Case: M/S STAR WIRE (INDIA) VIDYUT PVT LTD Vs. HARYANA ELECTRICITY REGULATORY COMMISSION

3. The appellants had set up a 9.90 MW independent Biomass Power Plant, which was declared commercially operational on 3 rd May, 2013. The principal Regulations were notified on 3 rd February, 2011, providing for the norms and parameters for determination of tariff for various renewal energy project developers. As per Regulation 4 of the principal Regulations, the first control period of three years was to end on 31 st March, 2013. The third proviso of Regulation 4 posits that in case, the regulations for the next control period were not notified after the expiry of the first control period, the tariff norms as per these regulations (principal Regulations) would continue to apply until notification of the revised regulations, subject to adjustments as per the revised regulations. As the first control period had already ended, the appropriate authority initiated suo motu proceedings for revision of tariff and issued draft fourth amendment to the principal Regulations, seeking to amend Regulation 4 and including Regulation 5 of the principal Regulations. This draft amendment was issued on 29 th December, 2014. Pursuant thereto, the concerned parties submitted their response. After giving opportunity to all concerned, the Commission proceeded to pass an order dated 4 th August, 2015, which attempts to analyse and adjudicate all the issues raised by the concerned parties. On the basis of the said order, the impugned Amended Regulations came to be notified. The effect whereof was to deny the applicability of tariff norms adjustments to the appellant No.1, which had commenced its commercial operations on 3 rd May, 2013. The said amendment has been given prospective effect qua the appellants. It has made classification between the projects commissioned/to be commissioned in financial years 2013¬14 on the one hand and 2014¬15, 2015-16 and 2016¬17 on the other, without any intelligible differentia or any rational basis therefor. Neither the principal Regulations nor the impugned Amended Regulations envisage classification on the basis of commissioning of renewable energy projects in a particular financial year during the same control period. Similarly, the regulations do not envisage determination of separate tariff on such differentiation. Indeed, the authority has been invested with power to determine project specific tariff under Regulation 6. In the present case, however, the power exercised by the Commission is indisputably with reference to Regulation 4 namely, to determine a generic tariff for the control period commencing from 1 st April, 2013 and ending with financial year 2016¬17 i.e. 31 st March, 2017, for a period of 4 years.4. In this back drop, the appellants filed writ petition and prayed for the followingis therefore most respectfully prayed that this Hon?ble Court may graciously be pleased to:a. Issue an appropriate writ under Article 226/227 of the Constitution of India for issuance of, order or direction in the nature of Certiorari for setting aside the Impugned Notification dated 12.08.2015 (Annexure P¬ 1) and the Impugned Order dated 04.08.2015 (Annexure P-2) passed by the Respondent to the extent the same seeks to apply the revised regulations with effect from the date of the Impugned Notification; andb. Issue an appropriate writ under Article 226/227 of the Constitution of India for issuance of, order or direction in the nature of Mandamus directing the Respondent to apply the revised regulations on and from the date of commencement of the Second Control Period i.e. with effect from 01.04.2013; andc. Issue an appropriate writ under Article 226/227 of the Constitution of India for issuance of, order or direction in the nature of Mandamus directing the Respondent to publish the revised tariff after adjusting the same as per the revised regulations from the first day of the Second Control Period i.e. 01.04.2013, and to further allow carrying cost on the overdue amounts; andd. Issue an appropriate interim direction granting ad¬ interim ex-parte stay of operation of the Impugned Notification dated 12.08.2015 (Annexure P¬1) and the Impugned Order dated 04.08.2015 (Annexure P¬2) passed by the Respondent; ande. Dispense with serving advance notice upon the Respondent; andf. Costs of the Writ Petition be awarded to the Petitioners; andg. Dispense with filing of certified copies/true typed copies of Annexures P¬1 to P-10, and the photo/typed copies of the Annexures may kindly taken on record and the requirement of filing typed/certified copies thereof be dispensed with; andh. Pass such other order(s) as this Hon?ble Court may deem fit and proper in the facts of the case.The appellants raised almost thirty grounds as articulated in the writ petition, in support of the reliefs claimed by them. They have attempted to demonstrate as to how the amended regulations were arbitrary, unreasonable, capricious and discriminatory. The respondent refuted the stand taken by the appellants by filing elaborate counter affidavit and mainly relied on the order passed by the Commission dated 4 th August, 2015, which was the foundation for the amendment of the relevant provisions of the principal Regulations. The reply affidavit filed by the respondents before the High Court runs into about 60 typed pages (forming part of volume II of the paper book). Accordingly, the writ petition proceeded before the Division Bench of the High Court. The High Court in the impugned judgment has noted that the appellants had raised only two contentions, as can be discerned from paragraph 6 of the impugned judgment. The same readsThe grievance of the petitioners is two fold. Firstly with the issuance of notification of the Amended Regulations on 12.8.2015, there would be different treatment for the persons operating in the same control period; namely, who had commissioned their projects in the year 2013¬14 and the persons, who had commissioned thereafter, the control period being same i.e. for the years from 2013¬14 to 2016¬17. Further, it was submitted that out of the control period prior to the date of notification of the Amended Regulations only financial year 2013-14 has been isolated for different treatment, which is discriminatory. How any of alleged Regulation is affecting the petitioner was not specifically pointedwould proceed on the basis that this was the limited argument canvassed before the High Court during the hearing of the writ petition. However, what is intriguing to note is that even these two points have been disposed of by the Division Bench of the High Court in a most cursory manner without analysing the issues in proper perspective, as can be discerned from the discussion in paragraph Nos.13 to 15 of the impugned judgment. The same readsIt is not in dispute that exercise for revision of the 2010 Regulations was not started six months before the expiry of the existing control period on 31.3.2013. The exercise was started only in the year 2015. Public hearing was held in which even the petitioner-company was represented. Vide order dated 4.8.2015, the Commission approved the proposed amendments in the 2010 Regulations. The Amended Regulations in terms of the order passed by the Commission were notified on 12.8.2015. Regulation 1(2) of the Amended Regulations provides that the Regulations shall be applicable to all the Renewable Energy Projects Commissioned/to be commissioned from Financial Years 2013¬14 to 2016-17, as the control period of four years was provided. Regulation 1(3) of the Amended Regulations provides that for the existing projects commissioned from Financial year 2013-14 onwards, the revised norms shall be applicable prospectively from the date of notification of the Amended Regulations unless otherwise provided in the Amended Regulations. For the period prior to the date of notification, existing norms as per the 2010 Regulations shall continue to be applicable. The Amended Regulations were to come into force from the date of publication in the official gazette. The Amended Regulation (4) provides that the second control period shall be of four years commencing from Financial year 2013¬14. 3 rd proviso thereto provides that in case revised regulations for the next control period are not notified on or before the commencement of that period, the tariff norms as per the Amended Regulations shall continue to remain applicable, until notification of the revised regulations and the second control period shall be deemed to have been extended upto the date of notification of the regulations for the next control period.14. The contention raised by learned counsel for the petitioners that there is discriminatory application of regulations qua the petitioners? company only because it started operation in the Financial year 2013-14, as compared to the other projects, which started functioning after Financial year 2013-14 is merely to be noticed and rejected. Though the control period is from the Financial Years 2013-14 to 2016¬17, however, the Amended Regulations clearly provide that for the existing projects from Financial year 2013¬14 onwards, the revised norms shall be applicable prospectively, from the date of notification of the Amended Regulations.15. As far as the second contention raised by learned counsel for the petitioners regarding application of the Amended Regulations in terms of 3 rd proviso to Regulation 4 of the 2010 Regulations is concerned, it clearly provides that the existing norms, even for the period subsequent to the expiry of control period, shall be applicable till such time revised Regulations are notified. However, the same shall be subject to adjustments as per revised regulations. That would mean, adjustments, if any, are to be specifically provided for in the Amended Regulations for the period prior to the notification of Amended Regulations. Wherever special conditions have been provided for in the Amended Regulations for different years, learned counsel for the petitioners did not point out how that prejudiced the petitioners. It is all matter of calculations for which facts were examined by the Commission while passing the order on 4.8.2015, on the basis of which, the Regulations werea matter of fact, paragraph 13 of the impugned judgment merely notices some factual aspects. The reason which weighed with the High Court to negative the issues agitated by the appellants can be noticed only from paragraph Nos.14 and 15, which ex facie to so the least is cryptic.6. Resultantly, the appellants have approached this Court by way of present appeal.

Reasoning:
8. After perusing the impugned judgment, we have no hesitation in taking the view that the High Court has committed manifest error or so to speak, failed to exercise jurisdiction vested in it for adjudicating the relevant issues raised by the appellants. For, there is hardly any intelligible discussion in the impugned judgment in that regard. If we may say so, it is cryptic and cannot stand the test of judicial scrutiny. We say so because, up to paragraph 9 of the judgment the High Court has only reproduced the rival stand. Paragraph 11 refers to the relevant provisions. Paragraph 12 is mere narration of some facts concerning this case. Paragraph 13, broadly refers to the purport of the provisions in the principal Regulations and the impugned Amended Regulations. The discussion with regard to the merits of the challenge, can be discerned only from paragraph Nos.14 and 15 reproduced hitherto. Paragraph 14 even if fairly analysed, merely adverts to the argument of discriminatory application of regulations qua the appellant company and proceeds to reject the same. No logic can be deduced as to why the Court was persuaded to reject the argument despite the multifaceted issues raised by the appellants. The second sentence in the said paragraph then proceeds to record that the control period may be from FY 2013-14 onwards, however, the impugned Amended Regulations envisage application of revised norms to projects commissioned in FY 2013¬14 prospectively from the date of notification of the impugned Amended Regulations. In other words, the High Court has not analysed the grounds of challenge regarding the validity of the impugned Amended Regulations and including the competency to frame such a regulation, appropriately. Strikingly, the High Court then straightaway proceeds to examine the second contention raised by the appellants in reference to the third proviso in the principal Regulations providing for adjustments as per revised regulations. The Court merely noted that the appellants failed to point out any prejudice caused to them because of exclusion from the benefit flowing from the principal Regulations. The appellants, on the other hand, have invited our attention to the specific grounds taken by the appellants in the writ petition and also noted in the order of the Commission dated 4 th August, 2015 and additionally articulated in the ground No. B of the special leave petition, giving comparative chart indicating substantial disparity regarding the norms applicable as per principal Regulations and the impugned Amended Regulations. In other words, the argument of prejudice was raised by the appellants to the detail but the High Court has failed to deal with the same, to say the least satisfactorily. Similarly, the detail arguments regarding the validity of the impugned Amended Regulations and the competency to frame such a regulation has not been analysed by the High Court.9. Suffice it to observe that the discussion in two paragraphs (para 14 and 15), to say the least, is one of disposing of the writ petition in a most casual and cavalier manner. That cannot be countenanced. Having said this, we are of the considered opinion that it would be appropriate to relegate the parties before the High Court for fresh consideration of the writ petition on its own merits in accordance with law. We refrain from expressing any opinion either way on the merits of the controversy or the grounds of challenge regarding the impugned Amended Regulations. In other words, the High Court must consider all relevant aspects of the matter agitated by the appellants and deal with the same appropriately in accordance with law.10. For completion of the record, we must note the decision of the Constitution Bench of this Court in PTC India Ltd. Vs. Central Electricity Regulatory Commission, Through Secretary (2010) 4 SCC 603  , which has held that the challenge to the validity of the regulations can be decided only in judicial review proceedings before the courts and not by way of appeal or review. The appellants having invoked such a remedy before the High Court, all contentions available to the appellants in that regard ought to have been adjudicated in proper perspective.