Delhi government rapped for interfering in power tariff

Friday, February 18, 2011

NEW DELHI - The Delhi High Court Friday pulled up the Delhi government for trying to interefere with the fixing of tariff rates for 2010-11 by the Delhi Electricity Regulatory Commission (DERC).

The division bench of Chief Justice Dipak Misra and Justice Manmohan sharply criticised the government, saying: “Delhi government cannot pass any direction, asking DERC to hold its decision on tariff.”

While passing the order, the high court accepted the submission of Attorney General G.E. Vahanvati, who has been helping the court in the matter, that the state government was “not empowered to interfere with the DERC’s decision and could only issue guidelines to it for its consideration”.

“Vahanvati’s submission deserves acceptence. Acordingly, we hold that the communication of the present nature made by the state government is absolutely unjustified, unwarranted and untenable and, accordingly, the same stands quashed,” the bench said, after seeing a file relating to the appointment of the DERC’s members.

“On a close scrutiny of the aforesaid directions, it is clear as noon day that there has been an order of prohibition to the commission not to pass the tariff order. The direction is issued keeping in view the public interest. The same is not discernible. It is neither evident nor demonstrable. It was an unwarranted interdiction. It is understandable that the state government could have suggested some kind of a matter relating to policy having nexus with public interest, but unfortunately that is not so,” said the court.

The court was hearing a public interest litigation (PIL) accusing the government of succumbing to pressure from private power distribution companies (discoms) and “prohibiting the release of a new tariff order approved by the DERC” April 29 last year.

The PIL contended that the DERC told the government that discoms were sitting on a combined cash profit of over Rs.300 crore per month and it was time to reduce the power rates.

“It is the most sorry state and the Delhi government has to play a pro-active role but the state is lost despite the fact that it has immense powers,” the bench observed.

The court also expressed its unhappiness over the entire exercise of fixing the power tariff for the capital and rapped the city government and the DERC for it.

The functioning of the DERC, which is a quasi-judicial body, was not satisfactory, the bench said, adding that the state government should not have interfered with the panel’s decision on fixing a new tariff.

Highlighting the lapses, advocate Prashant Bhusan had earlier said: “A large number of file notings have been tampered with and it is a serious issue.”

Senior advocate Mukul Rohatgi, appearing for one of the discoms, submitted that the issue of power tariff could be decided at a later stage but the issue of fuel surcharge be decided as it was hurting the power companies.

The court then deferred the matter for further hearing Feb 23.

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