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TMI Blog2011 (2) TMI 1281X X X X Extracts X X X X X X X X Extracts X X X X ..... i.e., Central Electricity Regulatory Commission (CERC) claims exclusive right in the matter of dealing with the trading activities in connection with the electricity including dealing in forward contract. In order to comprehend the controversy raised in these two writ petitions, a brief synoptical view of the facts in Writ Petition No. 1197 of 2010 may be noticed : 2. Multi Commodity Exchange of India (MCX), petitioner herein and Respondent No. 2 in Writ Petition No. 1604 of 2009, is a company incorporated under the provisions of the Companies Act, 1956 and a Commodity Exchange duly recognised by the Central Government/Forward Market Commission under the provisions of the Forward Contracts (Regulation) Act, 1952 (hereinafter referred to as "FCRA"). The MCX has been formed and/or constituted for facilitating the on-line trading, clearing and settlement operations for commodity futures contracts across the country. The MCX started operations in November, 2003 with the object of establishing, operating, regulating, maintaining and managing facilities to enable the members of the exchange, their authorized agents and constituents and other participants to transact, clear and settle t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of jurisdiction over electricity and (iii) the MCX had commenced launch of trading in electricity futures contracts without any approval of CERC and mere approval FMC had no efficacy in the eyes of law. MCX has raised an objection about the maintainability of such an application on the ground that CERC has no jurisdiction to entertain such application as the FMC is a statutory regulatory authority functioning under the Forward Market Act and the same is not subjected to the jurisdiction of CERC. The Commission vide order dated 28-4-2009, disposed of the said application by giving certain directions which read thus : "(a)FMC exercises jurisdiction over the forward contracts in accordance with the provisions of the 1952 Act as they cannot be said to be inconsistent with those of the 2003 Act and the two statutes operate in independent fields. (b)Regulatory oversight to promote development of market in power is vested in this Commission as mandated under section 66 of the 2003 Act and, therefore, the orders, guidelines issued by this Commission and the regulations framed shall be binding on all concerned. (c) Power Exchanges approved by this Commission need not approach FMC for a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... challenge in these writ petitions. The said Regulations were also tendered in the Court. Thereafter the matter has not been listed on the Board. Again, CERC came up with a press release dated 20-1-2010 notifying the said regulations. The petitioners herein challenge the Regulations on the ground that the action of the first respondent being wrongful exercise of jurisdiction, arbitrary, capricious, mala fide as well as being discriminatory in nature and violative of the principles of Article 14 of the Constitution. The said Regulations also seek to deprive the petitioner from entering into forward contracts inspite of being authorised by the second respondent and notified by the Government of India as a recognized association. 10. According to MCX, so far as forward market in electricity is concerned, it is the regulatory authority under the Forward Market Act which alone is competent to deal with the same and CERC has no right to frame any regulation in this behalf. The Regulations as notified by CERC provides for forward and futures contracts relating to electricity to come under the purview of CERC, whereas prior to the notification of the Regulations, the forward and future con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of India, Shastri Bhavan, New Delhi-110 001, as party respondent Nos. 5 and 6 respectively. Leave to amend the petition is granted. Amendment to be carried out forthwith. 3. Issue notice to the added respondents returnable on 10th December, 2010 at 3.00 p.m. before this Bench. We make it clear that since the petitioners and respondents have already addressed this Court and concluded their arguments, the Court is now required to hear only the added respondents in respect of the issue involved in the matter and regarding minutes dated 16th July, 2010 and decision taken during such meeting before the Cabinet Secretariat. As the matter is pending since long, the added respondents may point out their views on the next date of hearing. 4. Mr. Janak Dwarkadas, learned senior counsel appearing for FMC, states that a subsequent letter dated 13th September, 2010 has been issued to the Cabinet Secretary pointing out that the aforesaid minutes are not properly recorded. 5. The petitioner to take steps to serve the added respondents so that matters may not be required to be adjourned on the ground that they are not served". 12. Mr. M.K. Sharma, Joint Secretary and Legal Adviser in the Depa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted as (2004) Vol. 6 SCC 437 and earlier reported as (1992) 104 CTR (SC) 31 has categorically laid down the law to the extent that dispute(s) between Department to Department of the Government or Government of India Undertakings or Enterprises etc. need to be referred or such other matters which are the bone of contention, need to be resolved by said such Committee. I say that most of the Government of India Undertakings or Government of India Enterprises are born out of various statutes enacted by the Act of Parliament. As the present aforesaid two statutes are enacted by the Parliament and the dispute(s) are between two statutory bodies established under the said two Statutes, the same disputes between the such two statutory bodies are the disputes which need to be referred to for the purpose of adjudication or/conciliation to the said Committee consisting of the Secretaries of the various Departments/Ministries and headed by the Cabinet Secretary, Union of India. (v)I say that the said two statutory bodies are within the scope of Government of India Undertaking or Government of India Enterprises as they are equally born/established out of the said two Statutes, as referred to h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the said affidavit and the same read as under : "I. V.P. Arora, working as Under Secretary in the Cabinet Secretariat, Rashtrapati Bhavan, New Delhi, aged about 57 years, do hereby state and submit on solemn affirmation as under :- 1. I say that I have perused relevant records. I say that I crave leave of this Hon'ble Court to further add, amend, alter or delete any of the contents of this affidavit. I say that I have been authorised to file this affidavit. 2. That this Hon'ble High Court had impleaded the Cabinet Secretary as Respondent No. 5 in both the petitions. 3. That on the last date of hearing, Special Counsel for Union of India - Dr. G.R. Sharma had informed this Hon'ble High Court that the Cabinet Secretary will be calling a meeting of Secretaries of respective Departments/Ministries to amicably settle the issue at large in the present writ petitions and accordingly an attempt was made on 29-12-2010 by the Cabinet Secretary through the Secretary (Co-ordination) of the Cabinet Secretariat, New Delhi and had deliberations relating to the present issues. 4. That in the said meeting held on 29-12-2010, an attempt was made to settle and reconcile the issues which was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Now the arguments stand concluded. Judgment reserved". 16. In the case of Oil & Natural Gas Commission v. Collector of Central Excise 1995 Supp (4) SCC 541 the Supreme Court held that in every case where a dispute is between government departments and/or between a Government department and a public sector undertaking, the matter should be referred to the High Power Committee established by the Government pursuant to an order of the Supreme Court dated 11th September, 1991 and that it is the duty of every court or tribunal to demand clearance from the Committee and that in the absence of clearance, the proceedings must not be proceeded with. In the case of Chief Conservator of Forests Govt. of A.P. v. Collector [2003] 3 SCC 472 of it has been held by the Supreme Court as under : "Various departments of the Government are its limbs and, therefore, they must act in coordination and not in confrontation. Filing of a writ petition by one department against the other by invoking the extraordinary jurisdiction of the High Court is not only against the propriety and polity as it smacks of indiscipline but is also contrary to the basic concept of law which requires that for suing or bei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rice risk management. The option of delivery is available only in respect of residual contracts which remain outstanding on the date of expiry of contract period, but most participants offset their contracts before the date of expiry by entering into opposite contract, thus obviating the need for any delivery. On the other hand, the Electricity Act deals with the actual physical delivery and utilization of electricity. Mr. Seervai further submits that "trading" under the Electricity Act is limited to the physical market which is clear from the definition under sub-section 71 of section 2 viz. Purchase of electricity for resale thereof. The Electricity Act provides for and facilitates physical trading in electricity between States i.e., Inter-State as well as within a given State i.e., intra-State. The FCRA deals with all future and forward contracts including electricity futures contracts. Mr. Seervai submits that FCRA has been enacted under Entry 48, List I of the Constitution whereas the Electricity Act is a statute enacted under Entry 38, List III. The FCRA creates a single statutory authority which regulates and controls all forward contracts, including futures, in all commodit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Electricity Act that allowed CERC to issue the impugned Regulations to regulate and control a market that it now purporting to do so. CERC is attempting to do so in the face of a special statute that exclusively bestows that authority on another regulatory body. It is submitted that the FCRA is a statute enacted prior in time as that of the Electricity Act. The petitioner is a recognized Association under the FCRA and is governed by FMC. Mr. Seervai submits that in the original order, CERC has acknowledged that FCRA governs forward contracts in which rights and liabilities are transferable, unless exempted by the Central Government and that the provisions of the FCRA cover certain specific areas which are not covered under any of the provisions of the Electricity Act. It is submitted that in the subsequent review order, CERC suo motu rewrote and reversed the original order dated 28-4-2009 and deleted crucial observations which expressly stated that there was no conflict between the provisions of the FCRA and the Electricity Act on the ground that these observations were not relevant or germane to the inquiry. Mr. Seervai submits that the impugned orders are without jurisdiction in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g companies. The learned counsel further submits that the 2003 Act is a Special Act and is a complete Code with respect to all matters concerning electricity, including the development of a market in power. He submits that section 66 read with section 178(2)(y) of the Act enables CERC to make regulations for the development of the market in power, including trading. This necessarily covers all aspects of the market and business/trading in power and would include both spot and forward contracts for the sale or purchase of electricity. Mr. Chinoy submits that the concept of trading necessarily covers all forms of business in electricity and includes both spot and forward contracts for sale and purchase of electricity. He submits that CERC is the Central Commission established by the Central Government under sub-section (1) of section 3 of the Electricity Regulatory Commissions Act, 1998 and functioning as such before the date of coming into force of the Act of 2003 and as such is the Central Commission for the purpose of the Act in terms of section 76 thereof. CERC exercises functions and powers as a regulator in the whole of India in regard to Electricity. Section 79 of the 2003 Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntracts. It is not a financial contract. He submits that the impugned Regulations have been made by CERC under section 66 read with section 178(2)(y) of the Act of 2003 which have been published under a public notice dated 22nd September, 2009. There is nothing unconstitutional in the regulations so as to consider the prayer of the petitioner for staying the operation of the regulations. He submits that the Regulations deal with the creation of a comprehensive market structure and enabling the transaction, execution and contracting of all types of possible products in the electricity markets. Section 66 of the Act of 2003 mandates the CERC to promote the development of a market in power. He submits that in the event of repugnancy between the regulations/prescriptions made by the FMC and CERC, the CERC's guidelines/prescriptions/regulations will prevail. He submits that the principle of contemporaneo expositio is inapplicable to the instant case as is clear from the judgments to which we shall refer later on. He submits that the Regulations have been made by the CERC in exercise of the powers vested in and functions laid down under the provisions of section 66 read with section 178( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on issued by the Central Government applying provisions of section 15 of the FCRA whereby forward contracts in electricity could be traded only through the members of Associations/Exchange which have been granted recognition by the Central Government under section 6 of the FCRA. MCX had been recognised by the Central Government vide notification dated 26-9-2003. He submits that in view of the provisions of FCRA and the notification issued by the Central Government, FMC alone has jurisdiction to regulate forward contracts in electricity. He submits that spot market and forward markets are two separate and distinct economic realms, the former is concerned with transactions involving payment and delivery within the period specified for ready delivery contracts whereas the latter is concerned with financial contracts mostly settled by payment of differences between the contract rate and the settlement rate. He submits that the futures market is included in List I of Schedule VII of the Constitution at Entry No. 48 whereas the electricity is included in List III at entry 38. Spot markets in various commodities, agricultural or mineral are governed by the relevant statutes of the Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, distribution of electricity, tariff, etc. Mr. Dwarkadas submits that since there is no concept of exchange trading in the Electricity Act, the regulations cannot provide such a structure along with fees. Mr. Dwarkadas submits that the Regulation in so far as they relate to forward contracts deserve to be struck down because (i) they seek to restrict the forward market only to inter-state which is neither feasible nor permissible because there has to be one national market in which all traders need to have access to the trading platform; (ii) they extend the scope of the CERC jurisdiction beyond the power exchanges to embrace "other exchanges" already recognised by the Government under the statutory provisions of FCRA; (iii) they encroach on the Central Government's role in deciding when forward trading is to be introduced in a particular commodity. The regulations provide for deferment of introduction of power trading to a future date to be decided by the CERC; (iv) they bring options within the ambit of CERC when they have been specifically prohibited under section 19 of FCRA and (v) the regulations lack the necessary vires because they seem to derive their authority from an u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ire subject of electricity and hence after the passing of the said Act any other Central Act which could have been dealing with the subject of electricity is denuded of its power to deal with the same. He submits that section 3 of the Electricity Act which finds mention in section 66 of the Electricity Act provides that the Central Government shall from time to time prepare the national electricity policy. The learned counsel further submits that the notification issued by the Ministry of Consumer Affairs in January, 2006 was contrary to the express provisions of the Electricity Act which Act was an Act to consolidate the laws relating to electricity. The learned Counsel further submits that on a plain reading of Article 246 of the Constitution of India, it is clear that the Constitution does not create any primacy of Acts of the Union Parliament under List-1 vis-a-vis other Acts of the Union Parliament under List-III. The said Article is only dealing with a conflict between the legislation by the Union Parliament as against the legislation by the State Legislature. The learned counsel further submits that after the enactment of the Electricity Act, the Central Government was denud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d learned counsel for the parties. Since the High Court is seized of the main case as well as interim matter, we do not find any justification to entertain the petitioner's prayer. The Special Leave petition is dismissed. We have no doubt that the High Court will take note of the urgency involved in the matter and pass appropriate order at an early date in accordance with law." 24. This Court is, therefore, now required to consider as to whether the forward contract is exclusively within the jurisdiction of FMC in view of the notification dated 9-1-2006 and whether CERC can deal with futures contract in the matter of electricity in view of the Regulations framed by it. At this stage, the decision of the Supreme Court in the case of Sarwan Singh v. Kasturi Lal [1977] 1 SCC 750 is required to be taken into consideration. The Supreme Court in para of the said judgment held as under. "When two or more laws operate in the same field and each contains a non-obstante clause stating that its provisions will override those of any other law, stimulating and incisive problems of interpretation arise. Since statutory interpretation has no conventional protocol, cases of such conflict have t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to deliver goods or failure to make payment. Instead of having one to one relationship, many buyers and sellers may develop a market for trading in advance of the delivery. In the electricity sector, long term power purchase agreements are examples of forward contracts between generators and distribution companies. The forward contracts can be traded in a secondary market. The traders, including those neither producing nor consuming the good, can participate in this market. Parties not willing to take physical delivery can also participate in this market by selling their forward contracts. Such markets where contracts are not backed by physical delivery are futures markets. On the face of it, this market consists of speculators. However, the market benefits from the presence of these speculators as they increase debt (sic) and liquidity. It is required to be stated that the future prices for electricity traded on the exchanges make the demand and supply to adjust themselves to the signals they provide and converge onto the spot market prices. In addition thereto, futures markets consist of stakeholders who are beyond the physical market stakeholders and also participate in the pric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rking for improving the organization of markets. FCRA provides emergency powers to the FMC and the Central Government to suspend trading, suspend members of Association and even to supersede the governing body of the Exchange. FCRA also provides for penalties for contravention of provisions contained in the Act. 28. The Electricity Act, 2003 came to be enacted on 26-5-2003 and the same provided for the establishment of CERC to regulate, inter alia, the price of electricity. The Electricity Act also provides for intra-state transactions in contracts relating to electricity by State Electricity Regulatory Commissions. Under the ambit of the Electricity Act, the regulatory authorities are the CERC and the State Electricity Regulatory Commissions. Pursuant to section 14(c), each of these authorities has the power to grant a license to any person to undertake trading in electricity as an electricity trader. Part V of the Electricity Act provides for both inter-state and intra-state transmission of electricity; the CERC governs inter-state transmission, while a State Regulatory Commission would govern intra-state transmission within a given time. Section 66 conceives of a developmental ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Load Despatch Centre." 31. At this stage, the authorities cited at the Bar by the learned counsel appearing for the parties may be noticed succinctly. 32. FCRA is enacted under Entry 48 of List I to the Seventh Schedule of the Constitution of India i.e., The Union List. Mr. Seervai has relied upon the judgment of the Supreme Court in the case of Waverly Jute Mills Co. Ltd. v. Raymon & Co. (India) (P.) Ltd. [1963] 3 SCR 209 to submit that FCRA has been enacted under Entry 48 is unquestionable. In this case, the Supreme Court was required to resolve a conflict between Entry 48 of List 1 and Entry 26 of List II. Entry 48 deals with stock exchanges and futures markets whereas Entry 26 deals with trade and commerce. The Supreme Court held that trade and commerce would in their ordinary and accepted sense include forward contracts, but in a case where there are two entries, one general in its character and the other specific, the former must be construed as excluding the latter. It is settled that while reading entries in legislative lists, the widest possible construction according to the ordinary meaning of the words in the entry must be put upon them. The words employed in the entr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e it nugatory." 33. The legislative entries are useful guides, valuable in ascertaining the scope and ambit of a given statute and may be used to resolve conflicts, real or perceived, between the statutes so as to give effect to both. In order to buttress the submission to the effect that the legislative entries are important guides to interpretation, Mr. Seervai has relied upon the observation of the Supreme Court in the case I.T.C. Ltd. v. Agricultural Produce Market Committee [2002] 9 SCC 232 wherein the Supreme Court has held as under : "107. The starting point in any controversy dealing with apparently conflicting legislative jurisdictions is to see whether the conflict can be fairly reconciled by reading the entries to which the legislations are referable, together and 'by interpreting and, where necessary, modifying the language of the one by that of the other'. It is only when such resolution is not possible that the courts should be called upon to decide the question of legislative competence. This principle has been stressed in a number of cases by the Privy Council, the Federal Court and more recently by this Court." In view of the above, the learned counsel for the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conflict between the statutes only due to the fact that both enactments fell under the said legislative list. In the said case the Supreme Court observed as under. "49. This means that both the statutes, viz. The Public Premises Act and the Rent Control Act, have been enacted by the same legislature, Parliament, in exercise of the legislative powers in respect of the matters enumerated in the Concurrent List. We are, therefore, unable to accept the contention of the learned Additional Solicitor General that the Public Premises Act, having been enacted by Parliament in exercise of legislative powers in respect of matters enumerated in the Union List would ipso facto override the provisions of the Rent Control Act enacted in exercise of the legislative powers in respect of matters enumerated in the concurrent list". Mr. Seervai submits that on the strength of the provisions of Article 246, the FCRA ought to prevail over the provisions of the Electricity Act. 37. Mr. Seervai then submitted that contemporaneous documents throwing light on the construction of a statute are admissible external aids to the interpretation of such a statute. In support of his submission, the learned coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Seervai submits that the two Acts operate in different fields and there is no conflict between the provisions thereof. Even if there is any conflict between the provisions of the two Acts, the FCRA having enacted under Entry 48 of List I of Schedule VII will prevail over the Electricity Act which has been enacted under Entry 38 of List IIII i.e., Concurrent List. Mr. Seervai submits that in fact even where the CERC attempted to impose disqualifications in the context of grant of trading licence, the Supreme Court found against the legality, propriety and constitutionality of the delegated legislation. In support of his contention, the learned counsel has placed reliance on the judgment of the Supreme Court in the case of Global Energy Ltd. v. Central Electricity Regulatory Commission AIR 2009 SC 3194. 39. Controverting the submissions of Mr. Seervai, Mr. Aspi Chinoy submits that the Electricity Act is a consolidating Act and repeals the Indian Electricity Act, 1910, the Electricity (Supply) Act, 1948 and the Electricity Regulatory Commissions Act, 1998. Mr. Chinoy submitted that the Electricity Act, 2003 is an exhaustive Code on all matters concerning electricity. The learned cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lied, both the Acts are to be read together." 40. Mr. Chinoy further submits that section 66 read with section 178(2)(y) of the Act of 2003, clearly enables the CERC to make Regulations for the development of the market in power (including trading). This necessarily covers all aspects of the market and business/trading in power and would include both spot and forward contracts for the sale or purchase of electricity. The concept of trading necessarily covers all forms of business in electricity and includes both spot and forward contracts for sale and purchase of electricity. Section 2(71) of the Act refers to purchase of electricity for resale thereof. This is wide enough to cover both spot and forward contracts for electricity. Mr. Chinoy has referred to the decision of the Supreme Court in the case of Waverly Jute Mills Co. Ltd.'s case (supra) and submits that the trade and commerce would in their ordinary and accepted sense includes forward contracts. He submits that the market is a place where business in the sale and purchase of goods is carried on/transacted. While relying on the judgment of the Supreme Court in the case of Chimanlal Premchand v. State of Bombay AIR 1960 SC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tled that an enactment can be attributed to more than one entry in the Lists. In view thereof, the provisions of the Act of 2003 in so far as they relate to forward contracts in electricity, could, in addition to Entry 38 of List III, also be rested on Entry 48 of List I, in so far as provisions of the Act of 2003 relate to forward contracts. Mr. Chinoy has submitted that time has not reached where electricity can be effectively dealt with in futures contract at present though in future the position may change. 42. Mr. Dwarkadas, Senior Counsel, appearing for FMC, submits that the Supreme Court in the case of Raghu Bar Dayal Jai Parkash's case (supra) scrutinised in great detail the provisions of FCRA wherein the Supreme Court quoted the Expert Committee report to which the bill on Forward Contract Regulation had been referred. The said quotation reads thus : "Forward trading involves speculation about the future, but not all forms of forward trading could be considered as either unnecessary or undesirable for the efficient functioning of anything but the most primitive economy... To the extent to which forward trading enables producers, manufacturers and traders to protect thems ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Temple Committee (1956 (2) MLJ 563), the question arose with reference to provisions as to licensing by local authorities, and for that purpose market was interpreted as meaning a place. We we must examine that the word market means in Entry 48 "Futures Markets" in List 1. The word 'futures' is thus defined in Encyclopaedia Britannica "contracts which consist of a promise to deliver specified qualities of some commodity at a specified future time. The obligation is for a single quantity in a given month... Futures are thus a form of security, analogous to a bond or promissory note". In this sense a market can have reference only to business and not to any location. In our opinion, a legislation on Forward Contracts would be a legislation on futures markets." 45. Referring to the judgment of the Supreme Court in the case of Gujarat Urja Vikas Nigam Ltd.'s. case (supra) Mr. Dwarkadas submitted that CERC has sought to contend only the third test of Mimansa System (Badha). However, before applying this test, there are two tests to be applied, as observed in the said case. The principles are as under : "1. Where two texts which are apparently conflicting are capable of being reconci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regulatory commissions. 47. In the case of Firm of Pratapchand Nopaji v. Firm of Kotrike Venkata Setty & sons [1975] 2 SCC 208, the Supreme Court while dealing with the Bombay Forward Contract Act, 1947, whose provisions were similar to the FCRA, except that under section 9 of the said Act option in goods were banned only if a notification was issued by the provisional government in the official gazette whereas under the FCRA all option in goods are banned, held that if a contract was not for actual delivery and supply to bona fide purchaser, then such contracts are tainted with unlawfulness of their object and are forbidden by the law. The learned counsel has also placed reliance on the judgment of the Supreme Court in the case of Shiv Narayan Kabra v. State of Madras [1967] 1 SCR 138 wherein the Supreme Court had noticed the expert committee's report prior to the enactment of the FCRA and then had the occasion to consider the arguments wherein a defence had been taken that the contract being not for delivery of goods and being speculative in nature was not a forward contract, was pleased to reject the said argument as according to the Supreme Court the FCRA was meant to curb the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asion into the specific areas covered by the other. For this reason, both the statutes have to be given effect by harmoniously reading together the provisions of the 1952 Act and the 2003 Act. Such a conclusion will be in consonance with the law laid down by the Hon'ble Supreme Court at para 58 of its judgment in Gujarat Urja Vikas Nigam Ltd. (supra). In view of this conclusion, approval accorded by FMC to MCZ for trading of daily electricity contracts, weekly electricity contracts and monthly electricity contracts cannot be faulted and we do not propose to interfere in the matter." Thereafter in the review order, substantial changes were made in the original order passed by CERC. 50. It is no doubt true, as argued by Mr. Chinoy and Mr. Vikas Singh, that section 174 of the Act provides for overriding effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act. In our view, in view of the specific provisions in FCRA, which is a central legislation enacted earlier in point of time, by which in a notified commodity forward contract can be undertaken only thro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the clear provisions in this behalf in the FCRA. In our view, neither of the regulatory authorities will have exclusive jurisdiction to deal with in the futures contract so far as electricity is concerned. Since statutory duty is cast upon the CERC under the Electricity Act regarding market development, the Commission, in our view, is entitled to issue appropriate guidelines in connection with regulating the development of market in electricity. It is also the duty of the CERC under the Electricity Act to see that the transactions on the exchanges are conducted in a free and fair manner, while keeping the interest of the consumer in mind. As on today, the Regulations framed by the CERC also cannot be given any effect to as the power to deal with futures contract is specifically dealt with by other statute and in view of the same, it is not necessary to examine as to whether the CERC was justified in exercising jurisdiction on the basis of the application filed by Respondent No. 3 before the CERC or not. As stated above, neither the FMC nor the CERC can exclusively deal with electricity in the matter of futures contract. The CERC cannot act in the futures contract in the matter of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ward trading/futures contract in electricity and also CERC and authorities/commission under it. (c)In view of the above, both these Petitions are partly allowed and disposed of accordingly, with no order as to costs. Rule in each of the petitions is accordingly partly made absolute to the extent indicated above. (d)The Notices of Motion are also disposed of in view of disposal of the petitions. No costs. JUDGMENT Anoop V. Mohta, J. - I have the advantage of reading the judgment of my esteemed brother Justice P.B. Majmudar. I am in agreement with the conclusions. As important issues, having large ramification, are involved, I would like to address it by additional reasons :- 2. The Constitution of India, Union List I of Schedule VII provides entry 48, which deals with "stock exchanges and futures markets". Concurrent List III Schedule VII provides entry 38 "Electricity". Both the entries are operating in their respective fields without any conflicts. 3. "Under the Constitution, the subject of "stock exchanges and future markets" is included in the Union List. Consequently, the State Legislatures are no longer competent to enact any fresh legislation with regard to forward mark ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest of consumers and supply of electricity to all areas, rationalisation of electricity tariff, ensuring transparent policies regarding subsidies, promotion of efficient and environmentally benign policies, constitution of Central Electricity Authority, Regulatory Commissions and establishment of Appellate Tribunal and for matters connected therewith or incidental thereto." 6. It provides for; a National electricity and tariff policy and plan, generation of electricity, licensee, transmission of electricity (inter-State transmission, Regional Transmission, Distribution of electricity consumer protection, tariff regulations and its determination and development of power market. It also provides for Central Electricity Authority, Regulatory Commissions, its powers and functions and an Appellate Tribunal. There are other protective clauses and miscellaneous provisions which empowers authorities/commissions to make rules and regulations. 7. The Apex Court in (PTC India Ltd.'s case (supra) elaborated the same in following words :- "17. The 2003 Act is enacted as an exhaustive code on all matters concerning electricity. It provides for "unbundling" of SEBs into separate utilitie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same under the Act is made appealable vide section 111. These provisions, namely, Sections 61, 62 and 64 indicate the dual nature of functions performed by the Regulatory Commissions, viz., decision-making and specifying terms and conditions for tariff determination. 28. The 2003 Act contemplates three kinds of delegated legislation. Firstly, under section 176, the Central Government is empowered to make rules to carry out the provisions of the Act. Correspondingly, the State Governments are also given powers under section 180 to make rules. Secondly, under section 177, the Central Authority is also empowered to make regulations consistent with the Act and the rules to carry out the provisions of the Act. Thirdly, under section 178, the Central Commission can make regulations consistent with the Act and the rules to carry out the provisions of the Act. SERCs have a corresponding power under section 181. The rules and regulations have to be placed before Parliament and the State Legislatures, as the case may be, under section 179 and 182. The Parliament has the power to modify the rules/regulations. This power is not conferred upon the State Legislatures. A holistic reading of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irs, Food and Public Distribution, vide Gazette by Notification dated 9th January, 2006 by invoking Sections 15 and 16 of the FCR Act has covered "Electricity" and "Natural Gas". FMC has by order of January, 2009 permitted MCX to have trading of electricity in future/forward market. This was probably in view of national and international developing market of electricity. Therefore, the conflict so far as the trade of Futures contract in electricity. 12. The respective entries of the Constitution of India and the Acts based upon it need to keep in mind, while considering development of power/electricity market in India and/or for facilitating permission of investment in electricity sector and for protecting the interest of the consumers. The mandate of Electricity Act needs to be noted while dealing with the marketing and/or trading in electricity. When it comes to futures contracts or forward market, the provisions of Sections 14, 15 and 81 of FCR Act which govern the field by its rules and regulations and authorities also just cannot be overlooked. The power market in electricity developing and is at evolving stage which needs clear and unqualified rules, regulations and controll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture trading or future markets of electricity which non-storable goods, cannot be permitted without expertized body or statute or regulator under the guise of nation power policy or global market for development of electricity. The electricity falls within the ambit of "commodity features". The maintaining of update index like other commodity is also important factor. It is only the exchange decides whether the future contract is cash settled or settlement is delivery based. 16. The Electricity Act nowhere permits the CERC to use and/or suspend the control and/or delegate and/or handover the charges/control of electricity to FMC or to other associations under the FCR Act, considering the speciality of electricity as a non-storable goods. No other authorities even under the FCR Act can have exclusive and independent control and authority to trade in the electricity in futures market/forward market. No other authority/ commission is entitled to challenge and control the trading power of CERC by any modes in any markets, but this can be subject to appropriate rules/regulations as contemplated under section 178(2) of the Electricity Act based upon the desirable and workable electricit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ERC, cannot be permitted to transgress its jurisdiction by venturing into futures market, forward contracts and/or derivative as contemplated and covered under the FCR Act, in the guise of trading and developing the market of electricity. The orders and guidelines therefore, issued by the CERC in questions are in conflicts with the provisions of FCR Act in so far as the business in futures contract and forward market. Any such future contract or forward market of electricity falls within the scope and Sections of 15 and 16 of the FCR Act, the Power Exchange of India Limited (PXI) and Indian Energy Exchange Limited (IEX) therefore, also cannot be permitted to the future trading, even though it is approved by the CERC. Merely because Electricity Act also deals with subjects like railway, telegraph, telephone that itself is not sufficient to do futures trading in electricity. Any trading of power on PXI/IEX where delivery and payment is made beyond 11 days, falls within the ambit of forward contracts. But any contract having fixed delivery period, fixed parties and certain price stands on different footing. 20. Furthermore, apart from knowledge of law, engineering, finance, commerce, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trade and commerce including spot and forward contract for sale and purchase of electricity. The point is, who should control and regulate such contracts/trading protecting the interest of consumer, specially when at present in India power markets is not yet fully developed. 22. The CERC cannot be permitted to have regulations under section 66 and 178(2)(y) by virtue of section 174 of the Electricity Act, to prevail over the provisions of section 14-A and 15 of the forward contracts in such fashion with regard to the futures contracts/forward contracts. The Supreme Court Judgment in Gujarat Urja Vikas Nigam Ltd.'s case (supra) no way assist the CERC to prevail over different and distinct provisions of FCR Act. In the present circumstances, though the Electricity falls within ambit of commodities/goods in FCR Act, by notification in the year 2006, which was definitely after Electricity Act of 2003, the conflict therefore, definitely needs to be resolved by appropriate laws and regulations. In view of the above, the grant of approval in January, 2002 by the FMC to MCX permitting to trade in Electricity forward contracts based upon notification of January, 2006 is by itself not suff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time, unless generated on the day and/or the date of delivery. This distinguishes electricity as a goods from other commodities as contemplated under the FCR Act, which at present deals exclusively with all aspect of futures/forward contracts. (b)In view of the reasonings earlier recorded, it will not be possible either for FMC or MCX to control and regulate the mandatory requirements of electricity, at various stages, which are well within the exclusive domain and control of the CERC and/or authorities/commissions. It will create more complications than solving it, unless an experts body constituted and specialized rules and regulations are framed. Both authorities/commissions cannot deal in futures/forward contract in electricity excluding other and/or independently. (c)It is not only question of resolving the conflict between two entries and/or mandates of the respective specialized Act, but actual and physical workable solution to permit and/or to allow either authorities/commissions/exchanges to deal with the electricity in the futures/forward market. Both authorities/commissions under the respective Acts may not be in a position to control and regulate the futures contract ..... 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