In considered view of this
Court, the said argument does not hold any water - This Court's
dictum in PTC and Energy Watchdog respectively settles the law
in this regard and the absence of a regulation u/s.178 does not
preclude the CERC from exercising its powers u/s.79(1) to make
specific regulations or pass orders between the parties before
it.[Para 43]
Electricity Act, 2003 - s.79 - Regulatory and adjudicatory
functions of the CERC:
Held: The regulatory powers provided to the CERC u/s.79 are of
ad hoc nature and are required to be exercised by the CERC in
context of the specific circumstances of the parties before it - The
rationale for provision of such ad hoc powers by the Act, 2003 is
to ensure that regulatory gaps, if any, that may be discovered on a
case-to-case basis, are filled or removed - Therefore, there is n

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[2025] 5 S.C.R. 2062 : 2025 INSC 697
Power Grid Corporation of India Limited
v.
Madhya Pradesh Power Transmission Company
Limited & Ors.
(Civil Appeal No. 6847 of 2025)
15 May 2025
[J.B. Pardiwala* and R. Mahadevan, JJ.]
Issue for Consideration
(i) Whether the CERC, while exercising its functions u/s.79(1) of
the Electricity Act, 2003, is circumscribed by statutory regulations
enacted u/s.178 of the Act, 2003; (ii) Whether the CERC exercises
regulatory or adjudicatory functions u/s.79 of the Act, 2003. In
other words, what is the scope of the CERC's power to regulate
inter-state transmission of electricity and determine tariff for the
same under clauses (c) and (d) of s.79(1); (iii) Whether the grant
of compensation by the CERC for the delay vide the orders
dated 21.01.2020 and 27.01.2020 respectively, is a regulatory
or adjudicatory function and to what extent are the principles
of natural justice applicable to the exercise of such functions;
(iv) Whether the High Court was justified in admitting the writ
petition filed by the respondent no. 1 herein challenging the order
dated 21.01.2020 of the CERC when there existed an alternative
remedy u/s.111 of the Act, 2003.
Headnotes†
Electricity Act, 2003 - ss.79, 178 - Relationship between ss.79
and 178 of the Act, 2003:
Held: A perusal of the provisions laying down the functions of the
CERC indicates that the statutory authority is enjoined with the
task of regulation as well as adjudication of several aspects of the
generation, transmission and distribution of electricity - S.79 of the
Act, 2003 enumerates the functions of the CERC which includes
the dual functions of regulation and adjudication - S.178, on the
other hand, empowers the CERC to enact regulations by notification
thereby delegating to the body, the power of legislating statutory
regulations under the Act, 2003 - The aforesaid two provisions
* Author
[2025] 5 S.C.R.
2063
Power Grid Corporation of India Limited v. Madhya Pradesh
Power Transmission Company Limited & Ors.
indicate that the CERC functions as both, decision-making and
regulation-making authority u/ss.79 and 178 respectively - However,
while the authority exercising both these functions is one and the
same, it is a settled position of law that the functions by themselves
are separate and distinct - The functions u/s.79 are administrative
or adjudicatory whereas those u/s.178 are legislative - A regulation
u/s.178 is of general application to the entirety of a particular subject
matter as opposed to regulation on a case-to-case basis which may
be done by the CERC u/s.79 - Therefore, making of a regulation
u/s.178 has the effect of interfering with and overriding existing
contractual relationships between the regulated entities - On the
other hand, the orders u/s.79 have to be confined to the existing
statutory regulations and do not have the effect of altering the
terms of contract between the specific parties before the CERC.
[Paras 37, 38, 40]
Electricity Act, 2003 - ss.79, 178 - The CERC vide its orders
dated 21.01.2020 and 27.01.2020 respectively imposed the
liability of payment of compensation for delay onto the
respondent no. 1 - Correctness:
Held: It is the case of the respondent no. 1 that by doing so, the
CERC did not act in conformity with the 2014 Tariff Regulations
which do not provide for payment of transmission charges by a
party to whom the delay is attributable - In considered view of this
Court, the said argument does not hold any water - This Court's
dictum in PTC and Energy Watchdog respectively settles the law
in this regard and the absence of a regulation u/s.178 does not
preclude the CERC from exercising its powers u/s.79(1) to make
specific regulations or pass orders between the parties before
it.[Para 43]
Electricity Act, 2003 - s.79 - Regulatory and adjudicatory
functions of the CERC:
Held: The regulatory powers provided to the CERC u/s.79 are of
ad hoc nature and are required to be exercised by the CERC in
context of the specific circumstances of the parties before it - The
rationale for provision of such ad hoc powers by the Act, 2003 is
to ensure that regulatory gaps, if any, that may be discovered on a
case-to-case basis, are filled or removed - Therefore, there is no
doubt that the CERC is enabled to exercise its regulatory powers
by way of orders u/s. 79 and the purview of s.79 is not limited to
2064
[2025] 5 S.C.R.
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only adjudicatory orders but includes within its scope administrative
functions as well. [Para 48]
Electricity Act, 2003 - Whether the grant of compensation by
the CERC was a decision taken by the authority in its regulatory
or adjudicatory capacity and whether it goes a step beyond
the function of determination of tariff:
Held: A reading of the Act, 2003 would indicate that it makes
no distinction between the regulatory and adjudicatory functions
vested in and conferred upon the CERC, which is a quasi-judicial
body enjoined to regulate and administer the subject of electricity
generation, transmission and distribution - In such a situation, it
becomes necessary to undertake a harmonious reading of ss.61
and 79 respectively to determine whether the CERC granted
the liberty to claim compensation in exercise of its regulatory or
adjudicatory function - The CERC granted liberty to the appellant
herein to claim compensation from the respondent no. 1 to deal with
a situation caused due to an unprecedented event not covered by
any guidelines, regulations or contractual provisions between the
parties - The dictum of this Court in Energy Watchdog, indicates
that in such a situation where there is an absence of regulations and
guidelines, the Act, 2003 mandates the CERC to strike a judicious
balance between the parties keeping in mind commercial principles
and consumers' interest, in exercise of its general regulatory powers
u/s.79(1) - The aforesaid leaves no manner of doubt that though
the CERC's orders dated 21.01.2020 and 27.01.2020 respectively
were for determination of tariff, yet the order granting liberty to the
aggrieved appellant to claim compensation from the defaulting
party is a consequence of a regulatory lacuna in the 2014 Tariff
Regulations and therefore, is an instance of regulation of tariff
between the parties. [Paras 53, 59, 60]
Electricity Act, 2003 - Whether there was a contravention of
the principles of natural justice by the CERC:
Held: The CERC was not adjudicating the issue of delay between
the parties but was only regulating the consequences of the
delay to the commissioning of the transmission elements - There
was also no occasion for the respondent no. 1 to be afforded an
opportunity to be heard at that stage - In considered view of this
Court, any dispute pertaining to the levy of transmission charges
incurred before the concerned transmission assets were put to use,
[2025] 5 S.C.R.
2065
Power Grid Corporation of India Limited v. Madhya Pradesh
Power Transmission Company Limited & Ors.
would arise only upon the appellant raising bills to the respondent
no. 1 in this regard - In such a scenario, it cannot be said that
there was a contravention of the principles of natural justice by
the CERC. [Para 61]
Electricity Act, 2003 - Whether the CERC is empowered to
order for imposition of transmission charges on the party to
whom delay is attributable.
Held: The CERC is empowered to order for imposition of
transmission charges on the party to whom delay is attributable -
This Court has, however, have not considered the question
whether such liability of payment of transmission charges could
be imposed on the respondent no. 1 in the specific facts of the
case on hand - This Court is of the opinion that APTEL is the
appropriate authority to look into the merits of the matter should
the respondent no. 1 choose to prefer an appeal before APTEL
u/s.111 of the Act, 2003. [Para 66]
Electricity Act, 2003 - Writ Petition - Maintainability of a writ
petition before the High Court in the presence of the alternative
remedy - Conditions of:
Held: This Court's dictum in Whirlpool Corporation v. Registrar of
Trademarks wherein it has been held that despite the availability
of an alternative remedy, a writ petition can be entertained in the
following cases: a) Where principles of natural justice are breached;
b) Where fundamental rights are sought to be enforced or breach
thereof is complained of; c) Where the impugned order is passed by
an authority without jurisdiction; d) Where the constitutionality of any
provision is called in question - However, this Court's observations
in Whirlpool are of no avail to the respondent no. 1 as the present
matter falls in none of the cases enumerated therein - Therefore,
there was no occasion for the High Court to admit the writ petition
of the respondent no. 1. [Paras 11, 64]
Case Law Cited
PTC India Limited v. Central Electricity Regulatory Commission
[2010] 3 SCR 609 : (2010) 4 SCC 603; Airports Economic
Regulatory Authority of India v. Delhi International Airport Ltd. [2024]
10 SCR 1404 : 2024 SCC OnLine SC 2923; Energy Watchdog v.
CERC [2017] 3 SCR 153 : (2017) 14 SCC 80 - relied on.
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Supreme Court Reports
Whirlpool Corporation v. Registrar of Trademarks [1998] Supp.
2 SCR 359 : (1998) 8 SCC 1: Power Grid Corpn. of India Ltd. v.
Punjab State Power Corpn. Ltd. [2016] 2 SCR 116 : (2016) 4 SCC
797; Sitaram Sugar Co. Ltd. v. Union of India [1990] 1 SCR 909 :
(1990) 3 SCC 223 - referred to.
Nuclear Power Corporation of India Limited. v. Central Electricity
Regulatory Commission & Ors., 2019 SCC OnLine APTEL
83 - referred to.
List of Acts
Electricity Act, 2003; Central Electricity Regulatory Commission
(Terms and Conditions of Tariff) Regulations, 2014.
List of Keywords
Section 79 of the Electricity Act, 2003; Section 178 of the
Electricity Act, 2003; Determination of tariff; Regulatory and
adjudicatory functions; Tariff Regulations; Commercial Operation
Date; Compensatory transmission charges; Principles of natural
justice; Alternative remedy; Inter-state transmission; Intra-state
transmission; Time-overrun/Delay; Quasi-judicial body; Delegated
legislation; Ad hoc power.
Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 6847 of 2025
From the Judgment and Order dated 25.02.2021 of the High Court
of Madhya Pradesh at Indore in WP No. 10845 of 2020
With
Civil Appeal No. 6848 of 2025
Appearances for Parties
Advs. for the Appellant:
M.G. Ramachandran, Sr. Adv., Shubham Arya, Ms. Poorva Saigal,
Pramod Dayal, Nikunj Dayal, Ms. Reeha Singh, Ms. Pallavi Saigal,
Ms. Shirin Gupta, Aneesh Bajaj, Ms. Srishti Khindaria.
Advs. for the Respondents:
Prashant Singh. A.G. (MP), Amit Seth, Arjun Garg, Ms. Kriti Gupta,
Ms. Sagun Srivastava, Brahma Prakash Soni, Anup Jain, Udit
[2025] 5 S.C.R.
2067
Power Grid Corporation of India Limited v. Madhya Pradesh
Power Transmission Company Limited & Ors.
Gupta, Vyom Chaturvedi, Ms. Pragya Gupta, Amrnath Sahoo,
Ms. Nishtha Goel, Ms. Deep Shikha Kumar (for M/s. Udit Kishan
And Associates), Shirish K. Deshpande, Ms. Rucha Pravin Mandlik,
Mohit Gautam, Apoorv Sharma, Sudhanshu S. Choudhari.
Judgment / Order of the Supreme Court
Judgment
J.B. Pardiwala, J.
For the convenience of exposition, this judgment is divided into the
following parts:
INDEX*
A.
FACTUAL MATRIX .............................................................
2
B.
IMPUGNED ORDER ...........................................................
8
C.
SUBMISSIONS ON BEHALF OF THE APPELLANT ........ 12
D.
SUBMISSIONS ON BEHALF OF THE RESPONDENTS ... 16
E.
ISSUES FOR DETERMINATION ........................................ 20
F.
ANALYSIS ........................................................................... 21
i.
Relevant Provisions of the Act, 2003 ........................ 21
ii. Relationship between Sections 79 and 178 of the
Act, 2003 respectively .................................................
31
iii. Regulatory and adjudicatory functions of the CERC
under Section 79 .........................................................
38
iv. Grant of compensation for delay on the part of a
party is a regulatory function .....................................
41
G.
CONCLUSION ...................................................................... 55
* Ed. Note: Pagination as per the original Judgment.
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Supreme Court Reports
1.
Leave granted.
2.
Since the issues raised in both the captioned appeals are the same,
those were taken up for hearing analogously and are being disposed
by this common judgment and order.
3.
These appeals arise from the Judgment and Order passed by the
High Court of Madhya Pradesh, Indore Bench dated 25.02.2021, in
Writ Petition No. 10845 of 2020 and Writ Petition No. 9136 of 2020
respectively, by which the High Court admitted the writ petitions
filed by the Madhya Pradesh Power Transmission Company Limited
("MPPTCL") on the ground that the Central Electricity Regulatory
Commission (the "CERC") had exercised powers beyond those vested
in it as per the regulations under the Electricity Act, 2003 (the "Act,
2003") in passing the orders dated 21.01.2020 and 27.01.2020 in
Petition No. 311/TT/2018 and Petition No. 266/TT/2018 respectively.
A.
FACTUAL MATRIX
4.
The appellant herein is a Government of India Undertaking constituted
for the purpose of undertaking inter-state transmission of electricity.
In other words, the scope of work of the appellant includes inter
alia, establishing and operating transmission lines, sub-stations and
other transmission assets associated with inter-State transmission
of power. These include 'bays' and inter-connecting 'transformers' at
sub-stations to provide inter-connection facilities. By virtue of being
a central transmission utility, the appellant is a deemed transmission
licensee in terms of Section 38 of the Act, 2003. The respondent no.
1 herein is the State Transmission Utility and intra-state transmission
licensee in the State of Madhya Pradesh.
5.
The case on hand pertains to a dispute between the appellant and
respondent no. 1 in respect of the implementation of the "Western
Region System Strengthening Scheme XIV (WRSS-XIV) and Western
Region Strengthening Scheme XVI (WRSS-XVI)" respectively by
the appellant. The transmission assets were implemented by the
appellant at the Indore sub-station upon the specific request of the
respondent no. 1. In this regard, the parties planned and approved
the WRSS-XIV in its 37th Standing Committee Meeting on Power
System Planning of Western Region held on 05.09.2014 and WRSSXVI in the 38th Standing Committee Meeting for the Western Region
on 17.07.2015.
[2025] 5 S.C.R.
2069
Power Grid Corporation of India Limited v. Madhya Pradesh
Power Transmission Company Limited & Ors.
6.
According to the agreement between the parties, the respondent
no. 1 was required to construct and commission the intra-state
transmission line from Indore sub-station coinciding with the timeline
of completion of works which were within the scope of the appellant.
However, the construction and commissioning of the intra-state
transmission line by respondent no. 1 was delayed. Such delay
constrained the appellant to file Petition No. 311/TT/2018 and Petition
No. 266/TT/2018 corresponding to WRSS-XIV and WRSS-XVI
respectively, before the CERC for (i) approval of the Commercial
Operation Date (the "COD") of its transmission system, under
Regulation 4(3) of the Central Electricity Regulatory Commission
(Terms and Conditions of Tariff) Regulations, 2014 (the "2014 Tariff
Regulations"), and (ii) determination of transmission charges and
billing of the tariff for the transmission facilities established by it at
the Indore sub-station.
7.
The CERC vide its order dated 21.01.2020, observed, inter alia,
that as per the investment approval accorded to the transmission
scheme on 27.01.2016, the assets were scheduled to be
commissioned within 30 months from the date of investment
approval. Accordingly, the scheduled COD came to be 27.07.2018.
However, the commissioning of such assets was delayed thereby
compelling the appellant to file a petition for approval of COD under
Regulation 4(3) of the 2014 Tariff Regulations. The details of the
transmission assets are as follow:
Asset
Description
Scheduled
COD
Proposed
COD
as per
Regulation
4(3)(ii)
Date of
active
power
flow
Timeoverrun/
Delay
Asset-1
1 x 500 MVA,
400/220 kV
ICT-2 along
with associated
transformer
bays and 2 no.
220kV line bays
at 400/220 kV
Indore substation.
27.07.2018
02.09.2018
10.12.2018
37 days
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[2025] 5 S.C.R.
Supreme Court Reports
Asset-2
2 no. 220 kV line
bays at 400/220
kV Indore
substation.
27.07.2018
02.09.2018
12.12.2018
37 days
Asset-3
1 x 500 MVA,
400/220 kV
ICT-1 along
with associated
transformer bays
at 400/220 kV
Indore substation.
27.07.2018
14.10.2018
10.12.2018
79 days
Asset-4
1 no. 220 kV line
bays at 400/220
kV Indore
substation.
27.07.2018
14.10.2018
-
79 days
Asset-5
1 no. 220 kV line
bay at 400/220
kV Indore
substation.
27.07.2018
05.12.2018
-
131 days
8.
As regards the specific issue of time-overrun, the order dated
21.01.2020 passed by the CERC noted that the appellant herein
had attributed the entire time-overrun in case of the instant assets
to the respondent no. 1 who delayed the commissioning of the
downstream intra-state assets that were supposed to be operational
at the same time as the transmission assets to be commissioned by
the appellant. Even though the CERC approved the COD proposed
by the appellant under Regulation 4(3)(ii), yet it did not condone
the time-overrun on account of matching the commissioning of the
inter-state transmission assets in question with the downstream
network of respondent no. 1, on the ground that it was the decision
of the appellant to coordinate and match the commissioning dates
of both categories of assets. However, the CERC allowed the
appellant to claim compensation for the period prior to the COD as
determined under Regulation 4(3)(ii), by way of liquidated damages,
interest during construction and incidental expenses incurred during
construction. It was held that the transmission charges in case of all
the assets as enumerated above would be borne by the respondent
no. 1 from the COD determined under Regulation 4(3)(ii) upto one
day before actual charging of downstream system. It is pertinent to
[2025] 5 S.C.R.
2071
Power Grid Corporation of India Limited v. Madhya Pradesh
Power Transmission Company Limited & Ors.
note that the CERC did not allow compensation from the Scheduled
COD upto the newly determined COD as the delay in that case was
not condoned.
9.
Aggrieved by the aforesaid order of the CERC, the respondent no. 1
challenged the same by way of a writ petition before the High Court
on the following grounds:
(i)
There is no provision in the 2014 Tariff Regulations under
which compensatory transmission charges could be levied on
the respondent no. 1 by the CERC and therefore, the CERC
fell into grave jurisdictional error by holding that the appellant
could claim compensation from the respondent no. 1.
(ii)
Further, the agreement between the parties was recorded
in the minutes of the 37th and 38th meetings of the Standing
Committee held on 05.09.2014 and 17.07.2015 respectively.
Such agreement contains no terms and conditions as regards
the recovery of compensation from the respondent no. 1.
Therefore, the CERC, by granting liberty to the appellant to
claim compensation from the respondent no. 1 has effectively
re-written the terms and conditions of the agreement between
the parties.
(iii) The bill dated 08.06.2020 raised by the appellant for the payment
of Rs. 6.18 crore, in consequence of the order of the CERC
dated 21.01.2020 and 27.01.2020 respectively, is illegal and
not in accordance with either the 2014 Tariff Regulations or the
terms of agreement between the parties.
10. On the other hand, the appellant claimed before the High Court
that the issue raised by the respondent no. 1 by way of the writ
petition was not that the CERC did not have jurisdiction at all. The
challenge was to the exercise of jurisdiction by the CERC which
was not permissible in light of the alternative remedy available to
the respondent no. 1 in terms of Section 111 of the Act, 2003.
B.
IMPUGNED ORDER
11. The High Court vide its judgment and order dated 25.02.2021,
recorded the following submissions of the respondent no. 1:
i.
The respondent no. 1 herein relied on this Court's decision
in PTC India Limited v. Central Electricity Regulatory
2072
[2025] 5 S.C.R.
Supreme Court Reports
Commission reported in (2010) 4 SCC 603 to submit that the
decision of the CERC must be in conformity with the Regulations
enacted under Section 178 of the Act, 2003 wherever such
regulations are applicable. Therefore, the measures taken by
the CERC under Section 79(1) are required to be in conformity
with the Regulations under Section 178.
ii.
It was further submitted that a regulation under Section 178
is made under the authority of delegated legislation and
consequently, its validity can be tested only in judicial review
proceedings before the courts and not by way of appeal before
the Appellate Tribunal for Electricity (the "APTEL") under Section
111 of the Act, 2003.
iii.
It was submitted that the order of the CERC levying compensatory
transmission charges on the respondent no. 1 was not in
conformity with the 2014 Tariff Regulations enacted under
Section 178 of the Act, 2003 and was beyond the scope of the
said Regulations. Therefore, the said order was passed without
any jurisdiction and hence, was being assailed before the High
Court without availing the statutory alternative remedy.
iv.
Further, the APTEL had already addressed a similar question
in Nuclear Power Corporation of India Limited. v. Central
Electricity Regulatory Commission & Ors. reported in 2019
SCC OnLine APTEL 83 wherein it was held as under:
"10.5 Accordingly, in absence of specific provisions
in the Sharing Regulations/Tariff Regulations, 2014
to deal with the situation under question the Central
Commission through exercise of its regulatory
powers has prescribed a principle for sharing of
transmission charges of the Transmission System of
the Respondent No.2 in the Impugned Order. Thus,
it is observed that by way of exercising its regulatory
power by a way of judicial order(s) the Central
Commission has laid down the principles of payment
of transmission charges in such an eventuality.
However, it is felt that the Central Commission in
the impugned Order has abruptly concluded the
payment liability on the Appellant just by referring
[2025] 5 S.C.R.
2073
Power Grid Corporation of India Limited v. Madhya Pradesh
Power Transmission Company Limited & Ors.
to its earlier orders and not establishing the linkage
with the present case explicitly. This Tribunal would
like to clarify the same."
The respondent no. 1 submitted that the APTEL had taken a
peculiar view of the matter. Although the CERC exercises twin
powers of adjudication and regulation, yet the fact remains that
the regulatory power cannot be exercised by way of a judicial
order. Since APTEL took a contrary view on the issues at hand,
the respondent no. 1 was of the view that no useful purpose
would be served by filing an appeal under Section 111.
v.
Since the orders of the CERC were in the nature of regulations
as per the averments of the appellant, the vires of the same
could only be questioned before the High Court and not
before the APTEL in terms of this Court's dictum in Whirlpool
Corporation v. Registrar of Trademarks reported in (1998)
8 SCC 1 wherein it has been held that despite the availability
of an alternative remedy, a writ petition can be entertained in
the following cases:
(a) Where principles of natural justice are breached,
(b) Where fundamental rights are sought to be enforced or
breach thereof is complained of,
(c)
Where the impugned order is passed by an authority
without jurisdiction,
(d) Where the constitutionality of any provision is called in
question.
12. Having heard the parties, the High Court affirmed that despite
the availability of an alternative remedy, a writ petition can be
entertained if any of the factors mentioned in Whirlpool (supra)
are satisfied. Since the respondent no. 1 had challenged the
constitutionality of the orders of the CERC dated 21.01.2020 and
27.01.2020 respectively, on the grounds that the power exercised by
the CERC was beyond the powers vested in it as per the relevant
regulation and that the relief granted to the appellant was beyond
the reliefs prayed for, the High Court was of the opinion that the
principles of natural justice were breached. Therefore, despite the
availability of an alternative remedy, the writ petition deserved to
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Supreme Court Reports
be entertained. Having held so, the High Court admitted the writ
petition for hearing on merits. The relevant portion of the impugned
order is reproduced below:
"[13] This is trite that despite availability of alternative
remedy, a writ petition can be entertained if any of the
factors mentioned in the judgment of Whirlpool (supra) are
satisfied. In the instant case, the petitioner has challenged
the constitutionality of the orders. Even if it is challenged
by way of amendment, once amendment is allowed it will
relate back to the original date of filing of writ petitions.
Petitioner has also challenged the orders by contending
that power exercised by the Commission was beyond the
powers vested in it as per relevant regulation. The relief
granted was beyond the relief prayed for. Hence, principles
of natural justice were breached. In our view, in a case of
this nature despite availability of alternative remedy, the
writ petition can be entertained.
[14] Resultantly, the objection regarding alternative remedy
is over ruled. The petition is admitted for hearing."
C.
SUBMISSIONS ON BEHALF OF THE APPELLANT
13. Mr. M.G. Ramachandran, the learned senior counsel appearing on
behalf of the appellant, submitted that the orders dated 21.01.2020
and 27.01.2020 respectively were passed by the CERC under
Sections 62 and 79 of the Act, 2003 respectively. Section 111 of the
Act, 2003 provides for regular first appeal on both questions of fact
and law to the APTEL which is an expert body specially constituted
as per the recommendations of this Court in West Bengal Electricity
Regulatory Commission v. CESC Limited reported in (2002) 8
SCC 715. A second appeal to this Court is allowed under Section
125 of the Act, 2003 for the purpose of adjudication of substantial
questions of law.
14. He submitted that the Act, 2003 is an exhaustive and self-contained
complete code on all matters concerning electricity including
generation, distribution, trading and transmission of electricity. The
Act, 2003 provides for tariff fixation by the CERC under Section 62.
Since determination of tariff is a quasi-judicial function, the same
has been made appealable to the APTEL. The learned counsel
[2025] 5 S.C.R.
2075
Power Grid Corporation of India Limited v. Madhya Pradesh
Power Transmission Company Limited & Ors.
relied upon this Court's decision in PTC India (supra) to submit that
the only exclusion to the scope of the appellate remedies provided
under the Act, 2003 is that the statutory regulations notified by the
CERC under Section 178 cannot be challenged in appeal before
the APTEL. The APTEL, therefore, cannot rule on the vires of a
regulation formulated by the CERC but there is no bar on it to
interpret such regulations.
15. Therefore, a writ petition before the High Court cannot be maintained
when an efficacious alternative remedy was available to the
respondent. The learned counsel relied on this Court's judgment
in Jaipur Vidyut Vitran Nigam Limited v. MB Power (Madhya
Pradesh) Limited reported in (2024) 8 SCC 513 and GRIDCO v.
Western Electricity Supply Co. of Orissa Ltd. reported in (2024) 2
SCC 500 to fortify his submission in this regard. He also contended
that as per this Court's dictum in Titaghur Paper Mills Co. Ltd. v.
State of Orissa reported in (1983) 2 SCC 433, Nivedita Sharma
v. Cellular Operators Association of India reported in (2011) 14
SCC 337 and U.P. Jal Nigam & Anr. v. Nareshwar Sahai Mathur
& Anr. reported in (1995) 1 SCC 21, where statutory tribunal or
statutory remedies are in place, a writ petition should not ordinarily
be entertained at other fora.
16. It is the case of the appellant that the respondent has not challenged
any regulation or provision of the Act, 2003 and has only challenged
the orders dated 21.01.2020 and 27.01.2020 respectively passed by
the CERC which in ordinary circumstances may be appealed under
Section 111 of the Act, 2003.
17. In the case on hand, no issue of constitutionality of the order arises
as the conditions prescribed in this Court's judgment in Whirlpool
(supra), for exercise of writ jurisdiction are fulfilled. The learned
counsel submitted that there is no violation of principles of natural
justice as the respondent was duly served. Further, no issue as
regards the defect in jurisdiction of the CERC was raised before
that forum in the first instance.
18. Mr. Ramachandran submitted that it was not the case of the
respondent that the CERC had acted wholly without jurisdiction.
The respondent has admitted that in terms of Section 62 and
Section 79(1)(c) and (d) of the Act, 2003, the CERC undoubtedly
and undisputedly has the function and the jurisdiction to deal with
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inter-state transmission, determination of transmission charges and
the sharing thereof. The orders dated 21.01.2020 and 27.01.2020
respectively passed by the CERC had been challenged by the
respondent only on one consideration that is, the correctness of the
decision holding the respondent liable for transmission charges. It
is the case of the appellant that the APTEL is competent to decide
such issues.
19. The learned counsel further submitted that the respondent had
intentionally not approached the APTEL with a view to escape the
decision rendered by it in a similar set of facts wherein the liability
of payment of transmission charges was imposed on the generating
company in the event of delay in commissioning of downstream
assets by it. It was submitted that the writ petition was filed by the
respondent to avoid the binding decision of the APTEL in Nuclear
Power Corporation (supra).
20. Mr. Ramachandran also highlighted the consequences of entertaining
writ petitions against the orders of the CERC. He submitted that
there are multiple beneficiaries in an inter-state transmission system.
Owing to the nature of electricity transmission systems that span
across states, it is possible that an identical issue relating to the
same transmission system may be challenged before multiple High
Courts resulting in multiplicity of decisions as well as a higher chance
of conflict between different decisions for the same transmission
assets. He brought to our notice that the respondent no. 4 herein that
is, Maharashtra State Electricity Transmission Corporation Limited
("MSETCL"), who is one another beneficiary of the transmission
system established by the appellant, has filed an appeal under
Section 111 of the Act, 2003 before the APTEL bearing DFR No.
414 of 2024 challenging the order dated 27.01.2020 passed by the
CERC, which is the very same order that has been challenged by the
respondent no. 1 herein before the High Court of Madhya Pradesh
by way of a writ petition.
21. The learned counsel submitted that the delay on the part of the
respondent no. 1 in bringing up the intra-state system cannot lead
to deprive the appellant of the charges for its inter-state system. We
were informed that as on 23.11.2024, the principal amount due and
outstanding was approximately Rs. 16.86 crore along with the late
payment surcharge.
[2025] 5 S.C.R.
2077
Power Grid Corporation of India Limited v. Madhya Pradesh
Power Transmission Company Limited & Ors.
D.
SUBMISSIONS ON BEHALF OF THE RESPONDENTS
22. Mr. Prashant Singh, the learned Advocate General of the State
of Madhya Pradesh appearing on behalf of the respondent no. 1,
submitted that the present appeal is directed against an interim order
of admission of the writ petition passed by the High Court and the
same does not warrant any interference by this Court.
23. The learned counsel submitted that the orders dated 21.01.2020 and
27.01.2020 respectively passed by the CERC, wherein the liability of
payment of transmission charges from 11.01.2019 till the downstream
transmission assets achieve their Commercial Operation Date, are
beyond its jurisdiction and violative of the rights of the respondents.
It was submitted that no statutory authority or tribunal can assume
jurisdiction in respect of a subject matter which the statute does not
confer on such authority/tribunal. In the circumstance that a tribunal
erroneously decides a fact in which the question of the jurisdiction
depends, then in that case, the order passed thereby stands vitiated.
24. Mr. Singh further submitted that the powers of the High Court are wide
and unlimited, therefore, the availability of an alternate remedy is not
an absolute bar under Article 226. It is the case of the respondents
that as per the dictum of this Court in Southern Electricity Supply
Co. of Orissa Ltd. v. Sri Seetaram Rice Mill reported in (2012) 2
SCC 108, if the exercise of jurisdiction by a tribunal ex facie appears
to be in futility, then the High Court would be justified to interfere with
the order of the tribunal under Article 226. He also relied upon this
Court's decision in Maharashtra Chess Assn. v. Union of India
reported in (2020) 13 SCC 285, to submit that the availability of an
alternative remedy does not alter the discretionary nature of the High
Court under its writ jurisdiction.
25. The learned counsel submitted that the grounds set out in the
writ petition before the High Court clearly meet the parameters
laid down by this Court in Whirlpool (supra) and The Asssistant
Commissioner of State Tax and Ors. v. M/s Commercial Steel
Limited reported in (2022) 16 SCC 447, which are as follow:
(i)
An excess of jurisdiction,
(ii)
A breach of fundamental rights,
(iii) A violation of the principles of natural justice, and
(iv) A challenge to the vires of the statute or delegated legislation.
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It is the case of the respondent that no statutory authority or tribunal
can assume jurisdiction in respect of subject matter which the statute
does not confer on it and an error of jurisdictional facts renders the
order erroneous in law.
26. Mr. Singh submitted that the CERC exceeded its jurisdiction while
ordering for recovery of transmission charges as the provisions for
determination of tariff under the Act, 2003 do not confer power on the
CERC to act arbitrarily and levy unilateral charges. He vehemently
submitted that doing so is violative of the principles of natural justice.
He argued that there is no provision either in the agreement between
the parties or in the 2014 Tariff Regulations for claiming compensation
or damages. He further submitted that the conditions governing the
commissioning of the transmission assets in question were approved
in the 38th Standing Committee meeting held on 17.07.2015 and the
same include no provision as regards claiming of compensation or
damages from the respondent.
27. The learned counsel brought to our notice the order dated 18.01.2019
passed by APTEL in Nuclear Power Corporation (supra) wherein,
in a similar set of facts, the liability to pay compensation or damages
was imposed on the generating entity for delaying the commissioning
of transmission assets. It is the case of the respondent that since the
APTEL has already passed an adverse order previously, the concerns
of the respondent may not be addressed by filing an appeal under
Section 111 of the Act, 2003.
28. Mr. Singh informed us that the transmission line is now functional
and fully charged. The dispute regarding payment of compensation
or damages is with respect to a limited period of time in which
there was admittedly, a delay in commissioning the line due to
force majeure.
29. It was submitted that no error or illegality could be said to have
been committed by the High Court while exercising its discretion to
entertain the writ petition and the impugned orders passed thereby
are neither perverse nor contrary to law.
E.
ISSUES FOR DETERMINATION
30. Having heard the learned counsel appearing for the parties and
having gone through the materials on record, the following questions
fall for our consideration:
[2025] 5 S.C.R.
2079
Power Grid Corporation of India Limited v. Madhya Pradesh
Power Transmission Company Limited & Ors.
i.
Whether the CERC, while exercising its functions under Section
79(1) of the Act, 2003, is circumscribed by statutory regulations
enacted under Section 178 of the Act, 2003?
ii.
Whether the CERC exercises regulatory or adjudicatory
functions under Section 79 of the Act, 2003? In other words,
what is the scope of the CERC's power to regulate inter-state
transmission of electricity and determine tariff for the same
under clauses (c) and (d) of Section 79(1)?
iii.
Whether the grant of compensation by the CERC for the delay
vide the orders dated 21.01.2020 and 27.01.2020 respectively,
is a regulatory or adjudicatory function and to what extent are
the principles of natural justice applicable to the exercise of
such functions?
iv.
Whether the High Court was justified in admitting the writ petition
filed by the respondent no. 1 herein challenging the order dated
21.01.2020 of the CERC when there existed an alternative
remedy under Section 111 of the Act, 2003?
F.
ANALYSIS
i.
Relevant Provisions of the Act, 2003
31. Section 61 reads thus:
"61. Tariff regulations.
The Appropriate Commission shall, subject to the provisions
of this Act, specify the terms and conditions for the
determination of tariff, and in doing so, shall be guided
by the following, namely:--
(a) the principles and methodologies specified by the
Central Commission for determination of the tariff applicable
to generating companies and transmission licensees;
(b) the generation, transmission, distribution and supply of
electricity are conducted on commercial principles;
(c) the factors which would encourage competition,
efficiency, economical use of the resources, good
performance and optimum investments;
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Supreme Court Reports
(d) safeguarding of consumers' interest and at the same
time, recovery of the cost of electricity in a reasonable
manner;
(e) the principles rewarding efficiency in performance;
(f) multi year tariff principles;
(g) that the tariff progressively reflects the cost of supply of
electricity and also, reduces cross-subsidies in the manner
specified by the Appropriate Commission;
(h) the promotion of co-generation and generation of
electricity from renewable sources of energy;
(i) the National Electricity Policy and tariff policy:
Provided that the terms and conditions for determination of
tariff under the Electricity (Supply) Act, 1948 (54 of 1948),
the Electricity Regulatory Commission Act, 1998 (14 of
1998) and the enactments specified in the Schedule as
they stood immediately before the appointed date, shall
continue to apply for a period of one year or until the terms
and conditions for tariff are specified under this section,
whichever is earlier."
32. Section 62 reads thus:
"62.