Summary
The Supreme Court agreed with APTEL that a State Government policy direction under Section 108 of the Electricity Act, 2003 only guides and cannot bind or displace the State Commission's adjudicatory function, and that KSERC could not review its refusal to approve power supply agreements solely on the strength of such a direction; it nevertheless restored the distribution licensee's original appeal before APTEL, which had been withdrawn with liberty.
Issues
- Whether a policy direction issued by the State Government under Section 108 of the Electricity Act, 2003 binds the State Electricity Regulatory Commission in exercising its adjudicatory functions.
- Whether a subsequent State Government direction under Section 108 is a sufficient ground for the Commission to review its earlier order under Section 94 of the Act read with Order XLVII Rule 1 CPC.
- What relief should follow given APTEL's earlier order permitting withdrawal of the appellant's appeal with liberty to pursue the appellate remedy later.
Provisions considered
- Section 108, Electricity Act, 2003The State Commission is to be 'guided by' policy directions in matters of public interest. Read as not binding the Commission and as unable to impinge on its quasi-judicial discretion, in contrast with the mandatory wording of Section 11. (¶¶ 10, 16, 17, 18)
- Section 11, Electricity Act, 2003Relied on for contrast: it requires generating companies to operate in accordance with Government directions in extraordinary circumstances, using mandatory language absent from Section 108. (¶¶ 17, 18)
- Section 94(f), Electricity Act, 2003Gives the State Commission the review powers of a civil court under the CPC; KSERC exceeded this jurisdiction by reviewing its order without identifying any error in it. (¶¶ 12, 13, 19)
- Order XLVII Rule 1, Code of Civil Procedure, 1908Review lies only on limited grounds and cannot be an appeal in disguise; the Court or tribunal must find an error in its earlier order. Reliance solely on a later Government direction did not meet this threshold. (¶¶ 12, 14, 19)
- Sections 63 and 86(1)(b), Electricity Act, 2003The tenders were floated under Section 63; APTEL's view that the Commission regulates procurement price under Section 86(1)(b) and adopts a Section 63 tariff only where bidding is transparent and follows the guidelines was set out in the judgment under appeal. (¶¶ 2, 14)
Held
- A State Government issuing a policy direction under Section 108 cannot impinge on the adjudicatory discretion vested in the State Commission; the direction could not displace KSERC's adjudicatory function, following A.P. TRANSCO v. Sai Renewable Power (P) Ltd. (¶ 16)
- The words 'shall be guided by' in Section 108 mean the Commission is guided by, and not automatically bound by, State Government directions; the contrast with the mandatory language of Section 11 confirms that Section 108 does not control the Commission's quasi-judicial power. (¶¶ 17, 18)
- Under Section 94(f) read with Order XLVII Rule 1 CPC, review requires an error apparent in the earlier order and cannot be used as an appeal; KSERC pointed out no such error and relied only on the later Government direction, so APTEL rightly set aside the review order as beyond its jurisdiction. (¶¶ 19, 20)
- Because APTEL, when allowing withdrawal of the appellant's appeal against KSERC's order of 10 May 2023, had expressly preserved the appellant's appellate remedy, that appeal was restored, but issues covered by APTEL's impugned judgment cannot be re-agitated and only other grounds raised earlier may be considered. (¶¶ 11, 20, 21, 22)
Result
Appeals disposed of; APTEL's setting aside of KSERC's review order upheld; Appeal No. 518 of 2023 against KSERC's order dated 10 May 2023 restored to APTEL, to be heard only on grounds other than those covered by the impugned judgment.