Recently in its decision the Supreme Court raised objections to a Rajasthan High Court directive instructing a State-operated electricity distribution company (DISCOM) to procure 200MW of power from a private firm, MB Power Private Limited. This deal, if executed, would have resulted in increased tariffs for consumers. Justices BR Gavai and Prashant Kumar Mishra, presiding over the case, asserted that the High Court exceeded its authority by issuing a mandamus that could potentially harm public interest.
The Supreme Court contended that the High Court's directive neglected the broader interest of consumers and public welfare, emphasizing the need to strike a balance between the interests of consumers and DISCOMs. The Court highlighted the imprudence of taking a one-sided stance solely to protect the generators' interests at the expense of consumers and public well-being.
The case stemmed from appeals against a Rajasthan High Court decision that directed Jaipur Vidyut Vitran Nigam Limited to procure electricity from MB Power Private Limited, even though another supplier had submitted a lower bid.
The Supreme Court noted that the High Court's mandamus was issued based on a writ petition filed directly by the private power company, bypassing remedies available under the Electricity Act. The Court expressed disapproval of the High Court entertaining such a writ petition directly, pointing out that the state electricity commission and the Appellate Tribunal for Electricity (APTEL) possess sufficient powers to adjudicate matters related to electricity.
Furthermore, the Supreme Court disagreed with a related APTEL decision, which concluded that the Bid Evaluation Committee did not need to verify whether the rates quoted by bidders aligned with prevailing market prices once the bidding process was deemed transparent. The Court argued that such an interpretation would undermine a key objective of the Electricity Act, which is the protection of consumer interests.
Ultimately, the Supreme Court allowed the appeals by Jaipur Vidyut Vitran Nigam Limited and the State government, overturning the High Court order. The Court directed MB Power to pay ₹5 lakh each as litigation costs to the State government and the DISCOM. Senior Advocate P Chidambaram represented Jaipur Vidyut Vitran Nigam Limited, while Senior Advocates AM Singhvi and CS Vaidyanathan appeared for MB Power (Madhya Pradesh) Private Limited.
Case: JAIPUR VIDYUT VITRAN NIGAM LTD. & ORS. vs. MB POWER (MADHYA PRADESH) LIMITED & ORS.
CIVIL APPEAL NO.6503 OF 2022.
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