Case Note & Summary
The case involves a challenge by Tata Power Company Limited Transmission (TPC-T) against the grant of a transmission licence by the Maharashtra Electricity Regulatory Commission (MERC) to Adani Electricity Mumbai Infra Limited (AEMIL) for setting up a 1000 MW HVDC link between Kudus and Aarey in Mumbai. The appellant argued that the licence was granted without following the Tariff Based Competitive Bidding (TBCB) process mandated under Section 63 of the Electricity Act, 2003, and contrary to the National Tariff Policy and a Government Resolution of Maharashtra. The background includes a history of planning for HVDC technology to meet Mumbai's power demand, with earlier involvement of Reliance Infrastructure and later transfer to AEMIL. MERC granted the licence on 21 March 2021, which was upheld by APTEL on 18 February 2022. The Supreme Court framed the legal issues as whether Section 63 is mandatory, the binding nature of the National Tariff Policy, and the value of the Government Resolution. The appellant contended that TBCB is the dominant route and failure to adopt it is against public interest. The respondents argued that Section 63 is an alternative and MERC has discretion. The court analyzed the regulatory framework under the Electricity Act, 2003, and held that Section 63 is not mandatory but an alternative route; the National Tariff Policy is a material consideration but not binding; and the Government Resolution is not binding on MERC. The court emphasized the general regulatory power of the appropriate commission under Sections 61 and 62. It concluded that MERC's decision to grant the licence without TBCB was valid, and dismissed the appeal. The decision upholds the discretion of regulatory commissions in tariff determination and clarifies the interplay between specific provisions and general regulatory powers.
Headnote
A) Electricity Law - Transmission Licence - Grant without TBCB - Section 63 Electricity Act, 2003 - The issue was whether MERC could grant a transmission licence to AEMIL without a TBCB process. The court held that Section 63 is an alternative route and not mandatory; the appropriate commission has discretion to adopt other methods for tariff determination under Sections 61 and 62. (Paras 48-55) B) Electricity Law - National Tariff Policy - Binding Nature - The court held that the National Tariff Policy is a material consideration but not binding on the regulatory commission; the commission can deviate from it for valid reasons. (Paras 61-71) C) Electricity Law - Government Resolution - Value - The court held that a Government Resolution of the State Government is not binding on the regulatory commission; it is only a policy directive and cannot override the statutory framework. (Paras 72-88) D) Electricity Law - Regulatory Power - General vs Specific - Sections 61, 62, 63 Electricity Act, 2003 - The court held that the general regulatory power under Sections 61 and 62 is not ousted by Section 63; the commission can adopt a regulated tariff mechanism if justified. (Paras 56-60)
Issue of Consideration
Whether the grant of a transmission licence by MERC without following the Tariff Based Competitive Bidding (TBCB) process under Section 63 of the Electricity Act, 2003 is valid, and whether the National Tariff Policy and Government Resolution of Maharashtra are binding on the regulatory commission.
Final Decision
The Supreme Court dismissed the appeal, upholding MERC's order granting transmission licence to AEMIL without TBCB process. The court held that Section 63 is not mandatory, and MERC's decision was valid.
Law Points
- Section 63 of Electricity Act
- 2003 is an alternative route for tariff determination
- not mandatory
- National Tariff Policy is a material consideration but not binding
- Government Resolution of State Government is not binding on regulatory commission
- Regulatory commission has general regulatory power under Section 61 and 62 of Electricity Act
- 2003
- Tariff Based Competitive Bidding Guidelines are not mandatory for all transmission projects.
