APTEL upholds procedural fairness; WBERC’S order against Surya Alloy set aside and remanded.

JSA Advocates and Solicitors successfully represented Surya Alloy Industries Ltd. (“Surya Alloy”) before the Appellate Tribunal for Electricity (“APTEL”) challenging the Order dated 12.08.2022 (“Impugned Order”) passed by West Bengal Electricity Regulatory Commission (“WBERC”) in Case No. C15/993, which related to Damodar Valley Corporation’s (“DVC”) demand for additional energy charges during the restricted drawal period. While setting aside the Impugned Order, APTEL has reaffirmed the importance of procedural compliance and the principles of natural justice in regulatory proceedings.

• The brief facts leading up to the passing of the Judgment are summarised below:-
  • On 06.02.2019, Surya Alloy had filled in a Writ Petition before the Calcutta High Court inter alia, challenging the vires of Regulation 4.4 of the WBERC (Terms and Conditions of Tariff) Regulations, 2011 and seeking a direction for refund of all payments made by the Appellant towards the additional energy charges levied by DVC, for the months of June 2015 to December 2018.
  • On 12.02.2021, Calcutta High Court disposed of the Writ Petition filed by Surya Alloy, while:-
    • Permitting Surya Alloy to approach Ld. WBERC on the aspect of additional energy charges for the months of June 2015 to December 2018, while keeping the issue relating to the vires of Regulation 4.4 of the Tariff Regulations open.
    • Directing Ld. WBERC to pass the order within 6 months after hearing parties.
  • On 26.02.2021, Surya Alloy filed the Petition before WBERC, wherein:-
    • (On 31.01.2022, the Petition was heard by a quorum consisting of the Chairperson and two Members.
    • On 28.04.2022, one of the Members of Ld. WBERC retired.
    • On 18.07.2022, the Petition was heard by quorum consisting of the Chairperson and the remaining Member.
    • On 01.08.2022, the Chairperson retired.
    • On 12.08.2022, the Impugned Order was passed by Ld. WBERC. Notably, while the covering page of the Impugned Order notes the presence of the Chairperson (who had retired by then) along with another Member, the Impugned Order was signed by only one Member.
• The Impugned Order passed by WBERC was principally challenged on the ground that the Impugned Order was passed in contravention of:-
  • Regulation 2.14.1 and 2.14.2 of WBERC (Conduct of Business) Regulations, 2013 (“CBR Regulations”), which envisages that the Orders passed by WBERC shall be signed by (all) the members who considered and/or heard the matter; and
  • The settled principle of natural justice that “one who hears must decide”.
• By its Judgment dated 04.07.2025 (“Judgment”), APTEL set aside the Impugned Order and remanded the matter to WBERC for fresh consideration. The key findings of APTEL are summarised below:-
  • The principle of ‘one who hears must decide’ would apply where the Appropriate Commission exercises adjudicatory powers under Section 86(1)(f) of the Electricity Act, since a personal hearing is invariably provided in such cases to parties on either side.
  • Regulation 2.14 of the CBR Regulations excludes the application of this principle during the tariff determination exercise, since it permits:-
    • Even a member who has not heard the matter to sign the order, in order to validate it. Such instances may arise during the tariff determination exercise.
    • Existing members, who either heard or considered the matter to sign the order, even if one of them retired, resigned or been removed after the hearing but before the order was signed.
  • While tariff determination is a quasi-judicial exercise, it does not mandatorily require an oral hearing, since:-
    • If Parliament had intended an oral hearing to be mandatory in such cases, it would have explicitly provided, instead of confining the requirement of an oral hearing only to a situation where the tariff application, is intended to be rejected by the Commission, under Section 64(3)(b) of the Electricity Act
    • Unlike an adjudicatory order passed under Section 86(1)(f) of the Electricity Act, which may be required to be preceded by a hearing being afforded to the parties concerned, reading such a requirement, into the provisions of the Electricity Act and the Rules and Regulations made thereunder, may not be justified where the order passed by the Commission relate to matters other than those specifically falling under Section 86(1)(f) of the Electricity Act.
  • The principle of ‘one who hears must decide’ may not apply in situations where the Commission undertakes a tariff determination exercise under Section 62 read with Section 64 of the Electricity Act, unless the applicable regulations expressly stipulate an oral hearing to be provided to the applicant, before orders are passed by the Commission.
  • WBERC’s contention that its actions are saved by Section 93 of Electricity Act do not hold merit, since, in terms of the directions of the Calcutta High Court and, since three Members of WBERC had initially heard the matter pursuant to the directions of the Calcutta High Court, the order ought to have been passed and signed by all the three Members, and not just by one of them. The fact that two of them had retired in the interregnum, would require the remaining member to hear the matter afresh and pass a reasoned order.

APTEL has reaffirmed the importance of procedural compliance and the principles of natural justice in regulatory proceedings. The decision underscores that orders must reflect proper constitution and participation of the adjudicating authority to ensure fairness and transparency.

JSA’s Disputes team was led by Amit Kapur (Lead Partner), along with Akshat Jain (Partner) and Sayan Ghosh (Associate).