Supreme Court Pulls Up Center for Laxity, Extends Stay on CERC’s Functioning

The matter will now be heard on January 20, 2021

December 8, 2020


The Supreme Court pulled up the Ministry of Power (MoP) for failing to appoint a member of law in the Central Electricity Regulatory Commission (CERC) since August 2020. The apex court has now extended the stay on the Commission’s functioning to January 20, 2021, when the matter will be heard again.

The three-judge bench of Justice Sanjay Kishan Kaul, Justice Dinesh Maheshwari and Justice Hrishikesh Roy minced no words and told the CERC’s counsel, “We have shown considerable restraint in this matter. Our restraint seems to be misunderstood!”

In 2018, the court had ruled that all state electricity commissions would appoint a member from a legal background (high court or district court judge). The ruling also extended to the CERC, which was not adhered to. The MoP had informed the court that two advertisements were issued for the vacancy in 2019; however, the ministry could not appoint a suitable candidate.

Instead, the CERC appointed two non-judicial members- IS Jha (former chairman and managing director, Power Grid Corporation) and Arun Goyal (retired secretary, Government of India) – which prompted the Supreme Court to send the newly appointed members on leave until the Commission appoints a member of law.

The MoP had made appointments based on the attorney general’s opinion. Meanwhile, in its affidavit, the CERC mentioned that in 177 cases, orders had been reserved due to the SC’s intervention.

The bench stated, “Since the Government seemed to be in a hurry to see that the functioning of the commission is not affected, we gave liberty in terms of the last direction, making it clear that if a person of the law were so appointed within this period, the persons who would go on leave would be permitted to re-join.”

The bench further observed, “The passage of time also doesn’t seem to have awoken the Government to the problem at hand, and almost four months have passed since then. We are unable to come to the consumers’ aid because the Government does not seem to be interested in coming to the consumers’ assistance or making the Commission functional.”

Senior lawyer and associate partner of HSA Advocates Aditya K Singh told Mercom, “Laxity of the Government is significantly impacting the power sector. Developers are facing hardships due to the non-functioning of the Commission. Proceedings were also impacted due to the national lockdown announced by the Ministry of Home Affairs to contain the spread of novel coronavirus (COVID-19).”

He further added, “Due to the order of the Hon’ble Supreme Court, the functioning of the Central Commission has come to a complete standstill leading to the assimilation of a huge backlog of pending matters. Hardships of developers have also arisen since matters of significant sectoral importance are pending before the Central Commission. Until such matters are not settled, it will have a prejudicial impact on the overall power sector.”

Interestingly, in October 2020, the CERC had issued an advisory asking The Ministry of Power to work in harmony with the states by honoring the respective jurisdiction carved out in the Electricity Act 2003.

Image credit: By Legaleagle86, CC BY-SA 3.0

Rahul is a staff reporter at Mercom India. Before entering the world of renewables, Rahul was head of the Gujarat bureau for The Quint. He has also worked for DNA Ahmedabad and Ahmedabad Mirror. Hailing from a banking and finance background, Rahul has also worked for JP Morgan Chase and State Bank of India. More articles from Rahul Nair.