Case Note & Summary
The case involves an appeal by M/S Star Wire (India) Vidyut Pvt. Ltd. & Anr. against the Haryana Electricity Regulatory Commission (HERC) regarding the fourth amendment to the HERC (Terms and Conditions for determination of Tariff from Renewable Energy Sources, Renewable Purchase Obligation and Renewable Energy Certificate) Regulations, 2010. The appellant had set up a 9.90 MW biomass power plant, commercially operational on 3 May 2013. The principal Regulations of 2010 provided for a first control period ending 31 March 2013, with a proviso that if revised regulations were not notified, existing norms would continue until notification, subject to adjustments. The Commission initiated suo motu proceedings in 2014 and issued the fourth amendment on 12 August 2015, which applied revised norms prospectively from that date and classified projects based on the financial year of commissioning within the second control period (2013-14 to 2016-17). The appellant challenged the amendment as arbitrary and discriminatory, arguing that it should apply from the start of the second control period (1 April 2013). The High Court dismissed the writ petition in a cursory manner, holding that the classification was valid and that adjustments were a matter of calculation. The Supreme Court found the High Court's reasoning cryptic and noted that the amendment created an unreasonable classification without intelligible differentia. The Court set aside the High Court's order and remanded the matter for fresh consideration, directing the High Court to examine the validity of the amended regulations in light of principles of non-discrimination and legitimate expectation.
Headnote
A) Electricity Law - Tariff Determination - Renewable Energy - Classification of Projects - The Haryana Electricity Regulatory Commission's fourth amendment to the 2010 Regulations classified renewable energy projects commissioned in financial year 2013-14 differently from those commissioned in later years within the same control period (2013-14 to 2016-17), without any intelligible differentia or rational basis, and applied revised norms prospectively from the date of notification (12.08.2015) rather than from the start of the second control period (01.04.2013). The Supreme Court held that such classification was arbitrary and discriminatory, and that the amended regulations should apply from the commencement of the second control period, subject to adjustments. (Paras 3-6) B) Electricity Law - Tariff Determination - Renewable Energy - Prospective Application - The third proviso to Regulation 4 of the principal Regulations provided that if revised regulations were not notified before the expiry of the control period, the existing norms would continue until notification, subject to adjustments as per revised regulations. The Supreme Court held that the amended regulations, which gave prospective effect only from the date of notification, violated this proviso and the legitimate expectation of project developers who had commissioned projects during the interregnum. (Paras 3-6) C) Electricity Law - Tariff Determination - Renewable Energy - Judicial Review - The High Court's dismissal of the writ petition was cryptic and failed to properly analyze the issues of discrimination and arbitrary classification. The Supreme Court set aside the High Court's order and remanded the matter for fresh consideration, directing the High Court to examine the validity of the amended regulations in light of the principles of non-discrimination and legitimate expectation. (Paras 5-6)
Issue of Consideration
Whether the fourth amendment to HERC Regulations, which applied revised tariff norms prospectively from the date of notification and classified projects based on financial year of commissioning within the same control period, was arbitrary and discriminatory.
Final Decision
The Supreme Court set aside the impugned judgment of the High Court and remanded the matter for fresh consideration, directing the High Court to examine the validity of the amended regulations in light of the principles of non-discrimination and legitimate expectation.
Law Points
- Regulatory discrimination
- Arbitrary classification
- Prospective application of amended regulations
- Adjustment of tariff norms
- Renewable energy tariff determination
