Power Grid Corporation Of India Limited vs. Madhya Pradesh Power Transmission Company Limited

2025 INSC 697
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 6847 OF 2025
(Arising from SLP (C) No. 7605 of 2021)




POWER GRID CORPORATION OF INDIA LIMITED ...APPELLANT(S)

Versus

MADHYA PRADESH POWER TRANSMISSION
COMPANY LIMITED & ORS. ...RESPONDENT(S)



WITH

CIVIL APPEAL NO. 6848 OF 2025
(Arising from SLP (C) No. 7607 of 2021)



J U D G M E N T




Signature Not Verified
Digitally signed by
VISHAL ANAND
Date: 2025.05.15
13:25:19 IST
Reason:



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





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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


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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
th
approved the WRSS-XIV in its 37 Standing Committee Meeting on Power
System Planning of Western Region held on 05.09.2014 and WRSS-XVI in the
th
38 Standing Committee Meeting for the Western Region on 17.07.2015.
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


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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:


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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


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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 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.


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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
th th
the 37 and 38 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.


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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 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


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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 to its


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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,


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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 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


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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


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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 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


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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
inter-state transmission, determination of transmission charges and the sharing
thereof. The orders dated 21.01.2020 and 27.01.2020 respectively passed by


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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


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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.
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.


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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


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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.
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


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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
th
approved in the 38 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.


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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:
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


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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:

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32. Section 62 reads thus:

(b) transmission of electricity;
(c) wheeling of electricity;


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(d) retail sale of electricity:

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33. Section 64 reads thus:

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34. Section 79 reads thus:

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35. Section 111 reads thus:

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36. Section 178 reads thus:

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ii. Relationship between Sections 79 and 178 of the Act, 2003 respectively
37. 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. Section 79 of the Act, 2003 enumerates the functions of the
CERC which includes the dual functions of regulation and adjudication.
Section 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.


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38. The aforesaid two provisions indicate that the CERC functions as both,
decision-making and regulation-making authority under Sections 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 under Section 79 are administrative or
adjudicatory whereas those under Section 178 are legislative.
39. This Court in PTC (supra) has succinctly explained that the powers under
Section 79 of the Act, 2003 are supposed to be exercised in conformity with the
statutory regulations under Section 178 wherever such regulations are
applicable. However, there is no bar on the exercise of powers under Section
79 in a situation where a regulation under Section 178 has not been enacted in
respect of a particular subject matter. The relevant portion of the judgment
reads thus:
“ 53. Applying the abovementioned tests to the scheme of the
2003 Act, we find that under the Act, the Central Commission
is a decision-making as well as regulation-making authority,
simultaneously. Section 79 delineates the functions of the
Central Commission broadly into two categories —
mandatory functions and advisory functions. Tariff
regulation, licensing (including inter-State trading
licensing), adjudication upon disputes involving generating
companies or transmission licensees fall under the head


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“mandatory functions” whereas advising the Central
Government on formulation of National Electricity Policy
and tariff policy would fall under the head “advisory
functions”. In this sense, the Central Commission is the
decision-making authority. Such decision-making under
Section 79(1) is not dependent upon making of regulations
under Section 178 by the Central Commission. Therefore,
functions of the Central Commission enumerated in Section
79 are separate and distinct from functions of the Central
Commission under Section 178. The former are
administrative/adjudicatory functions whereas the latter are
legislative.
54. As stated above, the 2003 Act has been enacted in
furtherance of the policy envisaged under the Electricity
Regulatory Commissions Act, 1998 as it mandates
establishment of an independent and transparent Regulatory
Commission entrusted with wide-ranging responsibilities
and objectives inter alia including protection of the
consumers of electricity. Accordingly, the Central
Commission is set up under Section 76(1) to exercise the
powers conferred on, and in discharge of the functions
assigned to, it under the Act. On reading Sections 76(1) and
79(1) one finds that the Central Commission is empowered to
take measures/steps in discharge of the functions enumerated
in Section 79(1) like to regulate the tariff of generating
companies, to regulate the inter-State transmission of
electricity, to determine tariff for inter-State transmission of
electricity, to issue licences, to adjudicate upon disputes, to
levy fees, to specify the Grid Code, to fix the trading margin
in inter-State trading of electricity, if considered necessary,
etc. These measures, which the Central Commission is
empowered to take, have got to be in conformity with the
regulations under Section 178, wherever such regulations


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are applicable. Measures under Section 79(1), therefore,
have got to be in conformity with the regulations under
Section 178.
55. To regulate is an exercise which is different from making
of the regulations. However, making of a regulation under
Section 178 is not a precondition to the Central Commission
taking any steps/measures under Section 79(1). As stated, if
there is a regulation, then the measure under Section 79(1)
has to be in conformity with such regulation under Section
178. This principle flows from various judgments of this
Court which we have discussed hereinafter. For example,
under Section 79(1)(g) the Central Commission is required
to levy fees for the purpose of the 2003 Act. An order
imposing regulatory fees could be passed even in the absence
of a regulation under Section 178. If the levy is unreasonable,
it could be the subject-matter of challenge before the
appellate authority under Section 111 as the levy is imposed
by an order/decision-making process. Making of a regulation
under Section 178 is not a precondition to passing of an order
levying a regulatory fee under Section 79(1)(g). However, if
there is a regulation under Section 178 in that regard then
the order levying fees under Section 79(1)(g) has to be in
consonance with such regulation.
56. Similarly, while exercising the power to frame the terms
and conditions for determination of tariff under Section 178,
the Commission has to be guided by the factors specified in
Section 61. It is open to the Central Commission to specify
terms and conditions for determination of tariff even in the
absence of the regulations under Section 178. However, if a
regulation is made under Section 178, then, in that event,
framing of terms and conditions for determination of tariff


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under Section 61 has to be in consonance with the regulations
under Section 178.”
(Emphasis supplied)
40. What is discernible from the aforesaid exposition of law is that there is a
dichotomy between the power to make a regulation under Section 178 and the
power to regulate or adjudicate on the various areas enumerated under Section
79(1). A regulation under Section 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 under Section 79. Therefore, making of a
regulation under Section 178 has the effect of interfering with and overriding
existing contractual relationships between the regulated entities. On the other
hand, the orders under Section 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.
41. This Court in PTC (supra) also held that though the validity of a delegated
legislation under Section 178 can be tested by way of judicial review of the
courts and not by way of an appeal under Section 111, yet a dispute as regards
the interpretation of a regulation enacted under Section 178 is entertainable
before the APTEL by way of an appeal.


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42. In Energy Watchdog v. CERC , reported in (2017) 14 SCC 80 , this Court has
further held that Section 79(1) is the repository of the regulatory powers of the
CERC and such powers must be exercised in consonance with the guidelines
or regulations under Section 178. However, if there are no such guidelines or
regulations in place, it cannot be said that the hands of the CERC are tied when
it encounters a regulatory lacuna. The relevant portion of the judgment reads
thus:
“ 20. It is important to note that the regulatory powers of the
Central Commission, so far as tariff is concerned, are
specifically mentioned in Section 79(1). This regulatory
power is a general one, and it is very difficult to state that
when the Commission adopts tariff under Section 63, it
functions dehors its general regulatory power under Section
79(1)(b). For one thing, such regulation takes place under
the Central Government's guidelines. For another, in a
situation where there are no guidelines or in a situation
which is not covered by the guidelines, can it be said that the
Commission's power to “regulate” tariff is completely done
away with? According to us, this is not a correct way of
reading the aforesaid statutory provisions. The first rule of
statutory interpretation is that the statute must be read as a
whole. As a concomitant of that rule, it is also clear that all
the discordant notes struck by the various sections must be
harmonised. Considering the fact that the non obstante
clause advisedly restricts itself to Section 62, we see no good
reason to put Section 79 out of the way altogether. The reason
why Section 62 alone has been put out of the way is that
determination of tariff can take place in one of two ways —


SLP (C) No. 7605 of 2021 Page 36 of 56


either under Section 62, where the Commission itself
determines the tariff in accordance with the provisions of the
Act (after laying down the terms and conditions for
determination of tariff mentioned in Section 61) or under
Section 63 where the Commission adopts tariff that is already
determined by a transparent process of bidding. In either
case, the general regulatory power of the Commission under
Section 79(1)(b) is the source of the power to regulate, which
includes the power to determine or adopt tariff. In fact,
Sections 62 and 63 deal with “determination” of tariff, which
is part of “regulating” tariff. Whereas “determining” tariff
for inter-State transmission of electricity is dealt with by
Section 79(1)(d), Section 79(1)(b) is a wider source of power
to “regulate” tariff. It is clear that in a situation where the
guidelines issued by the Central Government under Section
63 cover the situation, the Central Commission is bound by
those guidelines and must exercise its regulatory functions,
albeit under Section 79(1)(b), only in accordance with those
guidelines. As has been stated above, it is only in a situation
where there are no guidelines framed at all or where the
guidelines do not deal with a given situation that the
Commission's general regulatory powers under Section
79(1)(b) can then be used.”
(Emphasis supplied)
43. In the case on hand, 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. 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


SLP (C) No. 7605 of 2021 Page 37 of 56


attributable. In our considered view, the said argument does not hold any water.
This Court’s dictum in PTC (supra) and Energy Watchdog (supra)
respectively settles the law in this regard and the absence of a regulation under
Section 178 does not preclude the CERC from exercising its powers under
Section 79(1) to make specific regulations or pass orders between the parties
before it.
iii. Regulatory and adjudicatory functions of the CERC under Section 79
44. The CERC vide its orders dated 21.01.2020 and 27.01.2020 respectively
determined and approved the transmission tariff for the assets commissioned
by the appellant at the Indore substation under Section 79 wherein the specific
prayer for condonation of delay in commissioning of the said assets was taken
by the appellant in terms of the Regulation 4(3)(ii) of 2014 Tariff Regulations.
“ 4. Date of Commercial Operation:
The date of commercial operation of a generating station or
unit or block thereof or a transmission system or element
thereof shall be determined as under:
[…]
(3) Date of commercial operation in relation to a
transmission system shall mean the date declared by the
transmission licensee from 0000 hour of which an element of
the transmission system is in regular service after successful
trial operation for transmitting electricity and
communication signal from sending end to receiving end:


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Provided that:
(i) where the transmission line or substation is dedicated for
evacuation of power from a particular generating station,
the generating company and transmission licensee shall
endeavour to commission the generating station and the
transmission system simultaneously as far as practicable
and shall ensure the same through appropriate
Implementation Agreement in accordance with
Regulation 12(2) of these Regulations :
(ii) in case a transmission system or an element thereof is
prevented from regular service for reasons not
attributable to the transmission licensee or its supplier or
its contractors but is on account of the delay in
commissioning of the concerned generating station or in
commissioning of the upstream or downstream
transmission system, the transmission licensee shall
approach the Commission through an appropriate
application for approval of the date of commercial
operation of such transmission system or an element
thereof. […]”
(Emphasis supplied)
45. The appellant in its petition before the CERC had submitted that the delay was
due to the delay in commissioning of the associated transmission lines which
were in scope of the respondent no. 1 herein. It is in consequence to this prayer
that the CERC, though did not condone the delay, yet granted the liberty to the
appellant to claim compensation from the respondent no. 1.


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46. It is the submission of the respondent no. 1 that the CERC does not possess any
regulatory or legislative power while adjudicating a petition and it functions as
a purely quasi-judicial body, therefore, it does not have the jurisdiction to
impose a charge on the respondent no. 1. In our considered view, the said
argument must fail for the reason that Section 79 of the Act, 2003 envisages
dual function of regulation and adjudication to be performed by the CERC. The
expressions “ to regulate ”, “ to determine ” and “ to adjudicate ” are used for
different purposes in the list of matters enumerated under Section 79(1) and
cannot be incorporated within the umbrella term of “adjudication”.
47. The exposition of law in PTC (supra) clarifies the scheme of regulatory powers
and functions under the Act, 2003. It was held therein that Section 178 that
deals with making of regulations by way of subordinate legislation by the
CERC, is wider than Section 79(1) which enumerates specified areas where the
CERC exercises regulatory functions to be discharged by orders or decisions.
Therefore, unlike the regulations enacted under Section 178 that have a general
application, the CERC, under Section 79, has both regulatory and adjudicatory
functions which it exercises in respect of specific issues arising between
specific parties. The relevant portion of the judgment reads thus:


SLP (C) No. 7605 of 2021 Page 40 of 56


“ 92. (i) In the hierarchy of regulatory powers and functions
under the 2003 Act, Section 178, which deals with making of
regulations by the Central Commission, under the authority
of subordinate legislation, is wider than Section 79(1) of the
2003 Act, which enumerates the regulatory functions of the
Central Commission, in specified areas, to be discharged by
orders (decisions).”
(Emphasis supplied)
48. The regulatory powers provided to the CERC under Section 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 in our mind that the CERC is enabled to exercise its regulatory powers
by way of orders under Section 79 and the purview of Section 79 is not limited
to only adjudicatory orders but includes within its scope administrative
functions as well.
iv. Grant of compensation for delay on the part of a party is a regulatory
function
49. The respondent no. 1 would submit that the CERC exhibits the trappings of an
adjudicatory authority when it determines tariff and therefore, was required to
confine itself to the reliefs as prayed for by the appellant before the CERC. By


SLP (C) No. 7605 of 2021 Page 41 of 56


providing the appellant with the liberty to claim compensation from the
respondent no. 1, CERC could be said to have granted a relief that was not
sought for and the proper opportunity to defend against such claims was not
afforded to respondent no. 1. In order to address this submission, we must first
look into the nature of the power exercised by the CERC while determining
tariff under Section 79(1).
50. This Court in PTC (supra) has held that the determination of tariff under
Section 79(1) is an adjudicatory function of the CERC for the following
reasons:
(i) First , the actual determination/fixation of tariff is done by the appropriate
commission between the parties before it under Section 62 of the Act,
2003. Although Section 61 is the enabling provision for framing of
regulations while keeping in mind the generic propositions provided
thereunder, yet the determination of tariff in respect of a specific
generation unit, asset, transmission line, etc, is done by virtue of the power
emanating from Section 62. Therefore, the determination of tariff is
specific to an individual case and is not of general application under the
Act, 2003. This is in consonance with the test laid down in Sitaram Sugar
Co. Ltd. v. Union of India , reported in (1990) 3 SCC 223 wherein it was


SLP (C) No. 7605 of 2021 Page 42 of 56


held that one of the factors to determine if an order was issued in exercise
of an adjudicatory function, is to ascertain whether it was specific to an
individual or of general application.
(ii) Secondly, even though determination of tariff like price fixation is a
legislative act, yet such determination has been made appealable to the
APTEL under Section 111. The terms of the Act, 2003, therefore, clearly
indicate that determination of tariff is an adjudicatory function. The
relevant observations of this Court in PTC (supra) are reproduced below:
“ 26. The term “tariff” is not defined in the 2003 Act. The
term “tariff” includes within its ambit not only the
fixation of rates but also the rules and regulations
relating to it. If one reads Section 61 with Section 62 of
the 2003 Act, it becomes clear that the appropriate
Commission shall determine the actual tariff in
accordance with the provisions of the Act, including the
terms and conditions which may be specified by the
appropriate Commission under Section 61 of the said
Act. Under the 2003 Act, if one reads Section 62 with
Section 64, it becomes clear that although tariff fixation
like price fixation is legislative in character, the same
under the Act is made appealable vide Section 111. These
provisions, namely, Sections 61, 62 and 64 indicate the
dual nature of functions performed by the Regulatory
Commissions viz. decision-making and specifying terms
and conditions for tariff determination.
49. On the above analysis of various sections of the 2003
Act, we find that the decision-making and regulation-


SLP (C) No. 7605 of 2021 Page 43 of 56


making functions are both assigned to CERC. Law comes
into existence not only through legislation but also by
regulation and litigation. Laws from all three sources are
binding. According to Professor Wade, “between
legislative and administrative functions we have
regulatory functions”. A statutory instrument, such as a
rule or regulation, emanates from the exercise of
delegated legislative power which is a part of
administrative process resembling enactment of law by
the legislature whereas a quasi-judicial order comes
from adjudication which is also a part of administrative
process resembling a judicial decision by a court of law.
(See Shri Sitaram Sugar Co. Ltd. v. Union of
India [(1990) 3 SCC 223].)
50. Applying the above test, price fixation exercise is
really legislative in character, unless by the terms of a
particular statute it is made quasi-judicial as in the case
of tariff fixation under Section 62 made appealable under
Section 111 of the 2003 Act, though Section 61 is an
enabling provision for the framing of regulations by
CERC. If one takes “tariff” as a subject-matter, one finds
that under Part VII of the 2003 Act actual
determination/fixation of tariff is done by the appropriate
Commission under Section 62 whereas Section 61 is the
enabling provision for framing of regulations containing
generic propositions in accordance with which the
appropriate Commission has to fix the tariff. This basic
scheme equally applies to the subject-matter “trading
margin” in a different statutory context as will be
demonstrated by discussion hereinbelow. ”
(Emphasis supplied)


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51. While we are in complete agreement with the observations in PTC (supra), we
are of the opinion that the bench therein had no occasion to consider the issue
of other kinds of reliefs that may be given by the CERC under Section 79(1)
read with Section 61 of the Act, 2003.
52. The question that falls for our consideration is 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. To answer this question, we may refer to
this Court’s decision in Airports Economic Regulatory Authority of India v.
Delhi International Airport Ltd. , reported in 2024 SCC OnLine SC 2923
(“ AERA ”) wherein one of us, J.B. Pardiwala, J., was a part of the bench. We
may refer to the following observations in AERA (supra) with profit:
(i) First, it was observed that while the distinction between ‘general’ or
‘specific’ as laid down in Sitaram Sugar (supra) is a crucial test
consistently applied by this Court for identifying adjudicatory functions,
it cannot be the sole litmus test for distinguishing between regulatory and
adjudicatory functions, especially where the statute in question does not
draw a clear distinction between the adjudication and regulatory functions.


SLP (C) No. 7605 of 2021 Page 45 of 56


A function, however specific, cannot be considered de hors the context in
which it is being exercised.
(ii) Secondly , an examination of the broad factors that are required to be
considered while exercising a function is important to ascertain the nature
of such function. The relevant portion of the judgment reads thus:
57. It may be argued by relying on the judgment
in PTC (supra) that the 2011 Guidelines issued in
exercise of the power under Section 15 is a regulatory
function while the determination of tariff under Section
13(1)(a) is adjudicatory by relying on the distinction
between ‘general’ and ‘specific’ as highlighted above.
In PTC (supra), this Court drew a distinction between
Section 61 of the Electricity Act which grants the
Appropriate Commission the power to issue specific
terms and conditions for determination of tariff and
Section 62 which grants the power to determine tariff.
The crucial test that has been consistently applied by this
Court in drawing the distinction is to determine if the
function is discharged in the capacity of a regulator or an
adjudicator. Now, it may be possible that certain statutes
create a clear distinction between the regulatory and
adjudicatory roles with respect to the same function.
When such a distinction is created, the Authority does not
put on the hat of a regulator while undertaking the
adjudicatory function. On the other hand, certain other
statutes may require the Authority to ‘determine’
something in its capacity as a regulator. In such cases, a
clear distinction between the adjudication and regulatory
functions cannot be drawn.


SLP (C) No. 7605 of 2021 Page 46 of 56



---xxx---

59. The respondents have relied on two clauses of Section
13 to argue that tariff determination is an adjudicatory
function. The first is the proviso to Section 13(1)(a) which
provides that different tariff structures may be
determined for different airports. This, it is argued, is a
specific/individualistic component which is an indicator
of the adjudicatory function. It is true that this Court
in Sitaram Sugar (supra) held that one of the factors to
assess if a function is adjudicatory is by determining if it
has a specific or a general application. However, the
observations cannot be interpreted to mean that it is an
overarching consideration in the determination of
whether the function is adjudicatory. Neither can it be
interpreted to mean that the factor must be considered de
hors the context. The consideration of the factors while
exercising the function is equally and if not more
important as a factor. As the judgment in Sitaram
Sugar (supra) notes, “judicial decisions are made
according to law while administrative decisions emanate
from administrative policy.” As held above, the factors to
be considered by AERA in terms of Section 13(1)(a) are
purely ‘policy’ factors. Further, the function of AERA to
determine tariff must be read in the context of the role of
the Authority as a ‘regulator’ as has been highlighted
above. Modern constitutional governance requires that
legislation is not general but context specific. Over-
emphasising the distinction between general and specific
provisions to determine if a function is regulatory or
adjudicatory would be to completely ignore the
jurisprudential developments governing both the
regulatory domain and Article 14.


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(Emphasis supplied)
53. 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 for us to undertake a harmonious reading of
Sections 61 and 79 respectively to determine whether the CERC granted the
liberty to claim compensation in exercise of its regulatory or adjudicatory
function.
54. Section 61 of the Act, 2003 lays down the guidelines that the CERC must
adhere to while specifying the terms and conditions for determination of tariff,
which inter alia includes that: (i) the generation, transmission, distribution and
supply of electricity are to be conducted on commercial principles; and (ii) the
consumers' interest is to be safeguarded while also recovering the cost of
electricity in a reasonable manner.
55. This Court in Power Grid Corpn. of India Ltd. v. Punjab State Power Corpn.
Ltd. , reported in (2016) 4 SCC 797 (“ Barh-Balia ”) has held that beneficiaries
cannot be made liable to pay for the delay in any transmission element, which


SLP (C) No. 7605 of 2021 Page 48 of 56


in turn prevents the entire transmission system form being operationalized. This
is in consonance with the principle of safeguarding consumers’ interest. We
affirm that in a situation where transmission charges accrue before the assets
are operationalized due to a non-condonable delay on part of one of the utilities
in charge of putting the transmission element into use, the cost of transmission
cannot be put on the beneficiaries or consumers through the Point of
Connection (POC) mechanism. The relevant portion of the Barh-Balia
judgment is reproduced below:
“ 10. […] In our opinion, Regulation 3(12) of the 2009
Regulations cannot be interpreted against the spirit of the
definition of “transmission lines” given in the statute. It is
evident from the record that it is not a disputed fact that
switchgear at Barh end of Barh-Balia line for protection and
metering were to be installed by NTPC and the same was not
done by it when transmission line was completed by the
appellant. As such the appellant might have suffered due to
delay on the part of NTPC in completing the transmission
lines for some period. But beneficiaries, including
Respondent 1, cannot be made liable to pay for this delay
w.e.f. 1-7-2010 as the energy supply line had not started on
the said date.

12. Since we are in agreement with the Tribunal that in the
present case, Respondent 1 and the beneficiaries could not
have been made liable to pay the tariff before transmission
line was operational, we find no infirmity in the impugned
order. Therefore, the appeals are liable to be dismissed.


SLP (C) No. 7605 of 2021 Page 49 of 56


Accordingly, both the appeals are dismissed without
prejudice to the right of the appellant, if any, available to it
under law, against NTPC. There shall be no order as to
costs. ”
(Emphasis supplied)
56. In the case on hand, there is no contractual clause between the parties for
establishing the risks of delay in commissioning of a transmission asset. There
is also no uniform settled position as regards the liability of transmission
charges payable before a particular transmission element is put in operation, in
the form of regulations under Section 178. These circumstances, considered
together with the prohibition on imposing liability of delayed payments on
beneficiaries, leave a regulatory gap. This lacuna was recognized by APTEL in
Nuclear Power Corporation (supra) wherein the correctness of the CERC’s
order was questioned. The CERC, therein, had imposed the liability of
transmission charges on the defaulting party on account of a transmission
element not having been put to use by it, in the absence of a contractual
arrangement between the parties. It was held that in the absence of any specific
provisions dealing with the situation in the 2014 Tariff Regulations or any other
concurrent regulations under Section 178, the CERC has prescribed a principle
that the party to which the delay is attributable would be responsible for


SLP (C) No. 7605 of 2021 Page 50 of 56


payment of the transmission charges for the period of delay not condoned. The
relevant portion of the order is reproduced below:
“ 10.2 […] Similarly, in the facts of the instant Appeal, there
is no inter se contractual arrangement between the
Respondent No. 2 and the defaulting party, i.e. the Appellant.
However, similar to the factual situation in the case of the
Patran Judgment, the Respondent No. 2 had entered into the
TSA dated 24.07.2013 with the various LTTCs, who were the
beneficiaries of the Project being established by it.
10.3 We further observe that these type of major issues ought
to have been covered under Regulations by the Central
Commission to plug the gaps, which would avoid litigations.
The importance of the same was considered by the Central
Commission at one point of time in its order dated 5.8.2015
and directed its staff for appropriate amendments in the
Tariff Regulations, 2014. Till date no such modifications
have been carried out by it in the Regulations. It is however,
observed that there are many regulatory/judicial orders of
the Central Commission to deal with the situations like in the
present case.

---xxx---

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


SLP (C) No. 7605 of 2021 Page 51 of 56


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 to its
earlier orders and not establishing the linkage with the
present case explicitly. This Tribunal would like to clarify the
same. ”
(Emphasis supplied)
57. The respondent no. 1 has averred that the CERC cannot conflate its powers of
regulation with its adjudicatory functions and a regulation cannot be brought
into force by way of a judicial order. In the specific case of Nuclear Power
Corporation (supra), we are inclined to agree with the submission of the
respondent no. 1 to the extent that a regulation cannot be done through the
process of adjudication. However, 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’.
58. We are of the view that even though the orders under Section 79 may not always
be limpid as regards the matters where CERC is exercising its regulatory
functions yet this cannot be the reason to conclude that the CERC passes all
orders in its capacity as an adjudicator. The nomenclature “ judicial order(s) ”
as used in Nuclear Power Corporation (supra) does not change the nature of a


SLP (C) No. 7605 of 2021 Page 52 of 56


specific order that the CERC gives in its capacity as a regulator and the courts
must understand the true import of an order to determine the nature thereof.
59. 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 paragraph 20 of Energy
Watchdog (supra), 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 under
Section 79(1).
60. The aforesaid leaves no manner of doubt in our mind 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.


SLP (C) No. 7605 of 2021 Page 53 of 56


61. Since 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, we are of the view that there was no requirement for a
specific prayer in this regard. As a natural corollary, there was also no occasion
for the respondent no. 1 to be afforded an opportunity to be heard at that stage.
In our considered view, any dispute pertaining to the levy of transmission
charges incurred before the concerned transmission assets were put to use,
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.
62. As regards the contention of the respondent no. 1 that the validity of a
regulation cannot be looked into by the statutory authorities under the Act,
2003, we are of the view that the said submission was made without considering
the general regulatory power under Section 79(1). While we are in agreement
with the submission of the respondent no. 1 that the vires of a regulation under
Section 178 cannot be challenged before an authority that is the creation of the
parent statute, the same cannot be said so for a specific regulation effected
under Section 79(1).


SLP (C) No. 7605 of 2021 Page 54 of 56


63. It is apposite to mention that the sources of power for enactment of a regulation
under Section 178 and regulatory order under Section 79(1) are different. The
former emanates from the power of delegated legislation whereas the latter is
an ad hoc power which is limited to the specific parties and situation in context
of which the order is given. Since the regulatory powers under Section 79(1)
are of an ad hoc nature and are not of general application, the orders thereunder
are made appealable under Section 111.
64. In view of the aforesaid exposition of law, we find that this Court’s
observations in Whirlpool (supra) 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.
G. CONCLUSION

65. For all the foregoing reasons, we have reached the conclusion that the High
Court committed an egregious error in passing the impugned judgment. We are
left with no other option but to set aside the impugned judgment and order dated
25.02.2021 passed by the High Court and dismiss both the writ petitions. In the
result, the appeals succeed and are hereby allowed.


SLP (C) No. 7605 of 2021 Page 55 of 56


66. Before we close this judgment, we must clarify something important with a
view to obviate the possibility of any confusion. The matter before us pertained
to the maintainability of the writ petitions filed by the respondent no. 1 on the
grounds that CERC had no jurisdiction to grant liberty to the appellant herein
to claim compensation. As already discussed by us in the foregoing paragraphs,
the CERC is empowered to order for imposition of transmission charges on the
party to whom delay is attributable. We, 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. We
are 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 under Section 111 of the Act, 2003.
67. Pending application(s), if any, are disposed of.
68. We direct the Registry to circulate a copy of this judgment to all High Courts.

………………………………J.
(J. B. Pardiwala)


………………………………J.
(R. Mahadevan)
New Delhi.
th
15 May, 2025.


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