Municipal Corporation of Delhi Vs. Gagan Narang & Ors. Etc. [Civil Appeal Nos. 7463-7464 of 2023]
- ByPravleen Kaur --
- 15 Jun 2025 --
- 0 Comments
The Supreme Court of India, in Municipal Corporation of Delhi vs. Gagan Narang & Ors. Etc. [Civil Appeal Nos. 7463-7464 of 2023], delivered its judgment on January 2, 2025, upholding the Municipal Corporation of Delhi’s (MCD) authority to issue tariff-based bids for Waste-to-Energy (WTE) projects under the Electricity Act, 2003.
Facts and Background
The MCD organized a meeting with Delhi Distribution Licensees and stakeholders in May 2022, agreeing to adopt a tariff-based bidding model for a WTE project at Narela Bawana, Delhi. Subsequently, MCD issued a Notice Inviting Tender and Request for Proposal for procurement of power from the WTE project, specifying a minimum capacity of 28 MW and processing 3,000 (+/- 20%) tonnes per day of municipal solid waste.
The Delhi Electricity Regulatory Commission (DERC) approved the bid tariff of Rs. 7.38 per kWh and directed the Distribution Licensee to negotiate the Power Purchase Agreement with MCD. However, the Appellate Tribunal for Electricity (APTEL) set aside DERC’s orders, holding that MCD, being neither a distribution licensee nor a generating company, lacked authority to issue tariff-based bids under Section 63 of the Electricity Act.
Legal Issues
The Supreme Court examined:
Whether MCD had the statutory authority under the Electricity Act, 2003, to issue tariff-based bids for the WTE project.
The correctness of APTEL’s decision invalidating DERC’s approval.
The public interest in managing Delhi’s huge waste problem through such projects.
The interpretation of Section 63 of the Electricity Act regarding tariff adoption after transparent bidding.
Court’s Analysis and Findings
The Court, through a bench of Justices B.R. Gavai and K.V. Viswanathan, held that the APTEL erred in its hyper-technical approach by ignoring the larger public interest involved. It observed that the WTE project was essential for effective disposal of Delhi’s massive municipal waste.
The Court clarified that MCD’s role in the project was on a Design, Build, Finance, and Operate basis, with ownership remaining with MCD and operation reverting to it after 25 years. Hence, MCD was not a “stranger” to the project but a statutory authority fulfilling its obligations under the Solid Waste Management Rules, 2016.
The Court emphasized that Section 63 permits the appropriate Commission to adopt tariffs determined through transparent bidding, and DERC’s approval was valid. It rejected APTEL’s reasoning that allowing MCD’s application would permit any stranger to apply under Section 63, noting that MCD’s statutory functions justified its authority.
Conclusion
The Supreme Court allowed the appeal, set aside APTEL’s order, and upheld DERC’s approval of MCD’s tariff-based bidding process for the WTE project. The ruling:
Confirms MCD’s authority to issue tariff-based bids under the Electricity Act.
Recognizes the importance of WTE projects in public interest waste management.
Affirms the validity of DERC’s regulatory approvals following transparent bidding.
Reinforces a purposive interpretation of the Electricity Act balancing statutory obligations and technical provisions.
This judgment facilitates efficient implementation of waste-to-energy projects in Delhi, ensuring sustainable waste management aligned with legal and regulatory frameworks.
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