In a case with potentially far-reaching implications for the powers of Electricity Regulatory Commissions nationwide, the Supreme Court of India has passed a crucial interim order in a dispute involving Rajasthan Discom and South West Mining Ltd., a Mine Developer and Operator (MDO) associated with Barmer Lignite Mining Ltd. (BLML). This legal challenge reached the apex court through a Special Leave Petition (SLP) filed by Rajasthan Discom, contesting a ruling by a Division Bench of the Rajasthan High Court that had overturned summons issued to the MDO by the Rajasthan Electricity Regulatory Commission (RERC).
Barmer Lignite Mining Ltd. operates as a joint venture, with a 51% stake owned by the Government of Rajasthan and the remaining 49% held by a JSW Group company. South West Mining Ltd. is the designated MDO responsible for the lignite mining operations carried out on behalf of this joint venture.
The Supreme Court bench, headed by Chief Justice of India Sanjiv Khanna and comprising Justices P.V. Sanjay Kumar and K.V. Viswanathan, admitted the matter and proceeded to issue notice to the respondents. While granting interim relief to Rajasthan Discom, the Court stayed the operation of the Rajasthan High Court’s order. It further directed South West Mining Ltd. to appear before RERC on May 6, 2025, with all pertinent records and information previously requisitioned by the regulatory body.
This interim direction is particularly noteworthy as it reaffirms and broadens the scope of authority vested in State Electricity Regulatory Commissions under Section 94 of the Electricity Act, 2003. The Supreme Court's order makes it clear that entities involved indirectly in the electricity value chain, such as MDOs, can be summoned to provide data essential for accurate tariff determination. This is especially relevant when the cost structure of such entities could influence pricing decisions impacting end consumers.
The ruling is likely to reshape the manner in which regulatory commissions engage with both public and private entities in tariff-related proceedings. By holding that even third-party operational contractors can fall under the regulatory purview, the judgment enhances transparency and accountability in electricity pricing mechanisms and strengthens the public interest mandate of such commissions.
With the matter scheduled for continued hearing in May 2025, further clarity is expected on how far these regulatory powers extend under the framework of the Electricity Act.
Legal Representation:
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On behalf of Rajasthan Discom (Appellant): Senior Advocate Shyam Divan and Advocate Kartik Seth, with M/s Chambers of Kartik Seth as the Advocate-on-Record.
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On behalf of South West Mining Ltd. (Respondent): Senior Advocate Dr. Abhishek Manu Singhvi and Advocate Mahesh Agarwal.
