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2010 (3) TMI 1209 - SC - Indian LawsValidity of Central Electricity Regulatory Commission (Fixation of Trading Margin) Regulations, 2006 framed in exercise of power conferred u/s 178 of the 2003 Act - Jurisdiction of Appellate Tribunal u/s 111 - Doctrine and jurisprudence of delegated legislation - Whether the Tribunal has jurisdiction to decide the question as to the validity of the Regulations framed by the Central Commission? - HELD THAT - We find that the Electricity (Amendment) Act, 2003 (No.57 of 2003) was brought into force by notification dated 27.1.2004. That, notification was issued u/s 1(2) of the Electricity (Amendment) Act, 2003 (No.57 of 2003). If one reads Section 1(2) of Electricity (Amendment) Act, 2003 (No.57 of 2003) with Notification dated 27.1.2004 issued u/s 1(2) of the amended Act, 2003, it becomes clear that on coming into force of the Electricity (Amendment) Act, 2003 (No.57 of 2003) all provisions amended by it also came into force. Hence, there was no requirement for a further notification u/s 1(3), consequently, Section 121 in its amended form came into force with effect from 27.1.2004. Summary of Our Findings - (i) In the hierarchy of regulatory powers and functions under the 2003 Act, Section 178, which deals with making of regulations by the Central Commission, under the authority of subordinate legislation, is wider than Section 79(1) of the 2003 Act, which enumerates the regulatory functions of the Central Commission, in specified areas, to be discharged by Orders (decisions). (ii) A regulation u/s 178, as a part of regulatory framework, intervenes and even overrides the existing contracts between the regulated entities inasmuch as it casts a statutory obligation on the regulated entities to align their existing and future contracts with the said regulations. (iii) A regulation u/s 178 is made under the authority of delegated legislation and consequently its validity can be tested only in judicial review proceedings before the courts and not by way of appeal before the Appellate Tribunal for Electricity u/s 111 of the said Act. (iv) Section 121 of the 2003 Act does not confer power of judicial review on the Appellate Tribunal. The words orders , instructions or directions in Section 121 do not confer power of judicial review in the Appellate Tribunal for Electricity. In this judgment, we do not wish to analyse the English authorities as we find from those authorities that in certain cases in England the power of judicial review is expressly conferred on the Tribunals constituted under the Act. In the present 2003 Act, the power of judicial review of the validity of the Regulations made u/s 178 is not conferred on the Appellate Tribunal for Electricity. (v) If a dispute arises in adjudication on interpretation of a regulation made u/s 178, an appeal would certainly lie before the Appellate Tribunal u/s 111, however, no appeal to the Appellate Tribunal shall lie on the validity of a regulation made u/s 178. (vi) Applying the principle of generality versus enumeration , it would be open to the Central Commission to make a regulation on any residuary item u/s 178(1) r/w Section 178(2)(ze). Accordingly, we hold that the CERC was empowered to cap the trading margin under the authority of delegated legislation u/s 178 vide the impugned notification dated 23.1.2006. (vii) Section 121, as amended by Electricity (Amendment) Act 57 of 2003, came into force with effect from 27.1.2004. Consequently, there is no merit in the contention advanced that the said section is not yet been brought into force. Conclusion - The Appellate Tribunal for Electricity has no jurisdiction to decide the validity of the Regulations framed by the Central Electricity Regulatory Commission u/s 178 of the Electricity Act, 2003. The validity of the Regulations may, however, be challenged by seeking judicial review under Article 226 of the Constitution of India. Our summary of findings and answer to the reference are with reference to the provisions of the Electricity Act, 2003. They shall not be construed as a general principle of law to be applied to Appellate Tribunals vis- -vis Regulatory Commissions under other enactments. In particular, we make it clear that the decision may not be taken as expression of any view in regard to the powers of Securities Appellate Tribunal vis- -vis Securities and Exchange Board of India under the Securities and Exchange Board of India Act, 1992 or with reference to the Telecom Disputes Settlements and Appellate Tribunal vis- -vis Telecom Regulatory Authority of India under the Telecom Regulatory Authority of India Act, 1997. Thus, we dismiss these appeals as having no merit with no order as to costs.
Issues Involved:
1. Jurisdiction of the Appellate Tribunal under Section 111 of the Electricity Act, 2003. 2. Judicial review power of the Appellate Tribunal under Section 121 of the Electricity Act, 2003. 3. Authority of the Central Electricity Regulatory Commission (CERC) to cap trading margins through regulations under Section 178 of the Electricity Act, 2003. Issue-wise Detailed Analysis: 1. Jurisdiction of the Appellate Tribunal under Section 111 of the Electricity Act, 2003 The Supreme Court examined whether the Appellate Tribunal for Electricity has jurisdiction under Section 111 to examine the validity of the Central Electricity Regulatory Commission (Fixation of Trading Margin) Regulations, 2006. The Court concluded that the Appellate Tribunal does not have jurisdiction to decide the validity of regulations framed by the CERC under Section 178. The Court emphasized that regulations under Section 178 are part of delegated legislation, and their validity can only be tested in judicial review proceedings before the courts, not by way of appeal before the Appellate Tribunal. 2. Judicial Review Power of the Appellate Tribunal under Section 121 of the Electricity Act, 2003 The Court analyzed whether Section 121 of the Electricity Act, 2003, confers the power of judicial review on the Appellate Tribunal. The Court held that Section 121 does not confer such power. The terms "orders," "instructions," or "directions" in Section 121 do not include the power of judicial review. The Court clarified that Section 121 empowers the Tribunal to issue orders, instructions, or directions to the Commission to perform its statutory functions but does not extend to reviewing the validity of regulations. 3. Authority of the Central Electricity Regulatory Commission (CERC) to Cap Trading Margins through Regulations under Section 178 of the Electricity Act, 2003 The Court examined whether the capping of trading margins could be done by the CERC through regulations under Section 178. The Court held that the CERC has the authority to cap trading margins through regulations under Section 178. The Court emphasized that regulations made under Section 178 are part of the regulatory framework and have a general application, overriding existing contracts between regulated entities. The Court noted that such regulations are in the nature of subordinate legislation and can even override existing contracts, including Power Purchase Agreements. Conclusion: The Supreme Court concluded that the Appellate Tribunal for Electricity does not have jurisdiction to decide the validity of regulations framed by the CERC under Section 178 of the Electricity Act, 2003. The validity of such regulations can only be challenged through judicial review under Article 226 of the Constitution of India. The Court also clarified that Section 121 of the Electricity Act, 2003, does not confer the power of judicial review on the Appellate Tribunal. The CERC was found to be empowered to cap trading margins through regulations under Section 178 of the Electricity Act, 2003.
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