Full order மின்சார கட்டணத்தை உயர்த்துவதற்கு மின்சார ஒழுங்குமுறை ஆணையத்திற்கு மதுரை உயர்நீதிமன்றம் தடை [8/24, 13:09] Sekarreporter1: Madurai Bench Madras High Court Restraining TNERC for increasing electricity tariff. Judgement pronounced by the Hon’ble Madurai Bench of Madras High Court by 4.00 PM yesterday. Grsj
[8/24, 13:09] Sekarreporter1: மின்சார கட்டணத்தை உயர்த்துவதற்கு மின்சார ஒழுங்குமுறை ஆணையத்திற்கு மதுரை உயர்நீதிமன்றம் தடை
[8/24, 13:09] Sekarreporter1: Madurai Bench Madras High Court Restraining TNERC for increasing electricity tariff.
Judgement pronounced by the Hon’ble Madurai Bench of Madras High Court by 4.00 PM yesterday
The Judgement direct
TNERC not to pass any order
until a Member-Legal is appointed to the the State Commission.
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED: 23.08.2022
CORAM
THE HON’BLE MR.JUSTICE G.R.SWAMINATHAN
WP(MD)Nos.16677, 17996 & 18323 of 2022 and
WMP(MD)Nos.12102,12104, 13130, 13133, 13138, 13344,
13348, 13349 of 2022
Tamilnadu Spinning Mills Association,
Rep.by its Chief Advisor
Dr.K.Venkatachalam
… Petitioner in WP(MD)No.16677 of 2022
Aruna Alloy Steels Pvt Ltd.,
Rep.by its Arun Arunachalam
Managing Director …Petitioner in WP(MD)No.17996 of 2022
Sripathi Paper and Boards Pvt Ltd.,
Rep.by its General Manager,
G.Srinivasan …Petitioner in WP(MD)No.18323 of 2022
v.
1.Tamil Nadu Electricity Regulatory Commission,
4th Floor, SIDCO Corporate Office Building, Thiru.Vi.Ka.Industrial Estate, Guindy, Chennai – 600 032.
2.The Government of Tamil Nadu,
Energy Department, Fort St.George, Chennai – 600 009.
Rep.by its Additional Chief Secretary
to Government … Respondents in all cases
Common Prayer: Writ Petitions filed under Article 226 of the Constitution of India, to issue a Writ of Mandamus for forbearing the first respondent Commission from holding anymore hearings and also direct the first respondent Commission to rescind its Daily Orders dated 19.07.2022 by cancelling the entire proceedings happened before the first respondent Commission in an in-camera mode on the petitions filed by the TANGEDCO/TANTRANSCO/SLDC in violation of the proposition declared by the Hon’ble Supreme Court of India in Civil Appeal No. 14697 of 2015 dated 12.04.2018 and in Contempt Petition No.429 of 2020 dated 28.08.2020, 07.12.2020 & 20.01.2021 and not to hear anymore, any other petitions filed or pending before the first respondent Commission until a Member-Legal is appointed first at the first respondent Commission by the second respondent the Government of Tamil Nadu based on the sponsoring of the candidates by the Selection Committee constituted for this purpose.
| For Petitioner in WP(MD)No.
18323 of 2022 For petitioners in WP(MD)Nos.16677 & 17996 of 2022 |
Mr.Huzefa Ahmadi, Senior Counsel for Mr.Abrar Md Abdulla.I.
Mr.Sricharan Rangarajan for Mr.M.Jerin Mathew & Mr.S.P.Parthasarathy |
| in all cases : –
For Respondent No.1 For Respondent No.2 |
Mr.P.Wilson, Senior Advocate for Mr.Richardson Wilson
Mrs.G.Rajagopalan, Senior Advocate & Mrs.Chitra Sampath, Senior Advocate assisted by Mr.K.Balasubramani, Special Government Pleader |
COMMON ORDER
The primary issue raised by the writ petitioners is whether
Tamil Nadu Electricity Regulatory Commission constituted under Section 82 of the Electricity Act, 2003 is competent to entertain and dispose of the petitions filed under Section 86(1)(a) of the Act even though it does not have a person of law as one of its Members. The other issue is whether the Commission discharges an adjudicatory function while
dealing with such petitions.
2.As per Section 82 (4) of the Act, the Commission shall consist of not more than three Members, including the Chairperson. The present Chairman Mr.M.Chandrasekar joined the Commission on
16.08.2019. Thiru.K.Venkitasamy was appointed as Member-Legal on
02.07.2019. The remaining vacancy was filled up on 12.01.2022 when Thiru.R.Jerard Kishore was appointed. He, however, resigned on 17.03.2022. The Member-Legal retired on 05.05.2022. In order to fill up the vacancy that arose on account of the resignation of Mr.Jerard Kishore, the Government of Tamil Nadu issued G.O (Ms) No.23 Energy (D1) Department dated 13.04.2022 constituting a Selection Committee under sub-section (1) of Section 85 of the Act for recommending a panel of two names for the said vacancy. The said Selection Committee submitted its report. Out of the two names recommended by the Committee, the Government selected Thiru.K.Venkatesan who joined
the Commission on 18.07.2022.
3.The Bench comprising the Chairperson Mr.M.Chandrasekar
and Thiru.Venkatesan entertained the Tariff Petitions (T.P Nos.1 & 2 of
2022, T.P No.1 of 2020 & MP.No.36 of 2022) filed by TANGEDCO/TANTRANSCO/SLDC. After hearing the brief arguments of the counsel, the petitions were admitted. They were hosted on the websites of the TANGEDCO and the Commission. 30 days time was
allowed for stakeholders for offering their comments on the proposal. Public hearings are being conducted at various places. At this stage,
these writ petitions came to be filed for the aforementioned reliefs.
4.The primary contention put forth by the learned Senior
counsel and the learned counsel appearing for the petitioners is that the directions issued by the Hon’ble Supreme Court in the decision reported in (2018) 6 SCC 21 (State of Gujarat and ors v. Utility Users’ Welfare Association) have been flagrantly breached. Their pointed contention is that without there being a person of law as a Member of the Commission, the Commission cannot hold its sittings.
They submitted that the task of tariff fixation is adjudicatory and that therefore, it is mandatory that a Member having legal expertise is on the Bench. Since at present, there is no such Member, the Bench lacks
the jurisdiction to hear the tariff petitions by the TANGEDCO/TANTRANSCO/SLDC. The learned Senior counsel and the
learned counsel apart from taking me through the relevant provisions of the Act as well as the Regulations framed thereunder relied on the precedents reported in (2010) 4 SCC 603 (PTC India Limited v. Central Electricity Regulatory Commission), (2014) 11 SCC 53 (Tamil Nadu
Generation and Distribution Corporation Limited v. PPN Power
Generation Company Private Limited), AIR 1963 SC 677 (Jaswant Sugar
Mills Ltd., Meerut vs. Lakshmichand and Ors) and (1990) 3 SCC 223 (Shri Sitaram Sugar Co.Ltd v. UOI).
5.Per contra, the learned Senior Counsel appearing for the
Government of Tamil Nadu and the Tamil Nadu Electricity Regulatory Commission strongly submitted that these writ petitions deserve to be dismissed for more than one reason. They contended that these writ petitions suffer from the vice of non-joinder of necessary parties. Without impleading TANGEDCO/TANTRANSCO/SLDC, the petitioners
herein cannot ask for rescinding the orders passed in their petitions.
They contended that the function of tariff fixation is purely regulatory and not at all adjudicatory and therefore, it is not necessary that a person with a legal background should sit on the Bench to hear the aforesaid petitions. They would submit that this issue is no longer res integra as it has already been dealt with by the Hon’ble Supreme Court in Paragraph No.90 of the judgment in State of Gujarat and ors v. Utility Users Welfare Association (2018) 6 SCC 21. They
submitted that there is no bar for the Commission to continue to function even without a Member-Legal. Merely because the order that may be passed on the tariff petitions is appealable, that would not by itself make the function of tariff fixation adjudicatory. There is no lis involved in tariff fixation. There are no respondents in the Tariff Petitions. The statutory scheme enables the stakeholders to offer their objections/suggestions. The petitioners can very well avail this opportunity and place their case during the public hearings. Without doing so, they have prematurely rushed to the Court. For the last
several years, the exercise of tariff fixation had not been undertaken. It is long overdue and any delay would have calamitous consequences on public interest. The learned Senior Counsel for the respondents pressed for dismissal of these writ petitions.
6.I carefully considered the rival contentions and went
through the materials on record. Let me first take up the issue as to whether the function of tariff fixation is adjudicatory. Even though the learned Senior Counsel and the learned counsel for the petitioners elaborately argued that the function of tariff fixation is adjudicatory, I am unable to accept the same. I need not refer to their contentions at length for the simple reason that this issue had already been decided by the Hon’ble Supreme Court in State of Gujarat and ors v. Utility Users Welfare Association (2018) 6 SCC 21. Paragraph No.90 of
the said decision is as under :
“90.We may also look to the nature and functions performed by the State Commission. Functions of the State Commission are prescribed Under Section 86 of the said Act.
The enumerated functions are determination of tariff, Regulation of electricity purchase and procurement process of distribution licencees, facilitating intra-state transmission, issuing licences to persons, promoting cogeneration and generation of electricity from renewable sources, levy fee, specify or enforce standards, fix trading margins. All these functions are regulatory in character rather than adjudicatory. The real adjudicatory function is only provided in Sub-clause (f) whereupon the Commission has the option of adjudicating the disputes between the licencees and generating companies, or to refer such disputes to arbitration. There is also an advisory role to be performed by the State Commission as specified in Sub-section (2)….”
Of course, the response from the petitioners’ side is that the what is found in the above paragraph as regards the nature of function
discharged under Section 86(1)(a) is only a obiter dicta and not a ratio decidendi. I need not resort to the inversion test to test to find out if it is really so. Such an exercise is unnecessary at present. This is because even the obiter dicta of the Supreme Court is very much binding on the
High Courts. This position of law was clearly stated in Municipal Committee, Amritsar vs. Hazara Singh (1975) 1 SCC 794 and reiterated in The Oriental Insurance Company Limited vs. Meena Variyal and Ors (2007) 5 SCC 428. The Hon’ble Division Bench of the Madras High Court also in V. Datchinamurthy and Ors. vs. Asst. Director of Inspection, (Intelligence), I.T. Dept. and Ors. [1984] 149 ITR 341 (Mad) categorically held that even an obiter dictum of the Supreme Court insofar as it expounded the law would be
binding on all the Courts under the Constitution.
7.Though this should conclude the issue, I must note that the
Hon’ble Supreme Court in Maharashtra Electricity Regulatory
Commission vs. Reliance Energy Ltd. and Ors (2007) 8 SCC
381 also took the same view when it held that the adjudicatory
function of the Commission is limited to the matter prescribed in Section 86(1)(f).
8.Of course, the learned Senior Counsel and the learned
counsel for the petitioners would want me to draw inspiration from the Constitution Bench judgment reported in (2010) 4 SCC 603. Paragraphs 49, 50 and 53 of the said decision read as under :
“49.On the above analysis of various sections of the 2003 Act, we find that the decision-making and regulation-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] .)
- 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.
- 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 “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.”
But in my view, the aforesaid propositions would not advance the case of the petitioners. There is a clear distinction between adjudicatory function and quasi-judicial function. P.Ramanatha Aiyar’s Advanced Law Lexicon defines “adjudication” as the legal process of resolving a dispute ; the process of judicially deciding a case ; the application of the law to the facts and an authoritative declaration of the result ; judicial determination of a cause after taking into consideration the material on record and after hearing the parties ; it implies a hearing by a court after notice of legal evidence on the factual issue involved. On the other hand, a determination of a question by an executive officer or other person who is not a court is “quasi-judicial” and he must follow the rules of natural justice. It describes a function that resembles the judicial function. It is something that is between a judicial and administrative function. The expression “quasi” means “not exactly”.
The distinction between “judicial” and “quasi-judicial” was set out in Cooper v. Wilson [1937] 2 K.B. 309 in the following terms :
“A true judicial decision presupposes an existing dispute between two or more parties, and then involves four requisites :- (1) The presentation (not necessarily orally) of their case by the parties to the dispute; (2) if the dispute between them is a question of fact, the ascertainment of the fact by means of evidence adduced by the parties to the dispute and often with the assistance of argument by or on behalf of the parties on the evidence; (3) if the dispute between them is a question of law, the submission of legal argument by the parties, and (4) a decision which disposes of the whole matter by a finding upon the facts in dispute and application of the law of the land to the facts so found, including where required a ruling upon any disputed question of law.
A quasi-judicial decision equally presupposes an existing dispute between two or more parties and involves (1) and (2), but does not necessarily involve (3) and never involves (4). The place of (4) is in fact taken by administrative action, the character of which is determined by the Minister’s free choice.”
This distinction was approved by the Hon’ble Supreme Court in Bharat
Bank Ltd v. Employees of Bharat Bank Ltd., (1950 LLJ 921,
930). The quotation is found verbatim in Para 108 in Utility Users’ case also. Thus the two concepts are distinct. Section 82 of the Act does not stipulate that there must be a law Member in the Commission. Only by inference from the statutory scheme, the Hon’ble Supreme Court in the aforesaid decision held that a law Member must be on the Bench of the Commission when it hears matters involving adjudication. That cannot be further stretched to mean that even in matters involving quasi-
judicial functions also, there must be a law Member.
9.In view of the above, I have to necessarily reject the
contention of the petitioners that tariff fixation is an adjudicatory function. Since it is not an adjudicatory function, there is no bar for the Bench comprising the present Chairman and the technical Member
to hear the tariff petitions.
10.But the above conclusion cannot result in dismissal of the writ petitions. The Hon’ble Supreme Court in State of Gujarat and ors v. Utility Users Welfare Association (2018) 6 SCC 21 had
categorically held as follows :
“125.2.It is mandatory that there should be a person of law as a Member of the Commission, which requires a person, who is, or has been holding a judicial office or is a person possessing professional qualifications with substantial experience in the practice of law, who has the requisite qualifications to have been appointed as a Judge of the High Court or a District Judge.“
The Hon’ble Supreme Court had been extremely strict in enforcing the aforesaid direction as seen, for instance, from the order dated 28.08.2020 in Contempt Petition (C) No.429 of 2020.
11.Article 141 of the Constitution of India states that the law
declared by the Supreme Court shall be binding on all Courts within the territory of India. Article 144 states that that all authorities, civil and judicial, shall act in aid of the Supreme Court. In other words, it is the duty of the High Court to ensure that the directions of the Hon’ble Supreme Court are complied with in letter and spirit. The Hon’ble Supreme Court expressed its anguish on more than one occasion when the law Member vacancy was not filled up at all. When it has been declared that it is mandatory that there should be a law Member in the Commission, the State Government has no justification in not filling up the same. The technical Member resigned on 17.03.2022. The law Member retired on 05.05.2022. Nothing stopped the Government from filling up both the vacancies simultaneously. It is true that a judgment should not be interpreted like a statute. But when the Hon’ble Supreme Court has made it clear that there must be a Member with legal background in the Commission, it cannot be ignored. It is for this
reason, I restrain TNERC from passing final order on the
aforementioned tariff petitions till a law Member is appointed. In other words, the present proceedings can very well go on and everything can be finalized by the Commission as now constituted except the formal declaration of the orders on the tariff petitions. The moment the appointment of the law Member is notified, the Commission is free to formally dispose of the Tariff Petitions. The restraint order of this Court
would operate till then and not a moment thereafter.
12.These writ petitions are disposed of on these terms. Since the petitioners had approached this Court without offering their suggestions or objections before the Commission, the petitioners are given a week’s time from today to place their objections/suggestions before the Commission. No costs. Connected miscellaneous petitions
are closed.
23.08.2022
Index : Yes / No Internet : Yes/ No
skm
To
1.Tamil Nadu Electricity Regulatory Commission,
4th Floor, SIDCO Corporate Office Building, Thiru.Vi.Ka.Industrial Estate, Guindy, Chennai – 600 032.
2.The Additional Chief Secretary to Government
The Government of Tamil Nadu,
Energy Department, Fort St.George, Chennai – 600 009.
G.R.SWAMINATHAN, J. skm
WP(MD)Nos.16677, 17996 &
18323 of 2022
23.08.2022
