Dismissal of Reliance's Challenge Against 'Discriminatory' MERC Regulation by SC

Team SoOLEGAL 22 Jan 2019 3:30pm

Dismissal of Reliance's Challenge Against 'Discriminatory' MERC Regulation by SC

A challenge to the validity of the regulations made by the MERC could lie before the HC. Therefore, the imposition of costs for having adopted the remedy under Article 226 was not justified.”

Supreme Court stated that the Bombay High Court judgment dismissed Reliance Infrastructure challenge against regulation 44.2(d) of the Maharashtra Electricity Regulatory Commission (Multi Year Tariff) Regulations.

The two judge’s bench comprising Justice DY Chandrachud and Justice Hemant Gupta disapproved the view of the High Court that the writ petition was not retainable. The cost of Rs One Lakh imposed on Reliance Infrastructure was set aside. Therefore, the bench stated that the challenge to the authenticity of the regulations framed by the MERC could only lie before the HC.

The Reliance Infra moved to the HC challenging the 'discrimination' against its Thermal Power Station at Dahanu, which asserted that the Station Heat Rate prescribed for its thermal power station at Dahanu has been subjected to a more stringent norm than other comparable units.

The bench agreed with Senior Advocate P Chidambaram who on the behalf of Reliance, contended that the HC was not justified in coming to the conclusion that in view of the pendency of the appeal before Appellate Tribunal for Electricity (APTEL), recourse to the jurisdiction under Article 226 constituted a cruelty of process.

As a referral, in the judgment of PTC India Limited v Central Electricity Regulatory Commission it was stated that while the Tribunal may decide upon a dispute involving the interpretation of a regulation, for which an appeal under Section 111 would be maintainable, no appeal can lie before the Tribunal on the validity of a regulation.

Afterwards the bench said: “Though the above principles emerge in the framework of regulations made under Section 178 by the CERC, the logic of the judgment broaden to the regulations 18 made under Section 181 by the State Electricity Regulatory Commissions. In view of the legal position settled by the Constitution Bench, we are of the clear view that the High Court was not justified in disparaging the appellant for taking recourse to a constitutional remedy under Article 226.”

MERC regulation and the bench observed: "MERC pursued the statutory procedures laid down for the determination of tariffs. The national tariff policy, suggestions of stakeholders and the assessment was brought out by the CPRI. Eventually, the present case does not fall in the pattern of the manifest unreasonableness or arbitrariness to warrant the interference of the apex court. It would be more formulaic to accept because DTPS was placed at par in the instantly previous period (2006- 07) and the period instantly succeeding (2016-20), that this must necessarily be extrapolated to the intervening period governed by the MYT Regulations 2011. Basically, on an evaluation of all the guiding principles, it was chosen a particular line of logic or rationale, the apex court ought not to interfere."

Tagged: sc   hc   reliance   section 111   APTEL   Chidambaram   Hemant  
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