Allahabad High Court


Allahabad High Court: In a public interest litigation filed by a Non-Governmental Organization (‘NGO') for restraining the Regulatory Commission from going ahead with the final tariff for the Lalitpur Power Generation Company Limited (‘LPGC Ltd.'), the division bench of Devendra Kumar Upadhyaya and Saurabh Srivastava, JJ. while dismissing the petition, said that despite the petition is maintainable, the petitioner was unable to establish that the process of determination of tariff was vitiated on account of the vice of conflict of interest.

The issues in the present case were:

  • Is the instant petition as public interest litigation maintainable at the behest of the NGO?

The Court referred to Dattaraj Nathuji Thaware v. State of Maharashtra, (2005) 1 SCC 590 , wherein the Court observed that “public interest litigation must be used with great care and circumspection and that the judiciary must be extremely careful to see that behind the beautiful veil of public interest an ugly private malice, vested interest and/or publicity seeking is not lurking”, and said that the Courts in India have been encouraging the genuine PILs, however, they are also expected to exercise caution about the misuse of the PILs being filed with oblique and malafide purposes.

Placing reliance on Vishwanath Chaturvedi v. Union of India, (2007) 4 SCC 380 , the Court said that the test to entertain public interest litigation at the behest of a petitioner, who does not have any direct grievance with the subject matter of the petition is as to whether allegations contained in such a PIL need inquiry by the Court entertaining the petition.

The Court after examining the allegations in the writ petition, found that the allegations relate to conflict of interest on account of alleged participation of the same person in preparation of the report by the Designated Independent Agency (‘DIA') as also in preparation and putting forth the objection to the same DIA report before the Regulatory Commission on behalf of the Power Corporation. Thus, it was opined that the instant petition is maintainable at the behest of the NGO

  • Whether the process of determination of power tariff is vitiated on account of conflict of interest on alleged participation of the partner of one of the respondents in preparation of the DIA report and putting forth objection to the same report before the Regulatory Commission on behalf of the Power Corporation?

The petitioner has relied upon the order passed by the Regulatory Commission, which is based on the public hearing, wherein the partner of Bhushan Rastogi & Associates has been shown to be present as consultant of the Power Corporation.

The Court after examining the documents and the reply filed by power corporation, observed that the Power Corporation had constituted a team of four high level officers all working in the Power Corporation for the purposes of studying the DIA report and preparing the comments, and Shardul Amarchand Mangaldas & Company was appointed as its consultant for the preparation of pleadings to be filed before the Regulatory Commission which will include objections to the DIA report.

The Court said that the Partner might have been present during the public hearing before the Regulatory Commission on video conferencing, however, he does not participate in the said hearing on behalf of the Power Corporation. Further, the objections to the DIA report as were prepared by the committee constituted for the said purpose by the Chairman of the Power Corporation in consultation with Shardul Amarchand Mangaldas & Company.

The Court further said that merely because in the Regulatory Commission order, the said Partner was shown to be present would not necessarily mean that he had participated in the public hearing on behalf of the Power Corporation. Further, if the petitioner had any objection in respect of amount of the capital cost claimed by the respondent for its project or as recommended by the DIA, he should have participated in the public hearing before the Regulatory Commission and filed its objection. However, instead of participating in the public hearing and making its objections, the petitioner straightaway filed this public interest petition.

The Court stated another reason to not interfere in this petition, as by the order dated 10-03-2022 the Regulatory Commission has finally approved the capital cost after prudence check and verification and considering the objections raised by the various stakeholders which has resulted in dis-allowance of certain amount from the capital cost claimed by LPGC ltd. Further, against the said order LPGC ltd preferred a statutory appeal under Section 111 of the Electricity Act, which is still pending.

Thus, it was opined that the petitioner has not been able to establish the allegations made in the writ petition in respect of the process of determination of tariff being vitiated on account of the vice of conflict of interest as alleged against the partner.

[Ishhita Foundation Metro City v. State of U.P, 2022 SCC OnLine All 753, decided on 10-11-2022]

Advocates who appeared in this case :

Pushpila Bisht, Advocate, Counsel for the Petitioner;

Neerav Chitravanshi and Sanjay Singh, Chief State Counsel, Counsel for the Respondent.

*Apoorva Goel, Editorial Assistant has reported this brief

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