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2015 (5) TMI 1189 - SC - Indian LawsPurchase minimum energy from renewable sources - validity of the Rajasthan Electricity Regulatory Commission (Renewable Energy Obligation) Regulations 2007 and Rajasthan Electricity Regulatory Commission (Renewable Energy Certificate and Renewable Purchase Obligation Compliance Framework) Regulations 2010. Whether the impugned Regulations imposing RE Obligation upon Captive Power Plants framed by the RERC in exercise of power Under Section 86(1)(e) of the Act of 2003 which provides for promotion co-generation of electricity from renewal source of energy are ultra vires the provisions of the Act or repugnant to Article 14 and 19(1)(g) of the Constitution? HELD THAT - The purchase of nominal quantum of energy from renewable resources cannot adversely affect the cost effectiveness of the Captive Power Plant. Moreover the object being reduction of pollution by promoting renewable source of energy larger public interest must prevail over the interest of the industry herein which will in any case pass on the extra burden if any will be as part of the cost of its products and therefore the same does not burden the Appellants - The provision of RE surcharge in the Statute is only meant for ensuring compliance with the requirement of consumption of the specified quantum of energy from renewable sources and the same is to be used in case of shortfall in compliance of RE obligation. The said provision does not amount to imposition of a pecuniary liability. Article 51A(g) of the Constitution of India cast a fundamental duty on the citizen to protect and improve the natural environment. Considering the global warming mandate of Articles 21 and 51A(g) of the Constitution provisions for the Act of 2003 the National Electricity Policy of 2005 and the Tariff Policy of 2006 is in the larger public interest Regulations have been framed by RERC imposing obligation upon captive power plants and open access consumers to purchase electricity from renewable sources. The RE obligation imposed upon captive power plants and open consumers through impugned Regulation cannot in any manner be said to be restrictive or violative of the fundamental rights conferred on the Appellants Under Articles 14 and 19(1)(g) of the Constitution of India. The High Court has rightly upheld the validity of the impugned Regulation and we do not find any reason to interfere with the impugned judgment - Appeal dismissed.
Issues Involved:
1. Validity of the Rajasthan Electricity Regulatory Commission (Renewable Energy Obligation) Regulations, 2007 and 2010. 2. Jurisdiction of RERC to impose Renewable Energy Obligation (RE obligation) on Captive Power Plants. 3. Violation of fundamental rights under Articles 14 and 19(1)(g) of the Constitution of India. 4. Imposition of surcharge for non-compliance with RE obligation and its legality under Article 265 of the Constitution of India. Detailed Analysis: 1. Validity of the RERC Regulations, 2007 and 2010: The Supreme Court upheld the validity of the Rajasthan Electricity Regulatory Commission (Renewable Energy Obligation) Regulations, 2007 and the Rajasthan Electricity Regulatory Commission (Renewable Energy Certificate and Renewable Purchase Obligation Compliance Framework) Regulations, 2010. The court noted that these regulations were framed under Sections 61, 66, 86(1)(e), and 181 of the Electricity Act, 2003, and were aimed at promoting the use of renewable energy sources. The regulations imposed an obligation on Captive Gencos and other obligated entities to purchase a minimum amount of energy from renewable sources and pay a surcharge in case of shortfall. 2. Jurisdiction of RERC to Impose RE Obligation on Captive Power Plants: The appellants argued that the RERC did not have jurisdiction under Section 86(1)(e) read with Section 181 of the Electricity Act, 2003, to impose RE obligations on captive power plants. They contended that the Act of 2003 liberalized the establishment of captive power plants, keeping them out of any licensing and regulatory regime. However, the Supreme Court found that the RERC had the authority to frame the impugned regulations under the powers conferred by the Act. The court emphasized that the regulations were consistent with the National Electricity Policy, 2005, and the Tariff Policy, 2006, and aimed at promoting environmentally benign policies and the use of green energy. 3. Violation of Fundamental Rights Under Articles 14 and 19(1)(g): The appellants claimed that the regulations violated their fundamental rights under Articles 14 and 19(1)(g) of the Constitution. They argued that the regulations imposed unreasonable restrictions on their right to conduct business. The Supreme Court rejected this argument, stating that the regulations imposed reasonable restrictions under Article 19(6) to achieve the Directive Principles of State Policy and to protect the environment. The court cited the case of Society For Unaided Pvt. Schools of Rajasthan v. U.O.I. and Anr., emphasizing that fundamental rights can be abridged to ensure public peace, health, and morality. 4. Imposition of Surcharge for Non-Compliance and its Legality: The appellants contended that the imposition of surcharge for non-compliance with the RE obligation was without authority of law and violated Article 265 of the Constitution, which states that no tax shall be levied or collected except by authority of law. The Supreme Court held that the surcharge was not a tax but a compensatory charge aimed at achieving the objectives of the Act of 2003. The court noted that the surcharge was levied under Section 86(1)(g) of the Act, which empowers the State Commission to levy fees for the purposes of the Act. The court also referred to Sections 142 and 147 of the Act, which provide statutory backing for penal consequences in case of contravention of the regulations. Conclusion: The Supreme Court dismissed the appeals, upholding the validity of the RERC regulations and confirming that the regulations were consistent with the Electricity Act, 2003, the National Electricity Policy, 2005, and the Tariff Policy, 2006. The court found that the regulations did not violate the fundamental rights of the appellants and that the imposition of surcharge for non-compliance was lawful and aimed at promoting the use of renewable energy sources in the larger public interest.
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