Delhi High Court: The present writ petition challenged the Delhi Electricity Regulatory Commission (Renewable Purchase Obligation and Renewable Energy Certificate Framework Implementation) Regulations, 2021 (‘2021 Regulations’) and the Open Access Charges and Related Matters (Fourth Amendment) Order, 2021 (‘Order’), which increased the renewable purchase obligations and imposed additional surcharges. Petitioner, Juniper Hotels (P) Ltd. contended that the changes introduced by 2021 Regulations and Order were anti-consumer and rendered procurement of green energy unviable. Sanjeev Narula, J.*, opined that petitioner had not explained as to how the 2021 Regulations affected competition and fairness rendering electricity in Delhi more oligopoly and likewise, there was no substantiation or foundation in the allegation that procurement of power from green sources had been rendered unviable. The Court thus rejected these grounds as unsustainable.
Background
Petitioner was an open access consumer which procured electricity through short term contracts in bilateral transactions with the generating companies and the power exchange, in terms of the Delhi Electricity Regulatory Commission (Terms and Conditions for Open Access) Regulations, 2005 (‘2005 Regulations’). On 13-04-2021, Respondent 1, Delhi Electricity Regulatory Commission (‘DERC’) promulgated the 2021 Regulations in exercise of its powers conferred under Section 181 read with Sections 61(h), 66 and 86(1)(e) of the Electricity Act, 2003 (‘Act’); and on 03-09-2021, the DERC issued the Order in exercise of powers vested in it by virtue of Regulations 12 and 17 of the 2005 Regulations.
The 2021 Regulations increased the Renewable Purchase Obligations (‘RPO’) when compared to the Delhi Electricity Regulatory Commission (Renewable Purchase Obligation and Renewable Energy Certificate Framework Implementation) Regulations, 2012 (‘2012 Regulations’) from (a maximum of) 9% to (a maximum of) 21.35% of total annual consumption. RPO was the requirement of certain entities as stipulated under the 2021 Regulations to source a minimum percentage of their total annual consumption of electricity from renewable sources. Petitioner was an ‘obligated entity’ as per Regulation 2(16), and hence was required to observe the minimum thresholds prescribed in the 2021 Regulations. It was submitted that under the earlier regime, Open Access Consumers enjoyed full exemption from these charges but the Order, now partly removed the exemption from Wheeling Charges, Transmission Charges, Cross Subsidy Surcharge and Additional Surcharge benefits.
Analysis, Law, and Decision
The Court opined that delegated legislation could not travel beyond the substantive provisions of the parent statute; however, apart from merely raising the challenge on ultra-vires, petitioner had failed to lay out any foundational facts or legal grounds to demonstrate any failure in the due process. The Court noted that petitioner challenged withdrawal of exemption from wheeling, transmission and additional surcharge and the increase in RPO compliance on the grounds that the impugned actions were ultra vires of the Constitution and failed to adhere to due process.
The Court observed that the exemption for the open access in the form of subsidy was now limited to the extent of the RPO compliance threshold and the impugned Order had been promulgated in exercise of powers vested under Regulations 12 and 17 of the 2005 Regulations, and the 2021 Regulations had been promulgated under Section 181 read with Sections 61(h), 66 and 86(1)(e). The Court noted that petitioner emphasized that a transparent bidding process was not adopted as stipulated in Section 63 of the Act and this provision had a non-obstante clause, which allowed the Commission to override Section 62 (determination of tariff) if a transparent process of bidding had been adopted for determination of tariff.
The Court opined that Section 63 of the Act made it evident that it did not provide for bidding as the only mechanism for determination of tariff. The Court further opined that it did not find force in petitioner’s submission on the ground of challenge relating to lack of due process. Further, the Court noted that Respondent 1 adopted transparent process and floated public notices in newspapers and on its website regarding the draft regulations at several instances for each draft version. Suggestions, comments, and objections were invited from stakeholders before the 2021 Regulations were enacted but petitioner had not controverted this categorical assertion and never sent in any objections, comments, or suggestions in response to these draft regulations and rather, at this stage, after finalization of the 2021 Regulations, challenge was being raised on non-existent and invalid grounds.
Exemption as a matter of right
The Court opined that the exemption from wheeling, transmission and additional surcharge for the open access consumer could not be claimed as a matter of right. The Court relied on State of Rajasthan v. J.K. Udaipur Udyog Ltd., (2004) 7 SCC 673, wherein the Supreme Court observed that “the exemptions and concessions granted by the Government are privileges and they do not confer upon the beneficiary any legally enforceable right against the Government for grant of a concession, except to enjoy the benefits of the concession during the period of its grant”. The Court thus opined that the recipient of a plain concession without a vested legally enforceable right could not seek continuation of the grant of waiver, except to enjoy the benefits during the concession period of the grant.
The Court also opined that petitioner had not explained as to how the 2021 Regulations affected competition and fairness rendering electricity in Delhi more oligopoly and likewise, there was no substantiation or foundation in the allegation that procurement of power from green sources had been rendered unviable. The Court thus rejected these grounds as unsustainable.
The Court disposed of the writ petition and held that in the present case, the fixation of tariffs through subordinate legislation was within the commission’s purview, and no manifest arbitrariness had been demonstrated to call this decision into question.
[Juniper Hotels (P) Ltd. v. Delhi Electricity Regulatory Commission, 2023 SCC OnLine Del 7100, decided on 03-11-2023]
*Judgment authored by: Justice Sanjeev Narula
Advocates who appeared in this case :
For the Petitioner: Pushti Gupta, Joney, Advocates
For the Respondents: Sanjeev Mahajan, Rishabh Varshney, Advocates
