Case: STATE OF GUJARAT Vs. UTILITY USERS WELFARE ASSOCIATION THROUGH ITS PRESIDENT

2. The Division Bench of the Madras High Court vide judgment dated 7.2.2014 took the view in respect of the challenge laid to the selection process of the Chairman of the Tamil Nadu State Electricity Commission that there was no such mandatory requirement though there was an option to appoint a Judge.3. The Division Bench of the Gujarat High Court in a similar case in respect of the appointment of a Chairperson of the Gujarat State Regulatory Commission vide impugned order dated 8.10.2015 opined that it was so mandatory.4. The aforesaid judicial conflict being before this Court, the Page 2 of 84challenges laid in different States were transferred to this Court through Transfer Petitions vide order dated6. This petition has been filed by a Senior Advocate of the Madras high Court against the exercise of suo moto power by the Commission in respect of a tariff hike and in that process sought to challenge the appointment of the Chairperson and seeks to canvass that there exists a mandatory requirement for him to be a retired Judge of a High Court7. This petition filed before the Madras High Court is, once again, by an Advocate, purportedly in public interest. Apart from the fundamental issue raised of a Judge to be appointed as the Chairman of the State Commission, like in the previous Transfer Petition, certain notifications have also been assailed. The Tamil Nadu Government had published a Notification dated 26.9.2013, constituting a three Member Selection Committee for selection of the Members of the State Commission in terms of Section 85 of the said Act. This selection process was required to be completed in three months and had to recommend, at least, two names for the post of Members. The Committee recommended the name of Mr. G. Rajagopal (respondent No.7) on 27.12.2013. This appointment is specifically assailed on the ground that he was still working as Director (Finance), TANGEDCO when his name was recommended by the Selection Committee, and that Mr. Rajagopal opted for voluntary retirement after his name had been recommended by the Selection Committee. The Notification of his appointment was issued on 31.12.2013 whereafter he assumed office on 9.1.2014.The impugned decision of the Madras High Court opining that the Chairperson need not be a High Court Judge was rendered on 7.2.2014.49. Another Notification dated 27.2.2014 was published constituting a Selection Committee for selecting a person for the post of the Chairperson. Mr. S. Akshayakumar (respondent No.6) retired from the post of the Managing Director of TANTRANSCO on 31.5.2014 and was appointed as the Chairperson of the State Commission vide Notification dated 6.6.2014, assuming charge on 9.6.2014.On 12.12.2014, the State Commission consisting of these two persons as Member and Chairman and Mr. S. Nagalsamy, passed a tariff order permitting a tariff hike by TANGEDCO by a majority of 2:1 with respondent Nos.6 & 7 concurring on the issue of tariff hike while the third Member (Mr. Nagalsamy) was dissenting. The dissent was on the legality of the suo moto tariff order.51. We have recited these facts only to bring on focus that the grievance is only with the tariff order, but under the garb of the same, the appointment of respondent Nos.6 & 7 is now sought to be assailed on the ground that the said two persons could not be really categorizedas not having any financial or other interest, which is likely to prejudice their functioning as Chairperson and Member in terms of Section 85(5) of the said Act. The two companies TANGEDCO and TANTRANSCO were established for power generation and transmission of power respectively by restructuring the Tamil Nadu Electricity Board in compliance of Section 131 of the said Act and are State owned companies.

Court's reasoning:
T.C.(C) No.140/2015 and T.C.(C) No.137/2015 & IA Nos.3 & 4/201654. There was really no fresh material addressed before us so far as the aforesaid petitions are concerned.55. Insofar as IA Nos.3 & 4/2016, filed by CLP Wind Farms Private Limited, seeking intervention in T.C.(C) No.137/2015, are concerned, the prayer for intervention is made on the ground that the Court issues appropriate directions to the Tamil Nadu Electricity RegulatoryCommission for time bound hearing and expeditious adjudication of thepetitions, being DRP Nos.62/2014 & 63/2014. The Court finds no merit in the applications, as the prayers made in the applications are outside the lis being adjudicated by the Court. The same are accordingly disposed of.If we turn back to the provisions of Section 84 of the said Act, we find that the expressions used in sub-section (1) both in the context of the requirement of ability, integrity and standing as also in the context of adequate knowledge and capacity in dealing with problems relating to engineering, finance, commerce, economics, law or management. On the other hand, in sub-section (2) while dealing with the possibility of appointment of a Chairperson from the pool of sitting or retired Judges, the expression used isg it to be a discretionary power.80. We are, thus, inclined to accept the line of reasoning advanced by the learned counsel led by the learned Attorney General that the plain reading of the section leaves no manner of doubt that the legislature only envisaged a possibility of appointment of a Chairperson from the pool of sitting or retired Judges of the High Court, in which case the method of appointment would be different from the one as envisaged under Section 85 of the said Act.81. We may also look to the nature and functions performed by the State Commission. Functions of the State Commission are prescribed under Section 86 of the said Act. The enumerated functions aredetermination of tariff, regulation of electricity purchase and procurement process of distribution licencees, facilitating intra-state transmission, issuing licences to persons, promoting cogeneration and generation of electricity from renewable sources, levy fee, specify or enforce standards, fix trading margins. All these functions are regulatory in character rather than adjudicatory. The real adjudicatory function is only provided in sub-clause (f) whereupon the Commission has the option of adjudicating the disputes between the licencees and generating companies, or to refer such disputes to arbitration. There is also an advisory role to be performed by the State Commission as specified in sub-section (2). The issue, however, is not whether a Judge would be comfortable doing this function but whether these are types of functions which necessarily mandate a Judge to be a Chairperson. The answer to this would also be in the negative, supporting the view we have adopted on the plain reading of the section.85. Mr. Jayant Bhushan, learned senior counsel also rightly emphasized that were it to be presumed that the Chairperson had to be mandatorily a Judge, the process of appointment would have to be in terms of the proviso and not in terms of Section 85 of the said Act. This would make the reference to a Chairperson under Sub-Sections (2), (3), (5) & (6) of Section 85 otiose as that eventuality would never arise were such a plea to be accepted.We are, thus, unable to accept the contention advanced on behalf of the parties, who sought to sustain the view adopted by the Gujarat High Court. The fact that the Chairperson has a right to nominate theMember, who would chair meetings in his absence as per sub-section (2) of Section 92, or that the presence of a man of law would be no substitute to the requirement of a Judge who would bring a judicial thought process to the decision making as Chairman, or that the regulatory body should not be unregulated, are generalized pleas, which are difficult to accept. No doubt, the law declared by the Supreme Court is binding on all Courts within the territory of India, which would also include principles of law emanating from a judgment or interpretation of the law, but then the ratio decidendi of the judgments of the Supreme Court, makes the principle of mandatory requirement of a Judge applicable only to cases where the judicial function is sought to be shifted through the process of. We may also note that Section 84(2) of the said Act begins with a non-obstante clause, i.e., Notwithstanding anything contained in(1), it does not take away what is stated in sub-section (1), which deals with the requirements that are necessary in the appointment of a Member or Chairperson. It would not cut down the clear terms of the enactment being sub-section (1). The occasion to use such a non-obstante clause really arose because the process ofappointment of a Chairperson who is, or has been a Judge, is required to be different, and thus, the mandatory consultation with the Chief Justice. It is nothing more or less. Further sub-section (1) of Section 85 provides for a Selection Committee to be headed by a Judge of the High Court but with the proviso that the said provision would not apply for the appointment of a person as a Chairperson who is, or has been, a Judge of the High Court. This, in fact, shows that a non-Judge can be appointed as the Chairperson by the Selection Committee constituted under Section 85 of the said Act, which in turn is chaired by a Judge of the High Court. We are, thus, unequivocally of the view that Section 84(2) of the said Act only gives the discretionary option to the State Government to appoint a Judge as the Chairperson of the State Commission. The said provision therefore, is not mandatory in nature.are conscious of the fact that the case (MJ-I) dealt with a factual matrix where the powers vested in courts were sought to be transferred to the tribunal, but what is relevant is the aspect of judicial functions with all the ‘trappings of theand exercise of judicial power, at least, in respect of same part of the functioning of the State Commission. Thus, if the Chairman of the Commission is not a man of law, there should, at least, be a member who is drawn from the legal field. The observations of the Constitution Bench in Madras Bar(MJ-II) constitutes adeclaration on the concept of basic structure with reference to the concepts ofe of. The first question raised before the Constitution Bench as to whether judicial review was part of the basicof the Constitutionwas, thus, answered in the affirmative.We are, thus, of the view that it is mandatory to have a person of law, as a member of the State Commission. When we say so, it does not imply that any person from the field of law can be picked up. It has to be a person, who is, or has been holding a judicial office or is a person possessing professional qualifications with substantial experience in thew, who has the requisite qualifications to have been appointed as aof the High Courtor a District Judge.at present there is asingle Commission, which inter alia performs adjudicatory functions and, thus, theof a man of law as a memberis a necessity in order to sustain the provision, as otherwise, it would fall foul of the principles of separation of powers and judicial review, which have been read to be a part of the basic09. We are also not in a position to accept the plea advanced by the learned Attorney General that since there is aof a Judgein the Appellate Tribunal that would obviate the needof a man of law as a memberof the State Commission. The original proceedings cannot be cured of its defect merely by providing a right of appeal.We are, thus, of the unequivocal view that for all adjudicatory functions, the Bench must necessarily have at least one member, who is or has been holding a judicial office or is a person possessing professional qualifications with substantial experience in theaw and who has the requisite qualifications to have been appointed as aof the High Courtor a District Judge.In respect of the aforesaid, reliance was placed on the judgment in Rajeshand Mor Modern Cooperative Transport Society Ltd.We, however, find that those judgments would not apply in the present case. Theal interest was examined in the narrower sense as well as the wider sense and in the wider sense, it was held to include the direct or indirect interest of a person in relation to a financial undertaking. The situation arose when the person concerned was holding both the posts simultaneously, which is not so in the present case. (as noticed in para 52 above) It is also pointed out by the learned counsel appearing for theil Nadu that the ordersof appointment have been exclusively assailed right till the Supreme Court. It may be added that the Selection Committee was presided over by a retiredWe, thus, find no merit in the plea sought to be advanced assailing either the appointment or the suo moto tariff