The Delhi government and the power companies suffered a setback on Friday as the Delhi high court quashed the government's directive that had stopped the Capital's power regulator from issuing a tariff order last year.
The judgment proved that the Delhi government had overstepped its authority last year in intervening in the tariff determination process at the behest of private power companies who had demanded a tariff increase and had petitioned the government claiming "precarious financial situation."
But the Delhi Electricity Regulatory Commission, sources said, was about to roll out a tariff last year that would have actually decreased the power tariff to some extent after calculations on the audited accounts of discoms proved that they were actually in the black.
Given the messy situation, now the court also restrained the DERC from issuing any new tariff decision without approval and permission of the court.
Slamming the government, the court specified it had no right to interfere in any affairs of a quasi-judicial body like the DERC in matters relating to fixing of power tariff.
"The instruction given by the State is quashed as beyond the scope of Electricity Act 2003," a Bench of Chief Justice Dipak Misra and Justice Manmohan said in a judgment.
Referring to government offer on February 11 that it wished to withdraw the letter in public interest, the court said, "the same is not discernible. It is neither evident nor demonstrable. It was an unwarranted interdiction".
The government had in April last year written to the DERC telling that it cannot issue a tariff order till it gave a statutory advise (on the tariff) to the state government and till the government examined and reverted. This had caused a delay in issuance of power tariff.
The court was hearing a PIL accusing the government of succumbing to pressure from power discoms and "prohibiting release of new tariff approved on April 2, 2010 by DERC" which it claimed would have been lesser than the present rate.
The PIL said the DERC told the government the discoms were sitting on a combined cash profit of over R300 crore per month and it was time to reduce the power rates.
But the government repeatedly denied the allegations saying it deemed that no decision was taken so far by DERC as there was no unanimity and there were serious differences between the chairman and its members.
The Bench had during the hearing slammed the conduct of the DERC chairman and members and said it was not befitting members of a quasi-judicial body.
"One day one member says something then changes it and then again takes a U-turn. Then another member changes decision. Then one goes left, the other right," the court had said.