M/s. Sundew Properties Ltd. Vs. Telangana State Electricity Regulatory Commission [May 17, 2024]
Case Overview
On May 17, 2024, the Supreme Court of India delivered its judgment in M/s. Sundew Properties Ltd. v. Telangana State Electricity Regulatory Commission (TSERC). The case dealt with electricity tariff disputes, regulatory powers of the State Electricity Regulatory Commission, and obligations of electricity distribution companies.
The dispute arose regarding the applicability of certain electricity tariff orders and whether the developer was liable to pay additional charges imposed by the State Electricity Regulatory Commission.
Facts of the Case
Parties Involved:
Petitioner: M/s. Sundew Properties Ltd., a real estate developer in Telangana.
Respondent: Telangana State Electricity Regulatory Commission (TSERC), the statutory body regulating electricity tariffs in the state.
Background:
Sundew Properties was supplied electricity by the state distribution company for a residential-commercial project.
The developer challenged certain tariff orders issued by TSERC, claiming that additional charges or levies imposed were not justified and violated regulatory norms.
Issue Before the Court:
Whether TSERC had the authority to impose the additional charges in the manner it did.
Whether the tariff methodology adopted by TSERC was in accordance with the Electricity Act, 2003.
Legal Issues
Tariff Determination: The interpretation of Section 62 and Section 86 of the Electricity Act, 2003, relating to the powers of State Electricity Regulatory Commissions to determine tariffs.
Developer Liability: Whether the developer was legally bound to pay the charges imposed under the tariff order.
Procedural Fairness: Whether TSERC followed the due process, including public consultation and notice before imposing charges.
Supreme Court’s Findings
Regulatory Powers:
TSERC has the statutory authority to determine tariffs and impose charges under the Electricity Act, 2003, provided the orders are reasonable, transparent, and based on due process.
Developer Liability:
The Court noted that Sundew Properties Ltd. had availed of electricity supply for its projects.
Since the charges were bona fide and notified, the developer was liable to pay the amount, even if it differed from what the developer initially expected.
Due Process and Fairness:
The Court emphasized that regulatory commissions must follow procedural requirements like public consultation, publication of draft orders, and an opportunity for objections.
In this case, TSERC had complied with these requirements.
Outcome:
The Supreme Court upheld the tariff order issued by TSERC.
Sundew Properties Ltd. was required to pay the additional charges in accordance with the tariff order.
Legal Implications
Regulatory Authority: Confirms the wide powers of State Electricity Regulatory Commissions to determine tariffs under the Electricity Act, 2003.
Tariff Compliance: Developers and electricity consumers must comply with tariff orders, provided they are issued following statutory procedures.
Precedent for Due Process: Regulatory authorities are expected to follow fair procedures in issuing tariff orders, ensuring transparency and public participation.
Conclusion
The Supreme Court in M/s. Sundew Properties Ltd. v. TSERC clarified:
State Electricity Regulatory Commissions have legal authority to impose tariff-related charges.
Developers or consumers cannot avoid legitimate charges if the commission follows due procedure.
The case reinforces the balance between regulatory powers and procedural fairness, emphasizing that statutory bodies must act transparently while stakeholders must comply with lawful orders.
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