2022 (8) TMI 1390 - HC - Indian Laws

Jurisdiction - competence of Tamil Nadu Electricity Regulatory Commission constituted under Section 82 of the Electricity Act, 2003 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 - whether the Commission discharges an adjudicatory function while dealing with such petitions? Whether the function of tariff fixation is adjudicatory? - HELD THAT - The Hon'ble Division Bench of the Madras High Court V. DATCHINAMURTHY AND OTHERS VERSUS ASSISTANT DIRECTOR OF INSPECTION, (INTELLIGENCE), INCOME-TAX DEPARTMENT, AND ANOTHER 1980 (11) TMI 3 - MADRAS HIGH COURT 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. The Hon'ble Supreme Court in Maharashtra Electricity Regulatory Commission vs. Reliance Energy Ltd. and Ors. 2007 (8) TMI 821 - SUPREME COURT 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). 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 contention of the petitioners that tariff fixation is an adjudicatory function is rejected. 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. 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 - 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. Petition disposed off.

Summary

Issues Involved:
1. Competency of Tamil Nadu Electricity Regulatory Commission (TNERC) to entertain petitions without a legal member.
2. Nature of tariff fixation - whether it is adjudicatory or regulatory.
3. Compliance with Supreme Court directions regarding the composition of TNERC.

Issue-wise Detailed Analysis:

1. Competency of TNERC to entertain petitions without a legal member:
The primary issue raised is whether TNERC, constituted under Section 82 of the Electricity Act, 2003, is competent to entertain and dispose of petitions filed under Section 86(1)(a) of the Act without having a person of law as one of its Members. The petitioners argued that without a legal member, the Commission lacks jurisdiction to hear tariff petitions, citing the Supreme Court decision in (2018) 6 SCC 21 (State of Gujarat and ors. v. Utility Users' Welfare Association). The respondents countered that the function of tariff fixation is regulatory, not adjudicatory, and thus does not require a legal member. The court rejected the petitioners' contention, stating that tariff fixation is not an adjudicatory function and the Commission can hear the petitions with its current composition.

2. Nature of tariff fixation - whether it is adjudicatory or regulatory:
The court examined whether tariff fixation is an adjudicatory function. It referred to the Supreme Court's decision in State of Gujarat and ors. v. Utility Users Welfare Association (2018) 6 SCC 21, which stated that the functions of the State Commission, including tariff determination, are regulatory rather than adjudicatory. The court also noted that adjudicatory functions are limited to matters prescribed in Section 86(1)(f) of the Act. The court distinguished between adjudicatory and quasi-judicial functions, concluding that tariff fixation is quasi-judicial and does not require a legal member.

3. Compliance with Supreme Court directions regarding the composition of TNERC:
Despite concluding that tariff fixation is not adjudicatory, the court acknowledged the Supreme Court's mandate that there must be a legal member in the Commission. The Supreme Court had emphasized the necessity of a legal member in its decision and subsequent orders. The court noted that the State Government failed to fill the legal member vacancy timely, which is mandatory. Consequently, the court restrained TNERC from passing final orders on the tariff petitions until a legal member is appointed. The court allowed the Commission to continue proceedings and finalize everything except the formal declaration of orders on the tariff petitions until the appointment of a legal member.

Conclusion:
The court disposed of the writ petitions, directing the petitioners to submit their objections/suggestions to the Commission within a week. The court emphasized the binding nature of Supreme Court directions and the necessity of having a legal member in TNERC for compliance with the law. The restraint on TNERC from passing final orders will remain until the legal member is appointed. No costs were awarded, and connected miscellaneous petitions were closed.