Financial Daily from THE HINDU group of publications
Tuesday, May 09, 2006
Financial Daily from THE HINDU group of publications Tuesday, May 09, 2006 |
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Regulatory Bodies & Rulings Industry & Economy - Power Tribunal dismisses plea on power trading margin cap Our Bureau
Out of bounds Tribunal said it could hear matters only if a person is aggrieved by an order of the Commission and not against any regulation framed by the Commission. Regulations are not just determination of margins for a single licensee.
New Delhi , May 8 The Appellate Tribunal for Electricity has dismissed petitions filed by power trading firms against a Central Electricity Regulatory Commission (CERC) regulation that capped trading margins for inter-State transactions at four paise per unit. Electricity trading firms PTC India Ltd, Reliance Energy Trading and Tata Power Trading had earlier challenged the validity of the CERC (Fixation of Trading Margin) Regulations 2006 and had asked the tribunal to set aside the regulator's order. The companies had argued before the tribunal that CERC could have determined margins as per licence conditions but opted to frame the Regulations instead. They also claimed that the move to fix margins would dent their revenues and profitability.
No jurisdiction
Responding to the petitions, the Tribunal said that its jurisdiction did not cover regulations issued by the Commission. A two-member bench said that according to Sections 111 and 121 of the Electricity Act, which defined its jurisdiction, the Tribunal could hear matters only if a person is aggrieved by an order of the Commission and not against any regulation framed by the Commission. During the hearings before the tribunal, CERC had contended that the tribunal had no authority or jurisdiction to examine the validity of Regulations issued by it. In its judgment, the tribunal accepted CERC's arguments and observed that the Regulations were not just determination of margins for a single licensee. Moreover, since these rules were in the nature of a Subordinate Legislation, the tribunal had no jurisdiction over them and the appeals were, therefore, not maintainable. Citing previous Supreme Court judgments, Appellate Tribunal Judicial Member Justice Mr E. Padmanabhan and Technical Member Mr H.L. Bajaj said the tribunal was a special forum set up under Section 110 of Electricity Act 2003 and since it was created under the Statute, it had to function within the limits imposed by the Act. Even as the tribunal dismissed the petitions, it expressed "anguish" over the divergence in various rules and regulations framed by State Electricity Regulatory Commissions under the Electricity Act. "We have come across Rules/Regulations framed by various state regulators without unanimity and at times some rules/ regulations ex-facie run counter to the Principal Act," the tribunal noted.
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