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Consumers’ interest is key in electricity matters: Supreme Court
The bench directed MB Power to pay a cost of ₹5 lakh each in the two appeals that the state government and its departments had to file in the top court
Courts cannot disregard consumer interest to protect power generating companies, the Supreme Court emphasised on Monday as it set aside a Rajasthan high court decision directing the state government to purchase 200 MW electricity from a private electricity producer.
It was improper for the high court to compel the state government to enter into a contract with MB Power (Madhya Pradesh) Ltd for the supply of electricity at the expense of public interest and at a high rate, which would eventually be passed on to consumers, held a bench headed by justice Bhushan R Gavai.
“It will not be permissible to take a lopsided view only to protect the interest of the power generators ignoring the consumers’ interest and public interest,” said the bench, which also included justice Prashant Kumar Mishra. “The high court, by the impugned judgment and order, could not have issued a mandamus (judicial writ) to the instrumentalities of the State to enter into a contract, which was totally harmful to the public interest.”
The high court order meant forcing Rajasthan to purchase 200 MW electricity from MB Power at a rate higher than that quoted by another supplier, whose bid was not accepted by the state electricity commission for not being aligned to prevailing market prices, the top court noted.
“If the power/electricity is to be procured by the procurers at the rates quoted by MB Power, the State would have been required to bear financial burden in thousands of crore rupees, which would have, in turn, passed on to the consumers,” underlined the bench, setting aside the September 2021 judgment of the high court.
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“We are of the considered view that the mandamus issued by the high court is issued by failing to take into consideration the larger consumers’ interest and the consequential public interest. We are, therefore, of the view that the impugned judgment and order passed by the high court is not sustainable in law and deserves to be quashed and set aside,” stated the top court judgment.
The bench also took a grim view of the fact that the high court entertained a writ petition by the power company instead of remitting the firm to suitable recourses available under the Electricity Act.
“As held by the Constitution bench of this court, the state electricity commission and the learned APTEL (Appellate Tribunal for Electricity) have ample powers to adjudicate in the matters with regard to electricity. Not only that, these tribunals are tribunals consisting of experts having vast experience in the field of electricity. As such, we find that the high court erred in directly entertaining the writ petition when MB Power had an adequate alternate remedy of approaching the state electricity commission,” it said.
The bench directed MB Power to pay a cost of ₹5 lakh each in the two appeals that the state government and its departments had to file in the top court.
In its 2021 judgment, the high court cited earlier orders of the Supreme Court asking the state government to purchase a total of 906 MW electricity from successful bidders. The high court also relied upon another order of the appellate tribunal, which held it was not for the bid evaluation committee or the state electricity commission to go into the aspect of whether the prices quoted by a bidder were market aligned or not, and also not to take into consideration the aspect of consumers’ interest.
MB Power had a right to supply power since there was a gap of 300 MW between the power procured by the procurers and the ceiling of 906 MW determined by the Supreme Court, the high court had held. It issued a judicial writ directing the state government and its power distribution departments to take supply of 200 MW electricity from MB Power at the rates quoted by the company.
