Holding

The CERC’s powers under section 79(1) are not limited by the existence of regulations under section 178; its ad‑hoc regulatory orders, including compensation for delay, are within its jurisdiction, and the High Court erred in admitting the writ petitions.

Summary

Power Grid Corporation of India Ltd (the appellant) sought CERC orders to approve the commercial operation date of its inter‑state transmission assets and to recover compensation for delays caused by Madhya Pradesh Power Transmission Company Ltd (respondent No.1). CERC, exercising powers under s.79(1) of the Electricity Act, 2003, imposed liability on the respondent for transmission charges despite the absence of a specific regulation under s.178. The respondent challenged the CERC orders by filing writ petitions, arguing that CERC exceeded its jurisdiction and that an alternative remedy under s.111 was available. The Supreme Court held that CERC’s regulatory functions under s.79 are distinct from its legislative power under s.178, and that in the absence of a specific regulation the Commission may fill regulatory gaps by ad‑hoc orders, including compensation for delay. The Court found no breach of natural‑justice principles and ruled that the High Court erred in admitting the writ petitions. Consequently, the appeals were allowed and the writ petitions dismissed.

Issues considered

Whether the CERC, while exercising its functions under section 79(1) of the Electricity Act, 2003, is circumscribed by statutory regulations enacted under section 178 of the Act.
Whether the CERC exercises regulatory or adjudicatory functions under section 79 of the Act, and the scope of its power to regulate inter‑state transmission and determine tariff under clauses (c) and (d) of s.79(1).
Whether the grant of compensation by the CERC for delay, via orders dated 21.01.2020 and 27.01.2020, is a regulatory or adjudicatory function and the extent to which principles of natural justice apply.
Whether the High Court was justified in admitting the writ petition challenging the CERC order when an alternative remedy under section 111 of the Act, 2003 existed.

Legislation cited

Electricity Act, 2003s. 111, s. 178, s. 61, s. 62, s. 64, s. 79

Headnote

Issue for Consideration (i) Whether the CERC, while exercising its functions u/s.79(1) of the Electricity Act, 2003, is circumscribed by statutory regulations enacted u/s.178 of the Act, 2003; (ii) Whether the CERC exercises regulatory or adjudicatory Act, 2003. In other words, what is the scope of the CERC’s power to regulate inter-state transmission of electricity and determine tariff for the same under clauses (c) and (d) of s.79(1); (iii) Whether the grant of compensation by the CERC for the delay vide the orders dated 21.01.2020 and

Subjects

Section 79 of the Electricity Act, 2003Section 178 of the Electricity Act, 2003Determination of tariffRegulatory and adjudicatory functionsTariff RegulationsCommercial Operation DateCompensatory transmission chargesPrinciples of natural justiceAlternative remedyInter‑state transmissionIntra‑state transmissionTime‑overrun/DelayQuasi‑judicial bodyDelegated legislationAd hoc power

Judgment

[2025] 5 S.C.R. 2062 : 2025 INSC 697

Power Grid Corporation of India Limited
v.
Madhya Pradesh Power Transmission Company
Limited & Ors.
(Civil Appeal No. 6847 of 2025)
15 May 2025
[J.B. Pardiwala* and R. Mahadevan, JJ.]

Issue for Consideration
(i) Whether the CERC, while exercising its functions u/s.79(1) of
the Electricity Act, 2003, is circumscribed by statutory regulations
enacted u/s.178 of the Act, 2003; (ii) Whether the CERC exercises
regulatory or adjudicatory functions u/s.79 of the Act, 2003. In
other words, what is the scope of the CERC’s power to regulate
inter-state transmission of electricity and determine tariff for the
same under clauses (c) and (d) of s.79(1); (iii) Whether the grant
of compensation by the CERC for the delay vide the orders
dated 21.01.2020 and 27.01.2020 respectively, is a regulatory
or adjudicatory function and to what extent are the principles
of natural justice applicable to the exercise of such functions;
(iv) Whether the High Court was justified in admitting the writ
petition filed by the respondent no. 1 herein challenging the order
dated 21.01.2020 of the CERC when there existed an alternative
remedy u/s.111 of the Act, 2003.

Headnotes†
Electricity Act, 2003 – ss.79, 178 – Relationship between ss.79
and 178 of the Act, 2003:
Held: A perusal of the provisions laying down the functions of the
CERC indicates that the statutory authority is enjoined with the
task of regulation as well as adjudication of several aspects of the
generation, transmission and distribution of electricity – S.79 of the
Act, 2003 enumerates the functions of the CERC which includes
the dual functions of regulation and adjudication – S.178, on the
other hand, empowers the CERC to enact regulations by notification
thereby delegating to the body, the power of legislating statutory
regulations under the Act, 2003 – The aforesaid two provisions

* Author
[2025] 5 S.C.R. 2063

Power Grid Corporation of India Limited v. Madhya Pradesh
Power Transmission Company Limited & Ors.

indicate that the CERC functions as both, decision-making and
regulation-making authority u/ss.79 and 178 respectively – However,
while the authority exercising both these functions is one and the
same, it is a settled position of law that the functions by themselves
are separate and distinct – The functions u/s.79 are administrative
or adjudicatory whereas those u/s.178 are legislative – A regulation
u/s.178 is of general application to the entirety of a particular subject
matter as opposed to regulation on a case-to-case basis which may
be done by the CERC u/s.79 – Therefore, making of a regulation
u/s.178 has the effect of interfering with and overriding existing
contractual relationships between the regulated entities – On the
other hand, the orders u/s.79 have to be confined to the existing
statutory regulations and do not have the effect of altering the
terms of contract between the specific parties before the CERC.
[Paras 37, 38, 40]

Electricity Act, 2003 – ss.79, 178 – The CERC vide its orders
dated 21.01.2020 and 27.01.2020 respectively imposed the
liability of payment of compensation for delay onto the
respondent no. 1 – Correctness:
Held: It is the case of the respondent no. 1 that by doing so, the
CERC did not act in conformity with the 2014 Tariff Regulations
which do not provide for payment of transmission charges by a
party to whom the delay is attributable – In considered view of this
Court, the said argument does not hold any water – This Court’s
dictum in PTC and Energy Watchdog respectively settles the law
in this regard and the absence of a regulation u/s.178 does not
preclude the CERC from exercising its powers u/s.79(1) to make
specific regulations or pass orders between the parties before
it.[Para 43]

Electricity Act, 2003 – s.79 – Regulatory and adjudicatory
functions of the CERC:
Held: The regulatory powers provided to the CERC u/s.79 are of
ad hoc nature and are required to be exercised by the CERC in
context of the specific circumstances of the parties before it – The
rationale for provision of such ad hoc powers by the Act, 2003 is
to ensure that regulatory gaps, if any, that may be discovered on a
case-to-case basis, are filled or removed – Therefore, there is no
doubt that the CERC is enabled to exercise its regulatory powers
by way of orders u/s. 79 and the purview of s.79 is not limited to
2064 [2025] 5 S.C.R.

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only adjudicatory orders but includes within its scope administrative
functions as well. [Para 48]

Electricity Act, 2003 – Whether the grant of compensation by
the CERC was a decision taken by the authority in its regulatory
or adjudicatory capacity and whether it goes a step beyond
the function of determination of tariff:
Held: A reading of the Act, 2003 would indicate that it makes
no distinction between the regulatory and adjudicatory functions
vested in and conferred upon the CERC, which is a quasi-judicial
body enjoined to regulate and administer the subject of electricity
generation, transmission and distribution – In such a situation, it
becomes necessary to undertake a harmonious reading of ss.61
and 79 respectively to determine whether the CERC granted
the liberty to claim compensation in exercise of its regulatory or
adjudicatory function – The CERC granted liberty to the appellant
herein to claim compensation from the respondent no. 1 to deal with
a situation caused due to an unprecedented event not covered by
any guidelines, regulations or contractual provisions between the
parties – The dictum of this Court in Energy Watchdog, indicates
that in such a situation where there is an absence of regulations and
guidelines, the Act, 2003 mandates the CERC to strike a judicious
balance between the parties keeping in mind commercial principles
and consumers’ interest, in exercise of its general regulatory powers
u/s.79(1) – The aforesaid leaves no manner of doubt that though
the CERC’s orders dated 21.01.2020 and 27.01.2020 respectively
were for determination of tariff, yet the order granting liberty to the
aggrieved appellant to claim compensation from the defaulting
party is a consequence of a regulatory lacuna in the 2014 Tariff
Regulations and therefore, is an instance of regulation of tariff
between the parties. [Paras 53, 59, 60]

Electricity Act, 2003 – Whether there was a contravention of
the principles of natural justice by the CERC:
Held: The CERC was not adjudicating the issue of delay between
the parties but was only regulating the consequences of the
delay to the commissioning of the transmission elements – There
was also no occasion for the respondent no. 1 to be afforded an
opportunity to be heard at that stage – In considered view of this
Court, any dispute pertaining to the levy of transmission charges
incurred before the concerned transmission assets were put to use,
[2025] 5 S.C.R. 2065

Power Grid Corporation of India Limited v. Madhya Pradesh
Power Transmission Company Limited & Ors.

would arise only upon the appellant raising bills to the respondent
no. 1 in this regard – In such a scenario, it cannot be said that
there was a contravention of the principles of natural justice by
the CERC. [Para 61]

Electricity Act, 2003 – Whether the CERC is empowered to
order for imposition of transmission charges on the party to
whom delay is attributable.
Held: The CERC is empowered to order for imposition of
transmission charges on the party to whom delay is attributable –
This Court has, however, have not considered the question
whether such liability of payment of transmission charges could
be imposed on the respondent no. 1 in the specific facts of the
case on hand – This Court is of the opinion that APTEL is the
appropriate authority to look into the merits of the matter should
the respondent no. 1 choose to prefer an appeal before APTEL
u/s.111 of the Act, 2003. [Para 66]

Electricity Act, 2003 – Writ Petition – Maintainability of a writ
petition before the High Court in the presence of the alternative
remedy – Conditions of:
Held: This Court’s dictum in Whirlpool Corporation v. Registrar of
Trademarks wherein it has been held that despite the availability
of an alternative remedy, a writ petition can be entertained in the
following cases: a) Where principles of natural justice are breached;
b) Where fundamental rights are sought to be enforced or breach
thereof is complained of; c) Where the impugned order is passed by
an authority without jurisdiction; d) Where the constitutionality of any
provision is called in question – However, this Court’s observations
in Whirlpool are of no avail to the respondent no. 1 as the present
matter falls in none of the cases enumerated therein – Therefore,
there was no occasion for the High Court to admit the writ petition
of the respondent no. 1. [Paras 11, 64]

Case Law Cited
PTC India Limited v. Central Electricity Regulatory Commission
[2010] 3 SCR 609 : (2010) 4 SCC 603; Airports Economic
Regulatory Authority of India v. Delhi International Airport Ltd. [2024]
10 SCR 1404 : 2024 SCC OnLine SC 2923; Energy Watchdog v.
CERC [2017] 3 SCR 153 : (2017) 14 SCC 80 – relied on.
2066 [2025] 5 S.C.R.

Supreme Court Reports

Whirlpool Corporation v. Registrar of Trademarks [1998] Supp.
2 SCR 359 : (1998) 8 SCC 1: Power Grid Corpn. of India Ltd. v.
Punjab State Power Corpn. Ltd. [2016] 2 SCR 116 : (2016) 4 SCC
797; Sitaram Sugar Co. Ltd. v. Union of India [1990] 1 SCR 909 :
(1990) 3 SCC 223 – referred to.
Nuclear Power Corporation of India Limited. v. Central Electricity
Regulatory Commission & Ors., 2019 SCC OnLine APTEL
83 – referred to.

List of Acts
Electricity Act, 2003; Central Electricity Regulatory Commission
(Terms and Conditions of Tariff) Regulations, 2014.

List of Keywords
Section 79 of the Electricity Act, 2003; Section 178 of the
Electricity Act, 2003; Determination of tariff; Regulatory and
adjudicatory functions; Tariff Regulations; Commercial Operation
Date; Compensatory transmission charges; Principles of natural
justice; Alternative remedy; Inter-state transmission; Intra-state
transmission; Time-overrun/Delay; Quasi-judicial body; Delegated
legislation; Ad hoc power.

Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 6847 of 2025
From the Judgment and Order dated 25.02.2021 of the High Court
of Madhya Pradesh at Indore in WP No. 10845 of 2020
With
Civil Appeal No. 6848 of 2025

Appearances for Parties
Advs. for the Appellant:
M.G. Ramachandran, Sr. Adv., Shubham Arya, Ms. Poorva Saigal,
Pramod Dayal, Nikunj Dayal, Ms. Reeha Singh, Ms. Pallavi Saigal,
Ms. Shirin Gupta, Aneesh Bajaj, Ms. Srishti Khindaria.
Advs. for the Respondents:
Prashant Singh. A.G. (MP), Amit Seth, Arjun Garg, Ms. Kriti Gupta,
Ms. Sagun Srivastava, Brahma Prakash Soni, Anup Jain, Udit
[2025] 5 S.C.R. 2067

Power Grid Corporation of India Limited v. Madhya Pradesh
Power Transmission Company Limited & Ors.

Gupta, Vyom Chaturvedi, Ms. Pragya Gupta, Amrnath Sahoo,
Ms. Nishtha Goel, Ms. Deep Shikha Kumar (for M/s. Udit Kishan
And Associates), Shirish K. Deshpande, Ms. Rucha Pravin Mandlik,
Mohit Gautam, Apoorv Sharma, Sudhanshu S. Choudhari.

Judgment / Order of the Supreme Court

Judgment

J.B. Pardiwala, J.

For the convenience of exposition, this judgment is divided into the
following parts:

INDEX*

A. FACTUAL MATRIX ............................................................. 2

B. IMPUGNED ORDER ........................................................... 8

C. SUBMISSIONS ON BEHALF OF THE APPELLANT ........ 12

D. SUBMISSIONS ON BEHALF OF THE RESPONDENTS ... 16

E. ISSUES FOR DETERMINATION ........................................ 20

F. ANALYSIS ........................................................................... 21

i. Relevant Provisions of the Act, 2003 ........................ 21

ii. Relationship between Sections 79 and 178 of the 31
Act, 2003 respectively .................................................

iii. Regulatory and adjudicatory functions of the CERC 38
under Section 79 .........................................................

iv. Grant of compensation for delay on the part of a 41
party is a regulatory function .....................................

G. CONCLUSION ...................................................................... 55

* Ed. Note: Pagination as per the original Judgment.
2068 [2025] 5 S.C.R.

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1. Leave granted.
2. Since the issues raised in both the captioned appeals are the same,
those were taken up for hearing analogously and are being disposed
by this common judgment and order.
3. These appeals arise from the Judgment and Order passed by the
High Court of Madhya Pradesh, Indore Bench dated 25.02.2021, in
Writ Petition No. 10845 of 2020 and Writ Petition No. 9136 of 2020
respectively, by which the High Court admitted the writ petitions
filed by the Madhya Pradesh Power Transmission Company Limited
(“MPPTCL”) on the ground that the Central Electricity Regulatory
Commission (the “CERC”) had exercised powers beyond those vested
in it as per the regulations under the Electricity Act, 2003 (the “Act,
2003”) in passing the orders dated 21.01.2020 and 27.01.2020 in
Petition No. 311/TT/2018 and Petition No. 266/TT/2018 respectively.

A. FACTUAL MATRIX
4. The appellant herein is a Government of India Undertaking constituted
for the purpose of undertaking inter-state transmission of electricity.
In other words, the scope of work of the appellant includes inter
alia, establishing and operating transmission lines, sub-stations and
other transmission assets associated with inter-State transmission
of power. These include ‘bays’ and inter-connecting ‘transformers’ at
sub-stations to provide inter-connection facilities. By virtue of being
a central transmission utility, the appellant is a deemed transmission
licensee in terms of Section 38 of the Act, 2003. The respondent no.
1 herein is the State Transmission Utility and intra-state transmission
licensee in the State of Madhya Pradesh.
5. The case on hand pertains to a dispute between the appellant and
respondent no. 1 in respect of the implementation of the “Western
Region System Strengthening Scheme XIV (WRSS-XIV) and Western
Region Strengthening Scheme XVI (WRSS-XVI)” respectively by
the appellant. The transmission assets were implemented by the
appellant at the Indore sub-station upon the specific request of the
respondent no. 1. In this regard, the parties planned and approved
the WRSS-XIV in its 37th Standing Committee Meeting on Power
System Planning of Western Region held on 05.09.2014 and WRSS-
XVI in the 38th Standing Committee Meeting for the Western Region
on 17.07.2015.
[2025] 5 S.C.R. 2069

Power Grid Corporation of India Limited v. Madhya Pradesh
Power Transmission Company Limited & Ors.

6. According to the agreement between the parties, the respondent
no. 1 was required to construct and commission the intra-state
transmission line from Indore sub-station coinciding with the timeline
of completion of works which were within the scope of the appellant.
However, the construction and commissioning of the intra-state
transmission line by respondent no. 1 was delayed. Such delay
constrained the appellant to file Petition No. 311/TT/2018 and Petition
No. 266/TT/2018 corresponding to WRSS-XIV and WRSS-XVI
respectively, before the CERC for (i) approval of the Commercial
Operation Date (the “COD”) of its transmission system, under
Regulation 4(3) of the Central Electricity Regulatory Commission
(Terms and Conditions of Tariff) Regulations, 2014 (the “2014 Tariff
Regulations”), and (ii) determination of transmission charges and
billing of the tariff for the transmission facilities established by it at
the Indore sub-station.
7. The CERC vide its order dated 21.01.2020, observed, inter alia,
that as per the investment approval accorded to the transmission
scheme on 27.01.2016, the assets were scheduled to be
commissioned within 30 months from the date of investment
approval. Accordingly, the scheduled COD came to be 27.07.2018.
However, the commissioning of such assets was delayed thereby
compelling the appellant to file a petition for approval of COD under
Regulation 4(3) of the 2014 Tariff Regulations. The details of the
transmission assets are as follow:

Proposed
Date of
COD Time-
Scheduled active
Asset Description as per overrun/
COD power
Regulation Delay
flow
4(3)(ii)
1 x 500 MVA,
400/220 kV
ICT-2 along
with associated
Asset-1 transformer 27.07.2018 02.09.2018 10.12.2018 37 days
bays and 2 no.
220kV line bays
at 400/220 kV
Indore substation.
2070 [2025] 5 S.C.R.

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2 no. 220 kV line
bays at 400/220
Asset-2 27.07.2018 02.09.2018 12.12.2018 37 days
kV Indore
substation.
1 x 500 MVA,
400/220 kV
ICT-1 along
Asset-3 with associated 27.07.2018 14.10.2018 10.12.2018 79 days
transformer bays
at 400/220 kV
Indore substation.
1 no. 220 kV line
bays at 400/220
Asset-4 27.07.2018 14.10.2018 - 79 days
kV Indore
substation.
1 no. 220 kV line
bay at 400/220
Asset-5 27.07.2018 05.12.2018 - 131 days
kV Indore
substation.

8. As regards the specific issue of time-overrun, the order dated
21.01.2020 passed by the CERC noted that the appellant herein
had attributed the entire time-overrun in case of the instant assets
to the respondent no. 1 who delayed the commissioning of the
downstream intra-state assets that were supposed to be operational
at the same time as the transmission assets to be commissioned by
the appellant. Even though the CERC approved the COD proposed
by the appellant under Regulation 4(3)(ii), yet it did not condone
the time-overrun on account of matching the commissioning of the
inter-state transmission assets in question with the downstream
network of respondent no. 1, on the ground that it was the decision
of the appellant to coordinate and match the commissioning dates
of both categories of assets. However, the CERC allowed the
appellant to claim compensation for the period prior to the COD as
determined under Regulation 4(3)(ii), by way of liquidated damages,
interest during construction and incidental expenses incurred during
construction. It was held that the transmission charges in case of all
the assets as enumerated above would be borne by the respondent
no. 1 from the COD determined under Regulation 4(3)(ii) upto one
day before actual charging of downstream system. It is pertinent to
[2025] 5 S.C.R. 2071

Power Grid Corporation of India Limited v. Madhya Pradesh
Power Transmission Company Limited & Ors.

note that the CERC did not allow compensation from the Scheduled
COD upto the newly determined COD as the delay in that case was
not condoned.
9. Aggrieved by the aforesaid order of the CERC, the respondent no. 1
challenged the same by way of a writ petition before the High Court
on the following grounds:
(i) There is no provision in the 2014 Tariff Regulations under
which compensatory transmission charges could be levied on
the respondent no. 1 by the CERC and therefore, the CERC
fell into grave jurisdictional error by holding that the appellant
could claim compensation from the respondent no. 1.
(ii) Further, the agreement between the parties was recorded
in the minutes of the 37th and 38th meetings of the Standing
Committee held on 05.09.2014 and 17.07.2015 respectively.
Such agreement contains no terms and conditions as regards
the recovery of compensation from the respondent no. 1.
Therefore, the CERC, by granting liberty to the appellant to
claim compensation from the respondent no. 1 has effectively
re-written the terms and conditions of the agreement between
the parties.
(iii) The bill dated 08.06.2020 raised by the appellant for the payment
of Rs. 6.18 crore, in consequence of the order of the CERC
dated 21.01.2020 and 27.01.2020 respectively, is illegal and
not in accordance with either the 2014 Tariff Regulations or the
terms of agreement between the parties.
10. On the other hand, the appellant claimed before the High Court
that the issue raised by the respondent no. 1 by way of the writ
petition was not that the CERC did not have jurisdiction at all. The
challenge was to the exercise of jurisdiction by the CERC which
was not permissible in light of the alternative remedy available to
the respondent no. 1 in terms of Section 111 of the Act, 2003.

B. IMPUGNED ORDER
11. The High Court vide its judgment and order dated 25.02.2021,
recorded the following submissions of the respondent no. 1:
i. The respondent no. 1 herein relied on this Court’s decision
in PTC India Limited v. Central Electricity Regulatory
2072 [2025] 5 S.C.R.

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Commission reported in (2010) 4 SCC 603 to submit that the
decision of the CERC must be in conformity with the Regulations
enacted under Section 178 of the Act, 2003 wherever such
regulations are applicable. Therefore, the measures taken by
the CERC under Section 79(1) are required to be in conformity
with the Regulations under Section 178.
ii. It was further submitted that a regulation under Section 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 (the “APTEL”) under Section
111 of the Act, 2003.
iii. It was submitted that the order of the CERC levying compensatory
transmission charges on the respondent no. 1 was not in
conformity with the 2014 Tariff Regulations enacted under
Section 178 of the Act, 2003 and was beyond the scope of the
said Regulations. Therefore, the said order was passed without
any jurisdiction and hence, was being assailed before the High
Court without availing the statutory alternative remedy.
iv. Further, the APTEL had already addressed a similar question
in Nuclear Power Corporation of India Limited. v. Central
Electricity Regulatory Commission & Ors. reported in 2019
SCC OnLine APTEL 83 wherein it was held as under:
“10.5 Accordingly, in absence of specific provisions
in the Sharing Regulations/Tariff Regulations, 2014
to deal with the situation under question the Central
Commission through exercise of its regulatory
powers has prescribed a principle for sharing of
transmission charges of the Transmission System of
the Respondent No.2 in the Impugned Order. Thus,
it is observed that by way of exercising its regulatory
power by a way of judicial order(s) the Central
Commission has laid down the principles of payment
of transmission charges in such an eventuality.
However, it is felt that the Central Commission in
the impugned Order has abruptly concluded the
payment liability on the Appellant just by referring
[2025] 5 S.C.R. 2073

Power Grid Corporation of India Limited v. Madhya Pradesh
Power Transmission Company Limited & Ors.

to its earlier orders and not establishing the linkage
with the present case explicitly. This Tribunal would
like to clarify the same.”
The respondent no. 1 submitted that the APTEL had taken a
peculiar view of the matter. Although the CERC exercises twin
powers of adjudication and regulation, yet the fact remains that
the regulatory power cannot be exercised by way of a judicial
order. Since APTEL took a contrary view on the issues at hand,
the respondent no. 1 was of the view that no useful purpose
would be served by filing an appeal under Section 111.
v. Since the orders of the CERC were in the nature of regulations
as per the averments of the appellant, the vires of the same
could only be questioned before the High Court and not
before the APTEL in terms of this Court’s dictum in Whirlpool
Corporation v. Registrar of Trademarks reported in (1998)
8 SCC 1 wherein it has been held that despite the availability
of an alternative remedy, a writ petition can be entertained in
the following cases:
(a) Where principles of natural justice are breached,
(b) Where fundamental rights are sought to be enforced or
breach thereof is complained of,
(c) Where the impugned order is passed by an authority
without jurisdiction,
(d) Where the constitutionality of any provision is called in
question.
12. Having heard the parties, the High Court affirmed that despite
the availability of an alternative remedy, a writ petition can be
entertained if any of the factors mentioned in Whirlpool (supra)
are satisfied. Since the respondent no. 1 had challenged the
constitutionality of the orders of the CERC dated 21.01.2020 and
27.01.2020 respectively, on the grounds that the power exercised by
the CERC was beyond the powers vested in it as per the relevant
regulation and that the relief granted to the appellant was beyond
the reliefs prayed for, the High Court was of the opinion that the
principles of natural justice were breached. Therefore, despite the
availability of an alternative remedy, the writ petition deserved to
2074 [2025] 5 S.C.R.

Supreme Court Reports

be entertained. Having held so, the High Court admitted the writ
petition for hearing on merits. The relevant portion of the impugned
order is reproduced below:
“[13] This is trite that despite availability of alternative
remedy, a writ petition can be entertained if any of the
factors mentioned in the judgment of Whirlpool (supra) are
satisfied. In the instant case, the petitioner has challenged
the constitutionality of the orders. Even if it is challenged
by way of amendment, once amendment is allowed it will
relate back to the original date of filing of writ petitions.
Petitioner has also challenged the orders by contending
that power exercised by the Commission was beyond the
powers vested in it as per relevant regulation. The relief
granted was beyond the relief prayed for. Hence, principles
of natural justice were breached. In our view, in a case of
this nature despite availability of alternative remedy, the
writ petition can be entertained.
[14] Resultantly, the objection regarding alternative remedy
is over ruled. The petition is admitted for hearing.”

C. SUBMISSIONS ON BEHALF OF THE APPELLANT
13. Mr. M.G. Ramachandran, the learned senior counsel appearing on
behalf of the appellant, submitted that the orders dated 21.01.2020
and 27.01.2020 respectively were passed by the CERC under
Sections 62 and 79 of the Act, 2003 respectively. Section 111 of the
Act, 2003 provides for regular first appeal on both questions of fact
and law to the APTEL which is an expert body specially constituted
as per the recommendations of this Court in West Bengal Electricity
Regulatory Commission v. CESC Limited reported in (2002) 8
SCC 715. A second appeal to this Court is allowed under Section
125 of the Act, 2003 for the purpose of adjudication of substantial
questions of law.
14. He submitted that the Act, 2003 is an exhaustive and self-contained
complete code on all matters concerning electricity including
generation, distribution, trading and transmission of electricity. The
Act, 2003 provides for tariff fixation by the CERC under Section 62.
Since determination of tariff is a quasi-judicial function, the same
has been made appealable to the APTEL. The learned counsel
[2025] 5 S.C.R. 2075

Power Grid Corporation of India Limited v. Madhya Pradesh
Power Transmission Company Limited & Ors.

relied upon this Court’s decision in PTC India (supra) to submit that
the only exclusion to the scope of the appellate remedies provided
under the Act, 2003 is that the statutory regulations notified by the
CERC under Section 178 cannot be challenged in appeal before
the APTEL. The APTEL, therefore, cannot rule on the vires of a
regulation formulated by the CERC but there is no bar on it to
interpret such regulations.
15. Therefore, a writ petition before the High Court cannot be maintained
when an efficacious alternative remedy was available to the
respondent. The learned counsel relied on this Court’s judgment
in Jaipur Vidyut Vitran Nigam Limited v. MB Power (Madhya
Pradesh) Limited reported in (2024) 8 SCC 513 and GRIDCO v.
Western Electricity Supply Co. of Orissa Ltd. reported in (2024) 2
SCC 500 to fortify his submission in this regard. He also contended
that as per this Court’s dictum in Titaghur Paper Mills Co. Ltd. v.
State of Orissa reported in (1983) 2 SCC 433, Nivedita Sharma
v. Cellular Operators Association of India reported in (2011) 14
SCC 337 and U.P. Jal Nigam & Anr. v. Nareshwar Sahai Mathur
& Anr. reported in (1995) 1 SCC 21, where statutory tribunal or
statutory remedies are in place, a writ petition should not ordinarily
be entertained at other fora.
16. It is the case of the appellant that the respondent has not challenged
any regulation or provision of the Act, 2003 and has only challenged
the orders dated 21.01.2020 and 27.01.2020 respectively passed by
the CERC which in ordinary circumstances may be appealed under
Section 111 of the Act, 2003.
17. In the case on hand, no issue of constitutionality of the order arises
as the conditions prescribed in this Court’s judgment in Whirlpool
(supra), for exercise of writ jurisdiction are fulfilled. The learned
counsel submitted that there is no violation of principles of natural
justice as the respondent was duly served. Further, no issue as
regards the defect in jurisdiction of the CERC was raised before
that forum in the first instance.
18. Mr. Ramachandran submitted that it was not the case of the
respondent that the CERC had acted wholly without jurisdiction.
The respondent has admitted that in terms of Section 62 and
Section 79(1)(c) and (d) of the Act, 2003, the CERC undoubtedly
and undisputedly has the function and the jurisdiction to deal with
2076 [2025] 5 S.C.R.

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inter-state transmission, determination of transmission charges and
the sharing thereof. The orders dated 21.01.2020 and 27.01.2020
respectively passed by the CERC had been challenged by the
respondent only on one consideration that is, the correctness of the
decision holding the respondent liable for transmission charges. It
is the case of the appellant that the APTEL is competent to decide
such issues.
19. The learned counsel further submitted that the respondent had
intentionally not approached the APTEL with a view to escape the
decision rendered by it in a similar set of facts wherein the liability
of payment of transmission charges was imposed on the generating
company in the event of delay in commissioning of downstream
assets by it. It was submitted that the writ petition was filed by the
respondent to avoid the binding decision of the APTEL in Nuclear
Power Corporation (supra).
20. Mr. Ramachandran also highlighted the consequences of entertaining
writ petitions against the orders of the CERC. He submitted that
there are multiple beneficiaries in an inter-state transmission system.
Owing to the nature of electricity transmission systems that span
across states, it is possible that an identical issue relating to the
same transmission system may be challenged before multiple High
Courts resulting in multiplicity of decisions as well as a higher chance
of conflict between different decisions for the same transmission
assets. He brought to our notice that the respondent no. 4 herein that
is, Maharashtra State Electricity Transmission Corporation Limited
(“MSETCL”), who is one another beneficiary of the transmission
system established by the appellant, has filed an appeal under
Section 111 of the Act, 2003 before the APTEL bearing DFR No.
414 of 2024 challenging the order dated 27.01.2020 passed by the
CERC, which is the very same order that has been challenged by the
respondent no. 1 herein before the High Court of Madhya Pradesh
by way of a writ petition.
21. The learned counsel submitted that the delay on the part of the
respondent no. 1 in bringing up the intra-state system cannot lead
to deprive the appellant of the charges for its inter-state system. We
were informed that as on 23.11.2024, the principal amount due and
outstanding was approximately Rs. 16.86 crore along with the late
payment surcharge.
[2025] 5 S.C.R. 2077

Power Grid Corporation of India Limited v. Madhya Pradesh
Power Transmission Company Limited & Ors.

D. SUBMISSIONS ON BEHALF OF THE RESPONDENTS
22. Mr. Prashant Singh, the learned Advocate General of the State
of Madhya Pradesh appearing on behalf of the respondent no. 1,
submitted that the present appeal is directed against an interim order
of admission of the writ petition passed by the High Court and the
same does not warrant any interference by this Court.
23. The learned counsel submitted that the orders dated 21.01.2020 and
27.01.2020 respectively passed by the CERC, wherein the liability of
payment of transmission charges from 11.01.2019 till the downstream
transmission assets achieve their Commercial Operation Date, are
beyond its jurisdiction and violative of the rights of the respondents.
It was submitted that no statutory authority or tribunal can assume
jurisdiction in respect of a subject matter which the statute does not
confer on such authority/tribunal. In the circumstance that a tribunal
erroneously decides a fact in which the question of the jurisdiction
depends, then in that case, the order passed thereby stands vitiated.
24. Mr. Singh further submitted that the powers of the High Court are wide
and unlimited, therefore, the availability of an alternate remedy is not
an absolute bar under Article 226. It is the case of the respondents
that as per the dictum of this Court in Southern Electricity Supply
Co. of Orissa Ltd. v. Sri Seetaram Rice Mill reported in (2012) 2
SCC 108, if the exercise of jurisdiction by a tribunal ex facie appears
to be in futility, then the High Court would be justified to interfere with
the order of the tribunal under Article 226. He also relied upon this
Court’s decision in Maharashtra Chess Assn. v. Union of India
reported in (2020) 13 SCC 285, to submit that the availability of an
alternative remedy does not alter the discretionary nature of the High
Court under its writ jurisdiction.
25. The learned counsel submitted that the grounds set out in the
writ petition before the High Court clearly meet the parameters
laid down by this Court in Whirlpool (supra) and The Asssistant
Commissioner of State Tax and Ors. v. M/s Commercial Steel
Limited reported in (2022) 16 SCC 447, which are as follow:
(i) An excess of jurisdiction,
(ii) A breach of fundamental rights,
(iii) A violation of the principles of natural justice, and
(iv) A challenge to the vires of the statute or delegated legislation.
2078 [2025] 5 S.C.R.

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It is the case of the respondent that no statutory authority or tribunal
can assume jurisdiction in respect of subject matter which the statute
does not confer on it and an error of jurisdictional facts renders the
order erroneous in law.
26. Mr. Singh submitted that the CERC exceeded its jurisdiction while
ordering for recovery of transmission charges as the provisions for
determination of tariff under the Act, 2003 do not confer power on the
CERC to act arbitrarily and levy unilateral charges. He vehemently
submitted that doing so is violative of the principles of natural justice.
He argued that there is no provision either in the agreement between
the parties or in the 2014 Tariff Regulations for claiming compensation
or damages. He further submitted that the conditions governing the
commissioning of the transmission assets in question were approved
in the 38th Standing Committee meeting held on 17.07.2015 and the
same include no provision as regards claiming of compensation or
damages from the respondent.
27. The learned counsel brought to our notice the order dated 18.01.2019
passed by APTEL in Nuclear Power Corporation (supra) wherein,
in a similar set of facts, the liability to pay compensation or damages
was imposed on the generating entity for delaying the commissioning
of transmission assets. It is the case of the respondent that since the
APTEL has already passed an adverse order previously, the concerns
of the respondent may not be addressed by filing an appeal under
Section 111 of the Act, 2003.
28. Mr. Singh informed us that the transmission line is now functional
and fully charged. The dispute regarding payment of compensation
or damages is with respect to a limited period of time in which
there was admittedly, a delay in commissioning the line due to
force majeure.
29. It was submitted that no error or illegality could be said to have
been committed by the High Court while exercising its discretion to
entertain the writ petition and the impugned orders passed thereby
are neither perverse nor contrary to law.

E. ISSUES FOR DETERMINATION
30. Having heard the learned counsel appearing for the parties and
having gone through the materials on record, the following questions
fall for our consideration:
[2025] 5 S.C.R. 2079

Power Grid Corporation of India Limited v. Madhya Pradesh
Power Transmission Company Limited & Ors.

i. Whether the CERC, while exercising its functions under Section
79(1) of the Act, 2003, is circumscribed by statutory regulations
enacted under Section 178 of the Act, 2003?
ii. Whether the CERC exercises regulatory or adjudicatory
functions under Section 79 of the Act, 2003? In other words,
what is the scope of the CERC’s power to regulate inter-state
transmission of electricity and determine tariff for the same
under clauses (c) and (d) of Section 79(1)?
iii. Whether the grant of compensation by the CERC for the delay
vide the orders dated 21.01.2020 and 27.01.2020 respectively,
is a regulatory or adjudicatory function and to what extent are
the principles of natural justice applicable to the exercise of
such functions?
iv. Whether the High Court was justified in admitting the writ petition
filed by the respondent no. 1 herein challenging the order dated
21.01.2020 of the CERC when there existed an alternative
remedy under Section 111 of the Act, 2003?

F. ANALYSIS

i. Relevant Provisions of the Act, 2003
31. Section 61 reads thus:
“61. Tariff regulations.
The Appropriate Commission shall, subject to the provisions
of this Act, specify the terms and conditions for the
determination of tariff, and in doing so, shall be guided
by the following, namely:--
(a) the principles and methodologies specified by the
Central Commission for determination of the tariff applicable
to generating companies and transmission licensees;
(b) the generation, transmission, distribution and supply of
electricity are conducted on commercial principles;
(c) the factors which would encourage competition,
efficiency, economical use of the resources, good
performance and optimum investments;
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(d) safeguarding of consumers’ interest and at the same
time, recovery of the cost of electricity in a reasonable
manner;
(e) the principles rewarding efficiency in performance;
(f) multi year tariff principles;
(g) that the tariff progressively reflects the cost of supply of
electricity and also, reduces cross-subsidies in the manner
specified by the Appropriate Commission;
(h) the promotion of co-generation and generation of
electricity from renewable sources of energy;
(i) the National Electricity Policy and tariff policy:
Provided that the terms and conditions for determination of
tariff under the Electricity (Supply) Act, 1948 (54 of 1948),
the Electricity Regulatory Commission Act, 1998 (14 of
1998) and the enactments specified in the Schedule as
they stood immediately before the appointed date, shall
continue to apply for a period of one year or until the terms
and conditions for tariff are specified under this section,
whichever is earlier.”
32. Section 62 reads thus:
“62. Determination of tariff.
(1) The Appropriate Commission shall determine the tariff
in accordance with the provisions of this Act for--
(a) supply of electricity by a generating company to a
distribution licensee:
Provided that the Appropriate Commission may, in case
of shortage of supply of electricity, fix the minimum and
maximum ceiling of tariff for sale or purchase of electricity
in pursuance of an agreement, entered into between a
generating company and a licensee or between licensees,
for a period not exceeding one year to ensure reasonable
prices of electricity;
(b) transmission of electricity;
(c) wheeling of electricity;
[2025] 5 S.C.R. 2081

Power Grid Corporation of India Limited v. Madhya Pradesh
Power Transmission Company Limited & Ors.

(d) retail sale of electricity:
Provided that in case of distribution of electricity in the
same area by two or more distribution licensees, the
Appropriate Commission may, for promoting competition
among distribution licensees, fix only maximum ceiling of
tariff for retail sale of electricity.
(2) The Appropriate Commission may require a licensee
or a generating company to furnish separate details, as
may be specified in respect of generation, transmission
and distribution for determination of tariff.
(3) The Appropriate Commission shall not, while determining
the tariff under this Act, show undue preference to any
consumer of electricity but may differentiate according to
the consumer’s load factor, power factor, voltage, total
consumption of electricity during any specified period or
the time at which the supply is required or the geographical
position of any area, the nature of supply and the purpose
for which the supply is required.
(4) No tariff or part of any tariff may ordinarily be amended,
more frequently than once in any financial year, except
in respect of any changes expressly permitted under the
terms of any fuel surcharge formula as may be specified.
(5) The Commission may require a licensee or a generating
company to comply with such procedures as may be
specified for calculating the expected revenues from the
tariff and charges which he or it is permitted to recover.
(6) If any licensee or a generating company recovers a
price or charge exceeding the tariff determined under
this section, the excess amount shall be recoverable by
the person who has paid such price or charge along with
interest equivalent to the bank rate without prejudice to
any other liability incurred by the licensee.”
33. Section 64 reads thus:
“64. Procedure for tariff order.
(1) An application for determination of tariff under section 62
shall be made by a generating company or licensee in
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such manner and accompanied by such fee, as may be
determined by regulations.
(2) Every applicant shall publish the application, in such
abridged form and manner, as may be specified by the
Appropriate Commission.
(3) The Appropriate Commission shall, within one hundred
and twenty days from receipt of an application under
sub-section (1) and after considering all suggestions and
objections received from the public,--
(a) issue a tariff order accepting the application with such
modifications or such conditions as may be specified in
that order;
(b) reject the application for reasons to be recorded in
writing if such application is not in accordance with the
provisions of this Act and the rules and regulations made
thereunder or the provisions of any other law for the time
being in force:
Provided that an applicant shall be given a reasonable
opportunity of being heard before rejecting his application.
(4) The Appropriate Commission shall, within seven days
of making the order, send a copy of the order to the
Appropriate Government, the Authority, and the concerned
licensees and to the person concerned.
(5) Notwithstanding anything contained in Part X, the
tariff for any inter-State supply, transmission or wheeling
of electricity, as the case may be, involving the territories
of two States may, upon application made to it by the
parties intending to undertake such supply, transmission
or wheeling, be determined under this section by the State
Commission having jurisdiction in respect of the licensee
who intends to distribute electricity and make payment
therefor.
(6) A tariff order shall, unless amended or revoked, continue
to be in force for such period as may be specified in the
tariff order.”
[2025] 5 S.C.R. 2083

Power Grid Corporation of India Limited v. Madhya Pradesh
Power Transmission Company Limited & Ors.

34. Section 79 reads thus:
“79. Functions of Central Commission.
(1) The Central Commission shall discharge the following
functions, namely:-
(a) to regulate the tariff of generating companies owned
or controlled by the Central Government;
(b) to regulate the tariff of generating companies other
than those owned or controlled by the Central Government
specified in clause (a), if such generating companies enter
into or otherwise have a composite scheme for generation
and sale of electricity in more than one State;
(c) to regulate the inter-State transmission of electricity;
(d) to determine tariff for inter-State transmission of
electricity;
(e) to issue licences to persons to function as transmission
licensee and electricity trader with respect to their inter-
State operations;
(f) to adjudicate upon disputes involving generating
companies or transmission licensee in regard to matters
connected with clauses (a) to (d) above and to refer any
dispute for arbitration;
(g) to levy fees for the purposes of this Act;
(h) to specify Grid Code having regard to Grid Standards;
(i) to specify and enforce the standards with respect to
quality, continuity and reliability of service by licensees;
(j) to fix the trading margin in the inter-State trading of
electricity, if considered, necessary;
(k) to discharge such other functions as may be assigned
under this Act.
(2) The Central Commission shall advise the Central
Government on all or any of the following matters, namely:-
(i) formulation of National electricity Policy and tariff policy;
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(ii) promotion of competition, efficiency and economy in
activities of the electricity industry;
(iii) promotion of investment in electricity industry;
(iv) any other matter referred to the Central Commission
by that Government.
(3) The Central Commission shall ensure transparency
while exercising its powers and discharging its functions.
(4) In discharge of its functions, the Central Commission
shall be guided by the National Electricity Policy, National
Electricity Plan and tariff policy published under section 3.”
35. Section 111 reads thus:
“111. Appeal to Appellate Tribunal.
(1) Any person aggrieved by an order made by an
adjudicating officer under this Act (except under section
127) or an order made by the Appropriate Commission
under this Act may prefer an appeal to the Appellate
Tribunal for Electricity:
Provided that any person appealing against the order of
the adjudicating officer levying any penalty shall, while filing
the appeal, deposit the amount of such penalty:
Provided further that where in any particular case, the
Appellate Tribunal is of the opinion that the deposit of such
penalty would cause undue hardship to such person, it may
dispense with such deposit subject to such conditions as it
may deem fit to impose so as to safeguard the realisation
of penalty.
(2) Every appeal under sub-section (1) shall be filed
within a period of forty-five days from the date on which
a copy of the order made by the adjudicating officer or
the Appropriate Commission is received by the aggrieved
person and it shall be in such form, verified in such
manner and be accompanied by such fee as may be
prescribed:
Provided that the Appellate Tribunal may entertain an
appeal after the expiry of the said period of forty-five days
[2025] 5 S.C.R. 2085

Power Grid Corporation of India Limited v. Madhya Pradesh
Power Transmission Company Limited & Ors.

if it is satisfied that there was sufficient cause for not filing
it within that period.
(3) On receipt of an appeal under sub-section (1), the
Appellate Tribunal may, after giving the parties to the
appeal an opportunity of being heard, pass such orders
thereon as it thinks fit, confirming, modifying or setting
aside the order appealed against.
(4) The Appellate Tribunal shall send a copy of every order
made by it to the parties to the appeal and to the concerned
adjudicating officer or the Appropriate Commission, as the
case may be.
(5) The appeal filed before the Appellate Tribunal under
sub-section (1) shall be dealt with by it as expeditiously
as possible and endeavour shall be made by it to dispose
of the appeal finally within one hundred and eighty days
from the date of receipt of the appeal:
Provided that where any appeal could not be disposed of
within the said period of one hundred and eighty days, the
Appellate Tribunal shall record its reasons in writing for
not disposing of the appeal within the said period.
(6) The Appellate Tribunal may, for the purpose of
examining the legality, propriety or correctness of any
order made by the adjudicating officer or the Appropriate
Commission under this Act, as the case may be, in relation
to any proceeding, on its own motion or otherwise, call for
the records of such proceedings and make such order in
the case as it thinks fit.”
36. Section 178 reads thus:
“178. Powers of Central Commission to make
regulations.
(1) The Central Commission may, by notification make
regulations consistent with this Act and the rules generally
to carry out the provisions of this Act.
(2) In particular and without prejudice to the generality of
the power contained in sub-section (1), such regulations
may provide for all or any of following matters, namely:-
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(a) period to be specified under the first proviso to
section 14;
(b) the form and the manner of the application under sub-
section (1) of section 15;
(c) the manner and particulars of notice under sub-section
(2) of section 15;
(d) the conditions of licence under section 16;
(e) the manner and particulars of notice under clause (a)
of sub-section (2) of section 18;
(f) publication of alterations or amendments to be made in
the licence under clause (c) of sub-section (2) of section 18;
(g) Grid Code under sub-section (2) of section 28;
(h) levy and collection of fees and charge from generating
companies or transmission utilities or licensees under
sub-section (4) of section 28;
(i) rates, charges and terms and conditions in respect of
intervening transmission facilities under proviso to section
36;
(j) payment of the transmission charges and a surcharge
under sub-clause (ii) of clause (d) of sub-section (2) of
section 38;
(k) reduction of surcharge and cross subsidies under
second proviso to sub-clause (ii) of clause (d) of sub-
section (2) of section 38;
(l) payment of transmission charges and a surcharge under
sub-clause (ii) of clause (c) of section 40;
(m) reduction of surcharge and cross-subsidies under the
second proviso to sub-clause (ii) of clause (c) of section 40;
(n) proportion of revenues from other business to be utilised
for reducing the transmission and wheeling charges under
proviso to section 41;
(o) duties of electricity trader under sub-section (2) of
section 52;
[2025] 5 S.C.R. 2087

Power Grid Corporation of India Limited v. Madhya Pradesh
Power Transmission Company Limited & Ors.

(p) standards of performance of a licensee or class of
licensees under sub-section (1) of section 57;
(q) the period within which information to be furnished by
the licensee under sub-section (1) of section 59;
(r) the manner of reduction of cross-subsidies under clause
(g) of section 61;
(s) the terms and conditions for the determination of tariff
under section 61;
(t) details to be furnished by licensee or generating
company under sub-section (2) of section 62;
(u) the procedures for calculating the expected revenue
from tariff and charges under sub-section (5) of section 62;
(v) the manner of making an application before the Central
Commission and the fee payable therefor under sub-section
(1) of section 64;
(w) the manner of publication of application under sub-
section (2) of section 64;
(x) issue of tariff order with modifications or conditions
under sub-section (3) of section 64;
(y) the manner by which development of market in power
including trading specified under section 66;
(z) the powers and duties of the Secretary of the Central
Commission under sub-section (1) of section 91;
(za) the terms and conditions of service of the Secretary,
officers and other employees of Central Commission under
sub-section (3) of section 91;
(zb) the rules of procedure for transaction of business
under sub-section (1) of section 92;
(zc) minimum information to be maintained by a licensee
or the generating company and the manner of such
information to be maintained under sub-section (8) of
section 128;
(zd) the manner of service and publication of notice under
section 130;
2088 [2025] 5 S.C.R.

Supreme Court Reports

(ze) any other matter which is to be, or may be, specified
by regulations.
(3) All regulations made by the Central Commission under
this Act shall be subject to the conditions of previous
publication.”

ii. Relationship between Sections 79 and 178 of the Act, 2003
respectively
37. A perusal of the provisions laying down the functions of the CERC
indicates that the statutory authority is enjoined with the task of
regulation as well as adjudication of several aspects of the generation,
transmission and distribution of electricity. Section 79 of the Act,
2003 enumerates the functions of the CERC which includes the
dual functions of regulation and adjudication. Section 178, on the
other hand, empowers the CERC to enact regulations by notification
thereby delegating to the body, the power of legislating statutory
regulations under the Act, 2003.
38. The aforesaid two provisions indicate that the CERC functions as
both, decision-making and regulation-making authority under Sections
79 and 178 respectively. However, while the authority exercising
both these functions is one and the same, it is a settled position
of law that the functions by themselves are separate and distinct.
The functions under Section 79 are administrative or adjudicatory
whereas those under Section 178 are legislative.
39. This Court in PTC (supra) has succinctly explained that the powers
under Section 79 of the Act, 2003 are supposed to be exercised in
conformity with the statutory regulations under Section 178 wherever
such regulations are applicable. However, there is no bar on the
exercise of powers under Section 79 in a situation where a regulation
under Section 178 has not been enacted in respect of a particular
subject matter. The relevant portion of the judgment reads thus:
“53. Applying the abovementioned tests to the scheme
of the 2003 Act, we find that under the Act, the Central
Commission is a decision-making as well as regulation-
making authority, simultaneously. Section 79 delineates
the functions of the Central Commission broadly into two
categories —mandatory functions and advisory functions.
[2025] 5 S.C.R. 2089

Power Grid Corporation of India Limited v. Madhya Pradesh
Power Transmission Company Limited & Ors.

Tariff regulation, licensing (including inter-State trading
licensing), adjudication upon disputes involving generating
companies or transmission licensees fall under the head
“mandatory functions” whereas advising the Central
Government on formulation of National Electricity Policy
and tariff policy would fall under the head “advisory
functions”. In this sense, the Central Commission is the
decision-making authority. Such decision-making under
Section 79(1) is not dependent upon making of regulations
under Section 178 by the Central Commission. Therefore,
functions of the Central Commission enumerated in
Section 79 are separate and distinct from functions of the
Central Commission under Section 178. The former are
administrative/adjudicatory functions whereas the latter
are legislative.
54. As stated above, the 2003 Act has been enacted in
furtherance of the policy envisaged under the Electricity
Regulatory Commissions Act, 1998 as it mandates
establishment of an independent and transparent
Regulatory Commission entrusted with wide-ranging
responsibilities and objectives inter alia including protection
of the consumers of electricity. Accordingly, the Central
Commission is set up under Section 76(1) to exercise the
powers conferred on, and in discharge of the functions
assigned to, it under the Act. On reading Sections 76(1)
and 79(1) one finds that the Central Commission is
empowered to take measures/steps in discharge of the
functions enumerated in Section 79(1) like to regulate the
tariff of generating companies, to regulate the inter-State
transmission of electricity, to determine tariff for inter-State
transmission of electricity, to issue licences, to adjudicate
upon disputes, to levy fees, to specify the Grid Code, to
fix the trading margin in inter-State trading of electricity,
if considered necessary, etc. These measures, which the
Central Commission is empowered to take, have got to
be in conformity with the regulations under Section 178,
wherever such regulations are applicable. Measures under
Section 79(1), therefore, have got to be in conformity with
the regulations under Section 178.
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Supreme Court Reports

55. To regulate is an exercise which is different from making
of the regulations. However, making of a regulation under
Section 178 is not a precondition to the Central Commission
taking any steps/measures under Section 79(1). As stated,
if there is a regulation, then the measure under Section
79(1) has to be in conformity with such regulation under
Section 178. This principle flows from various judgments
of this Court which we have discussed hereinafter. For
example, under Section 79(1)(g) the Central Commission
is required to levy fees for the purpose of the 2003 Act.
An order imposing regulatory fees could be passed even
in the absence of a regulation under Section 178. If the
levy is unreasonable, it could be the subject-matter of
challenge before the appellate authority under Section
111 as the levy is imposed by an order/decision-making
process. Making of a regulation under Section 178 is not
a precondition to passing of an order levying a regulatory
fee under Section 79(1)(g). However, if there is a regulation
under Section 178 in that regard then the order levying
fees under Section 79(1)(g) has to be in consonance with
such regulation.
56. Similarly, while exercising the power to frame the terms
and conditions for determination of tariff under Section 178,
the Commission has to be guided by the factors specified in
Section 61. It is open to the Central Commission to specify
terms and conditions for determination of tariff even in the
absence of the regulations under Section 178. However,
if a regulation is made under Section 178, then, in that
event, framing of terms and conditions for determination
of tariff under Section 61 has to be in consonance with
the regulations under Section 178.”
(Emphasis supplied)

40. What is discernible from the aforesaid exposition of law is that there
is a dichotomy between the power to make a regulation under Section
178 and the power to regulate or adjudicate on the various areas
enumerated under Section 79(1). A regulation under Section 178 is
of general application to the entirety of a particular subject matter as
opposed to regulation on a case-to-case basis which may be done
[2025] 5 S.C.R. 2091

Power Grid Corporation of India Limited v. Madhya Pradesh
Power Transmission Company Limited & Ors.

by the CERC under Section 79. Therefore, making of a regulation
under Section 178 has the effect of interfering with and overriding
existing contractual relationships between the regulated entities. On
the other hand, the orders under Section 79 have to be confined to
the existing statutory regulations and do not have the effect of altering
the terms of contract between the specific parties before the CERC.
41. This Court in PTC (supra) also held that though the validity of a
delegated legislation under Section 178 can be tested by way of
judicial review of the courts and not by way of an appeal under
Section 111, yet a dispute as regards the interpretation of a regulation
enacted under Section 178 is entertainable before the APTEL by
way of an appeal.
42. In Energy Watchdog v. CERC, reported in (2017) 14 SCC 80, this
Court has further held that Section 79(1) is the repository of the
regulatory powers of the CERC and such powers must be exercised
in consonance with the guidelines or regulations under Section 178.
However, if there are no such guidelines or regulations in place, it
cannot be said that the hands of the CERC are tied when it encounters
a regulatory lacuna. The relevant portion of the judgment reads thus:
“20. It is important to note that the regulatory powers of
the Central Commission, so far as tariff is concerned, are
specifically mentioned in Section 79(1). This regulatory
power is a general one, and it is very difficult to state
that when the Commission adopts tariff under Section
63, it functions dehors its general regulatory power under
Section 79(1)(b). For one thing, such regulation takes
place under the Central Government’s guidelines. For
another, in a situation where there are no guidelines or in
a situation which is not covered by the guidelines, can it
be said that the Commission’s power to “regulate” tariff is
completely done away with? According to us, this is not a
correct way of reading the aforesaid statutory provisions.
The first rule of statutory interpretation is that the statute
must be read as a whole. As a concomitant of that rule,
it is also clear that all the discordant notes struck by the
various sections must be harmonised. Considering the
fact that the non obstante clause advisedly restricts itself
to Section 62, we see no good reason to put Section 79
out of the way altogether. The reason why Section 62
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Supreme Court Reports

alone has been put out of the way is that determination
of tariff can take place in one of two ways — either under
Section 62, where the Commission itself determines the
tariff in accordance with the provisions of the Act (after
laying down the terms and conditions for determination of
tariff mentioned in Section 61) or under Section 63 where
the Commission adopts tariff that is already determined
by a transparent process of bidding. In either case,
the general regulatory power of the Commission under
Section 79(1)(b) is the source of the power to regulate,
which includes the power to determine or adopt tariff. In
fact, Sections 62 and 63 deal with “determination” of tariff,
which is part of “regulating” tariff. Whereas “determining”
tariff for inter-State transmission of electricity is dealt
with by Section 79(1)(d), Section 79(1)(b) is a wider
source of power to “regulate” tariff. It is clear that in
a situation where the guidelines issued by the Central
Government under Section 63 cover the situation, the
Central Commission is bound by those guidelines and
must exercise its regulatory functions, albeit under Section
79(1)(b), only in accordance with those guidelines. As has
been stated above, it is only in a situation where there
are no guidelines framed at all or where the guidelines
do not deal with a given situation that the Commission’s
general regulatory powers under Section 79(1)(b) can
then be used.”
(Emphasis supplied)

43. In the case on hand, the CERC vide its orders dated 21.01.2020
and 27.01.2020 respectively imposed the liability of payment of
compensation for delay onto the respondent no. 1. It is the case
of the respondent no. 1 that by doing so, the CERC did not act in
conformity with the 2014 Tariff Regulations which do not provide
for payment of transmission charges by a party to whom the delay
is attributable. In our considered view, the said argument does not
hold any water. This Court’s dictum in PTC (supra) and Energy
Watchdog (supra) respectively settles the law in this regard and
the absence of a regulation under Section 178 does not preclude
the CERC from exercising its powers under Section 79(1) to make
specific regulations or pass orders between the parties before it.
[2025] 5 S.C.R. 2093

Power Grid Corporation of India Limited v. Madhya Pradesh
Power Transmission Company Limited & Ors.

iii. Regulatory and adjudicatory functions of the CERC under
Section 79
44. The CERC vide its orders dated 21.01.2020 and 27.01.2020
respectively determined and approved the transmission tariff for the
assets commissioned by the appellant at the Indore substation under
Section 79 wherein the specific prayer for condonation of delay in
commissioning of the said assets was taken by the appellant in terms
of the Regulation 4(3)(ii) of 2014 Tariff Regulations.
“4. Date of Commercial Operation:
The date of commercial operation of a generating station or
unit or block thereof or a transmission system or element
thereof shall be determined as under:
[…]
(3) Date of commercial operation in relation to a
transmission system shall mean the date declared by the
transmission licensee from 0000 hour of which an element
of the transmission system is in regular service after
successful trial operation for transmitting electricity and
communication signal from sending end to receiving end:
Provided that:
(i) where the transmission line or substation is dedicated
for evacuation of power from a particular generating
station, the generating company and transmission
licensee shall endeavour to commission the generating
station and the transmission system simultaneously as
far as practicable and shall ensure the same through
appropriate Implementation Agreement in accordance
with Regulation 12(2) of these Regulations :
(ii) in case a transmission system or an element thereof
is prevented from regular service for reasons not
attributable to the transmission licensee or its supplier
or its contractors but is on account of the delay in
commissioning of the concerned generating station
or in commissioning of the upstream or downstream
transmission system, the transmission licensee shall
approach the Commission through an appropriate
2094 [2025] 5 S.C.R.

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application for approval of the date of commercial
operation of such transmission system or an element
thereof. […]”
(Emphasis supplied)

45. The appellant in its petition before the CERC had submitted that
the delay was due to the delay in commissioning of the associated
transmission lines which were in scope of the respondent no. 1
herein. It is in consequence to this prayer that the CERC, though
did not condone the delay, yet granted the liberty to the appellant
to claim compensation from the respondent no. 1.
46. It is the submission of the respondent no. 1 that the CERC does
not possess any regulatory or legislative power while adjudicating a
petition and it functions as a purely quasi-judicial body, therefore, it
does not have the jurisdiction to impose a charge on the respondent
no. 1. In our considered view, the said argument must fail for the
reason that Section 79 of the Act, 2003 envisages dual function
of regulation and adjudication to be performed by the CERC. The
expressions “to regulate”, “to determine” and “to adjudicate” are
used for different purposes in the list of matters enumerated under
Section 79(1) and cannot be incorporated within the umbrella term
of “adjudication”.
47. The exposition of law in PTC (supra) clarifies the scheme of
regulatory powers and functions under the Act, 2003. It was held
therein that Section 178 that deals with making of regulations by
way of subordinate legislation by the CERC, is wider than Section
79(1) which enumerates specified areas where the CERC exercises
regulatory functions to be discharged by orders or decisions.
Therefore, unlike the regulations enacted under Section 178 that
have a general application, the CERC, under Section 79, has both
regulatory and adjudicatory functions which it exercises in respect of
specific issues arising between specific parties. The relevant portion
of the judgment reads thus:
“92. (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
[2025] 5 S.C.R. 2095

Power Grid Corporation of India Limited v. Madhya Pradesh
Power Transmission Company Limited & Ors.

functions of the Central Commission, in specified areas,
to be discharged by orders (decisions).”
(Emphasis supplied)

48. The regulatory powers provided to the CERC under Section 79 are
of ad hoc nature and are required to be exercised by the CERC in
context of the specific circumstances of the parties before it. The
rationale for provision of such ad hoc powers by the Act, 2003 is to
ensure that regulatory gaps, if any, that may be discovered on a case-
to-case basis, are filled or removed. Therefore, there is no doubt in
our mind that the CERC is enabled to exercise its regulatory powers
by way of orders under Section 79 and the purview of Section 79 is
not limited to only adjudicatory orders but includes within its scope
administrative functions as well.

iv. Grant of compensation for delay on the part of a party is
a regulatory function
49. The respondent no. 1 would submit that the CERC exhibits the
trappings of an adjudicatory authority when it determines tariff and
therefore, was required to confine itself to the reliefs as prayed for
by the appellant before the CERC. By providing the appellant with
the liberty to claim compensation from the respondent no. 1, CERC
could be said to have granted a relief that was not sought for and the
proper opportunity to defend against such claims was not afforded
to respondent no. 1. In order to address this submission, we must
first look into the nature of the power exercised by the CERC while
determining tariff under Section 79(1).
50. This Court in PTC (supra) has held that the determination of tariff
under Section 79(1) is an adjudicatory function of the CERC for the
following reasons:
(i) First, the actual determination/fixation of tariff is done by
the appropriate commission between the parties before it
under Section 62 of the Act, 2003. Although Section 61 is the
enabling provision for framing of regulations while keeping in
mind the generic propositions provided thereunder, yet the
determination of tariff in respect of a specific generation unit,
asset, transmission line, etc, is done by virtue of the power
emanating from Section 62. Therefore, the determination of
2096 [2025] 5 S.C.R.

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tariff is specific to an individual case and is not of general
application under the Act, 2003. This is in consonance with the
test laid down in Sitaram Sugar Co. Ltd. v. Union of India,
reported in (1990) 3 SCC 223 wherein it was held that one of
the factors to determine if an order was issued in exercise of
an adjudicatory function, is to ascertain whether it was specific
to an individual or of general application.
(ii) Secondly, even though determination of tariff like price fixation
is a legislative act, yet such determination has been made
appealable to the APTEL under Section 111. The terms of the
Act, 2003, therefore, clearly indicate that determination of tariff
is an adjudicatory function. The relevant observations of this
Court in PTC (supra) are reproduced below:
“26. The term “tariff” is not defined in the 2003 Act.
The term “tariff” includes within its ambit not only the
fixation of rates but also the rules and regulations
relating to it. If one reads Section 61 with Section 62
of the 2003 Act, it becomes clear that the appropriate
Commission shall determine the actual tariff in
accordance with the provisions of the Act, including
the terms and conditions which may be specified by
the appropriate Commission under Section 61 of the
said Act. Under the 2003 Act, if one reads Section 62
with Section 64, it becomes clear that although tariff
fixation like price fixation is legislative in character,
the 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.
49. On the above analysis of various sections of
the 2003 Act, we find that the decision-making
and regulation-making functions are both assigned
to CERC. Law comes into existence not only
through legislation but also by regulation and
litigation. Laws from all three sources are binding.
According to Professor Wade, “between legislative
[2025] 5 S.C.R. 2097

Power Grid Corporation of India Limited v. Madhya Pradesh
Power Transmission Company Limited & Ors.

and administrative functions we have regulatory
functions”. A statutory instrument, such as a rule or
regulation, emanates from the exercise of delegated
legislative power which is a part of administrative
process resembling enactment of law by the
legislature whereas a quasi-judicial order comes from
adjudication which is also a part of administrative
process resembling a judicial decision by a court of
law. (See Shri Sitaram Sugar Co. Ltd. v. Union of
India [(1990) 3 SCC 223].)
50. Applying the above test, price fixation exercise
is really legislative in character, unless by the terms
of a particular statute it is made quasi-judicial as
in the case of tariff fixation under Section 62 made
appealable under Section 111 of the 2003 Act,
though Section 61 is an enabling provision for the
framing of regulations by CERC. If one takes “tariff”
as a subject-matter, one finds that under Part VII of
the 2003 Act actual determination/fixation of tariff is
done by the appropriate Commission under Section
62 whereas Section 61 is the enabling provision for
framing of regulations containing generic propositions
in accordance with which the appropriate Commission
has to fix the tariff. This basic scheme equally
applies to the subject-matter “trading margin” in a
different statutory context as will be demonstrated
by discussion hereinbelow.”
(Emphasis supplied)

51. While we are in complete agreement with the observations in PTC
(supra), we are of the opinion that the bench therein had no occasion
to consider the issue of other kinds of reliefs that may be given by
the CERC under Section 79(1) read with Section 61 of the Act, 2003.
52. The question that falls for our consideration is whether the grant of
compensation by the CERC was a decision taken by the authority
in its regulatory or adjudicatory capacity and whether it goes a
step beyond the function of determination of tariff. To answer this
question, we may refer to this Court’s decision in Airports Economic
2098 [2025] 5 S.C.R.

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Regulatory Authority of India v. Delhi International Airport Ltd.,
reported in 2024 SCC OnLine SC 2923 (“AERA”) wherein one of
us, J.B. Pardiwala, J., was a part of the bench. We may refer to the
following observations in AERA (supra) with profit:
(i) First, it was observed that while the distinction between ‘general’
or ‘specific’ as laid down in Sitaram Sugar (supra) is a crucial
test consistently applied by this Court for identifying adjudicatory
functions, it cannot be the sole litmus test for distinguishing
between regulatory and adjudicatory functions, especially
where the statute in question does not draw a clear distinction
between the adjudication and regulatory functions. A function,
however specific, cannot be considered de hors the context in
which it is being exercised.
(ii) Secondly, an examination of the broad factors that are required
to be considered while exercising a function is important to
ascertain the nature of such function. The relevant portion of
the judgment reads thus:
57. It may be argued by relying on the judgment
in PTC (supra) that the 2011 Guidelines issued in
exercise of the power under Section 15 is a regulatory
function while the determination of tariff under Section
13(1)(a) is adjudicatory by relying on the distinction
between ‘general’ and ‘specific’ as highlighted above.
In PTC (supra), this Court drew a distinction between
Section 61 of the Electricity Act which grants the
Appropriate Commission the power to issue specific
terms and conditions for determination of tariff and
Section 62 which grants the power to determine tariff.
The crucial test that has been consistently applied by
this Court in drawing the distinction is to determine
if the function is discharged in the capacity of a
regulator or an adjudicator. Now, it may be possible
that certain statutes create a clear distinction between
the regulatory and adjudicatory roles with respect to
the same function. When such a distinction is created,
the Authority does not put on the hat of a regulator
while undertaking the adjudicatory function. On the
other hand, certain other statutes may require the
[2025] 5 S.C.R. 2099

Power Grid Corporation of India Limited v. Madhya Pradesh
Power Transmission Company Limited & Ors.

Authority to ‘determine’ something in its capacity
as a regulator. In such cases, a clear distinction
between the adjudication and regulatory functions
cannot be drawn.
---xxx---
59. The respondents have relied on two clauses
of Section 13 to argue that tariff determination is
an adjudicatory function. The first is the proviso
to Section 13(1)(a) which provides that different
tariff structures may be determined for different
airports. This, it is argued, is a specific/individualistic
component which is an indicator of the adjudicatory
function. It is true that this Court in Sitaram Sugar
(supra) held that one of the factors to assess if a
function is adjudicatory is by determining if it has
a specific or a general application. However, the
observations cannot be interpreted to mean that it
is an overarching consideration in the determination
of whether the function is adjudicatory. Neither can
it be interpreted to mean that the factor must be
considered de hors the context. The consideration of
the factors while exercising the function is equally and
if not more important as a factor. As the judgment in
Sitaram Sugar (supra) notes, “judicial decisions are
made according to law while administrative decisions
emanate from administrative policy.” As held above,
the factors to be considered by AERA in terms of
Section 13(1)(a) are purely ‘policy’ factors. Further, the
function of AERA to determine tariff must be read in
the context of the role of the Authority as a ‘regulator’
as has been highlighted above. Modern constitutional
governance requires that legislation is not general
but context specific. Over-emphasising the distinction
between general and specific provisions to determine
if a function is regulatory or adjudicatory would be to
completely ignore the jurisprudential developments
governing both the regulatory domain and Article 14.
(Emphasis supplied)
2100 [2025] 5 S.C.R.

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53. A reading of the Act, 2003 would indicate that it makes no distinction
between the regulatory and adjudicatory functions vested in and
conferred upon the CERC, which is a quasi-judicial body enjoined
to regulate and administer the subject of electricity generation,
transmission and distribution. In such a situation, it becomes
necessary for us to undertake a harmonious reading of Sections
61 and 79 respectively to determine whether the CERC granted
the liberty to claim compensation in exercise of its regulatory or
adjudicatory function.
54. Section 61 of the Act, 2003 lays down the guidelines that the
CERC must adhere to while specifying the terms and conditions
for determination of tariff, which inter alia includes that: (i) the
generation, transmission, distribution and supply of electricity are to be
conducted on commercial principles; and (ii) the consumers’ interest
is to be safeguarded while also recovering the cost of electricity in
a reasonable manner.
55. This Court in Power Grid Corpn. of India Ltd. v. Punjab State Power
Corpn. Ltd., reported in (2016) 4 SCC 797 (“Barh-Balia”) has held
that beneficiaries cannot be made liable to pay for the delay in any
transmission element, which in turn prevents the entire transmission
system form being operationalized. This is in consonance with the
principle of safeguarding consumers’ interest. We affirm that in a
situation where transmission charges accrue before the assets are
operationalized due to a non-condonable delay on part of one of the
utilities in charge of putting the transmission element into use, the
cost of transmission cannot be put on the beneficiaries or consumers
through the Point of Connection (POC) mechanism. The relevant
portion of the Barh-Balia judgment is reproduced below:
“10. […] In our opinion, Regulation 3(12) of the 2009
Regulations cannot be interpreted against the spirit of the
definition of “transmission lines” given in the statute. It is
evident from the record that it is not a disputed fact that
switchgear at Barh end of Barh-Balia line for protection
and metering were to be installed by NTPC and the same
was not done by it when transmission line was completed
by the appellant. As such the appellant might have
suffered due to delay on the part of NTPC in completing
the transmission lines for some period. But beneficiaries,
[2025] 5 S.C.R. 2101

Power Grid Corporation of India Limited v. Madhya Pradesh
Power Transmission Company Limited & Ors.

including Respondent 1, cannot be made liable to pay for
this delay w.e.f. 1-7-2010 as the energy supply line had
not started on the said date.
12. Since we are in agreement with the Tribunal that in
the present case, Respondent 1 and the beneficiaries
could not have been made liable to pay the tariff before
transmission line was operational, we find no infirmity in
the impugned order. Therefore, the appeals are liable to
be dismissed. Accordingly, both the appeals are dismissed
without prejudice to the right of the appellant, if any,
available to it under law, against NTPC. There shall be
no order as to costs.”
(Emphasis supplied)

56. In the case on hand, there is no contractual clause between the parties
for establishing the risks of delay in commissioning of a transmission
asset. There is also no uniform settled position as regards the liability
of transmission charges payable before a particular transmission
element is put in operation, in the form of regulations under Section
178. These circumstances, considered together with the prohibition
on imposing liability of delayed payments on beneficiaries, leave a
regulatory gap. This lacuna was recognized by APTEL in Nuclear
Power Corporation (supra) wherein the correctness of the CERC’s
order was questioned. The CERC, therein, had imposed the liability
of transmission charges on the defaulting party on account of a
transmission element not having been put to use by it, in the absence
of a contractual arrangement between the parties. It was held that in
the absence of any specific provisions dealing with the situation in
the 2014 Tariff Regulations or any other concurrent regulations under
Section 178, the CERC has prescribed a principle that the party to
which the delay is attributable would be responsible for payment of
the transmission charges for the period of delay not condoned. The
relevant portion of the order is reproduced below:
“10.2 […] Similarly, in the facts of the instant Appeal,
there is no inter se contractual arrangement between
the Respondent No. 2 and the defaulting party, i.e. the
Appellant. However, similar to the factual situation in the
case of the Patran Judgment, the Respondent No. 2 had
entered into the TSA dated 24.07.2013 with the various
2102 [2025] 5 S.C.R.

Supreme Court Reports

LTTCs, who were the beneficiaries of the Project being
established by it.
10.3 We further observe that these type of major issues
ought to have been covered under Regulations by the
Central Commission to plug the gaps, which would avoid
litigations. The importance of the same was considered
by the Central Commission at one point of time in its
order dated 5.8.2015 and directed its staff for appropriate
amendments in the Tariff Regulations, 2014. Till date no
such modifications have been carried out by it in the
Regulations. It is however, observed that there are many
regulatory/judicial orders of the Central Commission to
deal with the situations like in the present case.
---xxx---
10.5 Accordingly, in absence of specific provisions in the
Sharing Regulations/Tariff Regulations, 2014 to deal with
the situation under question the Central Commission
through exercise of its regulatory powers has prescribed
a principle for sharing of transmission charges of the
Transmission System of the Respondent No. 2 in the
Impugned Order. Thus, it is observed that by way of
exercising its regulatory power by a way of judicial order
(s) the Central Commission has laid down the principles
of payment of transmission charges in such an eventuality.
However, it is felt that the Central Commission in the
Impugned Order has abruptly concluded the payment
liability on the Appellant just by referring to its earlier
orders and not establishing the linkage with the present
case explicitly. This Tribunal would like to clarify the same.”
(Emphasis supplied)

57. The respondent no. 1 has averred that the CERC cannot conflate its
powers of regulation with its adjudicatory functions and a regulation
cannot be brought into force by way of a judicial order. In the specific
case of Nuclear Power Corporation (supra), we are inclined to
agree with the submission of the respondent no. 1 to the extent that
a regulation cannot be done through the process of adjudication.
However, could it be said that there is a blanket ban on the CERC
[2025] 5 S.C.R. 2103

Power Grid Corporation of India Limited v. Madhya Pradesh
Power Transmission Company Limited & Ors.

to exercise its regulatory functions by way of orders under Section
79(1)? In light of this Court’s dictum in AERA (supra), our answer
to this question must be an emphatic ‘No’.
58. We are of the view that even though the orders under Section 79
may not always be limpid as regards the matters where CERC is
exercising its regulatory functions yet this cannot be the reason
to conclude that the CERC passes all orders in its capacity as an
adjudicator. The nomenclature “judicial order(s)” as used in Nuclear
Power Corporation (supra) does not change the nature of a specific
order that the CERC gives in its capacity as a regulator and the
courts must understand the true import of an order to determine
the nature thereof.
59. The CERC granted liberty to the appellant herein to claim compensation
from the respondent no. 1 to deal with a situation caused due to
an unprecedented event not covered by any guidelines, regulations
or contractual provisions between the parties. The dictum of this
Court in paragraph 20 of Energy Watchdog (supra), indicates that
in such a situation where there is an absence of regulations and
guidelines, the Act, 2003 mandates the CERC to strike a judicious
balance between the parties keeping in mind commercial principles
and consumers’ interest, in exercise of its general regulatory powers
under Section 79(1).
60. The aforesaid leaves no manner of doubt in our mind that though
the CERC’s orders dated 21.01.2020 and 27.01.2020 respectively
were for determination of tariff, yet the order granting liberty to the
aggrieved appellant to claim compensation from the defaulting party
is a consequence of a regulatory lacuna in the 2014 Tariff Regulations
and therefore, is an instance of regulation of tariff between the parties.
61. Since the CERC was not adjudicating the issue of delay between
the parties but was only regulating the consequences of the delay
to the commissioning of the transmission elements, we are of the
view that there was no requirement for a specific prayer in this
regard. As a natural corollary, there was also no occasion for the
respondent no. 1 to be afforded an opportunity to be heard at that
stage. In our considered view, any dispute pertaining to the levy of
transmission charges incurred before the concerned transmission
assets were put to use, would arise only upon the appellant raising
bills to the respondent no. 1 in this regard. In such a scenario, it
2104 [2025] 5 S.C.R.

Supreme Court Reports

cannot be said that there was a contravention of the principles of
natural justice by the CERC.
62. As regards the contention of the respondent no. 1 that the validity
of a regulation cannot be looked into by the statutory authorities
under the Act, 2003, we are of the view that the said submission
was made without considering the general regulatory power under
Section 79(1). While we are in agreement with the submission of the
respondent no. 1 that the vires of a regulation under Section 178
cannot be challenged before an authority that is the creation of the
parent statute, the same cannot be said so for a specific regulation
effected under Section 79(1).
63. It is apposite to mention that the sources of power for enactment of
a regulation under Section 178 and regulatory order under Section
79(1) are different. The former emanates from the power of delegated
legislation whereas the latter is an ad hoc power which is limited
to the specific parties and situation in context of which the order is
given. Since the regulatory powers under Section 79(1) are of an ad
hoc nature and are not of general application, the orders thereunder
are made appealable under Section 111.
64. In view of the aforesaid exposition of law, we find that this Court’s
observations in Whirlpool (supra) are of no avail to the respondent
no. 1 as the present matter falls in none of the cases enumerated
therein. Therefore, there was no occasion for the High Court to admit
the writ petition of the respondent no. 1.

G. CONCLUSION
65. For all the foregoing reasons, we have reached the conclusion
that the High Court committed an egregious error in passing the
impugned judgment. We are left with no other option but to set
aside the impugned judgment and order dated 25.02.2021 passed
by the High Court and dismiss both the writ petitions. In the result,
the appeals succeed and are hereby allowed.
66. Before we close this judgment, we must clarify something important
with a view to obviate the possibility of any confusion. The matter
before us pertained to the maintainability of the writ petitions filed by
the respondent no. 1 on the grounds that CERC had no jurisdiction
to grant liberty to the appellant herein to claim compensation. As
already discussed by us in the foregoing paragraphs, the CERC is
[2025] 5 S.C.R. 2105

Power Grid Corporation of India Limited v. Madhya Pradesh
Power Transmission Company Limited & Ors.

empowered to order for imposition of transmission charges on the
party to whom delay is attributable. We, however, have not considered
the question whether such liability of payment of transmission charges
could be imposed on the respondent no. 1 in the specific facts of the
case on hand. We are of the opinion that APTEL is the appropriate
authority to look into the merits of the matter should the respondent
no. 1 choose to prefer an appeal before APTEL under Section 111
of the Act, 2003.
67. Pending application(s), if any, are disposed of.
68. We direct the Registry to circulate a copy of this judgment to all
High Courts.

Result of the case: Appeals allowed.

†
Headnotes prepared by: Ankit Gyan