Telangana High Court
M/S Dilip Re Rolling Pvt. Ltd. vs The Telangana State Electricity ... on 31 July, 2025
Author: Nagesh Bheemapaka
Bench: Nagesh Bheemapaka
HON'BLE SRI JUSTICE NAGESH BHEEMAPAKA
WRIT PETITION No. 12304 OF 2024
O R D E R:
Petitioner is a private limited company incorporated under the provisions of the Companies Act, 1956. It has established a composite industrial unit (induction furnace and re-rolling) in Survey Nos. 21 to 24 of Gunded Village, Balanagar Mandal, Mahaboobnagar District and are engaged in the manufacture of M.S. Ingots, M.S. Rods, etcetera for which purpose, they obtained a High Tension Service Connection bearing No. MBN-719 from the 3rd respondent. Petitioner is stated to be availing power at 33 KV voltage level from the 3rd respondent.
The case of petitioner is that it is a scheduled consumer of the 2nd respondent distribution company, a deemed licensee under the Provisions of the Electricity Act, 2003 (for short, 'the Act'). The Scheduled Consumers are those, who avail power from the 2nd respondent source and also from other sources both intra or inter-state purchases by using the Distribution Lines etcetera of the 2nd respondent. Section 42 of the Act obligates the distribution companies like the 2nd respondent to allow to use open access corridor to its scheduled consumers i.e. to draw power purchased from the third parties through transmission / distribution lines of the 2nd respondent 2 distribution company. To avail open access facility, the users have to pay the following charges:-
i) Wheeling charges as determined by the 1st respondent
ii) Surcharge to meet the requirement of current level of cross subsidy within the area of supply of the distribution company.
iii) Additional surcharge on the wheeling charges as may be specified by the State Commission.
Wheeling charges are determined by the Regulatory Commission in exercise of powers conferred under Section 26 of the Indian Electricity (A.P. Amendment) Act, 1998 and Sections 61 and 62 of the 2003 Act read with A.P.E.R.C (Terms and Conditions for determination of Tariff for Wheeling and Retail Sale of Electricity) Regulation, 2005. Insofar as Cross Subsidy Surcharge is concerned, charges for the levy of said surcharge is to compensate the distribution companies like the 2nd respondent to replenish the cost of the cross subsidy extended by the distribution companies to particular category or categories of consumers, as Cross Subsidy Surcharge being actual expenditure incurred for extending cross subsidies. Therefore, its quantification depends upon the actual loss incurred by the 2nd respondent qua the cross subsidies provided to a class of consumers.
As per the 3rd Proviso to Section 42, the surcharge and cross subsidy shall be reduced in the manner as may be specified by the 1st respondent commission. It shall be the duty of the 1st respondent to see that cross subsidies are reduced. 3
While so, on 07.02.2015, the 2nd respondent filed A.R.R. (Actual Revenue Requirement) proposals with the 1st respondent. Simultaneously, the 2nd respondent filed F.P.T. (Filing for Proposed Tariff) along with A.R.R. filings in terms of Regulation No. 4/2005, The 2nd respondent determined the Cross Subsidy Surcharge sought to be levied by it at 30 paise per unit and 11 paise per unit in respect of 33 KV voltage and 132 KV voltage consumers respectively. In this connection, it is relevant to mention that as per Second Proviso to Section 42 of 2003 Act, the 2nd respondent alone has to assess and determine the Cross Subsidy Surcharge element for the loss sustained by it qua the expenditure incurred by it in extending the cross subsidies to consumers and the 1st respondent has no role to determine the same at a higher rate sought to be levied by the 2nd respondent. The proposals were therefore, placed before the State Advisory Committee constituted under Section 27 of 2003 Act, which Committee confirmed the Cross Subsidy Surcharge assessed and determined by the 2nd respondent distribution company. However, without any authority, the erstwhile Commission passed order dated 27.03.2015 in O.P. No. 76 and 77 of 2015 insofar as the 2nd respondent distribution company is concerned by fixing the Cross Subsidy Surcharge leviable at Rs. 1.29 paise per unit and 93 paise per unit in respect of 33 KV voltage and 132 KV voltage consumers respectively. Assailing 4 the validity of the above order, a spate of writ petitions came to be filed in this Court which vide common order in Writ Petition No. 26609 of 2015 and batch dated 29.10.2018 allowed batch of Writ Petitions. As against the same, the 2nd respondent filed Writ Appeals No. 1672 of 2019 and batch, which were dismissed by a Division Bench vide judgment dated 11.03.2019. Assailing the said judgment, the 2nd respondent filed S.L.P. (C) Nos. 14047-14066/2019 and the Hon'ble Supreme Court by order dated 07.11.2023 remitted the matter to the Regulatory Commission to decide the issue after following due process prescribed under law and affording opportunity to the parties concerned within three months from the date of filing a certified copy of the order by either of the parties.
Surprisingly, petitioner received notice dated 24.01.2024 from the 1st respondent wherein it formulated new proposal in the matter of levy of Cross Subsidy Surcharge proposing to levy Rs. 1.32 Ps. and 94 paise per unit in respect of 33 KV and 132 KV voltage consumers, though it has no power to do so. It cannot frame any proposals and submit the same to itself and then determine the levy by the 2nd respondent. The 2nd respondent distribution company has not come up with any fresh determination of Cross Subsidy Surcharge which in fact, it cannot do so in view of the remand of the matter, it has to stick as to its proposals submitted on 07.02.2015. Further, Cross 5 Subsidy Surcharge being a compensatory element has already been assessed and determined by the 2nd respondent distribution company in the proposals and confirmed by the State Advisory Committee in its meeting held on 04.03.2015.
After receipt of notice from the 1st respondent, petitioner submitted representation dated 12.02.2024 requesting the 1st respondent for supply of minutes of the meeting dated 04.03.2015 of the State Advisory Committee. However, the 1st respondent failed to supply a copy of the same for the reasons best known to the signatory of the counter affidavit, but a copy of the same is filed along with the counter affidavit filed on behalf of the 2nd respondent. That hearing was concluded on 28.02.2024 and after conclusion of the arguments on behalf of the consumers, the Chairman of the 1st respondent requested the representative of the 2nd respondent, who was present on the said day, to proceed with the arguments. However, the said representative except stating that proposals initiated by the 1st respondent may be finalized, has not stated anything. However, the Chairman directed him to file counter affidavit within two weeks and to serve the copy on the other side so as to enable them file reply. But till today, no counter affidavit is served on petitioner and like consumers. However, the 1st respondent passed the order dated 19.04.2024 in O.P.No. 76 of 2015 impugned in this Writ Petition. In the said 6 order, a mention is made that counter has been filed on behalf of the 2nd respondent.
2. While issuing notice before admission, this Court by order dated 02.05.2024 granted interim stay of all further proceedings pursuant to the order dated 19.04.2024 in O.P.No. 76 of 2015 passed by the 1st respondent in respect of the 2nd respondent including disconnection of petitioner's power supply. The said order was extended from time to time and the same is in force till today.
3. On behalf of the 1st respondent, the Commission Secretary states in the counter that the impugned order was passed in compliance with the directions of the Hon'ble Supreme Court in Civil Appeal Nos. 7517-7536 of 2023, vide judgment dated07.11.2023, wherein it is observed that no opportunity had been given and no public notice had been issued while increasing the CSS, hence, the view taken by the learned Single Judge as affirmed by the Division Bench is not correct. The High Court should not have taken upon itself to determine the tariff of CSS, rather it should have been left to the expert body which is the Commission. Further, there was a remedy of appeal available to the respondents to challenge the order of the Commission, if so aggrieved, on admissible grounds. In the light of the clear findings and observations of the Hon'ble Supreme Court, these Writ Petitions are not 7 maintainable before this Court. Furthermore, the order impugned is appealable under Section 111 of the 2003 Act before the Appellate Tribunal for Electricity (ATE). Since the determination of tariffs or CSS for open access is a technical order made under the 2003 Act, this Court would not reappraise the matter when there is alternative remedy available.
It is stated, the High Court for the state of Andhra Pradesh and Telangana in M/s Southern Power Distribution Company of Andhra Pradesh v. Appellate Tribunal for Electricity (Writ Petition No. 10184 of 2018) had clearly established that when a statutory remedy is available, a writ petition is not maintainable. This conclusion was reached by the Hon'ble Court after thoroughly considering relevant case law from both this Court and the Hon'ble Supreme Court.
According to this respondent, the issue on hand involves complex technical and financial matters, which have been thoroughly examined and decided by the expert body. This Court has consistently recognized its limitations in reviewing such issues when they have been decided by experts in the field. In support of this position, reliance is placed on the judgment of the Hon'ble Supreme Court in West Bengal Electricity 8 Regulatory Commission v. CESC Ltd. 1 The relevant observation is as follows:
" We have also noticed carefully the decisions relied upon by learned counsel for the respondent-company, which have held that an appeal Court whose powers are not hedged in by any limitation, is free to independently consider the evidence and satisfy itself whether the findings and conclusions arrived at by the Court of the first instance are proper or not. These judgments cited by the learned counsel for the company also hold that the appellate Court is competent to adjudicate all questions of fact and law and record its own findings and that it can re-appreciate and re-evaluate the evidence and arrive at its own finding and conclusions. These enunciations of law found in the judgments cited by the learned counsel for the respondent-company, in our opinion, in no way conflict with the decisions on which we have placed reliance hereinabove. It cannot be disputed that when the appellate power is not hedged in by any restriction, the appellate Court can independently reconsider the evidence, but the line of decisions relied on by us show that the rule of prudence in law is that such appellate power is not to be exercised for the purpose of substituting one subjective satisfaction with another, without there being any specific reason for such substitution. Further, in regard to the exercise of appellate power against the orders of expert Tribunals, on facts, the appellate Court which is not an expert forum should be doubly careful while interfering with such expert forum's findings on facts.....
46. We notice that the Commission constituted under Section 17 of the 1998 Act is an expert body and the determination of tariff which has to be made by the commission involves a very highly technical procedure, requiring working knowledge of law, engineering, finance, commerce, economics and management. A perusal of the report of the ASCI as well as that of the Commission abundantly proves this fact. Therefore, we think it would be more appropriate and effective if a statutory appeal is provided to a similar expert body, so that the various questions which are factual and technical that arise in such an appeal, get appropriate consideration the first appellate stage also.... Without meaning any disrespect of the Judges of the High Court, we think neither the High Court nor the Supreme Court would in reality be appropriate appellate 1 AIR 2002 SC 3588 9 forums in dealing with this type of factual and technical matters."
(emphasis supplied) It is also stated, the Hon'ble Supreme Court in U.P. Power Corporation Limited v. National Thermal Power Corporation Limited 2 held as follows:
"12-looking to the observations made by this court to the effect that the Central Commission constituted under sec. 3 of the Act is an expert body which has been entrusted with the task of determination of Tariff and as determination of Tariff involves highly technical procedure requiring not only working knowledge of law, but also Engineering, finance, Commerce, Economics and management, this court was firmly of the view that the issues with regard to determination of Tariff should be left to the said expert body and ordinarily the High Court and even this court should not interfere with the determination of Tariff".
(emphasis supplied) In view of the same, it is stated that Writ Petition may be dismissed giving liberty to petitioner to approach the ATE. It appears, petitioners have chosen to file these writ petitions which this Court entertains with a nominal fee of Rs.100/- whereas before the ATE, they have to pay court fee of Rs. 1 lac per each case.
It is stated, pursuant to the direction of the Hon'ble Apex Court, this respondent published a notice on its website on 24.01.2024 to initiate fresh determination of CSS for FY 2015-16 and sent individual notices to petitioner separately on 02.02.2024; in order to adhere to the timeline and avoid delays, notified draft CSS rates for FY 2015-16 to benefit stakeholders; 2 (2011) 12 SCC 400 10 to ensure transparency and avoid allegations of unilateral action, they openly shared the draft figures and understanding with all stakeholders before finalizing the decision. It is stated, petitioner seems to have misunderstood or misled about the statutory provisions of the Act, 2003. Section 64 outlines the procedure for tariff determination. Although the proposals were initially filed in 2015 and determined within the statutory timeframe, matter was remanded to the answering respondent due to the petitioners' litigation. This remand required to restart the process from the stage where preliminary conclusions were reached, provide an opportunity for stakeholder input, and make a final decision. Therefore, the procedure adopted by the answering respondent is in accordance with legal requirement.
It is further stated that insofar as the State of Telangana is concerned, the Telangana Electricity Reforms Act, 1998 would also apply. Section 26 thereof at clause (5) provides as below.
"26. Licensee's revenues and tariffs:-
(5) Every licensee shall provide to the Commission in a format as specified by the Commission at least 3 months before the ensuing financial year full details of its calculation for that financial year of the expected aggregate revenue from charges which it believes it is permitted to recover pursuant to the terms of its licence and thereafter it shall furnish such further information as the Commission may reasonably require to assess the licensee's calculation. Within 90 days of the date on which the licensee has furnished all the information that the Commission requires, the Commission shall notify the licensee either--11
(a) that it accepts the licensee's tariff proposals and revenue calculations; or
(b) that it does not consider the licensee's tariff proposals and revenue calculations to be in accordance with the methodology or procedure in its licence, and such notice to the licensee shall,--
(i) specify fully the reasons why the Commission considers that the licensee's calculation does not comply with the methodology or procedures specified in its licence or is in any way incorrect, and
(ii) propose a modification or an alternative calculation of the expected revenue from charges, which the licensee shall accept."
This provision clearly allows for modifications to the proposals made by answering Respondent and the submission of revised figures for determining the CSS for FY 2015-16. Therefore, the petitioners' contention that such modifications are impermissible is contrary to the law and cannot be upheld.
It is stated, in public hearings, this respondent invites objections / suggestions via public notices, not counter affidavits. The procedure followed was to require distribution companies to respond to submissions made by the petitioners, which were submitted as replies on 01.04.2024. This process adheres to procedural norms and legal requirements, refuting any claims of procedural irregularity. They are legally- empowered to initiate proceedings for determination of tariffs and CSS in the absence of proposals. The writ petitioners' contention lacks legal merit and should be dismissed.
The assertion that the 2nd respondent must submit proposals before the 1st respondent can fix the tariff is incorrect. The provisions cited by petitioner concerning the CSS use the term "specify," whereas Section 62 of the 2003 Act uses the 12 term "determine," and Section 64 uses the noun form. The term "specified" in Sections 39 (2) (d) (ii), 40 (c) (ii) and 42 (2) is defined in Clause 2 (62) to mean "specified by regulations made by the answering respondent." This indicates a distinct difference between "determine" and "specify." The answering respondent's authority to determine tariffs, as provided under section 62, includes CSS. Due to disputes raised by petitioner and subsequent orders from the Hon'ble Supreme Court, they initiated proceedings suo motu and notified the draft proposals itself as the allegation earlier was that the answering respondent did not place the draft figures in the public domain and passed orders without hearing the earlier parties. Petitioners' arguments confuse the concepts of determination and specification, thus, their claims regarding procedural errors are unfounded.
The allegations of legal malice suggesting favouritism towards the 2nd respondent are unfounded. Despite the 2nd respondent's initial proposals in 2015 being minimal, this respondent determined rates higher than those proposals. This is only an attempt to circumvent the Hon'ble Supreme Court's order.
This Court in Bharat Kumar v. APERC 3 acknowledged that the regulatory framework operates on 3 2000 (6) ALD 217 13 principles of transparency and natural justice, which this respondent has adhered to. Legal malice would only occur if the authority acted beyond or failed to exercise its powers. It is stated that this respondent followed proper procedures, provided transparency and ensured stakeholder participation. Therefore, the writ petitioners' claims are without merit and should be dismissed.
It is further stated, petitioner emphasizes the meeting held by the answering respondent with the State Advisory Committee (SAC), which is purely advisory and was not relied upon when determining the CSS. The relevance of this advisory meeting to the current impugned order is unclear, as nothing from it was quoted or relied upon in the decision making process. This respondent, while exercising its statutory power to determine CSS, has the authority to re-fix or deviate from initial proposals based on a prudent check according to the norms and procedure.
It is stated that petitioner's focus on the advisory committee minutes is misguided, as the Committee's role is advisory and not binding on them in matters like CSS determination. Petitioner's attempt to suggest any infirmity based on these minutes is unfounded as the minutes were not relied upon in the impugned order. Regarding ground (f), the petitioners seem to misconstrue the reasoning behind the 14 Hon'ble Supreme Court's remand, falsely asserting that it was solely due to stakeholders not being informed of the figures. In reality, the remand was issued because this Hon'ble Court lacked the expertise to interfere with the expert body's determination and it is appropriate for the expert body to revisit the same. The answering respondent properly initiated the proceedings by notifying the draft CSS figures to all stakeholders before reaching a final decision. The petitioners' allegations of bias and legal malice against the Members of the Commission are not only baseless but also improper, as these Members were not named as party respondents. The writ petitions should be dismissed for these unwarranted allegations. Furthermore, ground (G) (H) and (I), which involves the non-supply of SAC meeting minutes, holds no material relevance to the impugned order. The SAC's advisory role does not impact the final order, and the report was publicly available even before the CSS determination was set aside. The petitioners' claims regarding the SAC minutes appear to be a tactic to evade the liability of the CSS.
Petitioners contend that this respondent lacks the authority to determine CSS, asserting that this responsibility lies with respondent No. 2. This argument overlooks the provisions of the Act, 2003, which clearly entrust the power to determine the CSS to the State Commission, not to any other 15 entity. Specifically, Section 42 mandates that the State Commission introduce open access and determine associated charges, including CSS. The relevant portion of the provision is as follows:
" 42. Duties of distribution Licensee and open access:-
(1)....
(2) The State Commission shall introduce open access in such phases and subject to such conditions, (including the cross subsidies, and other operational constraints) as may be specified within one year of the appointed date by it and in specifying the extent of open access in successive phases and in determining the charges for wheeling, it shall have due regard to all relevant factors including such cross subsidies, and other operational constraints:
Provided that such open access may be allowed before the cross subsidies are eliminated on payment of a surcharge in addition to the charges for wheeling as may be determined by the State Commission:...." Thus, determination of CSS is unequivocally vested in this respondent. Furthermore, the answering respondent is not obliged to accept the figures submitted by the 2nd respondent No. 2, instead, it retains the right to independently review and decide upon the CSS, ensuring transparency in the process as required by the remand order from the Supreme Court. Draft figures were made available to all stakeholders before a final decision was reached, after considering their input. Therefore, the petitioner's contentions on this ground are both irrelevant and baseless.
Petitioner argues that this respondent improperly relied on cost components rather than audited figures for 16 determining the CSS. However, the determination in question pertains to financial year 2015-16, which necessitates using cost components since audited figures are only available after completion of financial year. The CSS determination made at the beginning of the financial year is, therefore, appropriately based on proposals and normative values. This approach is consistent with established practice and petitioner's contention is incorrect and contrary to these principles. Additionally, petitioner challenges the use of National Tariff Policy (NTP) formula for CSS computation, suggesting that the 2nd respondent may not need to impose a cross subsidy on open access consumers at all or only at a lower rate. However, the NTP is recognized as law by the Hon'ble Supreme Court, and the answering respondent is obligated to follow it. If petitioner disagreed with the NTP methodology, they should have contested it directly in the appropriate legal forum. The claim that respondent No. 2 did not collect CSS in previous years is also unsupported.
Petitioner contended that this respondent rejected the proposals of the 2nd respondent without justification and subsequently formulated new proposals, allegedly in violation of the Electricity Act, 2003, and without the empowerment of the Hon'ble Supreme Court. This claim appears to disregard the Supreme Court's judgment, which clearly established that 17 determination of CSS falls exclusively within the jurisdiction of the answering respondent which acted in accordance with the directions of the Hon'ble Supreme Court, particularly after the earlier order in 2015 was set aside due to the failure to disclose draft figures to stakeholders. Consequently, the answering respondent proceeded to determine CSS for the financial year 2015-16 from the appropriate stage. Therefore, the actions taken by the answering respondent are fully compliant with the Act, 2003, applicable rules and regulations, and the directions of the Hon'ble Supreme Court. The petitioners' submissions on this ground are unfounded and without any legal basis.
Petitioner's contention about the alleged deviation from National Tariff Policy (NTP), which calls for a progressive reduction of CSS up to 20%, is misplaced. The Act, 2003 was amended by Act No. 26 of 2007 on 15.06.2007, omitting the words "and eliminated" and the associated time period from the relevant clauses. Moreover, the NTP of 2006, as referenced by petitioner, was only applicable until 2015. Therefore, the arguments presented in this ground lack merit and should be dismissed. Similarly, petitioner's assertion that no CSS should have been levied for FY 2015-16, and that CSS should have reached 'zero,' is erroneous. The amendment to Act, 2003 removed the requirement for elimination of cross subsidies, making it clear that CSS cannot be 'zero.' NTP of 2016 also 18 supports imposition of CSS. As such, this contention is without merit. Lastly, petitioner argues that CSS could be zero based on an embedded cost formula, but the answering respondent allegedly allowed CSS in excess of this calculation. This argument fails to recognize that the formula considers the prevailing tariff, which is not 'zero,' and CSS is calculated based on 20% of the tariff. Therefore, the petitioners' contentions in these grounds are baseless and should be rejected. It is therefore prayed to direct petitioner company to pay CCS as per the orders of the Commission to the respondent company for compensating loss incurred by them which is pending.
4. The Chief General Manager of TGSPDCL filed counter on behalf of Respondents 2 to 4 stating almost on similar lines as that of the 1st respondent with regard to availability of alternative remedy. It is stated, the Commission has power to determine the tariff for retail sale of electricity under Section 62 of the 2003 Act. The Commission while determining the Tariff may differentiate according to the nature of supply and the purpose for which the supply is required in accordance with section 62(3) of Electricity Act, 2003.
It is stated, TGSPDCL and TGNPDCL have submitted CSS calculations with the proposed figures for FY 2015-16 in their filings dated 07.02.2015, based on which, the Commission computed the CSS considering the same formula 19 as adopted by TS DISCOMs, by order dated 27.03.2015. As per the directions of the Supreme Court, the Commission computed afresh CSS with the approved figures of FY 2015-16 inviting comments/objections on their fresh proposal through public notice dated 24.01.2024 duly following the procedure prescribed under law and affording due opportunities to the parties concerned. The Commission has considered more accurate figures (considering the decimals up to 4 digits) which resulted in marginal increase in Cross Subsidy Surcharge from Rs. 1.29 Ps to Rs. 1.32 Ps in respect of 33 KV consumers.
It is stated, computation of accurate CSS by the Commission by considering the more accurate figures (decimals up to 4 digits), and the same has resulted in marginal increase in Cross Subsidy Surcharge from Rs. 1.29 Ps to Rs. 1.32 Ps in respect of 33KV consumers. The Commission has already placed the copies of minutes dated 04.03.2015 in the Commission's Website for the viewing of the stakeholders in the year 2015 itself. In this connection it is to submit that the Commission conducts the meeting with State Advisory Committee members on the ARR filings of the TG DISCOMs every year before determination of Retail Tariff.
The Commission is empowered to determine the tariff including Cross Subsidy Surcharge under Sections 62 &
64. Based on the directions of the Hon'ble Supreme Court, the 20 Commission has proposed CSS afresh by considering the more accurate figures (decimals up to 4 digits) with already available data filed by the Telangana State DISCOMs in 2015 and invited comments/objections from the stakeholders as per the procedure laid in the conduct of Business Regulation 2015. The Commission has determined afresh as per the orders of the Supreme Court taking into consideration the objections filed by petitioner and the replies of DISCOM based on the approved figures for FY 2015-16. The Commission proposed a tariff in paper publication and has called for objections, hence, the contention of petitioner that Commission has taken up on itself to arrive at the CSS before considering the objections of the stakeholders is false and the same is denied. The Commission has published the proposed Tariff and called for objections which were duly taken into account before passing the orders dated 19.04.2024 in OP. No. 76 of 2015.
After conclusion of public hearing on 28.02.2024 for fresh determination of CSS, the Commission directed Respondent Company to submit written replies to the objections of Petitioner within a week. Accordingly, the Respondent company submitted written replies to the objections raised during the public hearing held on 28.02.2024 to the Commission and the same were hosted in the websites of the Commission and the Respondent Company.
21
It is stated, there is no breach of Act by the Commission in the process of issue of Determination of Cross subsidy surcharge order for FY 2015-16 and Principles of Natural Justice are not violated. The Commission has discretion to revise the projections of the Licensees and compute parameters such as sales projections, energy requirement, power purchased quantum, power purchase cost etc., which will determine the retail tariff and cross subsidy surcharge and rectify the errors found if any. Therefore, there is a likely possibility of change in the value of the CSS based on the approved figures of the commission. The Commission has placed the copies of minutes of State Advisory Committee dated 04.03.2015 in the Commission's Website for the view of the stakeholders. Based on the filings of TS DISCOMs in 2015, the Commission computed CSS for 33 KV consumers at Rs.1.29 Ps as per the procedure laid in National Tariff Policy 2006. There is no legal malice on the part of the Commission as per the operative portion of the relevant order of the Hon'ble Supreme Court dated 07.11.2023.
It is stated that there was marginal increase in CSS in the fresh proposals of Commission as compared to that determined in 2015 duly considering the accurate data up to 4 decimals. Public hearing was conducted on 28.02.2024 and final orders were passed on 19.04.2024 in OP. No. 76 of 2015 22 and OP. No. 77 of 2015 as per the procedure laid in the National Tariff Policy 2006, considering the objections raised by the parties during the public hearing.
It is stated, the Electricity Act 2003 and National Tariff Policy 2006 empower the Respondent Company to collect the Cross Subsidy Surcharge determined by the Commission to compensate the loss in case of switching over by the consumers and is not additional revenue. Hence, it is prayed to direct Petitioner Company to pay Cross Subsidy Surcharge as per the orders of the Hon'ble Commission to the Respondent Company for compensating the loss incurred by them due to switching over of Petitioner Company to Open Access which is still pending since 2015.
In the reply, petitioner stated that the Hon'ble Supreme Court remanded the matter to the 1st respondent for fresh consideration of the issue, therefore, it is obvious that the scope of the remand always should be confined to the lis which arose and considered during the earlier round of litigation i.e., fixation of higher cross subsidy surcharge at Rs. 1.29 Ps. per unit and Rs. 0.93 paise per unit in respect of 33 KV and 132 KV consumers respectively, as against the proposals of the 2nd respondent to collect Rs.0.30 paise per unit and Rs. 0.11 paise per unit from 33 KV AND 132 KV voltage consumers respectively. But the 1st respondent cannot expand the scope of 23 the lis involved and decided in the earlier round of litigation. The said approach is per se and ex facie illegal. Even under the provisions of the A.P. Electricity Reforms Act 1998, the Electricity Act, 2003 and the Regulations and Rules framed thereunder, the 1st respondent does lack power and jurisdiction to expand the scope of the proposals submitted by the 2nd respondent to collect cross subsidy surcharge. Moreover, the 1st respondent framed new proposals and submitted the same to itself for consideration and determination, which act is contrary to the orders of the Honourable Supreme Court as well as 1998 Act, the 2003 Act and Regulations made thereunder. As against the impugned order, an Appeal lies to the Appellate Tribunal for Electricity (ATE) under Section 111 of 2003 Act cannot be countenanced inasmuch as when there is breach of the principles of natural justice, the mandatory statutory provisions and violation of the Fundamental Rights, the citizens can invoke the extra-ordinary jurisdiction of this Honourable Court under Article 226 of the Constitution of India. The rule of exclusion of writ jurisdiction due to availability of an alternative remedy is rule of discretion and not one of compulsion and in appropriate cases, writ petitions can be maintained irrespective of availability of alternative remedy. The Hon'ble Supreme Court in M/s Agro Industries Development Corporation Limited v. 24 Jahan Khan 4 considered this issue and rendered the judgment in the above lines. Determining the Cross Subsidy Surcharge other than what is required and sought by the 2nd respondent amounts to allowing the 2nd respondent to become unjustly rich at the cost of the open access users and accordingly, the said exercise is ex facie per se illegal. Moreover, the principle underlying under Section 42 is to make available the open access power relatively at a competitive rate and the action of the Commission in the present case runs contrary to the same. The grounds raised in the Writ Petition are purely legal in nature and on the admitted fact scenario and therefore, no complexities of technical and financial issues are involved in the matter as alleged by the 1st respondent. The averment that the order under challenge in the Writ Petition involved complex technical and financial matters, which have been thoroughly examined and decided with the expert body cannot be questioned before this Honourable Court is highly untenable in view of the fact that the grounds raised in the writ petition inasmuch as the order passed by the 1st respondent is challenged on legal grounds as is demonstrated in the writ petition. Therefore, the judgments of the Hon'ble Supreme Court relied on by the 1st respondent have no application to the fact situation in the present case. It is not true to say that in order 4 2007(10) SCC 88 25 to avoid payment of substantial court fee of Rs. 1 lac and additional costs in filing the Appeal before the Appellate Tribunal for Electricity, petitioner filed the present writ petition inasmuch as the order impugned the present writ petition is passed in utter breach of principles of natural justice, mandatory statutory provisions and violating the Fundamental Rights guaranteed to petitioner under the Constitution. Apart from that, the way in which the 1st respondent favoured the 2nd respondent in the matter of determination of cross subsidy surcharge by determining the same at a rate higher than what is required and sought by the 2nd respondent basing on the statutory audited figures, which figures are approved by the 1st respondent itself on the earlier occasion and now coming up with fresh proposals on its own in an illegal fashion beyond its power and jurisdiction as envisaged under 2003 Act enabling the cross subsidy further necessitated petitioner to approach this Court by way of filing the present writ petition. At any rate, the 1st respondent cannot determine the surcharge more than what is required and calculated by the 2nd respondent by taking into consideration the power procured by the scheduled consumers (open access consumers) and the Cross Subsidy Surcharge leviable thereon. Petitioner is advised that permitting the 2nd respondent to collect more Cross Subsidy Surcharge than what is required and sought by it amounts to allowing the 26 2nd respondent to become unjustly rich at the cost of the open access users and accordingly, is ex facie per se illegal. In this connection it is relevant to mention that distribution companies like the 2nd respondent allow its consumers to avail power through third parties by using open access corridor of the distribution companies on payment of surcharge to take care of the requirement of current level of cross subsidy and fixed cost arising out the licensees' obligation to supply. Basically, the Cross Subsidy is a compensatory component for the subsidies provided to vulnerable sections of the society and to recover the fixed cost. Taking the above aspects into consideration, the 2nd respondent submitted proposals to recover cross subsidy at 30 paise and 11 paise per unit in respect of its 33 KV and 132 KV consumers respectively, since the same would suffice its requirement. It did not want to saddle its open access consumers with more cross subsidy surcharge amount than what is required by it However, on account of the lopsided approach of the 1st respondent. In order to take advantage of the situation, the 2nd respondent is now staking claim for higher Cross Subsidy Surcharge unnecessarily. The action of respondent in coming up with a fresh proposal enhancing Cross Subsidy Surcharge levy at Rs. 1.32 ps. per unit in respect of 33 KV voltage consumers and Rs. 0.93 paise per unit in respect of 132 KV voltage consumers, after remanding the matter by the 27 Hon'ble Supreme Court is purely an act in contravening the orders of the Supreme Court. As per the orders of the Apex Court, the 1st respondent has to ultimately decide sustainability on the earlier order passed by the Commission permitting the 2nd respondent to collect Rs. 1.29 Ps. per unit and 93 Ps. per unit in respect of 33 KV and 132 KV voltage consumers respectively as against the actual requirement of the 2nd respondent, 30 paise per unit and 11 pasie per unit in respect of 33 KV and 132 KV voltage consumers respectively. The required Cross Subsidy Surcharge as aforementioned has been worked out basing on the statutory-audited figures as approved by the 1st respondent. At any rate, the 1st respondent altered the audited figures whimsically so as to make the 2nd respondent stand to gain unjustly. When the 2nd respondent itself does not want to collect higher Cross Subsidy Surcharge than what was fixed by the earlier Commission, the earlier committee ought not to have traversed beyond the requirement of the 2nd respondent. In the counter affidavit filed on behalf of the 1st respondent in the earlier round of litigation, it was mentioned that proposals were submitted on 07.02.2015, thereafter on 04.03.2015, there was a meeting conducted with the advisory committee and thereafter, the orders in O.P. No. 76 and 77 of 2015 dated 23.03.2015 were passed. In the above order, there is no mention about conduct of meeting by the 2nd 28 respondent with the State Advisory Committee. The purport and purpose of the alleged meeting is not known or communicated to the affected parties like petitioner. Despite petitioner's counsel seeking supply of copy of the minutes of the alleged meeting conducted by the 1st respondent with the State Advisory Committee, the 1st respondent has not been supplied copy of the same to our counsel for the reasons best known to the 1st respondent. Though, the 1st respondent failed to supply copy of the minutes of the meeting held by the State Advisory Committee with the 1st respondent on 04.03.2015, a copy of the same is filed before this Court by the 2nd respondent along with its counter affidavit. A perusal of the same clinches that the 2nd respondent presented A.R.R. Tariff filings for the year 2015-16 before the State Advisory Committee. On the A.R.R. Tariff Filings FAPCCI's representative raised certain objections as to the levy of Cross Subsidy basing on the said tariff filings. Further, in the said meeting, the Chairman of the 1st Respondent Commission stated that A.R.R. Tariff filings were presented by the 2nd respondent for the financial year 2015-16. Accordingly, the Commission accepted the proposals of the 2nd respondent in toto without any deviation. Having adopted the proposals of the 2nd respondent, the previous Commission ought not to have fixed higher cross subsidy than what was proposed by the 2nd respondent. In the light of the same, the present 29 Commission ought not to have ventured to fix Cross Subsidy Surcharge over and above 30 paise per unit and 11 paise per unit in respect of 33 KV and 132 KV voltage consumers respectively for the financial year 2015-16. Petitioner was advised that the 1st respondent cannot approbate and reprobate on the same issue.
It is stated, the Supreme Court never directed any statutory authority to traverse beyond the scope of any legal frame and to act thereon. Under special circumstances, the Supreme Court grants relief to a party to meet the ends of justice by invoking Article 142 of the Constitution of India Therefore, the understanding of the 1st respondent that it can traverse beyond the scope of 2003 Act and the relevant regulations made thereunder is sheer outcome of legal malice and presumably an attempt to make the 2nd respondent to stand to gain for no reason over and above the 2nd respondent's requirement. It is also stated, Section 26 of the Telangana Electricity Reforms Act, 1998 deals with fixation of tariff and has nothing to do anything with the determination of Cross Subsidy Surcharge. However, the statutory-audited figures as regards the aggregate revenue requirement and other relevant data submitted and approved in terms of terms and conditions for determination of tariff for wheeling and retail sale of Electricity Regulation 2005, which Regulation is framed under 30 Sections 61 and 62 read with Section 181(2) of the Act, will be taken into consideration. Public hearing was conducted on 28.02.2024 and by that time the 2nd respondent neither filed any counter nor furnished remarks to the novel proposal brought into existence by the 1st respondent. At least the representative of the 2nd respondent who was present on 28.02.2024 did not venture to submit anything despite the Members of the Commission requesting him. He simply stated that whatever proposal submitted by the 1st respondent to itself for determination of Cross Subsidy Surcharge may be confirmed. However, the Chairman of the Commission required him to file counter within two weeks and serve copies on all the concerned so as to enable them to file reply. However, the 2nd respondent did not serve any counter or remarks as orally directed by the Chairman even till today. The statement of the Secretary of the Commission that on 28.02.2024, the 1st respondent has not directed the 2nd respondent's representative to file counter affidavit is not true. In the context, petitioner is advised that the said statement is a mis-statement deliberately made without any fear of facing perjury. It is informed by their counsel and representatives of M/s Davashree Ispat Private Limited, M/s Jeevaka Industries Private Limited and M/s Scan Energy Private Limited, who were present on the said day that the Chairman of the Commission specifically directed the 31 representative of the 2nd respondent to file counter affidavit within two weeks. That is the reason why their counsel filed Memo dated 27.04.2024 duly brining to the notice of the Commission that despite the direction of the Commission, the 2nd respondent has not served any counter affidavit. But, however, in the impugned order, it is mentioned that the 2nd respondent filed counter affidavit / remarks. As per the procedure envisaged under the Act and Regulations, the 2nd respondent has to submit proposals to the 1st respondent seeking determination of Cross Subsidy Surcharge and thereafter, the 1st respondent shall invite objections / remarks from the concerned and then only has to determine the Cross Subsidy Surcharge to be collected by the 2nd respondent. However, in the present case, the 1st respondent submitted proposals to itself (without even any request by the 2nd respondent) and required the 2nd respondent to submit remarks, which procedure is unknown to the mandatory procedure as contemplated under the Act and Rules. Apart from the above, admittedly and evidently, no counter affidavit / remarks were submitted by the 2nd respondent by 28.02.2024, on which date public hearing was closed by the 1st respondent nor any counter affidavit / remarks served upon the petitioner or its counsel till the filing of the present writ petition. However, the 1st respondent has taken the remarks submitted by the 2nd 32 respondent into consideration and passed the impugned order, as such, the impugned order is liable to be set aside since the same is passed in utter contravention of the mandatory statutory procedure envisaged under the Act and Regulations and also in utter breach of the Principles of Natural Justice. It is not true to say that the 1st respondent does have power to initiate proceedings for determination of Cross Subsidy Surcharge or tariff in the absence of the proposals of the 2nd respondent. Unless and until there are proposals submitted by the distribution companies like the 2nd respondent seeking determination of Cross Subsidy Surcharge or tariff as the case may be, the cause of action in the said context does not arise at all. At any rate, the respondent cannot play dual role of a licensee and a regulator, which action traverses beyond the scope of 2003 Act apart from being unconstitutional. The 2003 Act does not confer such kind of omnipotent power to the 1st respondent as is being presumed and assumed by the deponent of the counter affidavit.
The averment that in the absence of the proposals submitted by the 2nd respondent in the matter of either determination of tariff or specification of Cross Subsidy Surcharge as the case may be, the 1st respondent can formulate proposals proposing to determine tariff or specify the levy of Cross Subsidy Surcharge to meet the current levels of Cross 33 Subsidies for a given year is rather hypothetical, misconceived or misunderstood, inasmuch as when there were no proposals from the 2nd respondent, it is rather high-handed to state that the 1st respondent can frame proposals for fixing the Cross Subsidy Surcharge even in the absence of proposed requirement of Cross Subsidy Surcharge component by the 2nd respondent. This averment of the 1st respondent reflects the autocratic exercise of the powers by the 1st respondent beyond the scope of Act and Regulations. Apart from that, the Honourable Supreme Court never directed the 1st respondent to initiate "suo-motu"
proceedings and on the other hand, the matter is simply remanded and the 1st respondent directed to act upon when a certified copy of the order is filed before the 1st respondent either by open access consumers or the 2nd respondent. However, though nobody has approached the 1st respondent, it is assumed and presumed jurisdiction on its own and formulated a new proposal with which the 2nd respondent has no Interest at all. Though, the Honourable Supreme Court passed orders directing the 1st respondent to consider the issue as per law, the latter passed the impugned order in deviation of the statutory scheme apart from the Principles of Natural Justice violating the Fundamental Rights guaranteed to the petitioner and like open access consumers.34
It is stated, the action of the 1st respondent at the first instance in determining higher Cross Subsidy Surcharge rate is purely an act tainted with legal malice, inasmuch as under the Scheme of the Act and Regulations, when the 2nd respondent submits proposals basing on the statutory audited figures claiming Cross Subsidy Surcharge, which is compensatory in nature at a particular rate, the 1st respondent cannot compel the 2nd respondent to collect more Cross Subsidy Surcharge than what is proposed and required by the 2nd respondent. Such an approach is unknown to any canons of legal principles. Moreover, it is not for the 1st respondent to decide what is the requirement of the 2nd respondent in arriving at the fixed charges in the matter of Cross Subsidy Surcharge which is a compensatory component. The act of the erstwhile commission or the present commission is tainted with sheer legal malice. During the earlier round of litigation, there was a vague mention about the alleged meeting of the 1st respondent with the State Advisory Committee on 04.03.2015 before the orders in O.P. dated 27.03.2015 came to be passed and secondly, after remand of the matter shockingly the 1st respondent altogether came up with a new proposal though such proposal was not submitted by the 2nd respondent nor even the same was known to the officials of the 2nd respondent. Apart from that when the counsel for petitioner sought for 35 furnishing a copy of the same by filing a Memo., the same has not been supplied for the reasons best known to the 1st respondent. Since the scenario either before or after remand of the matter is one and the same and re-visitation of facts and circumstances of the previous round of litigation is just and necessary for adjudication of lis. The 1st respondent having conducted a meeting with State Advisory Committee on 04.03.2015, after submission of Cross Subsidy Surcharge fixation proposals for the year 2015-16, ought to have furnished a copy of the minutes of the meeting to the petitioner. In this regard, it is also relevant to submit that the said meeting is also placed reliance in the counter affidavit filed on behalf of the 2nd respondent during earlier round of litigation. But, however, the 1st respondent failed to furnish a copy of the same even to this Court. The statement of the 1st respondent in the present counter affidavit that the role of the State Advisory Committee is also advisory in nature and therefore, it was not relied on shows the lopsided approach of the 1st respondent meddling with the rights of the consumers defeating the object with which the statutory bodies like the 1st respondent are established. As submitted in the preceding paragraphs, having relied on the alleged meeting of the 1st respondent, as State Advisory Committee on 04.03.2015, the 1st respondent now came up with a plea that the decision / opinion of the State Advisory 36 Committee is not binding on the 1st respondent. During the earlier round of litigation, in the counter affidavit of the 2nd respondent, there was mention about the meeting of the 1st respondent with State Advisory Committee on 04.03.2015 and that was sought to be relied on. In the present counter affidavit, the 1st respondent states that the decision of the State Advisory Committee is not binding. These kinds of contradictory statements have definitely adverse affect on any democracy governed by Rule of Law. As submitted in the proceeding paragraphs, the Hon'ble Supreme Court never permitted the 1st respondent to assume the role of the 2nd respondent. For the best reasons known to the respondent from day one is bent upon to help the 2nd respondent by fixing the Cross Subsidy Surcharge that what was proposed and required by the 2nd respondent. After remand, the 1st respondent went a step further by expanding the scope of the issue and assumed the role of the 2nd respondent by drawing proposal on its own and required the 2nd respondent to submit comments, which is very much on unknown procedure. The same is sought to be relied on by the 1st respondent by taking shelter of the orders of the Supreme Court. All the above would go to show that all is not well with the 1st respondent and therefore, legal malice ground is raised and pleaded by petitioner in the present writ petition. However, as no personal malice is alleged as against any 37 members of the 1st respondent Commission, there is no need of making any of them as parties in personal capacity.
The power of the 1st respondent to determine the Cross Subsidy Surcharge basing on the proposals and requirement of the 2nd respondent is not in dispute, but however as the 1st respondent traversed beyond the requirement of the Cross Subsidy Surcharge by the 2nd respondent and enhanced the same from 30 paise to Rs. 1.29 paise per unit and 11 paise per unit to 93 paise per unit in respect of 33 KVA and 132 KV voltage consumers respectively, even without any additional proposals, the orders of the earlier commission was challenged. The matters are remitted and consequently the 1st respondent has to conduct de nova enquiry from the stage of submission of proposals by the 2nd respondent and the legal intricacies involved therein. Definitely, the 1st respondent should confine its enquiry as to the actual requirement of the 2nd respondent as to the Cross Subsidy Surcharge component for the year 2015-
16. Unnecessarily and unwontedly, the 1st respondent expanded the scope of order of Honourable Supreme Court in an illegal and high-handed fashion and the same is sheer outcome of act of legal malice and consequently, the impugned order is liable to be set at naught on this ground alone.
It is also stated, it is either misconceived on the part of the 1st respondent to state that the Hon'ble Supreme 38 Court has relieved the issue and then remanded; such an understanding of the 1st respondent is cryptic and whimsical. The Apex Court simply remitted the matter to the 1st respondent for fresh consideration, which means the 1st respondent has to confine the scope of enquiry to the proposal submitted by the 2nd respondent on 07.02.2015, the meeting held between the 1s respondent and the State Advisory Committee on 04.03.2015 and the order passed by the earlier commission dated 27.03.2015, but not to traverse even by an inch thereafter. The way in which the 1st respondent is assuming and presuming the power which are not vested in the 1st respondent and conferring the an extra-ordinary jurisdiction on it is an act perversity.
It is stated, though an Appeal lies as against the order impugned, in view of the extra-ordinary circumstances like breach of mandatory statutory provisions, the principles of natural justice and violation of Fundamental Rights guaranteed to the petitioner are involved, petitioner is constrained to approach this Court by way of filing the writ petition. The 1st respondent failed to furnish a copy of the proposals of the 2nd respondent submitted on 07.02.2015 and copies of the minutes of meeting of the 1st respondent held with the State Advisory Committee, despite specific request made by the petitioner Apart from that, by the time the hearing of the matter was 39 closed on 28.02.2024, no remarks were submitted on behalf of the 2nd respondent nor any counter affidavit was filed or even a single submission was made by anybody representing the 2nd respondent. That is the reason why petitioner's counsel filed Memo dated 27.04.2024 in the Office of the 1st respondent by duly bringing to their notice as to the above and requested to furnish a copy of the counter affidavit filed, if any, on behalf of the 2nd respondent, but, there is no response from the Office of the 1st Respondent till date. The said fact is neither denied nor controverted in the counter affidavit.
5. Sri D.V. Nagarjuna Babu, learned Senior Counsel appearing on behalf of Sri Chandra Shekhar Rao, learned counsel for petitioner submits that this Court has ample power to entertain this Writ Petition under Article 226 of the Constitution despite availability of alternative remedy to a party to lis in case the said party seeks enforcement of its Fundamental Rights, where the action challenged is contrary to the Principles of Natural Justice, without any jurisdiction, etcetera. In this connection, learned Senior Counsel relied on the judgments of the Hon'ble Supreme Court in M.P. Agro Industries Development Corporation Limited v. Jahan 40 Khan 5 and U.P. Power Transmission Corporation Limited v. C.G. Power and Industrial Solutions Limited 6.
It is submitted, the 1st respondent is devoid of any power and authority to formulate proposals on its own and determine the Cross Subsidy Surcharge to be levied by the 2nd respondent inasmuch as none of the provisions of the Act nor the Regulations made thereunder do empower the 1st respondent to resort to such kind of arbitrary exercise if power.
Under the third Proviso of Section 42(2) of the 2003 Act, the 1st respondent is obligated to specify the progressive reduction of the Cross Subsidy Surcharge. The 1st respondent cannot take shelter under the orders of the Apex Court to deviate from the mandatory procedure as envisaged under the Act and Rules and in fact the Apex Court never permitted the 1st respondent to traverse beyond the scope of the Act and Regulations while passing an order under Article 141 of the Constitution of India.
According to learned Senior Counsel, the scope of the enquiry, after remand, has to be confined to the aspect whether Cross Subsidy Surcharge sought to be levied by the 2nd respondent on the actual or not. Though there was no additional proposals submitted by the 2nd respondent, the (2007) 10 SCC 88 5 6 (2021) 6 SCC 15 41 previous Commission fixed higher Cross Subsidy Surcharge than the assessed and sought by the 2nd respondent. The proposals submitted by the 2nd respondent were approved by the State Advisory Committee in its meeting on 04.03.2015. In that view of the matter, the previous Commission ought to have restricted the levy of Cross Subsidy Surcharge as per the proposals submitted by the 2nd respondent inasmuch as Cross Subsidy Surcharge is compensation to which distribution licensees are entitled and assessed basing on the quantum of cross subsidy extended by the distribution companies on certain categories of consumers. Therefore, the said levy shall be on actuals only, but cannot be based on hypothetical. Justifying his submissions, reliance is placed on Sesa Sterlite Limited v.
Orissa Electricity Regulatory Commission 7.
The impugned action of the 1st respondent traversed beyond the scope and ambit of the provisions of the Act and Regulations. Any act to be done in particular manner, the act must be done in that manner alone, but not otherwise. The judgment in State of Kerala v. Kerala Rare Earth and Minerals Limited 8 was relied on in this regard.
Another argument put forward by learned Senior Counsel is that the 1st respondent is bound to act within the (2014) 8 SCC 444 7 8 2016(6) SCC 323.
42four corners of the 2003 Act as laid down by the Hon'ble Supreme Court in A.P. Electricity Regulatory Commission v. R.V.K. Energy Private Limited 9.
The impugned order is tainted with legal malice since while passing the same, the 1st respondent traversed beyond the scope and ambit of the 2003 Act and Regulations made thereunder. Further, the impugned order is not passed in furtherance of public interest, inasmuch as up-keeping the public interest does not mean to favour the 2nd respondent at the cost of the open access consumers like the petitioner, contends learned Senior Counsel. He takes cue from the judgment in A.P. Southern Power Distribution Company Limited and another vs. Induja National Power Corporation Limited 10 and Kalabharathi Advertising Vs Hemanth Vimalnath Narichania 11.
6. On the other hand, learned Advocate General and Sri P. Prasad representing the 1st respondent TGERC and Sri N. Sreedhar Reddy, learned Standing Counsel for TGSPDCL primarily object the Writ Petition on the ground of maintainability when an efficacious alternative remedy under Section 111 of the 2003 Act is available. In this connection, he relied on the judgment of the Hon'ble Supreme Court in PTC 9 (2008) 17 SCC 769 10 (2022) 5 SCC 484 11 (2010) 9 SCC 437 43 India Ltd. v. CERC 12. Apart from this, the learned Standing counsel argued that the Court under Article 32 does not have the power to revise the tariff charges or determine them. In support of this contention, he relied on the judgment of the Hon'ble Supreme Court in Association of Industrial Electricity Users v. State of A.P. 13 . He further argued that the State Regulatory Commission has the power to fix the tariff and is not bound under the conditions (Kerala State Electricity Board v. Jhabua Power Ltd. 14).
7. Having considered the respective submissions and perused the record, it may be noted that the impugned order dated 19.04.2024 passed by the 1st respondent-State Electricity Regulatory Commission in O.P.No.76 of 2015, determining the Cross Subsidy Surcharge (CSS) for Financial Year 2015-16 at Rs.1.32 per unit (33 KV) and Rs.0.94 per Unit (132 KV), despite the 2nd respondent's proposal of Rs.0.30 and Rs.0.11 per Unit, respectively; is challenged on the ground of jurisdiction, contending that the Commission has no jurisdiction to formulate its own proposal, the Commission failed to follow due process, acted contrary to the orders of remand of the Hon'ble Supreme Court and also violated the principles of natural justice. The said contention is controverted by Respondents 1 to 12 (2010) 4 SCC 603 13 (2002) 3 SCC 711 14 2024 SCC Online SC 2819 44 4 contending that they complied with the orders of the Hon'ble Supreme Court, in that the Authorities issued draft proposals, held public hearings, and that petitioner has an alternative remedy before the Appellate Tribunal for Electricity under Section 111 of the Electricity Act, 2003.
8. It is relevant to note, at this juncture, that under Section 62 of the Act, the Commission alone may determine tariff, including CSS and Section 111 provides an Appeal to Appellate Tribunal against such orders. The Hon'ble Supreme Court in PTC India Ltd.'s case (supra) held that tariff fixation is a quasi-legislative/technical function vested in specialized regulatory bodies and that Courts should discourage bypassing of statutory remedies through Writ Petitions. Likewise, in Transmission Corporation of A.P. v. Sai RPP 15, the Court emphasized that judicial review of tariff decisions is limited and the Courts would not interfere unless the impugned action of the Commission is arbitrary, illegal or contrary to the Act.
9. Though in Mafatlal Industries Ltd. v. Union of India 16, Whirlpool Corporation v. Registrar of Trade Marks, Industrial Consumers' Association v. KSERC, it was held that there is no bar to entertain a Writ Petition under Article 226 despite existence of an alternative remedy, it may be noted that nature of grievance espoused plays a pivotal role in 15 (2011) 11 SCC 34 16 AIR Online 1996 SC 1268 45 exercising writ jurisdiction despite availability of alternative remedy.
10. At this juncture, it is relevant to note that in Jaipur Vidyut Vitran Nigam Limited vs. MB Power (Madhya Pradesh) Limited 17, the Hon'ble Supreme Court had categorically held as follows:
" 128. We find that the High Court was not justified in entertaining the petition. The Constitution Bench of this Court in PTC [PTC India Ltd v. CERC, (2010) 4 SCC 603: 2010 INSC 146] has held that 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. As held by the Constitution Bench of this Court, the State Electricity Commission and the learned APTEL have ample powers to adjudicate in the matters with regard to electricity. No only that, these Tribunals are tribunals consisting of experts having vast experience in the field of electricity. As such, we find that the High Court erred in directly entertaining the writ petition when Respondent 1 i.e., the writ petitioner before the High Court had an adequate alternate remedy of approaching the State Electricity Commission."
11. The Regulatory Commission, under Section 61 of the Act has power to frame terms and conditions for tariff 17 (2024) 8 SCC 513 46 determination; and under Section 62, has the power to determine tariff on an Application made by a generating company or a licensee. Further, the remand Order dated 07.11.2023 of the Hon'ble Supreme Court was concerned with the justifiability or otherwise of the CSS rates fixed at Rs.1.29 / Rs.0.93 given the DISCOMs' proposal of Rs.0.30 / Rs.0.11. In view of the nature of grievance espoused by the petitioner with regard to the alleged jurisdictional overreach stating that the 1st respondent-Commission cannot determine tariffs without there being proposals from the generating company/DISCOM, the writ petition is per se maintainable.
12. Having said so, it is to be noted that in the matters of this nature, pertaining to electricity tariffs, and Cross Subsidy Surcharge levied by the electricity authorities/regulatory bodies for wheeling power using the distribution lines to the consumers, the Hon'ble Supreme Court in the very same judgments in Jaipur Vidyut Vitran Nigam Limited (supra) and PTC India Ltd (supra) further held that the Tribunals consisting of experts have vast experience in the field of electricity and the High Court erred in directly entertaining the Writ Petition when respondent no.1 i.e. writ petitioner therein before the High Court had an adequate alternate remedy of approaching the State Electricity Commission. 47
13. In light of the law laid down by the Hon'ble Supreme Court in the above two judgments, this Court is not inclined to entertain the Writ Petition, bypassing the primary statutory remedy before the Appellate Tribunal.
14. Accordingly, the writ petition is dismissed. No costs.
15. Consequently, the interim order which was extended from time to time stands dissolved automatically.
-------- -----------------------------
NAGESH BHEEMAPAKA, J 31st July 2025 ksld