In a significant ruling, the Supreme Court has held that the Central Electricity Regulatory Commission (CERC) exercises both regulatory and administrative functions under Section 79 of the Electricity Act, 2003. The Court clarified that the CERC’s powers are not confined merely to adjudication but extend to regulatory decisions, including granting compensation for delay in commissioning inter-state transmission assets.
The judgment was delivered by a bench comprising Justices J.B. Pardiwala and R. Mahadevan in the case of Power Grid Corporation of India Limited vs Madhya Pradesh Power Transmission Company Limited & Others [Civil Appeal Nos. 6847-6848 of 2025].
Background
The case arose from a dispute regarding the commissioning of assets under the Western Region System Strengthening Schemes (WRSS-XIV and WRSS-XVI). Power Grid Corporation of India Limited (PGCIL) had implemented transmission assets at the Indore substation upon the request of Madhya Pradesh Power Transmission Company Limited (MPPTCL), which was to build the downstream intra-state transmission line. MPPTCL failed to complete the line on time, causing delay in operationalizing the assets.
PGCIL approached the CERC for approval of the commercial operation date (COD) and determination of transmission charges under the 2014 Tariff Regulations. CERC approved the COD but did not condone the time-overrun. However, it permitted PGCIL to claim compensation for the delay from MPPTCL by way of liquidated damages and other construction-related expenses.
MPPTCL challenged the CERC’s orders dated 21.01.2020 and 27.01.2020 before the Madhya Pradesh High Court, which admitted the writ petition, despite the availability of an alternative remedy under Section 111 of the Electricity Act.
Supreme Court’s Analysis
The Supreme Court framed key issues, including whether CERC’s actions under Section 79 were purely adjudicatory or also regulatory, and whether the High Court was justified in entertaining a writ petition.
The Court held that CERC performs both regulatory and administrative/adjudicatory functions under Section 79:
“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’.”
Referring to the precedent set in PTC India Ltd. v. CERC [(2010) 4 SCC 603] and Energy Watchdog v. CERC [(2017) 14 SCC 80], the Court reaffirmed that the powers under Section 79 are distinct from the regulation-making powers under Section 178, but both are valid and coexistent. It also held that the grant of compensation, though specific, was within the regulatory purview of CERC:
“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.”
On Maintainability of the Writ Petition
The Court found the High Court’s decision to entertain the writ petition erroneous. It ruled that MPPTCL had access to an efficacious alternative remedy under Section 111 before the Appellate Tribunal for Electricity (APTEL), and the circumstances did not justify bypassing the statutory appellate process.
“In the absence of any challenge to the vires of statutory provisions or regulations, or a violation of natural justice, the writ petition was not maintainable.”
Decision
The Supreme Court allowed the appeals and set aside the High Court’s order, reaffirming that CERC’s decision to permit compensation fell within its regulatory authority under Section 79.
