The Supreme Court recently delivered a significant judgment affirming the Central Electricity Regulatory Commission’s (CERC) authority under Section 79 of the Electricity Act, 2003. The court clarified that CERC has broad regulatory powers to issue orders and award compensation for delays in interstate transmission projects—even when there are no specific regulations framed under Section 178.
A bench comprising Justices J.B. Pardiwala and R. Mahadevan ruled on a dispute where the Madhya Pradesh Power Transmission Company Limited (MPPTCL) delayed building downstream intra-state transmission lines. This delay hindered the Power Grid Corporation of India Ltd’s (PGCIL) interstate transmission work at the Indore substation from becoming operational. PGCIL sought compensation for the revenue loss caused by MPPTCL’s delay.
Read Also:- Supreme Court Rejects Plea for Action Against BJP Minister Vijay Shah Over Remarks on Colonel Sofiya
In 2020, CERC awarded compensation to PGCIL. However, MPPTCL challenged this order in the High Court, arguing that CERC had exceeded its jurisdiction since no regulations under Section 178 existed to support awarding such compensation. The High Court admitted the writ petition, effectively halting CERC’s order. This prompted PGCIL to approach the Supreme Court.
The Supreme Court set aside the High Court’s decision, emphasizing that Section 79(1) of the Electricity Act gives CERC wide regulatory powers to issue case-specific orders even if general regulations under Section 178 are missing. The judgment referred to the landmark case Airports Economic Regulatory Authority of India v. Delhi International Airport Ltd., stating:
“Could it be said that there is a blanket ban on the CERC to exercise its regulatory functions by way of orders under Section 79(1)? In light of this Court’s dictum in AERA (supra), our answer to this question must be an emphatic 'No'.”
The court acknowledged that while CERC cannot replace regulations with judicial orders in general, it can still exercise its regulatory role to fill gaps where regulations are absent. The judgment also cited the Energy Watchdog v. CERC (2017) case, which held that the absence of regulations under Section 178 does not tie CERC’s hands in exercising its regulatory powers under Section 79.
The Supreme Court observed:
“The CERC imposed the liability of payment of compensation for delay on the respondent. The argument that CERC did not follow the 2014 Tariff Regulations—which do not provide for payment of transmission charges for delay—is not valid. The absence of a regulation under Section 178 does not prevent CERC from exercising its powers under Section 79(1) to pass specific orders.”
Read Also:- Supreme Court to Hear Plea on NEET PG Marks Normalisation, Transparency Issues on May 20
Ultimately, the Court allowed the appeal and upheld CERC’s power to grant compensation under Section 79 despite the lack of specific regulations under Section 178. This ruling strengthens CERC’s ability to ensure timely execution of power transmission projects by addressing regulatory gaps through case-specific orders.
Case Title: POWER GRID CORPORATION OF INDIA LIMITED Versus MADHYA PRADESH POWER TRANSMISSION COMPANY LIMITED & ORS.
Appearance:
For Petitioner(s) Mr. M.G. Ramachandran, Sr. Adv. Mr. Shubham Arya, Adv. Ms. Poorva Saigal, Adv. Mr. Pramod Dayal, AOR Mr. Nikunj Dayal, Adv. Ms. Reeha Singh, Adv. Ms. Pallavi Saigal, Adv. Ms. Shirin Gupta, Adv. Mr. Aneesh Bajaj, Adv. Ms. Srishti Khindaria, Adv.
For Respondent(s) Mr. Prashant Singh. A.G., MP Mr. Amit Seth, Adv. Mr. Arjun Garg, AOR Ms. Kriti Gupta, Adv. Ms. Sagun Srivastava, Adv. Mr. Brahma Prakash Soni, Adv. Mr. Anup Jain, Adv. Mr. Udit Gupta, Adv. Mr. Vyom Chaturvedi, Adv. Ms. Pragya Gupta, Adv. Mr. Amrnath Sahoo, Adv. Ms. Nishtha Goel, Adv. Ms. Deep Shikha Kumar, Adv. For M/s. Udit Kishan And Associates, AOR Mr. Shirish K. Deshpande, AOR Ms. Rucha Pravin Mandlik, Adv. Mr. Mohit Gautam, Adv. Mr. Apoorv Sharma, Adv. Mr. Sudhanshu S. Choudhari, AOR
