The challenge by Tata Power to Maharashtra Electricity Regulatory Commission’s (MERC) on their decision to award a ₹7,000 crore transmission contract on a nomination basis to Adani Electricity was dismissed by the Supreme Court today.
An order passed by Appellate Tribunal For Electricity (APTEL) in this regard was upheld in this regard.
The Court wanted to know if a large infrastructure project can be awarded on a nomination basis under Section 62 of the Electricity Act by departing from competitive bidding under Section 63 of the Act.
A bench of Chief Justice of India DY Chandrachud said that the provisions of the Act do not provide one dominant method to determine tariff and that the tariff has to be determined by exercising general regulatory power.
The Court has said that the Electricity Act 2003 gives a lot of flexibility to State for having inter-state power transmission.
It also said that Electricity Act 2003 does not provide one dominant method for determining tariff. Appropriate commission cannot negate tariff arrived through bidding.
It also said that Section 63 cannot be meant to take precedence over Section 62. MERC has neither framed guidelines to determine tariff thus tariff to be determined by exercising general regulatory power.
The Court, said that due to the above reasons it cannot exercise appellate powers, also it can not interfere in concurrent findings arrived by MERC as it is an independent body to determine tariff.
“It added that the Electricity Act 2003 read with Maharashtra govt GOM does not make tariff only through bidding route. This case has brought to notice the ad hoc nature of state electricity transmission. MSETCL flip flops have led to waste of time,
It has asked all the State Electricity Regulatory Commissions for framing guidelines on determination of tariff as per section 61 of Electricity Act in accordance with the national policy and dismissed the appeal.
The judgment said the law that both cost plus and tariff based competitive bidding are available to a Commission while setting up Transmission projects.
Competitive Bidding is not a dominant route, the Court said putting the Section 62 vs. Section 63 controversy to rest.