The Supreme Court of India, comprising a bench of Justice Pamidighantam Sri Narasimha and Justice Alok Aradhe, has refused to interfere with an interim order of the Jharkhand High Court that permitted respondent ‘Energy Watchdog’ to participate in proceedings initiated by the Jharkhand Bijli Vitran Nigam Ltd. (JBVNL) against captive power suppliers. The apex court disposed of the Special Leave Petition, holding that the High Court’s adoption of an interim measure in the peculiar facts of the case cannot be termed perverse under Article 136 of the Constitution, while expressly clarifying that it has not opined on the merits or the final scope of third-party interventions under the Electricity Act, 2003.
Background of the Dispute
Petitioner No. 1, M/s. Amalgam Steels and Power Ltd., entered into a Captive Power Plant (CPP) Agreement on May 17, 2012, with JBVNL for the supply of surplus power from its captive generation plant to Petitioner No. 2. The agreement was subsequently renewed in 2017 and 2023.
On April 15, 2024, respondent no. 1, Energy Watchdog, filed a complaint with the Additional Chief Secretary, Department of Energy, State of Jharkhand. The complaint alleged that Petitioner No. 2 was consuming power generated by Petitioner No. 1’s Captive Power Generation Unit without possessing valid “captive user” status under Rule 3 of the Electricity Rules, 2005. Energy Watchdog sought action against Petitioner No. 1 under Section 135 of the Electricity Act, 2003. Following this, the Government of Jharkhand and JBVNL launched a fact-finding inquiry on June 28, 2024.
Energy Watchdog subsequently approached the High Court of Jharkhand at Ranchi in a Public Interest Litigation (W.P. (PIL) No. 3347 of 2025). The PIL sought a declaration that the supply of electricity between the petitioners without Open Access Approval and statutory captive status was illegal and unauthorised, along with directions for a detailed investigation and recovery of financial losses caused to the state utility.
On August 26, 2025, JBVNL issued show cause notices to the petitioners alleging breach of the CPP Agreement, supply of power without JBVNL’s consent, and infringement of JBVNL’s right of first refusal. On the same day, JBVNL issued demand notices seeking cross subsidy surcharges amounting to Rs. 176.74 crores from Petitioner No. 1 and Rs. 108.17 crores from Petitioner No. 2.
Petitioner No. 1 moved an interlocutory application before the High Court raising a preliminary objection to the maintainability of the PIL. By an interim order dated February 5, 2026, the High Court held that JBVNL’s affidavit prima facie showed substance in the allegations, rendering the petition maintainable. Noting that while Energy Watchdog was not privy to the contract between JBVNL and Petitioner No. 1, the High Court directed that the interest of justice would be better served if Energy Watchdog was also heard alongside the petitioners in the pending show cause proceedings before JBVNL. Against this interim direction, the petitioners approached the Supreme Court.
Arguments Before the Supreme Court
Appearing for the petitioners, Senior Counsel Dr. A.M. Singhvi argued that Energy Watchdog is a stranger to the contract who suffered no legal injury and cannot be classified as an “aggrieved person.” He contended that the organisation lacked locus standi to maintain the writ petition. Dr. Singhvi asserted that the Electricity Act, 2003 is an exhaustive and self-contained statutory framework governing regulation, adjudication, and compliance, and that the High Court could not have judicially expanded this framework by introducing an unlegislated tripartite procedure permitting a third party to participate in JBVNL’s proceedings. He added that Energy Watchdog could seek legal remedies, if any, once the proceedings concluded, citing Ayaaubkhan Noorkhan Pathan v. State of Maharashtra and Others, D.N. Jeevaraj v. Chief Secretary, Government of Karnataka and Others, and Kunga Nima Lepcha & Ors. v. State of Sikkim & Ors.
Conversely, counsel for respondent no. 1, Mr. Prashant Bhushan, submitted that the petitioners had defaulted on paying the cross subsidy surcharge and that inquiries were initiated only after six complaints from Energy Watchdog. He pointed out that the demands were issued under the Jharkhand Open Access Rules, maintaining that the interim order warranted no interference.
The Court’s Analysis and Observations
Examining the regulatory framework, the bench referred to the Constitution Bench ruling in PTC India Ltd. v. Central Electricity Regulatory Commission, which established that the Electricity Act is an exhaustive code for all matters concerning electricity. The court also cited Southern Power Distribution Company of Andhra Pradesh Ltd. & Anr. v. Green Infra Wind Solutions Ltd. & Ors., reiterating that following the unbundling of electricity and the establishment of Central and State Regulatory Commissions, no unallocated regulatory residue exists outside regulatory bodies.
The bench reviewed the statutory provisions of the Act, observing:
- Section 79 delineates the functions of the Central Commission, with Section 79(3) mandating transparency in the exercise of its powers.
- Section 86 sets out the functions of the State Commission, wherein Section 86(1)(f) mandates adjudication of disputes between licensees and generating companies, and Section 86(3) mandates transparency.
- Section 94(3) empowers the Appropriate Commission to authorise any person to represent consumer interests before it.
The bench emphasized that it was necessary for the High Court to consider the statutory regulatory regime before passing its final order.
Turning to the impugned interim direction, the court noted: “Having considered the matter in detail, we are of the opinion that facts presented before the High Court by respondent no. 1 Energy Watchdog seem to have given an impression to the High Court that all is not well in the inquiry which is to be conducted by JBVNL against respondent nos. 1 and 2. The High Court has in detail referred to the circumstances in which action was not taken against the petitioners despite a long-standing complaint by respondent nos. 1 and 2 at the right time.”
Addressing the locus and contractual privity, the bench observed: “We are conscious of the fact that proceedings have been initiated by JBVNL against the petitioners for violation of the CPP Agreement, and respondent no. 1 is not privy to the aforesaid agreement. However, in the peculiar facts and circumstances of the case, High Court came to the conclusion that it is necessary to bring full facts to the notice of JBVNL through a party other than the petitioners so that an appropriate decision could be reached. The High Court has found it compelling to adopt an interim measure in the peculiar facts of the case which in our opinion cannot be termed as perverse, warranting any interference at this stage under Article 136 of the Constitution of India.”
Regarding the nature of JBVNL’s upcoming inquiry, the court clarified: “We are sure that JBVNL will take its own decision on the basis of material to be placed before Energy Watchdog after due deliberation and caution and shall not convert the direction for oral hearing to that of a Court or Tribunal but a means to collect information to enable it to initiate necessary action.”
Decision of the Court
Declining to interfere with the High Court’s interim order, the Supreme Court made it clear that it expressed no view on the merits of the dispute. The bench directed that at the time of final hearing, the High Court will consider all aspects, including the scope and ambit of third-party intervention under the Electricity Act. With these observations, the Special Leave Petition and pending applications were disposed of.
Case Title: M/s. Amalgam Steels and Power Ltd. and Anr. Versus Energy Watchdog and Ors.
Case No.: Special Leave Petition (C) No. 10538/2026
Bench: Justice Pamidighantam Sri Narasimha and Justice Alok Aradhe
Date: September 3, 2026
