Tamilnadu Generation and DistributionCorporation Limited v. Central Electricity Regulatory Commission

5. The learned counsels appearing on behalf of the petitionerhad submitted that the petitioner in the above writ petitions is theTamilnadu Generation and Distribution Company Limited, which is aGovernment of Tamilnadu enterprise. The primary functions of thepetitioner corporation are the generation and distribution ofelectricity, within the State of Tamilnadu. 6. The petitioner has filed the above writ petitions challengingthe recent amendments to the existing Central Electricity RegulatoryCommission (Unscheduled Interchange Charges and Related Matters)Regulations, 2009, hereinafter referred to as the `UI Regulations'and the Central Electricity Regulatory Commission (Indian ElectricityGrid Code) Regulations, 2010, hereinafter referred to as the `GridCode Regulations', stating that they are, ex facie, arbitrary andthat they suffer from the vice of unreasonableness, as they have beenmade without taking note of the relevant factors and the applicableprinciples like the doctrine of proportionality. The CentralElectricity Regulatory Commission, hereinafter referred to as `CERC’,has narrowed down the grid frequency from the existing bandwidth,resulting in enhancement of power cuts, from 10 hours to 14 hours,without taking into consideration the relevant factors.7. It has been further stated that the CERC, in exercise of thepowers conferred, under Section 178, read with Section 79(1)(C) ofthe Electricity Act, 2003, had issued the Central ElectricityRegulatory Commission (Unscheduled Interchange Charges and RelatedMatters) (Second Amendment) Regulations, 2012, hereinafter referredto as the `Impugned Second Amendment', by which certain amendmentsare sought to be brought into effect, from 2.4.2012.8. It has been further stated that the impugned amendments,inter alia, suffer from the vice of arbitrariness andunreasonableness. By the impugned amendments the CERC has narroweddown the operating frequency of electricity supply (Grid Frequency)by 0.2 Hz i.e. from 49.50-50.20 Hz to 49.70-50.20 Hz in the GridCode, as well as in the Unscheduled Interchange Charges and relatedmatters. The impugned amendments in the Grid Code and in the UIRegulations, relating to the frequency bandwidth, are only aimed atpromoting the sale of power by the Power Traders and Exchanges. Theinefficient management of the power situation, by the Regulators,would result in higher rates being paid for the electricity purchasedfrom private generators, at the cost of the end users of power. 9. It has been further stated that India is geographicallydivided into five grids, namely, Northern, Eastern, Western, NorthEastern and Southern. All the States and the Union Territories in https://hcservices.ecourts.gov.in/hcservices/ India fall within the five grids. The first four grids aresynchronized with each other (NEW Grid) and the power can flow acrossthese regions, seamlessly, as per the relative load and generation.The Southern region is interconnected with the rest of India gridthrough asynchronous links of High Voltage Direct Current networks.There is only controlled flow of power and it cannot flow seamlessly,as per the relative load and generation. 10. It has also been stated that the petitioner cannot drawelectricity from the NEW Grid because of the controlled flow ofelectricity and the failure on the part of CERC to directsynchronisation of the Southern Grid, with the NEW Grid, for seamlessnatural flow of power. The petitioner’s requirement is 12500megawatts of power. The installed capacity is about 10180 megawatts,which includes 3080 megawatts of the Central Sector GeneratingStations. The maximum available power from the installed capacity,inclusive of power purchases, is about 8000 megawatts. Thus, there isa maximum deficit of about 4500 megawatts.11. It has been further stated that the recent amendments to theexisting UI Regulations, 2009 and the Grid Code, 2010, narrowing downthe grid frequency, from the existing bandwidth, would result in theenhancement of power cuts, from 10 hours to 14 hours. It would alsoseriously affect the economy of the State. Both public and privateestablishments would suffer due to such measures. 12. It has also been stated that the gap between the supply andthe demand of electricity is mainly measured by the system frequency.When the demand equals the supply then the system frequency will be50 Hz. Each of the five regions has a Regional Load Despatch Centre(RLDC), which ensures economic, efficient and integrated operation ofthe power system in the region concerned. The RLDCs monitor the gridoperations and supervise the economical, efficient and integratedfunctioning of the power systems. Any difference between thescheduled and actual quantum of power drawn from the grid is treatedas Unscheduled Interchange. The charges of the UnscheduledInterchanges shall be payable for the over drawal, by the buyer orthe beneficiary.13. It has been further stated that the Electricity Act, 2003,confers substantial powers on the Central Commission to develop therelevant market, in accordance with the principles of competition,fair participation, as well as the protection of the consumers’interests. However, the CERC while exercising such powers, would haveto take into consideration certain factual aspects before arriving atits decisions, for initiating the regulatory measures. https://hcservices.ecourts.gov.in/hcservices/

14. It is the case of the petitioner that such mandatory factsand the relevant factors have not been taken into consideration,while bringing about the impugned amendments. It has been furtherstated that the CERC had not considered any of the mandatory factsrequired to be considered, as per the Grid standard of CEA, and hadbrought about the amendments to the Grid Code and the UI Regulations.The CERC had failed to consider the fact that there has been no gridfailure in the recent past. It had failed to consider the frequencyprofile and the voltage profile of the Southern Grid. It had alsofailed to consider the line loading of the corridor connecting theNEW Grid with the Southern Grid, through the HVDC line. The CERC hadalso failed to consider that even with their limited supply ofelectricity the Southern Grid is stable due to the heavy loadshedding, as part of the load management carried out by the SouthernState utilities. 15. It has been further stated that as an effect of the amendedUI Regulations the petitioner has to necessarily restrict its overdrawing facility at 49.80 Hz itself, instead of 49.70 Hz, resultingin longer periods of load shedding. Further, the impact of theincrease in UI Rate, at the threshold frequency, would cost anincrease of 52 percent in the charges at the lower limit i.e. 49.70Hz, as compared to the present UI rates. The rate is increased fromRs.3.875 per unit to Rs.5.906 per unit. The inevitable effect of theamended grid frequency in the Grid Code Regulations would lead tofurther loss in industrial growth, education, emergency services suchas hospitals, combined water schemes, water purification andtreatment plants, irrigation plants and public security measures, asthe petitioner could be compelled to go in for longer periods ofpower cuts to manage the supply and the demand of electricity in theState of Tamilnadu.16. It has been further stated that the grid is operating at thepresent grid frequency for the last two years and there has been nogrid failure reported in the Southern Grid, so far. There is nobenefit to the end consumer due to the frequency correction. Insteadthe end consumer would be put to more hours of power cuts affectingthe gross domestic product of the State. The amendments introduced bythe CERC would not help the cause of higher reliability and costsaving measures, which are essential for the proper functioning ofthe system. 17. It has been further stated that the CERC had not taken therelevant factors into account, while deciding to introduce theamendments. It had not taken into account the fact that there is nointegrated grid operation in effect, between the NEW Grid and theSouthern Grid. As the Southern Grid operates independent of the restof the grids in the country the CERC has not made any endeavour toconnect and syncronise the Southern Grid with the NEW Grid, in spiteof the repeated demands made by the petitioner and the other https://hcservices.ecourts.gov.in/hcservices/ utilities of the Southern Grid. The failure of the CERC to appreciateand to take concrete steps to improve the power situation in the fourSouthern States connected to the Southern Grid has resulted in thepresent situation, which is adverse in nature.18. It has been further stated that the Southern Grid isoperating as a separate entity. It is connected to the NEW Gridthrough High Voltage Direct Current (HVDC System) in which there isonly a controlled power flow and there is no natural power flow. Sucha situation does not facilitate adequate drawal of power from the NEWGrid by the Southern utilities. Further, the lack of congestion freetransmission system has lead to the inability of the petitioner todraw power from other grids of the country to manage its demand andsupply of power. The CERC being the Regulatory Authority shouldensure that all the grids within the country are connected with eachother and synchronized in such a way that they operate economically,without, any congestion in the Central Transmission System.19. It has been further stated that, even though the CERC hasheld the Central Transmission Utility (CTU) to be solely responsiblefor the lack of sufficient inter-State transmission system, it hadfailed to appreciate that load management by the Southern utilitiesis not possible in the absence of an efficient and economicalcongestion free inter-State transmission system. It has been furtherstated that, in order to tide over adverse supply and demandmanagement, on a short term basis, the petitioner has been purchasingpower from power exchanges, at a very high rate. The rate of purchaseof power, from the power exchanges, not only depends upon the marketconditions, but also the corridor congestion during the transmissionof the power to the State of Tamilnadu. There is no mechanism tocontrol the market price variation. Therefore, it is the duty of theCERC to ensure an efficient, economical and co-ordinated CentralTransmission System for efficient management of the demand and supplyof power in the various regions of the country. 20. It has been further stated that the various provisions ofthe Electricity Act, 2003, which is an exhaustive code concerning thematters relating to electricity, has entrusted wide ranging powersand responsibilities with the Regulatory Commissions. However, whileexercising such powers and responsibilities the RegulatoryCommissions are to be guided by the National Electricity Policy, theTariff Policy, as well as the National Electricity Plan, in terms ofSection 79(4) and 86(4) of the Electricity Act, 2003. The TariffPolicy which had been brought into effect, from 6.1.2006, shouldensure the availability of electricity to consumers at reasonable andcompetitive rates. The Tariff Policy should try to balance theinterests of consumers and the need for investments, whileprescribing the rate of return. It should also try to promote tradingin electricity for making the markets competitive. Under the TariffPolicy the Regulatory Commissions are mandated to monitor the trading https://hcservices.ecourts.gov.in/hcservices/ transactions, continuously, in order to ensure that the electricitytraders do not indulge in profiteering, in cases of market failure.The Tariff Policy directs the Regulatory Commissions to fix thetrading margin in a manner, which would ensure that the cost ofelectricity utilized by the consumers are at a reasonably low level,keeping in mind the necessary requirements for the investments.21. The learned counsels appearing on behalf of the petitionerhad stated, while pointing out the relevant provisions of theElectricity Act, 2003, that, pursuant to Section 177(2) of theElectricity Act, 2003, the CERC had notified the Grid Code in theyear, 2010. Under the UI Regulations, which had been introduced inthe year, 2009, the grid frequency was 49.20 to 50.30 Hz, as per theCEA specified standard. As such, the CEA, vide Gazette of Indianotification, dated 26.6.2010, had notified the Central ElectricityAuthority (Grid Standards) Regulations, 2006, under sub Section 3 ofSection 177 of the Electricity Act, 2003, read with Section 34 andClause (d) of Section 73 of the said Act. As per Regulation 3, theStandard for Operation and Maintenance of Transmission Lines is tooperate at a frequency close to 50 Hz and it shall not go beyond therange of 49.20 to 50.30 Hz, or a narrower band specified in the GridCode, except during the transient period following tripping.22. It has been further stated that no untoward incidents hadtaken place, in respect of grid stability and security, even when thefrequency range was 49.20 - 50.30 Hz, after the introduction ofAvailability Based Tariff (ABT) in the year, 2003. It has also beenstated that the narrow bandwidth prescribed by the CERC has not beenratified by the Parliament, as required under Section 179 of theElectricity Act, 2003. Further, Regulation 4, dealing with theoperation planning provides that the RLDC shall review, periodically,the performance of the grid, in the past and to plan stable operationof the grid, in the future. It shall take into consideration thevarious parameters such as, frequency profile, voltage profile, lineloading, grid incidence, grid disturbance, performance or systemprotection schemes and protection coordination for its planning andimplementation of the regulations. 23. It has also been stated that Unscheduled Interchange is theover drawal or under drawal of power from a grid, in deviation to thescheduled quantum of power. The CERC had made regulations to dealwith Unscheduled Interchange, by introducing a penalty clause forviolation of UI Regulations. Apart from the UI Charges the petitionerwould also have to pay the congestion charges to Power GridCorporation of India, due to the lack of corridor required to get thepower transmitted. It is the duty of the Central Transmission Utility(CTU), under Section 38 of the Electricity Act, 2003, to ensure anefficient, economical and integrated transmission system to theutilities. The CERC, vide first Amendment, dated 28.4.2010, hadchanged the lower utility frequency, from 49.20 to 49.50 Hz and the https://hcservices.ecourts.gov.in/hcservices/ higher utility frequency, from 50.30 to 50.20 Hz. While so, the CERChad issued a public notice, dated 19.8.2011, to the Draft Amendmentto CERC (Unscheduled Interchange Charges and Related Matters)Regulation, 2009, and had invited comments from the public, StateElectricity Boards and other stake holders. The CERC in its draftnotice, dated 19.8.2011, had enclosed an Explanatory Memorandum tothe draft CERC (Unscheduled Interchange Charges and Related Matters)(Amendment) Regulation, 2011. The petitioner had forwarded itscomments to the proposal made by the CERC to amend the regulation.The petitioner had cited various difficulties it was facing due tothe corridor congestion, the non-synchronisation of the Southern Gridwith the NEW Grid and the lack of proper regulations to aid theutilities in managing their demands. It had also pointed out that theState of Tamilnadu is the only State in India which pays the maximumamount of congestion charges, due to its geographical location.However, without paying heed to the comments and the difficultiesexpressed by the petitioner the CERC has proceeded to bring about theimpugned second amendment, by which it had changed the lower utilityfrequency, once again, from 49.50 to 49.70 Hz, in the bandwidth of49.50 to 50.20 Hz. The change in frequency was to come into effect,from 2.4.2012. 24. A common counter affidavit has been filed on behalf of thefirst respondent, wherein, the averments and allegations made in theaffidavit filed in support of the writ petitions have been denied. Ithas been stated that the Central Electricity Regulatory Commission(CERC) is a statutory authority, constituted under Section 76 of theElectricity Act, 2003. The functions of CERC, as per Section 79 ofthe Act, include the regulation of inter-State transmission ofelectricity, specification of Grid Code, having regard to the gridstandards, specification and enforcement of standards, with respectto quality, continuity and reliability of service, by the licensees.Under Section 178 of the Act the Central Commission is vested withthe power to make regulations consistent with the Act and the Rules.In order to give effect to the provisions of the Act, in exercise ofthe powers conferred under Section 178, read with Section 79(1)(h) ofthe Electricity Act, 2003, the Central Commission has issued theCentral Electricity Regulatory Commission (Indian Electricity GridCode), Regulations, 2010. The Grid Code has come into effect, on3.5.2010, repealing the Indian Electricity Grid Code, 2006.Similarly, in exercise of the powers, under Section 79(1)(c), readwith Section 178(1) and 178(2)(ze) of the Act, the CentralElectricity Regulatory Commission (Unscheduled Interchange Chargesand Related Matters), Regulations, 2009, had been issued, with effectfrom 1.4.2009. 25. It has been further stated that the Supreme Court of Indiain its decision, in Central Power Distribution Power Company LimitedVs. the Central Electricity Regulatory Commission, (2007) 8 SCC 197,has recognized the role and the functions of the Central Commission,in specifying the Grid Code and the UI Charges, for the purpose of https://hcservices.ecourts.gov.in/hcservices/ maintaining grid discipline. In the said decision the supreme courthad held that the application of Availability Based Tariff (ABT) andthe imposition of Unscheduled Interchange (UI) Charges are essentialparts of the functions of the Central Commission. The ABT and UIcharges are commercial mechanisms to control the utilities inscheduling the dispatch and the drawal of power. The UI charges arepayable for the deviations, if any. 26. It had also been stated that the Appellate Tribunal forElectricity, while considering an appeal filed by the Delhi TranscoLimited, in Appeal No.124 of 2009, under Section 111 of the Act,challenging the order passed by the Central Commission imposingpenalties for grid violation, had issued certain directions, withregard to grid security and the need for periodic revision of the UIrates, for overdrawal from the grid. By the said directions it hadbeen made clear that the Central Commission should review the UIrates, periodically, as it would encourage additional generation andunder drawal of power.27. It has been further stated that it is desirable to maintaingrid frequency, as close as possible to 50 Hz. Any deviation in thefrequency would result in inefficient operation of generation andload equipment and would result in degradation of the quality ofelectricity supply, to the end consumers and it could also result inthe collapse of the power system. While comparing the operationalfrequency band in Europe and in the United States of America, it hasbeen stated that the frequency band in such countries had been fixedin a very narrow range, in order to ensure supply of quality power tothe consumers and for protection of the generating stations,transmission systems and electrical equipments and appliances. Incontrast the utilities in India had been relying on overdrawal ofpower from the grid for meeting the consumer demand, without settingup power projects. 28. It has been further stated that the over drawal of powerfrom the grid to meet the consumer demand is not in the interest ofgrid security and grid discipline. The utilities should plan forprocurement of power on long term, medium term and short basis, tomeet the consumer demands. For a stable and secure operation of thegrid it is required to bring the permissible range of the frequencyband close to the nominal level, at the earliest, so that theutilities across the country are encouraged to go for planneddevelopment of electricity and to create an environment for theinvestors to set up new power projects.29. It has been further stated that Section 80 of theElectricity Act, 2003, provides for the constitution of the CentralAdvisory Committee (CAC). The CAC is to advise the Central Commissionon major issues relating to policy, protection of consumer interestand electricity supply and in maintaining the overall standards ofperformance, by the utilities. It has also been stated that the issueof narrowing down the grid frequency had been discussed in the 15thmeeting of the CAC, held on 7.3.2011. It has considered the issue of https://hcservices.ecourts.gov.in/hcservices/ narrowing down the grid frequency band and the consequent revision ofUI price vector.30. It has also been stated that the Central Commission is toensure safety, security and reliability of the grid. Therefore, theCentral Commission had initiated the process of amendment to the GridCode and the UI Regulations, as per the procedures prescribed, underSection 178 of the Electricity Act, 2003. The Central Commission,after considering the suggestions and objections received, inresponse to the draft amendments, had finalized and notified theCentral Electricity Regulatory Commission (Indian Electricity GridCode) (First Amendment) Regulations, 2012 and Central ElectricityRegulatory Commission (Unscheduled Interchange Charges and RelatedMatters) (Second Amendment) Regulations, 2012. The impugnedregulations have been validly made, in accordance with the provisionsof the Act, in due discharge of the statutory responsibility vestedin the Central Commission.31. It has been further submitted that the impugned regulations,which are in the nature of delegated legislation, can only bechallenged if they are ultra vires the provisions of the parent Act,or offends any of the provisions of the Constitution of India, or anyother Act in force. In fact the impugned regulations have beenvalidly made, in accordance with the procedures prescribed under therelevant provisions of law, for the purpose of ensuring the safe andsecure operation of the National Grid and to instill disciplineamongst the utilities, through the commercial mechanism ofUnscheduled Interchange and by initiating penal actions against theerring utilities, who overdraw, under low grid frequency conditions,by endangering the National Grid.32. It has also been stated that the petitioner was found to beoverdrawing power, on several occasions in the past, in violation ofthe permissible limits specified in the Grid Code. The petitioner hasalso been imposed with penalties for overdrawal from the Grid.Further, the petitioner has also defaulted in payment of the UI dues.It had also been stated that the impugned regulations do not sufferfrom the vice of unreasonableness and arbitrariness and they are nothit by the doctrine of proportionality, as averred by the petitioner.33. It had been further stated that the Central Commission hadmade the impugned regulations, by following the process of previouspublication, as specified under Section 178(3) of the ElectricityAct, 2003, and after considering the comments, suggestions andobjections received in response to the draft regulations, includingthe suggestions and objections raised on behalf of the petitioner. Ithas also been denied that the narrowing down of the grid frequency,through the impugned regulations, has resulted in the enhancement ofpower cuts from 10 to 14 hours, in the State of Tamilnadu.34. It has been further stated that the petitioner has alegitimate right to schedule the drawal from the grid, by arranging https://hcservices.ecourts.gov.in/hcservices/ for power through long term, medium term and short term access.Unscheduled Interchange, which is in the nature of deviation from theschedule, cannot be relied on as a regular source of power. It is acommercial mechanism to discourage drawal in deviation of theschedule and to encourage the utilities to resort to plannedprocurement of power. In fact, the power cut in the State ofTamilnadu is a result of the cumulative and prolonged inaction on thepart of the petitioner to make the necessary arrangements, to supplysufficient power, considering the consumer demands in the State, byprocuring sufficient power from the various power generating andtransmitting agencies.35. It has also been stated that the main objective of theimpugned regulations is to encourage sale of power through scheduledtransactions and to discourage overdrawal from the grid, underUnscheduled Interchange, which has the potential to endanger thesafety and security of the grid. It has also been stated that thenarrowing down of the frequency band, by way of the impugnedregulations, would result in safe, secure and reliable grid operationand supply of quality power to the consumers. It would also result inthe smooth integration of Southern Regional Grid with the NEW Gridand it would enhance the service life of the generating units. 36. It has also been pointed out that overdrawal through UImechanism cannot be a substitute for scheduled power, sourced throughthe traders or by power exchange or by direct purchase of power fromthe generators. In fact, the average UI prices have been higher thanthe prices of power available through the power exchanges, includingthe congestion charges. As such, the allegation of the petitionerthat the difficulties in maintaining grid discipline had arisen dueto the inefficient management of the power situation, by the CentralCommission, is neither true nor valid. 37. It has been further stated that the tightening of thefrequency bandwidth is a critical requirement for synchronization ofthe Southern Grid with the NEW Grid. The NEW Grid and the SouthernGrid have an approximate installed capacity of 1,32,600 megawatts and51000 megawatts, respectively. For ensuring secured and integratedoperation of the National Grid of 1,84,000 megawatts, one of theprimary requirements is that the system frequency should be as closeas possible to 50 Hz. The overdrawal by the utilities would endangerthe grid security, with unsustainable flow in the inter-regionaltransmission lines leading to the tripping of the grid, or griddisturbance, with a cascading effect.38. It is not open to the petitioner to claim that the problemhas been existing due to the alleged lack of sufficientinfrastructure for the transmission of power from the NEW Grid to theSouthern Grid. If the petitioner makes sufficient plans, in advance, https://hcservices.ecourts.gov.in/hcservices/ to procure electricity from other generators, it would be possible toprovide sufficient corridor space for such transmission of power. Thepetitioner ought to have long term and medium term plans, along withthe short term plans, to buy power from the various power generators.If long term and medium term contracts are made, the cost of powerwould also be at a lower rate, as compared to short term plans. Infact, the transmission corridors are built on the basis of long termaccess. Since, the State of Tamilnadu had not entered into long termaccess agreements, for the supply of electricity, sufficientinfrastructural development cannot be made, as it would involve heavycost. 39. It has also been submitted that the power number of theSouthern Grid is about 1100 megawatts per Hertz, as per the latestload generation status. Since, the impugned regulations have soughtto tighten the frequency by 0.02 Hz, the impact would be about 220megawatts for the Southern Grid. As such, the petitioner would beaffected to a maximum extent of 220 megawatts, if the State ofTamilnadu is the only State overdrawing power in the region. It hasalso been stated that a number of power generation projects are onthe verge of being commissioned in the Southern region. As such, itwould be possible to maintain the load generation balance in theSouthern region and the tightening of the frequency band would onlyhave a minimum effect on the load management, by the petitioner. 40. It has also been stated that the Central Commission has alsoa duty to take steps for the development of the market, in accordancewith the mandate of the Electricity Act, 2003, and the NationalElectricity Policy. The Central Commission has granted tradinglicences for inter-State trading in electricity, with a cap ontrading margin, in order to protect the interests of the consumers.It has been further stated that there has been no grid failure in therecent past, despite the constant load growth, due to theimplementation of Availability Based Tariff, with the continuousreview of UI Mechanism and by the continuous narrowing down of thefrequency bandwidth, as per the requirements of the Indian PowerSystem. 41. It has also been stated that, due to the harnessing of powerthrough effective power market mechanisms, including theparticipation of small captive power plants and renewable energyproducers, a major grid failure has also been averted by ensuringstrict compliance of the Electricity Grid Code and the UI Regulationsand due to the implementation of the various special protectionschemes. It has also been noted that the average frequency of theSouthern Grid was 49.80 Hz and 49.77 Hz, during the years 2010-2011and 2011-2012, respectively. The lower end of the frequency band hasbeen fixed at 49.70 Hz, by way of the impugned regulations and it iscommensurate with the prevailing frequency profile of the Southernregion. https://hcservices.ecourts.gov.in/hcservices/

42. The Central Commission has taken pro-active steps, by way ofa suo motu petition, bearing Petition No.67 of 2010, to remove thevarious bottle necks in the different transmission systems, includingthat of the Southern region. The Central Commission has also grantedregulatory approval to the Central Transmission Utility, for interconnection between the NEW Grid and the Southern Grid, for relievingthe corridor congestion and to facilitate additional flow of powerfrom the NEW Grid to the Southern Grid. 43. It has also been stated that, if the petitioner adheres tothe scheduled drawal of power from the grid, it shall be spared fromthe burden of paying the UI Charges. The grievance of the petitionerregarding the restriction of its overdrawing facility, on account ofthe revision of the UI rates, cannot be held to be valid, as theoverdrawal under the UI is allowed only as a temporary excursion fromthe schedule and not as a regular source of purchasing power. The nonfailure of the grid, for the past two years, cannot be the solecriterion for deferring the decision of grid frequency, as it isfound to be necessary to achieve safety, security and reliability ofthe grid. Failure of the grid would result in serious financial andother losses to a number of stake holders and it would adverselyaffect the economy of the State. As such, the contentions raised onbehalf of the petitioner against the narrowing of the frequency band,by way of the Regulations and the increase in the UI rates areinvalid. They are neither arbitrary in nature or ultra vires theConstitution of India, as alleged by the petitioner. As such, theimpugned regulations are valid in the eye of law, as they have beenintroduced for the purpose of enforcing grid discipline to befollowed by the utilities, such as the petitioner. Since, the writpetitions filed by the petitioner are devoid of merits, they areliable to be dismissed. 44. The learned counsels appearing on behalf of the petitionerhad submitted that the impugned amendments are arbitrary,unreasonable and ultra vires the Constitution of India and therefore,they are liable to be quashed. The impugned amendments had been madewithout taking note of the relevant factors and the objections raisedon behalf of the petitioner. It has also been stated that theimpugned amendments have the effect of narrowing down the gridfrequency from the existing bandwidth, resulting in the enhancementof power cuts. It has also been submitted that the impugnedamendments are hit by the doctrine of proportionality. The amendmentshad been made by the Central Electricity Regulatory Commission,without considering the practical difficulties faced by thepetitioner and without a proper appreciation of the ground realities. https://hcservices.ecourts.gov.in/hcservices/

45. It has also been submitted that the petitioner is not in aposition to purchase power from power generators and to transmit thesame to the Southern Grid, due to the lack of sufficientinfrastructural facilities. It had also been stated that, due to thecorridor congestion and the increase in the UI rates, the cost ofpower supplied to the consumers would increase substantially. Theamendments introduced by the Commission does not adhere to theprocedures, as contemplated by the relevant provisions of theElectricity Act, 2003. The Commission had failed to carry out themandate of Section 25 of the act, which requires the CentralGovernment, through its agencies, to provide efficient, integratedand economical supply of electricity. The act of the CentralTransmission Utility is in violation of Section 38 of the Act, asthere is no corridor to meet the present congestion and to facilitatethe natural uninterrupted flow of electricity, from the NEW Grid tothe Southern Grid. The petitioner has also been burdened with thecongestion charges imposed on the State distribution utilities. Assuch, the power grid corporation is the beneficiary of the congestioncharges. The imposition of congestion charges makes the purchase ofpower costlier and it is in violation of Section 38(2)(d) of theElectricity Act, 2003. However, no serious attempt has been made toreduce the congestion in the corridor, through which the power istransmitted. 46. The learned counsel appearing on behalf of the petitionerhad submitted that the impugned Regulations, which fall under thecategory of Subordinate Legislation, could be declared to bearbitrary, invalid and ultra vires the Constitution of India, if itdoes not satisfy the requirements enumerated by the Supreme Court ofIndia. He had further submitted that Subordinate Legislation could besubject to judicial review on wider grounds, as compared to that of aprimary enactment. Presumption of the constitutional validity of asubordinate legislation cannot be on the same footing as that of anenactment. He had further submitted that, except the State of Gujaratall the other States in India have been overdrawing power. There hasnot been a single grid failure in the last 10 or 12 years. Sufficientmechanisms have been put in place to protect the system from gridfailures. Instead of addressing the basic issue of integration of theSouthern Grid with the NEW Grid to ease the power situation,drastically, the Central Electricity Regulatory Commission hasimposed certain stringent conditions, which would increase the costof electricity supplied to the consumers. As per Section 25 of theElectricity Act, 2003, the Central Government may take necessarysteps for intra-State, regional and inter-regional transmission ofelectricity. However, the impugned amendments are contrary to thesaid provision of law, as well as the object of providing efficient,economical and integrated transmission and supply of electricity. 47. The learned counsel appearing on behalf of the petitionerhad relied on the following decisions in support of his contentions: https://hcservices.ecourts.gov.in/hcservices/

47.1) In Indian Express Newspapers Vs. Union of India, (1985) 1SCC 641, the supreme court had held as follows:"In deciding the reasonableness of restrictionsimposed on any fundamental right the Court should take intoconsideration the nature of the right alleged to have beeninfringed, the underlying purpose of the restrictionsimposed, the disproportion of the imposition and theprevailing conditions at the relevant time including thesocial values whose needs are sought to be satisfied bymeans of the restrictions.A subordinate legislation may be questioned on thegrounds of (1) legislative competence on which the plenarylegislation which delegated the power is also subject; (2)being ultra vires the parent statute or the Constitution inthat it fails to take into account the very vital factswhich either expressly or by necessary implication arerequired to be taken into consideration by the statute orthe Constitution or that it does not conform to thestatutory or constitutional requirements; (3) being inconflict with any other statute; (4) being so arbitrarythat it could not be said to conform to the statute or beviolative of Article 14. But subordinate legislature cannotbe questioned on ground of violation of natural justicewhich is available against an administrative action. Itcannot be challenged merely on the ground that it is notreasonable or that it has not taken into account relevantcircumstances which the court considers relevant."47.2) In Bombay Dyeing & Mfg. Co. Ltd (3) Vs. BombayEnvironmental Action Group, (2006) 3 SCC 434, it had been held asfollows:"The court ordinarily is required to consider theconstitutionality of the subordinate legislation within theaccepted norms and parameters of judicial review. Asubordinate legislation apart from being intra vires theConstitution, should not also be ultra vires the parent Actunder which it has been made. A subordinate legislationmust be reasonable and in consonance with the legislativepolicy as also give effect to the purport and object of theAct and in good faith. Subordinate legislation can also bechallenged if it is violative of the legislative object orif the reasons assigned therefor are not germane orotherwise malafide. Unreasonableness is certainly a groundof striking down a subordinate legislation."47.3) In State of M.P. Vs. Bhola, (2003) 3 SCC 1, it had beenheld as follows: https://hcservices.ecourts.gov.in/hcservices/ "A delegated legislation can be declared invalid bythe Court mainly on two grounds: firstly, that it violatesany provision of the Constitution and secondly, it isviolative of the enabling Act. If the delegate which hasbeen given a rule-making authority exceeds its authorityand makes any provision inconsistent with the Act and thusoverrides it, it can be held to be a case of violating theprovisions of the enabling Act but where the enabling Actitself permits ancillary and subsidiary functions of thelegislature to be performed by the executive as itsdelegate, the delegated legislation cannot be held to be inviolation of the enabling Act."47.4) In A.Satyanarayana Vs. S.Purushotham, (2008) 5 SCC 416, ithad been held as follows:"There cannot be any doubt that a policy decision and,in particular, legislative policy should not ordinarily beinterfered with and the superior courts, while exercisingtheir power of judicial review, should not consider as towhether such policy decision has been taken mala fide ornot. But where a policy decision as reflected in astatutory rule pertains to the field of subordinatelegislation, indisputably, the same would be amenable tojudicial review, inter alia, on the ground of beingviolative of Article 14 of the Constitution."47.5) In Sanjay Singh Vs. U.P.Public Service Commission, (2007)3 SCC 720, it had been held as follows:"39. Learned counsel for the Commission also referredto several decisions in support of its contention thatcourts will be slow to interfere with matters affectingpolicy requiring technical expertise and leave them fordecision of experts. (State of U.P. v. Renusagar Power Co.1988 (4) SCC 59, Tata Iron & Steel Co. Ltd. v. Union ofIndia 1996 (9) SCC 709, Federation of Railway OfficersAssociation v. Union of India 2003 (4) SCC 289). There canbe no doubt about the said principle. But manifestarbitrariness and irrationality is an exception to the saidprinciple. Therefore, the said decisions are of no avail."47.6) In State of Kerala Vs. Unni, (2007) 2 SCC 365, it had beenheld as follows:"The principles on which constitutionality of astatute is judged and that of a subordinate legislation aredifferent. A subordinate legislation would not enjoy thesame degree of immunity as a legislative Act would.Unreasonableness is one of the grounds of judicial reviewof delegated legislation. Reasonableness of a statute orotherwise must be judged having regard to the various https://hcservices.ecourts.gov.in/hcservices/ factors including the effect thereof on a person carryingon a business. If by reason of the rule-making power, theState intended to impose a condition, the same was requiredto be a reasonable one. It was required to conform to theprovisions of the statute as its violation would attractpenal liability. It was expected to be definite and notvague. Indisputably, the State having regard to Article 47of the Constitution, must strive hard to maintain publichealth. However, it should have specified the mode andmanner in which the percentage of ethyl alcohol can befound out by the licensee. When a statute provides for acondition which is impossible to be performed, itsunreasonableness shall be presumed. It would be for theState in such a situation to justify the reasonablenessthereof." 47.7) In Union of India Vs. Cynamide India Ltd., (1987) 2 SC720, it had been held as follows:"With the proliferation of delegated legislation,there is a tendency for the line between legislation andadministration to vanish. However, the distinction betweenthe two has usually been expressed as "one between thegeneral and the particular". A legislative act is thecreation and promulgation of a general rule of conductwithout reference to particular cases; an administrativeact is the making and issue of a specific direction or theapplication of a general rule to a particular case inaccordance with the requirements of policy. Again,adjudication determines past and present facts and declaresrights and liabilities while legislation indicates thefuture course of action. But, this is only a broaddistinction, not necessarily always true. The object of therule, the reach of its application, the rights andobligations arising out of it, its intended effect on past,present and future events, its form, the manner of itspromulgation are some factors which may help in drawing theline between legislative and non-legislative acts."47.8) In Shri Sitaram Sugar Co. Ltd. Vs. Union of India, (1990)3 SCC 223, it had been held as follows"Power delegated by statute is limited by its termsand subordinate to its objects. The delegate must act ingood faith, reasonably, intra vires the power granted, andon relevant consideration of material facts. All hisdecisions, whether characterised as legislative oradministrative or quasi-judicial, must be in harmony withthe Constitution and other laws of the land. They must be"reasonably related to the purposes of the enablinglegislation". If they are manifestly unjust or oppressiveor outrageous or directed to an unauthorised end or do not https://hcservices.ecourts.gov.in/hcservices/ tend in some degree to the accomplishment of the objects ofdelegation, court might well say, "Parliament neverintended to give authority to make such rules; they areunreasonable and ultra vires.A repository of power acts ultra vires either when heacts in excess of his power in the narrow sense or when heabuses his power by acting in bad faith or for aninadmissible purpose or on irrelevant grounds or withoutregard to relevant considerations or with grossunreasonableness."47.9) In State of U.P. Vs. Renusagar Power Co., (1988) 4 SCC 59,it had been held as follows:"Price fixation under Section 3(4) which is ultimatelythe basis of rise in cost because of the rise of theelectricity duty is not a matter for investigation ofcourt. Whether in a particular situation, ruralelectrification and development of agriculture should begiven priority or electricity or development of aluminiumindustry should be given priority or which is in publicinterest, are value judgments and the legislature is thebest judge."47.10) In Barium Chemicals Ltd. And another Vs. Company LawBoard and others, AIR 1967 SC 295(1), it had been held as follows:"Though an order passed in exercise of power under astatute cannot be challenged on the ground of propriety orsufficiency, it is liable to be quashed on the ground ofmala fides, dishonesty or corrupt purpose. Even if it ispassed in good faith and with the best of intention tofurther the purpose of the legislation which confers thepower, since the Authority has to act in accordance withand within the limits of that legislation, its order canalso be challenged if it is beyond those limits or ispassed on grounds extraneous to the legislation or if thereare no grounds at all for passing it or if the grounds aresuch that no one can reasonably arrive at the opinion orsatisfaction requisite under the legislation. In any one ofthese situations it can well be said that the authority didnot honestly form its opinion or that in forming it, it didnot apply its mind to the relevant facts."47.11) In Teri Oat Estates (P) Ltd. Vs. U.T., Chandigarh, (2004)2 SCC 130, it had been held as follows:"46. By proportionality, it is meant that the questionwhether while regulating exercise of fundamental rights,the appropriate or least restrictive choice of measures hasbeen made by the legislature or the administrator so as to https://hcservices.ecourts.gov.in/hcservices/ achieve the object of the legislation or the purpose of theadministrative order, as the case may be. Under theprinciple, the court will see that the legislature and theadministrative authority.........................49. Ever since 1952, the principle of proportionalityhas been applied vigorously to legislative andadministrative action in India. While dealing with thevalidity of legislation infringing fundamental freedomsenumerated in Article 19(1) of the Constitution of India,this Court had occasion to consider whether therestrictions imposed by legislation were disproportionateto the situation and were not the least restrictive of thechoices. In cases where such legislation is made and therestrictions are reasonable; yet, if the statute concernedpermitted administrative authorities to exercise power ordiscretion while imposing restrictions in individualsituations, question frequently arises whether a wrongchoice is made by the administrator for imposing therestriction or whether the administrator has not properlybalanced the fundamental right and the need for therestriction or whether he has imposed the least of therestrictions or the reasonable quantum of restrictions etc.In such cases, the administrative action in our country hasto be tested on the principle of proportionality, just asit is done in the case of main legislation. This, in fact,is being done by the courts. Administrative action in Indiaaffecting the Fundamental Freedoms has always been testedon the anvil of the proportionality in the last 50 yearseven though it has not been expressly stated that theprinciple that is applied is the proportionality principle"47.12) In Global Energy Ltd Vs. Central Electricity RegulatoryCommission, (2009) 15 SCC 570, it had been held as follows:"35. In the event a statute provides for licensing, ina case of this nature, the same must thus be found tosatisfy the test of reasonableness. The standard fordetermining reasonableness of a statute so as to satisfythe constitutional scheme as adumbrated in Article 14 ofthe Constitution of India must receive a higher level ofscrutiny than an ordinary statute. Such a higher level ofscrutiny is necessary not for the purpose of determiningthe Constitutionality of the statute alone vis-a-vis thefield of legislative power as envisaged under Article 245of the Constitution of India but also having regard to theobject and purpose, the statute seeks to achieve. 36. Electricity was subject to strict regulations. It,subject to just exceptions, was the monopoly of the StateElectricity Boards, Public Sector Undertakings.Participation of the private sector inter alia in trading https://hcservices.ecourts.gov.in/hcservices/ was encouraged by the provisions of the Act. Court'sconcern, therefore, would be not only to see that theStatute is intra vires the Constitutional scheme includingthe legislative field, but also as to whether it passes thetest of reasonableness having regard to the object andpurpose of the Act. For achieving the aforementionedpurpose not only the premise, relevancy of theconstitutional scheme in relation thereto is required to betaken into consideration as would be noticed a little laterbut therefor the doctrine of purposive interpretationshould also be resorted to.48. Mr.Sriram Panchu, the learned senior counsel, appearing onbehalf of the first respondent had submitted that the writ petitions,filed by the petitioner, are liable to be dismissed, as they areunsustainable, both on facts and in law. The learned counsel hadsubmitted that the contention of the petitioner that the impugnednotifications meant to ensure better grid security are unnecessary,as there had not been a single instance of grid failure in the past,is devoid of merits. He had pointed out that the collapse of theentire Northern Grid, on 30.7.2012, and the Northern, Eastern andNortheastern grids, on 31.7.2012, shows the fragility of the gridsystem and the necessity to tighten the regulations necessary forensuring grid discipline, by imposing increased penalty. The gridfailure in 21 States of the Northern and Northeastern regions ofIndia had caused serious havoc, disrupting the normal life of thepeople in the said regions. It had also caused severe financial lossand irreparable damage to many industrial units and other entities.The reason for the grid failure in the Northern and NortheasternStates of India is said to be due to the grid indiscipline by some ofthe States in the said regions. 49. The learned counsel has further stated that, even if certainsafety measures, like under frequency trip relays, automaticgeneration control, frequency protective relays etc., are in place,they would not be sufficient to ensure the safety of the grid and toprevent it from failure. Further, the frequency protective relays,installed by the petitioner, would come into play only when thefrequency drops below 48.8 Hz. However, they are not sufficient toprotect the grid from imminent collapse when it is put under severestrain. 50. It had also been stated that the new amendments introducedby way of the impugned notifications for the tightening of theoperating grid frequency and the introduction of certain measures forenhancing the grid discipline are prerequisites for the integrationof the Southern Grid with the NEW Grid. Further, the impugnednotifications have been issued to promote the objects of theElectricity Act, 2003, the National Electricity Policy and the TariffPolicy and for the purpose of ensuring the availability of quality https://hcservices.ecourts.gov.in/hcservices/ power to the consumers at reasonable and competitive rates. 51. The learned counsel had further submitted that the impugnednotifications do not fall foul of the requirement to provideefficient, economical and integrated transmission and supply ofelectricity. The impugned notifications conform to the mandate of theElectricity Act, 2003, and the National Electricity Policy. 52. It has been further stated that the increase in the price ofthe electricity cannot be attributed to the impugned notifications.In fact, the increase in the price of electricity is due to theincrease in its price, by the distribution companies, as a result inthe increase in cost of coal and the other components and the cost ofgeneration of electricity, by such companies. Further, it is clearthat the petitioner would be liable to pay the UI charges only whenit makes unscheduled drawals from the grid. The penalty that has beenimposed for overdrawals cannot be shown as a reason for the increasein the price of the electricity. Further, it is open to thepetitioner to avoid payment of UI charges by purchasing power fromthe distribution companies and by informing about the necessity forthe transmission of the power purchased, by the petitioner, from thedistribution companies, to avoid payment of corridor congestioncharges. 53. It has been further stated that it is for the petitioner toenter into long term and medium term contracts or arrangements, forthe supply of electricity, by the distribution companies, instead ofoverdrawing power from the grid, when it is in short supply. Thepetitioner could also make the necessary arrangements for gettingpower from wind and solar power generators. However, it is notappropriate for the petitioner to consider UI as a viable source ofdrawing electricity. 54. It has been further stated that the contentions raised onbehalf of the petitioner, with regard to non syncronisation of theSouthern Grid with the NEW Grid and the issues relating to thecorridor congestion and the resultant cost implications cannot beaccepted. In fact, the erstwhile Tamilnadu Electricity Board had notraised the issue of syncronisation of the grids, during the meetingsof the committee. In fact, the Board had felt more secure beingislanded to prevent the outflow of electricity from the State ofTamilnadu. The non-integration of the grids is due to the fact thatthere should be proper grid discipline and an operating frequencyrange as close to 50Hz as possible, for the safety of the network. 55. It has been further stated that the petitioner would beliable to pay the congestion charges only when it overdrawselectricity through the available corridor, without proper planned https://hcservices.ecourts.gov.in/hcservices/ purchases of power. The congestion charges would not be leviable ifcontracts or agreements are entered into for the purchase ofelectricity, well in advance, based on the requirement of thepetitioner to draw the power and if the petitioner draws power, afterconveying its need to draw such power, by prior intimation. If sucharrangements are made it would be convenient for all the stakeholders involved, including the petitioner. As such the freshmeasures, sought to be implemented, by narrowing the frequency range,would be useful to all the stake holders, including the petitioner,as such measures would make the supply of power efficient and costeffective. The unscheduled overdrawals of power would result inpayment of UI charges, by the petitioner, and it would result in theincrease in the cost of electricity supplied to the consumers. Itwould also reduce the quality of power supplied by the petitioner. 56. It has been further stated that the revision of the UIcharges is in accordance with the order of the APTEL, in AppealNo.124 of 2010 and the order passed by the supreme court, aftertaking into account all relevant factors, including the pattern ofoverdrawal, the cost of generation of power, using different fuelsand the frequency profile of the grid. It cannot be said that thedifference in the rates prescribed for power producers and itsconsumers, like the petitioner, are arbitrary and contrary to Article14 of the Constitution of India. Even though different UI rates havebeen in existence, from 7.1.2008, the petitioner had not challengedthe same, till date. 57. It has also been stated that the tightening of the frequencyby 0.2 Hz will have an overall impact of about 220 megawatts, out ofwhich the impact on the State of Tamilnadu would be around 75megawatts, based on the drawal from the grid. It has been furtherstated that no objections had been raised on behalf of thepetitioner, with regard to the Grid Code Notification, when it wasopen to the petitioner to raise such objections. Therefore, thecontention of the petitioner that its objections had not beenconsidered is devoid of merits. In fact, at the time of the hearingof the objections, it was only requested, on behalf of thepetitioner, that the Commission may postpone the implementation ofthe proposed amendments. Further, all the objections raised on behalfof the petitioner, some of which were similar to those which had beenraised by other similarly placed entities, had been considered by theCommission. Thereafter, the Commission had arrived at the conclusionthat certain regulatory procedures should be introduced to bringabout greater grid discipline amongst its users, for the protectionof the grid and for providing efficient, economical and integratedtransmission and supply of quality power.58. The learned counsel appearing on behalf of the firstrespondent had relied on the decision of the supreme court, in Stateof Tamilnadu and another Vs. P.Krishnamurthy and Others, AIR 2006 SC https://hcservices.ecourts.gov.in/hcservices/ 1622, to show that there is a presumption in favour of theConstitutionality and the validity of a subordinate legislation. Hehad relied on the decision of the supreme court, in Hinsa VirodhakSangh Vs. Mirzapur Moti Kuresh Jamat and Others, AIR 2008 SC 1892,wherein it had been held, relying on its decision, in Government ofAndhra Pradesh and Others Vs. Smt.P.Laxmi Devi, AIR 2008 SC 1640,that the court should exercise judicial restraint while judging theconstitutional validity of statutes. The same principle would alsoapply when judging the constitutional validity of delegatedlegislation. In K.T.Plantation Pvt. Ltd. And another Vs. State ofKarnataka, AIR 2011 SC 3430, a Constitutional Bench of the supremecourt had held that any law which, in the opinion of the court, isnot just, fair and reasonable cannot be struck down because such anapproach would always be subjective in nature and that it would notreflect the will of the people, as there is always a presumption ofthe constitutionality of the statute.59. The learned counsel had further submitted that it is a wellrecognized position in law that a subordinate legislation can bechallenged only on certain specified grounds like lack of legislativecompetence, violation of fundamental rights or any other provision inthe Constitution of India, failure to conform to the statute underwhich it is made or exceeding the limits of authority conferred bythe enabling Act, repugnancy to the laws of the land, manifestarbitrariness or unreasonableness. He had also pointed out that thesupreme court, in Central Power Distribution Co. and others Vs.Central Electricity Regulatory Commission and another, AIR 2007 SC2912, had held that the Central Electricity Regulatory Commissionhas plenary powers to regulate the grid. He had also cited thedecisions of the supreme court, in Gauri Shankar Vs. Union of India,AIR 1995 SC 55, Ashustosh Gupta Vs. State of Rajasthan, (2002) 4 SCC34, Western U.P. Electric power and supply co. Vs. State of UttarPradesh, AIR 1970 SC 21 and State of Uttar Pradesh Vs. Kamal Palace,AIR 2000 SC 600, while elaborating on the concept of equality, underArticle 14 of the Constitution of India. 60. The learned counsel had further relied on the decision ofthe supreme court, in State of Bihar Vs. Kameshwar Singh AIR 1952 SC252, wherein it had been held that the legislature is the best judgeof what is good for the community, by whose suffrage it comes intoexistence. He had also relied on the decision of Keshvananda BharatiVs. State of Kerala, AIR 1973 SC 1461, wherein, it had been observedthat, in exercising the power of judicial review the courts cannot beoblivious of the practical needs of the government. The door has tobe left open for trial and error. 61. He had also stated that the supreme court, in State of Biharand Others Vs. Bihar Distillery Ltd., AIR 1997 SC 1511, had observedthat the approach of the court, while examining the challenge to theconstitutionality of an enactment, is to start with the presumption https://hcservices.ecourts.gov.in/hcservices/ of constitutionality. The court should strike down the enactment onlywhen it is not possible to sustain it. He had quoted the observationsof Justice Frankfurter of the U.S. supreme court, in AmericanFederation of Labour Vs. American Sash and Door Co., 335 U.S. 538(1949), wherein, it had been observed that, even where the socialundesirability of a law may be convincingly urged, invalidation ofthe law, by a court, debilitates popular democratic government. Mostlaws dealing with social and economic problems are matters of trialand error.62. The learned counsel had further stated that, in Federationof Railway Officers Vs. Union of India, AIR 2003 SC 1344, the supremecourt had held that, on matters affecting policy and requiringtechnical expertise, the court would leave the matter for thedecision of those who are qualified to address the issues. Therefore,he had submitted that the determination of the grid frequency and theimposition of UI charges are matters involving high technicalexpertise and scientific reasons for arriving at the policy andtherefore, it is not the subject matter of judicial review.63. He had also submitted that, in Central Power DistributionCo. and Ors. Vs. Central Electricity Regulatory Commission, AIR 2007SC 2912, the supreme court had held that the Central ElectricityRegulatory Commission has the plenary powers to regulate the grid byevolving a commercial mechanism such as imposition of UI charges.Further, it is a well settled position in law that a power toregulate includes within it the power to enforce, as held in InduBhusan Vs. Rama Sunderi, (1970) 1 SCR 443, K.Ramanathan Vs. State ofTamilnadu, (1985) 2 SCR 1028, V.S.Rice and Oil Mills Vs. State ofAndhra Pradesh, (1964) 7 SCR 456 and Deepak Theatre, Dhuri Vs. Stateof Punjab, AIR 1992 SC 1519. Therefore, the enforcement of griddiscipline, by the Central Regulatory Electricity Commission, byintroducing the amendments, by way of the impugned notifications,cannot be held to be arbitrary or invalid in the eye of law.Accordingly, the writ petitions filed by the petitioner are liable tobe dismissed. 64. The learned counsels appearing on behalf of the respondents2 to 4 had submitted that the Central Regulatory ElectricityCommission had issued the amendments in question, in exercise of itspower conferred under Section 178 of the Electricity Act, 2003, readwith Section 79 (1)(c) of the said Act. The notifications had beenpublished, on 5.3.2012, and they had come into effect, on 2.4.2012.The said amendments had been introduced only with a view to regulatethe operating frequency of electricity supply, in view of the nearmisses of total collapse of the grid, in the past. By changing thefrequency of the electricity supply, by 0.2 Hz, from 49.50 Hz - 50.20Hz to 49.70 Hz – 50.20 Hz the petitioner is not going to be affected,in any manner. https://hcservices.ecourts.gov.in/hcservices/

65. The learned counsel had further stated that the petitioneris a member of the Standing Committee. While so, they had not agreedfor the construction of the required transmission lines, for thetransmission of electricity. Further, the petitioner had not takenthe necessary efforts to link the Southern Grid, with the NEW Grideven though it had been warned, on several occasions, and when fineshad been imposed for not following the Grid Code Regulationintroduced in the year, 2009. He had further submitted that thepetitioner has not been in a position to demonstrate as to how theamendments to the Central Electricity Regulatory Commission (IndianElectricity Grid Code) Regulations, 2012, are arbitrary andunreasonable. In fact, the impugned notifications, which areapplicable to all the regions in India, cannot be challenged by thepetitioner, merely on the ground that the petitioner has certaingrievances, which are peculiar to the State of Tamilnadu. If suchregulations are not introduced respondents 2 to 4 would not be in aposition to monitor and regulate the supply of power in an effectivemanner. He had also submitted that the cost of establishing the gridis on the Central exchequer and therefore, the larger interests ofthe country, as a whole, had to be taken into account whileconsidering the necessity for such regulations. As such, the writpetitions, filed by the petitioners, are devoid of merits andtherefore, they are liable to be dismissed.66. The learned counsel appearing on behalf of the respondents 2to 4 had relied on the decision reported in M/s.Bajaj Hindustan Ltd.Vs. Sir Shadi Lal Enterprises Ltd. (2011) 1 SCC 640 67. In the common rejoinder, filed on behalf of the petitioner,it has been stated that the observation made by the AppellateTribunal is that it is desirable to maintain grid frequency, as closeas possible to 50 Hz. Considering the prevailing shortage of powerand load imbalances it has been specifically stated that CentralElectricity Regulatory Commission should encourage additionalgeneration to discourage overdrawal of electricity, during lowfrequency conditions. 68. It has been further stated that the order passed by theAppellate Tribunal deals with UI rates for overdrawal by the buyerand the under injection by the generator. It does not, in any manner,support the case of the respondents to reduce the utility frequencybandwidth, while the under injection by the generator or theoverdrawal by the beneficiaries have the same impact on the gridsecurity. There is discrimination between the generators and thebeneficiaries, due to the difference in the cap rates. As such, theregulations of the Commission are more generator friendly,comparatively, even though the main object of the Electricity Act,2003, is to protect the interests of the end consumers. https://hcservices.ecourts.gov.in/hcservices/

69. It has also been stated that the concept of operating in anarrow frequency bandwidth should be brought into effect only afterensuring that there is sufficient power available to meet the demand.As such, the primary requirement before narrowing down the frequencybandwidth is to ensure that sufficient power is made available tomeet the demand. 70. It has been further stated that a comparison of the utilityfrequency with that of advanced countries in Europe and the UnitedStates of America is not appropriate, as such countries are selfsufficient in electricity generation, unlike the Indian situation.Therefore, the real issue that needs to be addressed is the increasein the generation of electricity. Therefore, the regulationsintroduced, by the Commission, for the reason of ensuring gridsecurity, by way of amendments, are liable to be held as arbitrary,unreasonable and ultra vires the Constitution of India.71. In the common reply affidavit filed on behalf of the firstrespondent, as a reply to the rejoinder filed on behalf of thepetitioner, it has been stated that the issue raised by thepetitioner, relating the discriminatory treatment meted out to thegenerators of electricity and its consumers, cannot be accepted. Ithas been further stated that UI is not a prerogative. It is primarilya mechanism for settlement of deviations from schedules. It alsoprovides incentives to all the parties to do the right thing. TheCommission is basically reducing, consciously, the incentive forcoal, lignite and Administrative Price Mechanism gas fired stationsto overgenerate. This has been considered to be necessary forremoving any perverse incentives for flogging the plants,manipulating the availability declaration etc. and for reducing theopposition to the tariff rationalization. Therefore, the cap providedfor over injection by coal and lignite fired stations and thestations burning only Administrative Price Mechanism Gas is neitherarbitrary nor discriminatory in nature.72. It has also been stated that the drawal of UI power in thereal time load generation balancing is permitted, by the Commission,so that if one State faces a load crash the other States can use theavailable surplus power through the UI balancing tool. As such, theCommission has taken a conscious decision to permit flexibility foroverdrawal within certain limits, so as to enhance grid security. 73. In view of the averments made on behalf of the petitioner,as well as the respondents, and in view of the submissions made bythe learned counsels appearing on their behalf, and on a perusal ofthe records available, and on considering the decisions cited supra,it is noted that the first respondent Commission had issued theimpugned notifications containing the regulations, seeking to narrow https://hcservices.ecourts.gov.in/hcservices/ the operating frequency of electricity supply (Grid Frequency) by 0.2Hz, from 49.50 – 50.20 Hz to 49.70 to 50.20 Hz, in the Grid Code andto increase the Unscheduled Interchange charges.74. It is further noted that the Central Electricity RegulatoryCommission, in exercise of the powers conferred under Section 178,read with Section 79(1)(C) of the Electricity Act, 2003, had issuedthe Central Electricity Regulatory Commission (UnscheduledInterchange Charges and Related Matters) (Second Amendment)Regulations, 2012. The said Commission had also brought about certainamendments to the Central Electricity Regulatory Commission (IndianElectricity Grid Code) Regulations, 2010, in exercise of Clause (h)of sub Section (1) of Section 79, read with Clause (g) of sub section(2) of Section 178 of the Electricity Act, 2003. 75. It is not in dispute that the amendments in the Grid Codeand in the UI Regulations have been brought about, by the Commission,in exercise of its delegated powers of legislation. As such, theregulations which have been issued, as subordinate legislation, aresubject to judicial review. Accordingly, this court finds that theimpugned regulations have been introduced, by the Central ElectricityRegulatory Commission, with a view to bring about grid disciplineamongst the users of electricity, like the petitioner corporation.The Central Electricity Regulatory Commission, the first respondentherein, has issued the impugned regulations, after having followedall the necessary procedures prescribed by the Electricity Act, 2003. 76. It is also seen, from the records available, that thepetitioner corporation had been given sufficient opportunity to raiseits objections, when the draft regulations had been notified. Theobjections raised by the users of electricity, including thepetitioner corporation, had been considered by the Commission beforethe impugned regulations had been issued. It is also noted that mostof the users of electricity, including the petitioner corporation,had requested the Commission to postpone the narrowing down of theoperating frequency of electricity supply (Grid Frequency). However,the first respondent Commission has issued the impugned regulationsto prevent unscheduled overdrawals of power, by its users, with aview to ensure grid discipline. Further, the first respondentCommission has issued the impugned regulations in order to maintainsafe, secure and efficient operation of the grid, by maintaining griddiscipline. 77. It is clear, from the records available, that the petitionerhas been overdrawing power, without maintaining sufficient griddiscipline. The mere existence of the under frequency load sheddingrelays cannot be considered to be sufficient protection against amajor grid collapse. It is not open to the petitioner corporation tocontend that it would be costly for the consumers of electricity, if https://hcservices.ecourts.gov.in/hcservices/ the Unscheduled Interchange Charges are increased and if penaltiesare levied for unscheduled overdrawal of power, by the petitionercorporation. 78. From the statistical data available, the first respondentCommission had come to the conclusion that it is desirable tomaintain grid frequency, as close as possible to 50 Hz. It had alsofound that any deviation in the frequency would result in theinefficient operation of the generation and load equipment, resultingin the degradation of the quality of electricity reaching the endconsumers. It could also result in the collapse of the power system.As such, the overdrawal of power from the grid, by its users, to meetthe consumer demand, is not in the interest of grid discipline andgrid security. It is for the utilities like the petitionercorporation to plan for procurement of power, on long term, mediumterm and short term basis, to meet their consumer demands. Therefore,the first respondent Commission has issued the impugned regulationsto ensure stable and secure operation of the grid, by bringing thepermissible range of frequency band close to the nominal level. Thiswould also encourage the distribution utilities in the variousregions of the country to embark on a planned development of power,by setting up new power projects. 79. This court is also of the view that the petitionercorporation has not been in a position to show that the impugnedregulations issued by the first respondent Commission are arbitrary,unreasonable and ultra vires the parent Act or the provisions of theConstitution of India. It is a well settled position in law thatthere is a presumption in favour of the constitutionality or thevalidity of a legislation, including a subordinate legislation. Assuch, the burden is on the petitioner corporation to show that theimpugned regulations are unconstitutional and invalid in the eye oflaw. However, the petitioner corporation has failed to persuade thiscourt, to declare the regulations in question, as ultra vires andinvalid. The first respondent Commission has issued the impugnednotifications only after considering the objections raised by thestakeholders. It had taken into account the various factors, whichwere found to be relevant, before introducing the amendments, inorder to ensure grid discipline and grid security. 80. The contention raised on behalf of the petitionercorporation that there has been no major grid failure in the recentpast and therefore, the reduction in the grid frequency isunnecessary, cannot be accepted. If the petitioner corporation hadentered into long term and medium term contracts or agreements, withthe suppliers of power, there would be no necessity to overdraw powerfrom the grid, except under extraordinary circumstances. In suchcircumstances, there would be no need for the petitioner corporationto pay the enhanced Unscheduled Interchange charges or the penalty.Further, if sufficient advance information is given for drawing power https://hcservices.ecourts.gov.in/hcservices/ through the grid, for supplying the same to its consumers, therewould be no necessity for the payment of congestion charges. By suchadvance planning the petitioner corporation could avoid theescalation of the cost of power supplied to its end consumers. Thelack of synchronisation of the Southern Grid with the NEW Grid cannotbe shown as a reason for the overdrawals of power by the petitionercorporation. 81. In fact, the impugned regulations had been introduced onlywith the object of efficient, integrated and economic supply ofelectricity. It is also a well settled position in law that whencertain policy decisions had been made, based on technical data, thepower of judicial review of this court cannot be invoked, to declarethe same to be ultra vires and invalid, unless it could beestablished that such a decision has been made in contravention ofthe tests laid down by the various decisions of the apex court, citedby the learned counsel appearing on behalf of the first respondentCommission. 82. It is clear from the decisions of the supreme court, citedsupra, that the legislature is the sole repository of the power todecide the policy that should be pursued, with regard to the matterscovered by the Electricity Act, 2003. Therefore, there is no scopefor interference, in such matters, by the courts of law, unless thespecific provisions, which are impugned before them, can be said tosuffer from serious legal infirmities. 83. If a law is made by a legislature, under its law makingpower, or by an authority, under the power of delegated legislation,it cannot be questioned before a court of law, unless it can be shownthat it is totally beyond the scope of its jurisdiction, or that itis ultra vires the provisions of the Constitution of India, orcontrary to the provisions of the parent Act, under which it is made.84. Under normal circumstances, the courts of law do not act asappellate authorities to examine as to whether the policy decisionsof the government concerned, formulated by way of legislations, arecorrect, appropriate and suitable to achieve the desired results. Thescope of judicial review, in such matters, is limited to the extentof finding out if the laws enacted to implement the policy decisionsof the government are contrary to the provisions of the Constitutionof India, or opposed to the existing statutory provisions andmanifestly arbitrary in nature. 85. The courts of law do not interfere with the policy decisionsof the government, either on the ground that they are erroneous, orfor the reason that a better, fairer or a wiser alternative isavailable. Any provision of law, which is not just, fair andreasonable, as perceived by the courts of law, cannot be the primaryconsideration for striking down the same, as there is always apresumption in favour of the constitutional validity of the statute. https://hcservices.ecourts.gov.in/hcservices/ In matters relating to the policy making process and in theirimplementation, the courts of law would be reluctant to interfere,especially, when technical expertise is required to address suchissues. Therefore, the determination of the Grid Frequency and theimposition of the Unscheduled Interchange charges are, without doubt,matters involving intricate technical expertise and deep scientificknowledge and therefore, it is not for this court to question thesame, by way of judicial review. 86. Further, there is no doubt that the impugned notificationsconform to the mandate of the Electricity Act, 2003, and the NationalElectricity Policy. The fact remains that the petitioner corporationis liable to pay Unscheduled Interchange charges only in case ofunscheduled drawals or overdrawals and it would also incur thepenalty for such acts, as per the prevailing regulations. In suchview of the matter, the contentions raised on behalf of thepetitioner corporation cannot be countenanced. As such, this court isof the considered view that the writ petitions, filed by thepetitioner corporation, are devoid of merits. Hence, the writpetitions stand dismissed. No costs. Consequently, connectedmiscellaneous petitions are closed. Sd/ Asst.Registrar //True Copy// Sub.Asst.RegistrarcshTo1.The Secretary, Central Electricity Regulatory Commission,3rd and 4th Floor, Chanderlok Building,36, Janpath, New Delhi-110001.2. The General Manager,National Load Dispatch CentrePower System Operation Corporation Ltd.,(POSOCO) B-9, Qutab Institutional Area,Katwari Sarai, New Delhi-110 016.3.The General Manager,Southern Region Loa Dispatch CentreNo.29, Race Course Cross Street,Bangalore-560 009.4.The General Manager/Commercial,Power Grid Corporation of India Ltd.B-9, Qutab Institutional Area,Katwaria Sarai, New Delhi-110 016. https://hcservices.ecourts.gov.in/hcservices/

5. The Secretary,Government of IndiaMinistry of Power,New Delhi-110 001.2 cc to M/s.Aiyar & Dolia, Advocate, Sr.No.578262 cc to Mr.G.Vasudevan , Advocate, Sr.No.576341 cc to Mr.T.Mohan , Advocate, Sr.No.58162Writ Petition No.8509 and 8510 of 2012ug(co)pmk.17.9.2012