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One of the legislative purposes of the (act) was to curtail the role and powers of governments in electricity supply matters. The act led to the creation of specialised bodies, the central and state commissions, for the purpose of managing tariffs, open access and other matters. The central government directs policy, leaving the commissions to apply their specialised knowledge for regulation purposes.

This division of responsibilities was confirmed in the recent Supreme Court case of . The court held that government policy can guide the commissions but cannot direct them in such a way that interferes with their quasi-judicial functions as set out in sections 107 and 108 of the act. Despite the clear legislative intent, the Ministry of Power has frequently used the rule-making powers provided in section 176 to usurp the duties and functions of state commissions.

In another judicial brake on executive overreach, the Karnataka High Court in held the Electricity (Promoting Renewable Energy Through Green Energy Open Access) Rules 2022 (GEOA rules) to be ultra vires. The court made the same ruling in respect of the Karnataka Electricity Regulatory Commission (Terms and Conditions for Green Energy Open Access) Regulations, 2022 (KERC regulations) made in compliance with the GEOA rules.

The GEOA rules governed the generation, consumption and purchase of electricity from renewable sources and set up renewable purchase obligations on regulated entities. Only monthly banking was permitted, although the relevant commission could set banking charges.

The main challenge to the constitutional validity of the GEOA rules and the KERC regulations was that the government had no legislative competence to enact such provisions. The court held that, under sections 42 and 86 of the act, all aspects relating to the open access to electricity were reserved to the state commissions.

The high court also rejected the government’s argument that the residuary provision of section 176 of the act empowered it to frame the GEOA rules. The argument was superficially appealing because section 176(1) gave the government the power to make rules for carrying out the provisions of the act. Section 176(2) provided that the power under section 176(1) was without prejudice to its generality in addition to the specific instances set out in section 176(2).

The high court rightly held that the residuary provision could not be used or interpreted in such a way as to confer rule-making power on the government that would render otiose the provisions of the act expressly conferring powers on the state commissions to regulate open access. The court relied on decisions of the Supreme Court to hold that the particular powers were illustrative of the general power. Further, the general powers granted for rule-making could not be read in such a way that would extend the scope of delegation. Such delegation was always ancillary.

The government contended that its timebound international commitments to achieve net-zero emissions under the Paris Agreement of 2015 allowed it to fulfil those undertakings by drafting directives such as the GEOA rules. However, the court rejected this argument because article 253 of the constitution did not confer power to breach existing laws enacted through the legislative process by parliament. The court held that should the government wish to carry into effect its international treaty obligations, it would have to amend the Electricity Act to eliminate the inconsistencies between the domestic law and those international obligations.

The high court directed the Karnataka Electricity Regulatory Commission to bring into force appropriate regulations or to continue under its regulations drafted in 2004. It also asked the commission to consider allowing the generators annual banking.

The judicial striking down of the GEOA rules and the KERC regulations has been a reminder that if the government wishes to exercise a supervisory or directory role over bodies established with express status, purposes and functions, it must do so appropriately. This means it must amend legislation through parliamentary amendment and not by exercising its rule-making powers.

Abhishek Tripathi is the founding partner and Mani Gupta is a partner at Sarthak Advocates & Solicitors.