Holding

The High Court lacks authority under Section 16 to grant an interim stay of the CERC’s tariff norms, and such a stay is inappropriate given the advisory nature of the Commission’s order.

Summary

The Punjab State Electricity Board and other state electricity boards appealed to the Supreme Court against an interim order of the Delhi High Court that virtually stayed the Central Electricity Regulatory Commission's (CERC) norms for hydro‑generation and inter‑state transmission tariffs. The appeal was filed under Section 16 of the Electricity Regulatory Commissions Act, 1998, which allows aggrieved persons to appeal CERC orders to the High Court. The Supreme Court held that Section 16 merely confers a right to appeal and does not empower the High Court to grant interim relief, especially where the order under challenge is of an administrative or advisory nature. While appellate jurisdiction is generally wide, the power to stay an order depends on the nature of the original order, and a routine stay would render CERC's report nugatory. Consequently, the Court set aside the High Court's interim order and allowed the appeals, with no order as to costs.

Issues considered

Whether Section 16 of the Electricity Regulatory Commissions Act, 1998 empowers the High Court to grant an interim stay of a CERC order while hearing an appeal.
Whether an interim stay is appropriate when the order under challenge is of an administrative or advisory nature.
Whether granting a stay would defeat the purpose of the CERC's tariff‑norms and render its report ineffective.

Legislation cited

Electricity Regulatory Commissions Act, 1998s. 13(e), s. 16, s. 38(1)

Subjects

electricity tariffappellate jurisdictioninterim staySection 16Central Electricity Regulatory Commissionadministrative orderregulatory law

Judgment

PUNJAB STATE ELECTRIClTY BOARD A
v.
NATIONAL THERMAL POWER CORPORATION LTD. AND ORS.

OCTOBER iO, 2001

[M.B. SHAH AND R.P. SETHI, JJ.] B

Electricity Regulatory Commissions Act, 1998 : Section 16.

. Electricity Tariff-Hydro-generation and inter-State transmission-
Fix(ltion of norms for-By Central Electricity Regulatory Commission_;.High C
Court, by its interim order, virtually stayed such fixation ofnorms-Correctness ·
of-Held: When appellate jurisdiction is conferred, the jurisdiction of appellate
authority is of the wildest amplitude-In proper cases, interim relief may be
granted-However, in the exercise of administrative or advisory jurisdiction
question of grant of interim stay may not arise-Interim stay may not be
granted in a routine way or as a matter of course-Hence, High Court's order D
set aside.

The respondent challenged before the High Court under Section 16
of the Electricity Regulatory Commissions Act, 1998 the norms for tarriff
., for hydrogeneration and inter-state transmission fixed by the Central E
Electricity Regulatory Commission constituted under the Act. The High
Court, by its interim order, had virtually stayed the impugned order•.
Hence this appeal.

On behalf of the appellant it was contended that Section 16 of the
F
Act only provided for filing of appeal but it did not empower the High ·
Court to stay the operation· of the order.

Allowing the appeal, the Court

HELD : 1.1. It is true that Section 16 of the Electricity Regulatory G
Commissions Act, 1998 provides that any person aggrieved by the decision
or order of the Central Electricity Regulatory Commission may file an
appeal to the High Court. There is no provision in the Act or the RuJes
indicating that while exercising the appellate jurisdiction, the High Court
has power to grant interim relief. [10-H; 11-A] H
7
8 SUPREME COURT REPORTS [2001] SUPP. 4 S.C.R.
.A 1.2. It is true that when appellate jurisdiction is conferred, unless
there is a specific provision to the contrary, the jurisdiction of the appellate
authority would be of widest amplitude. In proper case, such authority
may have jurisdiction to grant interim relief. However, this would depend
upon the nature of the order passed by the competent authority in the
B discharge of its function. In case of exercise of administrative or advisory
jurisdiction by the authority there may not be any. question of granting
interim stay. Even if there is power to grant interim stay, it cannot be
exercised in a routine way or as a matter of course in view of the special
nature of jurisdiction conferred upon the Commission. Hence this was not
a fit case for grant of interim relief so as to make the Commission's report
c virtually nugatory. (11-B-E]

CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 7082-7084
of 2001.

From the Judgment and Order dated 7.3.2001 of the Delhi High Court
D in C.M. No. 232/2001 in F.A.O. Nos. 13112001, 159/2000 and 88 of 2001.

Shanti Bhushan, Ashwani Kumar, Swaroop Singh,' H.M. Singh, Anil
Hooda, Rubinder Ghuman, Ranjan, M.G. Ramachandran, Vishal Gupta, Prashant
Bhushan, Sanjeev Kapoor, Narender Verma, Sanjay Pathak, Pramod Dayal,
E Ms. Ruchi, Rakesh K. Sharma, Ms. Ariupama Grover, Rana Mukherjee, Ms.
Sumita. Mukherjee, Navin Prakash, (NP), S.B. Upadhyay, Satish K: Agnihotri,
Rohit Singh, Manish Singhvi, Ashok K. Mahajan, R.K. Arora and R~j Kumar
Mehta for the appearing parties.

The Judge_ment of the Court was delivered by
F
SHAH,.J. Leave granted.

Appellant-Punjab State Electricity Board and other States Electricity
Boards have filed these appeals against the iinpugned judgment and order dated·
, G 7th March, 2001_ passed by the High Court of Delhi in Civil Miscellaneous
.) ·~,MWr2~2~0f1_20JH11nJ:if\.Q¢-T~,14~ gf)f:QW, JfAO No . 159 of 2000 and FAO No.88
nu9'f'.2'QO!:;~J ~!i b:;v ,,h:,i~~H no" l'.J'"f mt> h;1H ,>.';lhi·rn1q ~Wi,11 ,hl1 ?1wi1.~"'ll•ll'--'
llfJ :iiit n;rn 1wie~i1nm1d ·1101,:111•1'}.fi 1thi"Ihsl.>l linw~'.J 1111 )n ,.,lnl> 10
The Central Electricity Regulator¥ Commission (hereinafter referred to
i'.'.)fs1R ':1rl1 :IO ;:;;,. ..,,!J Iii tHHr.11/1 Hi t)H "'~n·.m I ,J'HJtL.t li!!"I ·Jiil of ·1u,1<rn
as."the Commission") constituted under the Electricity Regulato!")' Commi~Sions
h uo ..J i!;:lH ~. :)i<J ··~ou:..hhi".l H!I. ~n:w.sqtJI> ')tu ),!IH~!TI!li'.;J ~Ulli?( 1Jm; !>OU!;.J:.!UOI
H Act, 1998 (heremafter referred to a~ "tbe".Act"),by 1ts order dated 21.12.2.000
ii . iJc-11 ;h-\11 1 .1:1wn r•!P'-' 1 m uu;1:g 01 l'.fllOff i!:lifl
PUNJAB STATE ELECTRICITY BOARD v. N.T.P.C. [SHAH, J.] 9
has fixed the norms for tariff for hydro generation and inter-state transmissibn. A
That order was challenged by the respondent - National Thermal Power
Corporation Limited (hereinafter referred to as the "NTPC") by filing PAO
No.159 of 2000 under Section 16 of the Act before the High Court of Delhi.
The High Court by its interim order has virtually stayed the operation of the
impugned order by laying down certain conditions and by observing that. it
appears desirable that all the directions issued by the Commission shall be
B
observed to charge tariff on the basis of the pre-existing norms. It was also
observed that the NTPC shall continue to charge tariff on the basis of pre-
existing norms only so long as the arrears up to 31st March, 2001 due against
different responderits mainly Sta~e Electricity Boards are not adjusted and the
moment the arrears of NTPC stand paid, the concerned State Electricity Board c
and all concerned respondents shall be entitled to move the ~ourt for fresh·
consideration. The Court also observed that it was just an interim order and
after the group for formulating the tariff policy takes a decision; the Court shall
be informed about the decision taken by the group for formulating the tariff
· ·policy and the party shall be entitled .to be heard afresh. These interim D
directions are challenged by the Punjab State E,lectricity Board (PSEB).

At the time of hearing of these matters, learned counsel for the PSEB
submitted that the interim order passed by the High Court is, on the face of
it, illegal. He also contends that Section 16 only provides for filing of appeal
but it does not empower the High Court to stay the operation of the order which E
was passed by the Commission after cotisidefing the submission as well as
evaluaiing various norms required for fixin.g the tariff.

. In its report, the Commission has observed as under:

"l.4.1. The terms and conditions as will be notified, shall, apply to p
all utilities cove.red UQ.der Section 13(a) (b) and (c) of the ERC Act
unless specifically stated otherwise. However, it should be remembered
. that these terms and conditions shall apply wherever cost based tariff
is determined by the Commission. These terins and conditions shall
be in force for a period of 3 years effective from 1st April, 2001 and
- J
reviewable/renewable at the discretion ·of the Commission.
G

1.4.3. If this order creates any unfairness, or hardship, parties may
approach ihe <;omillission for redressal, within 60 days of issue in
accordance with the provisions for review as contained in Regulation
1, " 103 o,f.the C9nduct·of Business.Regulation.". H
10 SUPREME COURT REPORTS [2001) SUPP. 4 S.C.R.
A In para 151 the Commission has kept in view the twin objectives
contained in Section 13(e) according to which tariff shall be fair to the
consumers and facilitate mobilization of adequate resources for the power ·
sector.

In its operative order, the Commission has observed tha.t the normal tariff
B period shall be a period of five years but shall at this stage be for a period
bf three years. Finally it has observed that:

"Ensuring the" financial viability of efficient and proactive utilities,
would be a prime concern of the Commission. At. the same time,
c safeguarding the interests of the consumers is a major responsibility
of the Commission, particularly, when the market_ structure and system.
conditions do not support competition. The Commission has to play
a balancing role and it intends to discharge this responsibility
transparently, through a consultative mode. it expects that participative
decision making will lighten the burden of transiting to a more
D efficient system, for all stareholders."

It is true that under Section 38(1) of the Act, the Central Commission
has to discharge its functions by taking into consideration directions issued
by the Central Government in matters of policy involving public interest.
Nothing has been pointed out to indicate that Government has issued such
E
directions. In any case all these questions are required to be dealt with at .the
time of final hearing of the matter and at this stage, it would be difficult to
hold that prima facie, the norms prescribed by the Central Commission are
arbitrary or ex facie unjustifiable, particularly in view of Section 13(e) which
inter alia provides that its function is to aid and advise the Central Government
F in formulation of tariff policy which shall be (i) fair to the consumer; and (ii)
facilitate mobilization of adequate resources for the power sector..

Further, the. Commission has submitted its Report after considering all
relevant_ material which was placed before it and after hearing all objections
raised by the concerned parties. In view of the time frame prescribed by the \-
G
Commission, if the interim stay order continues indefinitely, the Report would
become totally nugatory. If the norms prescribed by the Commission are
impleµientecf and ·finally if the appeal is allowed or norms are modified, NTPC
could be appropriately compensated.

H Lastly, it is true that section 16 only provides UJat any person aggrieved
PUNJAB STATE ELECTRICITY BOARD v. N.T.P.C. [SH.AH, J.] 11

by the decision or order .of the Central Commission may file an appeal to the A
High Court. No further procedure is prescribed under the Act and no rules
are shown to us prescribing any procedure. Learned counsel for the parties
have also not pointed out any provision in the Act or the Rules indicating that
while exercising the appellate jurisdiction, the High Court has power to grant
such interim relief. It is true that when appellate jurisdiction is conferred unless
there is a specific provision to the contrary, the jurisdiction of the appellate
B
authority would be of widest amplitude. In proper cases, such authority may
have jurisdiction to grant interim reliefs. However, this would depend upon
the nature of the order passed by the competent authority in discharge of its
functions. In case of exercise of administrative or advisory jurisdiction by
the authority, there may· not be any question of granting interim stay. It is c
needless to point out that even if there is power to grant interim stay. it cannot
be exercised in a routine way or as a matter of course in view of the special
nature of jurisdiction conferred upon the Commission. However, considering
the fact that the appeal is pending before the High Court, in our view, the
aforesaid question is not required to be finally determined at this stage becaus~ D
the High Court itself has observed that the matter may be placed for further
hearing after the Group for formulating the Tariff Policy takes decision and
that the parties would be entitled to be heard afresh. Similar are the observations
made by the Commission in its Report.

Hence, in our view, this was not a fit case for grant of interim relief E
so as to make the Report virtually nugatory. Further, the High Court in its
impugned judgment has observed that "this is just an interim order" and after
the Group for formulating the Tariff Policy takes a decision, the High Court
should be informed about the decision taken by the Group for formulating the
tariff policy and parties would be entitled to be heard afresh. In this view F
of the matter, the impugned order passed by the High Court requires to be
set aside and the Court is requested to decide the .appeals on merits as
expeditiously as possible.

- ;
In the result, the appeals are allowed, the impugned order passed by the
High Court is set aside. There shall be no order as to costs. G

v.s.s. Appeals allowed.