Government withdraws direction to DERC on power tariff

NEW DELHI - The Delhi government Friday informed the Delhi High Court that it was withdrawing its directive to the Delhi Electricity Regulatory Commission (DERC) to put on hold a decision on the power tariff for 2010-2011.

The court reserved verdict on the issue whether the government has the jurisdiction to pass any order to the commission. The verdict will be pronounced Feb 24.

Standing counsel for Delhi government, Najmi Waziri, submitted before a division bench of Chief Justice Dipak Misra and Justice Manmohan that the government would withdraw its May 2010 direction asking the commission to put on hold its decision on tariff.

Meanwhile, the court also said that it will deal all other matters related to tariff plan by hearing it regularly.

Following an order of the court, Attorney General G.E. Vahanvati had appeared before the court and submitted that “under the Delhi Electricity Act, the state has no jurisdiction to pass such an order to the statutory function of the Commission”.

Taking note of the senior lawyer’s submission, the court had pulled up the government for its standoff with DERC causing delay in taking a decision on tariff.

Raising a question whether the NCT government has any power to issue a direction to any statutory Commission not to release its decision on tariff, the bench had sought the attorney general’s assistance.

The court was hearing a public interest litigation seeking a direction to the Delhi government, which has allegedly succumbed to the pressure of DISCOMS to hike tariff and asked DERC not to make public its approved tariff order, to vacate the stay on the commission’s approved tariff for the year 2010-2011.

According to Nand Kishor Garg, the petitioner, the commission has fixed the hike of tariff to 40 per cent basing on the annual revenue return filed by the DISCOMS according to which the companies have generated a surplus amount of Rs.3,577 crore.

“The commission had approved the tariff for government to issue for this year but May 1, 2010, the DISCOMS made a representation to the government seeking a hike of existing tariff from 50 to 70 percent,” said Garg.

He further said the decision was taken by the commission but one of the three members was to sign on it in April last year.

However, before its release, the state government had intervened and stayed the approved tariff in May, 2010, which was illegal and arbitrary.

As per the petition, the government withheld the approved tariff basing on the demand by DISCOMS for hike despite the fact that power distributing companies have generated a huge profit on an average of Rs.300 crore per month from consumers.

Later, DERC had sought legal opinion from the solicitor general of India who opined that the government’s direction was not mandatory for the commission as it is a statutory body.

In the light of the legal opinion by the law officer, the petition sought a court direction to vacate the stay on the commission’s decision.