CERC’s Ad-Hoc Regulatory Powers under Section 79: Writ Jurisdiction Barred when Statutory Appeal to APTEL Exists – Commentary on Power Grid Corporation of India Ltd. v. Madhya Pradesh Power Transmission Co. Ltd. (2025 INSC 697)

1. Introduction

This Supreme Court decision clarifies a recurrent friction point in India’s electricity jurisprudence: whether the Central Electricity Regulatory Commission (CERC) may, by an order passed while deciding a tariff petition, impose liability for transmission charges on a defaulting utility without an explicit enabling clause in the Tariff Regulations, and if so, whether such an order can be challenged directly under Article 226 or only through the statutory appellate mechanism before the Appellate Tribunal for Electricity (APTEL).

The parties were:

• Appellant: Power Grid Corporation of India Ltd. (PGCIL) – the Central Transmission Utility and deemed inter-state transmission licensee.
• Respondent 1: Madhya Pradesh Power Transmission Company Ltd. (MPPTCL) – the State Transmission Utility for Madhya Pradesh.

PGCIL completed five transmission assets at the Indore 400/220 kV sub-station under WRSS-XIV and WRSS-XVI schemes. MPPTCL’s downstream 220 kV lines, meant to synchronise with these assets, were delayed. CERC approved Commercial Operation Date (COD) under Regulation 4(3)(ii) of the 2014 Tariff Regulations, declined to condone delay, yet invoked its regulatory power to fasten the pre-COD transmission charges on MPPTCL (the defaulting utility). MPPTCL bypassed APTEL and invoked Article 226; the Madhya Pradesh High Court admitted the petitions.

2. Summary of the Judgment

Allowing PGCIL’s appeals, the Supreme Court (J.B. Pardiwala & R. Mahadevan JJ.) held:

1. CERC’s liberty to PGCIL to recover compensation from MPPTCL was a valid regulatory measure issued under Section 79(1) to plug a regulatory lacuna, consistent with PTC India and Energy Watchdog.
2. Such ad-hoc regulatory orders are appealable to APTEL under Section 111. They are not “regulations” framed under Section 178 whose vires can only be tested in constitutional courts.
3. None of the four Whirlpool exceptions (lack of jurisdiction, breach of natural justice, fundamental-right violation, or constitutional challenge) were satisfied; consequently, the High Court ought to have dismissed the writ petitions for availability of an efficacious statutory remedy.
4. The High Court’s order of admission dated 25-02-2021 was set aside and the writ petitions dismissed, without prejudice to MPPTCL’s right to appeal to APTEL on merits.

3. Analysis

3.1 Precedents Cited and Their Influence

• PTC India Ltd. v. CERC, (2010) 4 SCC 603 – Distinguished between:
  • Legislative power under Section 178 (making regulations of general application); and
  • Regulatory/adjudicatory power under Section 79 (case-specific orders).
  Court applied this matrix to hold that CERC’s order, not being a Section 178 regulation, is amenable to Section 111 appeal.
• Energy Watchdog v. CERC, (2017) 14 SCC 80 – Recognised CERC’s residuary regulatory powers when guidelines/regulations are silent. The judgment is the fulcrum for validating CERC’s impugned directions.
• Nuclear Power Corporation of India Ltd. v. CERC (2019 APTEL) – Earlier APTEL decision approving allocation of transmission charges to the defaulting entity in absence of specific regulations. Supreme Court used it to reject MPPTCL’s apprehension of “futility” before APTEL.
• Whirlpool Corporation v. Registrar of Trademarks, (1998) 8 SCC 1 – Set out exceptions to the alternative-remedy rule. The Court held none were attracted.
• Barh-Balia case, (2016) 4 SCC 797 – Laid down that beneficiaries cannot be burdened with charges when transmission elements are delayed due to another party’s default. Provided policy justification for CERC’s stance.

3.2 Legal Reasoning

1. Inter-play of Sections 79 & 178:
   “Making of a regulation under Section 178 is not a pre-condition to the Commission taking steps under Section 79(1).” – PTC India
   The Court applied this to accept that CERC could craft an ad-hoc solution (shifting liability to the delaying party) in absence of a dedicated clause in the 2014 Tariff Regulations.
2. Nature of the Impugned Directions: Determination of tariff is an adjudicatory process; but allocation of its incidence (who pays during an unanticipated delay) in order to protect consumers and uphold commercial principles is regulatory. Thus:
   • The order is not a “delegated legislation” but a case-specific regulatory direction.
   • Vires arguments do not arise; instead correctness and proportionality can be tested in statutory appeal.
3. Writ vs. Statutory Appeal: Whirlpool exceptions did not apply because:
   • CERC had clear jurisdiction under Sections 62 & 79.
   • Natural justice – MPPTCL participated fully; liability crystallises only when PGCIL actually raises bills – challenge then lies to APTEL.
   • No fundamental-rights or constitutional challenge pleaded.
4. Doctrine of Exhaustion of Remedies: The Act is a “complete code”. Entertaining writs would spawn conflicting orders from different High Courts (already evident as another beneficiary, MSETCL, had appealed in APTEL). Uniformity and sectoral expertise justify channelling disputes to the specialist tribunal first.

3.3 Impact of the Judgment

• Strengthens APTEL’s Primacy: Re-affirms that all orders (quasi-judicial and regulatory) of CERC are first appealable to APTEL, except challenges to the validity of Section 178 Regulations.
• Clarifies CERC’s Toolkit: Confirms that CERC may, within tariff petitions, fill regulatory gaps on a case-specific basis to allocate costs equitably, safeguarding consumers.
• Reduces Forum Shopping: High Courts are cautioned against admitting writs on tariff-related disputes; uniform sectoral jurisprudence is promoted.
• Commercial Certainty: Utilities now know that delays attributable to them can lead to direct exposure for transmission charges even if contracts/regulations are silent.
• Prompt Regulatory Amendments Expected: The Court noted the persisting lacuna since 2015. The judgment likely presses CERC to codify a generic clause in the next tariff or sharing regulations.

4. Complex Concepts Simplified

• CERC: Central quasi-judicial regulator for inter-state electricity matters.
• Section 79 (Electricity Act, 2003): Lists CERC’s functions. It can both “determine” (adjudicatory) and “regulate” (policy-oriented, case-specific) aspects of tariff and transmission.
• Section 178: Enables CERC to make Regulations – binding subordinate legislation of general application.
• Regulatory vs. Adjudicatory: • Regulatory – prospective, policy-driven, may apply to a specific situation to fill gaps. • Adjudicatory – resolves a dispute, determines rights/liabilities inter se parties.
• Tariff vs. Transmission Charges: Tariff is the price of using network assets; transmission charges accrue from COD. When COD is delayed, “compensation” covers capital cost recovery for the idle period.
• APTEL: Specialist appellate body for electricity sector; hears appeals on facts & law from CERC/SERC orders.
• Whirlpool Exceptions: Supreme Court permits writ despite alternative remedy only for: (a) breach of natural justice; (b) constitutional issues; (c) lack of jurisdiction; (d) fundamental-rights violations.

5. Conclusion

The Supreme Court’s ruling in Power Grid v. MPPTCL cements a crucial doctrinal point: CERC’s power “to regulate” under Section 79 is sufficiently elastic to devise equitable cost-allocation mechanisms even when statutory regulations are silent, and such orders must be challenged before the sector-specific appellate forum, not under the writ jurisdiction of High Courts.

By overturning the High Court’s admission of the writs, the Court has reinstated the architecture of the Electricity Act, 2003 as a self-contained code, reinforced sectoral expertise, and provided guidance for future instances of delay-related cost recovery. The judgment thus ushers in doctrinal clarity on (i) the scope of Section 79 regulatory orders, (ii) the boundary between Section 79 and Section 178 instruments, and (iii) the disciplined channel of appellate redressal through APTEL.