Municipal Corporation Of Delhi vs Gagan Narang

2025 INSC 2 REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 7463-7464 OF 2023

MUNICIPAL CORPORATION OF DELHI …APPELLANT(S)

VERSUS

GAGAN NARANG & ORS. ETC. …RESPONDENT(S)

JUDGMENT

B.R. GAVAI, J.

1. The present appeals filed under Section 125 of the

Electricity Act, 20031 arise out of the Impugned common final

judgment and order of the Appellate Tribunal for Electricity at

New Delhi2 dated 31st August 2023 passed in DFR No. 245 of

2023 and DFR No. 247 of 2023 which were both filed by the

Respondent No. 1 herein- Mr. Gagan Narang. The APTEL Signature Not Verified Digitally signed by DEEPAK SINGH Date: 2025.01.02 12:39:13 IST Reason: 1 ‘The Act’ hereinafter 2 ‘APTEL’ hereinafter 1 disposed of the appeals and set aside the orders of the Delhi

Electricity Regulatory Commission3 dated 6th and 7th March

2023. Vide the order dated 6th March 2023 the DERC had

dismissed the petition filed by Waste to Energy Research &

Technology Council4 challenging the authority of the Appellant

herein - Municipal Corporation of Delhi5, to issue the tariff-

based bid and Request for Proposal6 for setting up the Waste

to Energy7 project at Narela Bawana, Delhi. Vide order of 7th

March 2023, the DERC had approved the bid tariff of Rs.

7.38/KWh for the project and had directed the Distribution

Licensee to negotiate the terms of the Power Purchase

Agreement8 with the Appellant-MCD.

2. Shorn of details, the facts leading to the present appeals

are:

2.1 The Appellant-MCD organized a meeting with the

Distribution Licensees in Delhi and other stakeholders on 14 th

May 2022. It was agreed that a tariff-based bidding model may

be adopted and the details about the same, including the volume

3 ‘DERC’ hereinafter 4 ‘WTERT’ hereinafter 5 ‘Appellant-MCD’ hereinafter 6 ‘RfP’ hereinafter 7 ‘WTE’ hereinafter 8 ‘PPA’ hereinafter 2 of waste, total power generation, and other considerations for

the proposed project were decided. It was further decided that

the sale of power be distributed amongst the Distribution

Licensees as per their ‘Renewable Purchase Obligation’. The

Appellant was authorized to conduct the bidding process as per

the regulations and requirements of Section 63 of the Act for the

proposed WTE project. The same was put in writing and was

detailed in the Minutes of Meeting dated 30th May 2022.

2.2 The Appellant-MCD, issued the Notice Inviting Tender9 and

the RfP dated 15th July 2022 whereby the tariff-based bids for

procurement of power under WTE project for Solid WTE

Processing Facility with a minimum 28 MW capacity in Narela

Bawana, New Delhi, for 3000 (+/- 20%) TPD of MSW10 were

invited. The documents for the same were sent to the DERC for

its consideration.

2.3 The DERC, vide letter dated 24th August 2022 directed the

Appellant-MCD to file a petition for approval of PPA, RfP, etc. The

letter also contained the details of the petitions filed by South

Delhi Municipal Corporation and the East Delhi Waste

9 ‘NIT’ hereinafter 10 ‘Project’ hereinafter 3 Processing Co. Ltd. seeking similar approvals, which were

granted by the DERC through separate orders. An evaluation

committee was also constituted for the evaluation of bids and

other related issues. The Appellant-MCD issued a notice that the

bidding process dated 15th July 2022 were closed and a new NIT

was issued on 21st October 2022 with identical terms as the

earlier NIT.

2.4 The WTERT filed a Petition No. 65 of 2022 before the DERC

inter alia challenging the authority of the Appellant-MCD for

issuing the tariff-based bid and the RfP in setting up the Project.

During the pendency of this petition, the bidding process was

undertaken, and on 14th November 2022, bids were received

from M/s JITF Urban Infrastructure Ltd. and M/s JBM

Renewables Pvt. Ltd. A meeting of the Evaluation committee was

held, and the documents submitted by the bidders keeping in

mind the requirement of the RfP document were discussed, and

on recommendation of the committee, the bids of both the

bidders were declared to be technically qualified and their bids

were allowed to be opened. The Regional Centre for Urban &

4 Environmental Studies11 calculated the levelized tariff based on

the RfP and the same was communicated and calculated as:

Name of the Bidder Levelized Tariff (Rs/KWh)

M/s JITF Urban Infrastructure Limited 7.380

M/s JBM Renewable Pvt. Limited 9.909

2.5 The Financial Bids were evaluated by the Evaluation

Committee and its recommendation report dated 26th November

2022 was issued. It was stated in the report that in accordance

with the terms of the RfP, the “Lowest Bidder” for a project was

to be the qualified bidder and the lowest evaluated levelized tariff

shall be the selected bidder for the Project. M/s JITF Urban

Infrastructure Limited was selected to be the lowest bidder with

a levelized tariff bid of Rs. 7.380/KWh. It was further mentioned

that a meeting of the Evaluation Committee was held on 6th

October 2022 for the consideration of the Financial Model for

price bid evaluation prepared by RCUES. The representative of

RCUES presented the financial model and after deliberation, the

committee reached a consensus on the key assumptions taken

11 ‘RCUES’ hereinafter 5 and had arrived at a levelized tariff of Rs. 6.73/KWh. Since, there

existed a difference between the tariff according to the financial

model and the tariff by the lowest bidder, a

justification/calculation for arriving at the quoted bid was

requested from M/s JITF Urban Infrastructure Limited, and the

same was considered by the committee. It was further

mentioned, that after detailed deliberations, the committee was

of the opinion that the bids had been received through a

competitive bidding process and the lowest bid of Rs.

7.380/KWh was arrived at, through a competitive and

transparent bidding process. It was further mentioned that the

Appellant-MCD herein has no benefit or loss accruing out of this

as the power is to be procured by the Distribution Companies in

accordance with the approval of tariff by DERC. The report was

then forwarded to the DERC as the final approval was to be given

by it.

2.6 Pursuant to the same, the Appellant-MCD filed a Petition

No. 72 of 2022 before the DERC for the approval of the bidding

process of the Project.

2.7 The DERC, vide order dated 6th March 2023, dismissed the

Petition No. 65 filed by WTERT and inter alia held that the

6 Appellant-MCD is mandated under the Solid Waste Management

Rules, 201612 to construct, operate, and maintain the solid

waste processing facilities. Vide order dated 7th March 2023, the

DERC in Petition No. 72 filed by the Appellant-MCD herein,

approved the bid tariff of Rs. 7.38/KWh for the project and

directed the Distribution Licensee to negotiate terms of the PPA

with the Appellant-MCD and place a signed copy of the PPA

before the DERC within three months.

2.8 Aggrieved, two separate appeals were filed by the

Respondent No. 1 herein bearing DFR Nos. 245 of 2023 and 247

of 2023 against the orders dated 7th March 2023 and 6th March

2023 respectively.

2.9 The APTEL, vide the Impugned common final judgment and

order dated 31st August 2023 disposed of the appeals and set

aside both the orders dated 6th and 7th March 2023 passed by

the DERC on the ground that the DERC lacked jurisdiction to

entertain and adjudicate upon a petition filed by the Appellant-

MCD herein.

2.10 Aggrieved, the present appeals are filed under Section 125

of the Electricity Act, 2003.

12

‘SWM Rule 2016’ hereinafter 7

3. We have heard Mr. Ramji Srinivasan, learned Senior

Counsel appearing for the Appellant and Mr. Basava Prabhu

Patil, learned Senior Counsel appearing for the Respondent

No.1, Mr. Krishna M. Singh, Ms. Ishita Jain, Mr. Buddy

Ranganathan, Mr. Suresh Chandra Tripathi, learned counsel

appearing for Respondent Nos. 2, 3, 4 & 5, and 9 respectively

and Mr. Pukhrambam Ramesh Kumar, learned counsel for the

applicant.

4. Mr. Ramji Srinivasan, learned Senior Counsel appearing

for the Appellant submits that the APTEL has grossly erred in

restricting the applicability of Sections 63 and 86(1)(b) of the

Act only to the distribution licensee13 or generating company

insofar as the filing of application for adoption of tariff is

concerned. He submits that the provisions of Section 86(1)(b)

of the Act would reveal that a wide power is bestowed upon the

State Commission to regulate electricity purchase and

procurement process of Discoms including the price at which

electricity shall be procured from the generating companies or

licensees or from other sources.

13

‘Discoms’ hereinafter 8

5. Learned Senior Counsel further submits that the

Appellant-MCD, which is a statutory body under the Delhi

Municipal Corporation Act, has been put under statutory

obligation under Rule 15(v)(b) of the SWM Rules 2016 to

proceed for setting up of the WTE projects. It is submitted that

this statutory duty has also been recognized by this Court in

the case of Pune Municipal Corporation v. Sus Road Baner

Vikas Manch and others14.

6. The learned Senior Counsel further submits that Rule

6.4(1)(ii) and (2) of the National Tariff Policy 2016 mandates

Discoms to procure 100% of the power produced from all WTE

plants either through Section 62 (normative tariff process) or

through Section 63 (competitive based mechanism).

7. It is further submitted that Section 175 of the Act itself

provides that the provisions of the Act are in addition to and

not in derogation of any other law for the time being in force.

It is, therefore, submitted that the mandate for setting up the

WTE project by MCD has to be read in consonance with the

provisions of the Environment (Protection) Act, 1986 and the

Rules framed thereunder.

14

(2024) 9 SCC 1 9

8. It is submitted that for WTE projects, no guidelines have

been framed by the Central Government for conducting the

bidding and accordingly the DERC has exercised its powers to

regulate under Section 86(1)(b) of the Act to approve the

bidding process and adopt the tariff. It is submitted that this

is in tune with the judgment of this Court in the case of Energy

Watchdog v. Central Electricity Regulatory Commission

and others15, wherein this Court has held that in a situation

when there are no guidelines, then the general regulatory

powers under Section 79(1)(b) can be exercised by the

Commission. It is, therefore, submitted that by the same

analogy the State Commission can exercise such powers in

view of Section 86(1)(b) of the Act.

9. The learned Senior Counsel submits that the APTEL has

failed to take into consideration the larger issue of public

interest. It is submitted that WTE project was necessary for

processing the unprocessed municipal solid waste which is

increasing day by day.

10. It is further submitted that the DERC vide its order dated

6th March 2023 had held that the Appellant-MCD under Rule

15 (2017) 14 SCC 80 10 15(v) of the SWM Rules 2016 was performing its statutory

functions to conduct the bidding process for the Project and

that there is no bar in the National Tariff Policy that WTE

project cannot be set up under Section 63 of the Act. It is

submitted that on an earlier occasion also the DERC has

approved the bidding process with regard to Tehkhand WTE at

Okhla which is under operation and supplying electricity to all

Delhi Discoms.

11. Mr. Basava Prabhu Patil, learned Senior Counsel

appearing for the Respondent No.1, on the contrary, submits

that the APTEL has rightly held that the Appellant-MCD was

not entitled to make an application for adoption of tariff under

Section 63 of the Act. It is submitted that the APTEL rightly

held that it is only the Discoms or generating companies who

are entitled to invoke the provisions of Section 63 of the Act.

The learned Senior Counsel submits that in view of Rule 6.4(2)

of the National Tariff Policy, 2016, it is exclusively for the

Ministry of Power to provide a mechanism for adoption of tariff

for WTE projects. It is, therefore, submitted that the DERC

has no jurisdiction to entertain the application filed by the

present Appellant-MCD. He, therefore, prays for the dismissal

11 of the present appeals.

12. The limited question that falls for consideration in the

present appeals is that, whether the application under Section

63 of the Act could have been made by the present Appellant-

MCD which is a “local authority” within the meaning of Section

2(41) of the Act.

13. For appreciating the rival controversy, it will be necessary

to consider the nature of the Project which the Appellant-MCD

was implementing. For the said purpose, it will be relevant to

refer to clauses (q) and (v) of Rule 15 of the SWM Rules 2016,

which read thus:

“15. Duties and responsibilities of local authorities and village panchayats of census towns and urban agglomerations.—The local authorities and Panchayats shall— ***

(q) transport segregated bio-degradable waste to the processing facilities like compost plant, biomethanation plant or any such facility. Preference shall be given for on site processing of such waste; ***

(v) facilitate construction, operation and maintenance of solid waste processing facilities and associated infrastructure on their own or with private sector participation or through any agency for optimum utilisation or various components of solid waste adopting suitable technology including the following 12 technologies and adhering to the guidelines issued by the Ministry of Urban Development from time to time and standards prescribed by the Central Pollution Control Board. Preference shall be given to decentralised processing to minimise transportation cost and environmental impacts such as—

(a) bio-methanation, microbial composting, vermi-composting, anaerobic digestion or any other appropriate processing for bio-stabilisation of biodegradable waste;

(b) waste to energy processes including refused derived fuel for combustible fraction of waste or supply as feedstock to solid waste based power plants or cement kilns;”

14. It could thus be seen that the SWM Rules 2016 require

that, while making provisions for solid waste disposal, the

authorities shall give a preference to decentralized processing

to minimize transportation cost and environmental impacts

such as, waste to energy processes including refused derived

fuel for combustible fraction of waste or supply as feedstock to

solid waste based power plants or cement kilns.

15. It is further to be noted that the “Tariff Policy” notified by

the Ministry of Power on 28th January 2016 is in compliance

with the mandate of Section 3 of the Act. It could further be

13 seen that under the said “Tariff Policy”, a provision has been

made for renewable sources of energy generation including Co-

generation from renewable energy sources. It will be relevant

to refer to Rule 6.4 of the said “Tariff Policy”, which reads thus:

“6.4 Renewable sources of energy generation including Co-generation from renewable energy sources:

(1) Pursuant to provisions of section 86(1)(e) of the Act, the Appropriate Commission shall fix a minimum percentage of the total consumption of electricity in the area of a distribution licensee for purchase of energy from renewable energy sources, taking into account availability of such resources and its impact on retail tariffs. Cost of purchase of renewable energy shall be taken into account while determining tariff by SERCs. Long term growth trajectory of Renewable Purchase Obligations (RPOs) will be prescribed by the Ministry of Power in consultation with MNRE.

Provided that cogeneration from sources other than renewable sources shall not be excluded from the applicability of RPOs.

(i) Within the percentage so made applicable, to start with, the SERCs shall also reserve a minimum percentage for purchase of solar energy from the date of notification of this policy which shall be such that it reaches 8% of total 14 consumption of energy, excluding Hydro Power, by March 2022 or as notified by the Central Government from time to time.

(ii) Distribution Licensee(s) shall compulsorily procure 100% power produced from all the Waste-to-Energy plants in the State, in the ratio of their procurement of power from all sources including their own, at the tariff determined by the Appropriate Commission under Section 62 of the Act.

(iii) It is desirable that purchase of energy from renewable sources of energy takes place more or less in the same proportion in different States. To achieve this objective in the current scenario of large availability of such resources only in certain parts of the country, an appropriate mechanism such as Renewable Energy Certificate (REC) would need to be promoted. Through such a mechanism, the renewable energy based generation companies can sell the electricity to local distribution licensee at the rates for conventional power and can recover the balance cost by selling certificates to other distribution companies and obligated entities enabling the latter to meet their renewable power purchase obligations.

The REC mechanism should 15 also have a solar specific REC.

(iv) Appropriate Commission may also provide for a suitable regulatory framework for encouraging such other emerging renewable energy technologies by prescribing separate technology based REC multiplier (i.e. granting higher or lower number of RECs to such emerging technologies for the same level of generation).

Similarly, considering the change in prices of renewable energy technologies with passage of time, the Appropriate Commission may prescribe vintage based REC multiplier (i.e. granting higher or lower number of RECs for the same level of generation based on year of commissioning of plant).

(2) States shall endeavor to procure power from renewable energy sources through competitive bidding to keep the tariff low, except from the waste to energy plants. Procurement of power by Distribution Licensee from renewable energy sources from projects above the notified capacity, shall be done through competitive bidding process, from the date to be notified by the Central Government.

16. It can thus be seen that clause (1) of Rule 6.4 provides

that the Appropriate Commission shall fix a minimum

percentage of the total consumption of electricity in the area of

16 a distribution licensee for purchase of energy from renewable

energy sources, taking into account availability of such

resources and its impact on retail tariffs. It further provides

that the cost of purchase of renewable energy shall be taken

into account while determining tariff by SERCs and that the

long-term growth trajectory of Renewable Purchase

Obligations (RPOs) will be prescribed by the Ministry of Power

in consultation with Ministry of New and Renewable Energy

(MNRE).

17. Certain exceptions have been made to the applicability of

the said clause. One of the exceptions is that, the Distribution

Licensee(s) shall compulsorily procure 100% of the power

produced from all the Waste-to-Energy plants in the State, in

the ratio of their procurement of power from all sources

including their own, at the tariff determined by the Appropriate

Commission under Section 62 of the Act.

18. It is further to be noted that the following provision has

been made in SWM Rules 2016:

“9. Duties of the Ministry of Power.- The Ministry of Power through appropriate mechanisms shall,-

(a) decide tariff or charges for the power generated from the waste to energy plants 17 based on solid waste.

(b) compulsory purchase power generated from such waste to energy plants by distribution company.”

19. It could thus be seen that under the SWM Rules 2016, a

duty is cast upon the Ministry of Power to decide tariff or

charges for the power generated from the waste to energy

plants based on solid waste and compulsory purchase of power

generated from such waste to energy plants by distribution

company.

20. Thus, it is to be noted that the Project, for which bids were

invited by the Appellant-MCD, was proposed to be set up by

the Appellant-MCD in pursuance of its statutory obligations

under the SWM Rule 2016.

21. A perusal of the record would reveal that the Appellant-

MCD issued NIT for the competitive tariff bidding process for

setting up of the Project for procurement of power by Discoms

in the NCT of Delhi as part of Discom’s Renewal Purchase

Obligation16. The said project was on Design, Build, Finance,

and Operate basis and was to be transferred back to the

Appellant-MCD after 25 years.

16

“RPO” for short 18

22. It is further to be noted that after the bid was conducted

in consonance with the decision taken in the meeting dated

14th May 2022, wherein the Discoms authorized the Appellant-

MCD to proceed with the same, on 3rd August 2022, the

bidding documents were sent to the DERC for its

consideration. Based on the same, the DERC vide letter dated

24th August 2022 directed the Appellant-MCD to file a Petition

for adoption of tariff. The DERC, further informed the

Appellant-MCD about similar petitions filed by East Delhi

Processing Limited seeking similar approvals.

23. After M/s JITF Urban Infrastructure Ltd. emerged as a L-

1 bidder at the levelized tariff of Rs.7.380/KWh, the Appellant-

MCD filed a Petition No. 72 of 2022 before the DERC for

adoption of tariff and approving the draft PPA. The DERC vide

its order dated 7th March 2022 adopted the tariff of

Rs.7.380/KWh and directed the Discoms and the successful

bidder to renegotiate the terms of the PPA.

24. Insofar as the petition of the WTERT is concerned, the

DERC specifically rejected the contention of the WTERT to the

effect that since the Appellant-MCD was not an authorized

distribution licensee, it cannot float the impugned tender. It

19 was further sought to be argued that the Bidding procurement

under Section 63 of the Act was impermissible in case of ‘waste

to energy’ power.

25. The DERC relying on the provisions of Rule 15 of the SWM

Rules 2016 specifically rejected the said contention and held

that the Appellant-MCD was performing its statutory

obligations.

26. While allowing the applications filed by the Respondent

No. 1, the APTEL interpreted Section 63 of the Act and held

that since the Appellant-MCD was neither a distribution

licensee nor a generating company, it had no jurisdiction to file

an application under Section 63 of the Act for adoption of tariff.

27. For appreciating the correctness of the findings of the

APTEL, it will be apposite to refer to Section 63 of the Act,

which reads thus:

“63. Determination of tariff by bidding process.- Notwithstanding anything contained in section 62, the Appropriate Commission shall adopt the tariff if such tariff has been determined through transparent process of bidding in accordance with the guidelines issued by the Central Government.”

28. It could thus be seen that under Section 63 of the Act, the

Appropriate Commission is entitled to adopt the tariff if such 20 tariff has been determined through a transparent process of

bidding in accordance with the guidelines issued by the

Central Government.

29. It could be seen that a plain reading of Section 63 of the

Act would reveal that it does not restrict invoking of the

provisions of Section 63 only to Discoms or generating

companies.

30. It is a settled principle of law that the first and foremost

principle of interpretation is that of literal interpretation.

When the statute read in a literal manner is capable of giving

meaning to the provision that the legislation intended to and

does not lead to any absurdity, it is not permissible by judicial

interpretation to add, alter, or delete any words to such a

statute. Reliance in this respect could be placed on the

judgment of this Court in the case of Punjab State Power

Corporation Limited and another vs. Emta Coal Limited17

wherein this Court has observed thus:

“23. The principle of giving a plain and literal meaning to the words in a statute is well-recognised for ages. Though there are a number of judgments, we may gainfully refer to the judgment of this Court delivered by Das, J. as early as 1955

17 (2022) 2 SCC 1 21 in Jugalkishore Saraf v. Raw Cotton Co.

Ltd. [Jugalkishore Saraf v. Raw Cotton Co. Ltd., (1955) 1 SCR 1369 : AIR 1955 SC 376] : (AIR p. 381, para 6)

“6. … The cardinal rule of construction of statutes is to read the statute literally, that is by giving to the words used by the legislature their ordinary, natural and grammatical meaning. If, however, such a reading leads to absurdity and the words are susceptible of another meaning the Court may adopt the same. But if no such alternative construction is possible, the Court must adopt the ordinary rule of literal interpretation.”

24. Though there are various authorities on the said subject, we do not wish to burden the present judgment by reproducing those. In our considered view, if the words used in Section 11 of the said Act are construed in plain and literal term, they do not lead to an absurdity and as such, the rule of plain and literal interpretation will have to be followed. We find that in case the interpretation as sought to be placed by Shri Rohatgi is to be accepted, it will do complete violence to the language of Section 11 of the said Act. If it is held that under Section 11 of the said Act, a prior contractor is entitled to continue if his performance is found to be satisfactory and if there is nothing against him, then it will be providing something in Section 11 of the said Act which the statute has not provided for. It will also lead to making the words “may elect, to 22 adopt and continue” redundant and otiose.

25. It is a settled principle of law that when, upon a plain and literal interpretation of the words used in a statute, the legislative intent could be gathered, it is not permissible to add words to the statute. Equally, such an interpretation which would make some terms used in a statute otiose or meaningless, has to be avoided. We therefore find that if an interpretation as sought to be placed by EMTA is to be accepted, the same would be wholly contrary to the principle of literal interpretation. There are number of authorities in support of the said proposition. However, we refrain from referring to them in view of the following observations made by this Court in a recent judgment in Ajit Mohan v. Delhi Legislative Assembly [Ajit Mohan v. Delhi Legislative Assembly, (2022) 3 SCC 529 :

2021 SCC OnLine SC 456] : (SCC para

240)

“240. … In our view if the proposition of law is not doubted by the Court, it does not need a precedent unless asked for. If a question is raised about a legal proposition, the judgment must be relatable to that proposition — and not multiple judgments.”

As such, the contention in that regard is found to be without merit.”

31. Upon a plain reading of Section 63 of the Act, it would

23 reveal that the power of the Appropriate Commission

thereunder is, notwithstanding anything contained in Section

62.

32. It can thus be seen that the intention of the legislature is

to empower the Appropriate Commission to adopt the tariff if

such tariff has been determined through a transparent process

of bidding in accordance with the guidelines issued by the

Central Government.

33. The legislative purpose appears to be that when the power

is being produced through a process of bidding it has to be

done in a transparent manner. Another requirement is that

the same must be done in accordance with the guidelines

issued by the Central Government.

34. This Court in the case of Energy Watchdog (supra) has

held that when there are no guidelines, then the Central

Commission can exercise power under Section 79(1)(b) of the

Act. The provisions of Section 86(1)(b) of the Act are analogous

with Section 79(1)(b) of the said Act.

35. A plain reading of Section 63 of the Act would not show

that the legislature intended to restrict the invocation of the

jurisdiction of the State Commission only by the Discoms or

24 generating companies. In our view, the interpretation as

placed by the APTEL is adding words in the provisions of

Section 63 of the Act which the legislature did not intend to.

36. As already stated herein above, when a provision in the

statute upon its plain reading is capable of giving a meaning to

it as intended by the legislature, then it will not be permissible

for the courts to add, alter, or delete the words to the said

provision. In any case, upon a plain reading of the provisions

of Section 63 of the Act, the meaning which we gather does not

result in any absurdity. In such a situation, addition of words

in the statute by judicial interpretation is wholly

impermissible.

37. Apart from that, we are of the view that APTEL could not

have read the provisions of Section 63 of the Act in isolation.

The provisions of Section 63 will have to be read in harmony

with the provisions of Section 86(1)(b) of the Act, which reads

thus:

“86. Functions of the State Commission.-(1) The State Commission shall discharge the following functions, namely:-

(a) ……………………………………………

(b) regulate electricity purchase and procurement process of distribution licensees including the price at which 25 electricity shall be procured from the generating companies or licensees or from other sources through agreements for purchase of power for distribution and supply within the State;”

38. A perusal of the provision of Section 86(1)(b) of the Act

would reveal that a duty is cast upon the State Commission to

regulate electricity purchase and procurement process of

distribution licensees including the price at which electricity

shall be procured from the generating companies or licensees

or from other sources through agreements for purchase of

power for distribution and supply within the State.

39. It could thus be seen that the duty cast upon the State

Commission is to regulate:

(i) the electricity purchase and procurement process of

distribution licensees;

(ii) the price at which electricity shall be procured from

the generating companies or licensees, or;

(iii) from other sources through agreements for

purchase of power for distribution and supply

within the State.

40. The legislative intent behind Section 86(1)(b) of the Act is

to empower the State Commission to regulate all matters 26 regarding the electricity purchase and procurement processes.

41. As held by this Court in the case of Jaipur Vidyut Vitran

Nigam Limited and others v. MB Power (Madhya Pradesh)

Limited and others18, the State Commission is not a mere

post office, but a duty is cast upon it to balance the interests

of consumers on one hand and that of generators or Discoms

on the other hand. If the provisions of Section 63 of the Act

are read in harmony with the provisions of Section 86(1)(b) of

the Act, the legislative intent that could be gathered is that the

State Commission while exercising its powers under Section

63 of the Act shall adopt the tariff when it has been determined

in the bidding process. However, while adopting the same it

will have to be satisfied that the same is done in a transparent

manner. It will also have to be examined as to whether the

interests of the generators/Discoms on one hand are balanced

with the interests of the consumers.

42. In our view, reading the Section 63 of the Act in the

manner in which it has been interpreted by the APTEL, would

impose unnecessary restrictions on the powers and duties of

the State Commission under Section 86(1)(b) of the Act, which

18 (2024) 8 SCC 513 27 are of a very wide amplitude.

43. In this respect, we may refer to the judgment of this Court

in the case of Sanjay Ramdas Patil v. Sanjay and others19

wherein this Court after referring to the earlier judgments of

this Court has observed thus:

“25. In Balasinor Nagrik Coop. Bank Ltd. v. Babubhai Shankerlal Pandya [Balasinor Nagrik Coop. Bank Ltd. v. Babubhai Shankerlal Pandya, (1987) 1 SCC 606] , this Court observed thus : (SCC p. 608, para 4) “4. … It is an elementary rule that construction of a section is to be made of all parts together. It is not permissible to omit any part of it. For, the principle that the statute must be read as a whole is equally applicable to different parts of the same section.”

26. Again in Mohan Kumar Singhania v. Union of India [Mohan Kumar Singhania v. Union of India, 1992 Supp (1) SCC 594 : 1992 SCC (L&S) 455] , this Court observed thus : (SCC p. 624, para

67) “67. We think, it is not necessary to proliferate this judgment by citing all the judgments and extracting the textual passages from the various textbooks on the principles of Interpretation of Statutes. However, it will suffice

19 (2021) 10 SCC 306 28 to say that while interpreting a statute the consideration of inconvenience and hardships should be avoided and that when the language is clear and explicit and the words used are plain and unambiguous, we are bound to construe them in their ordinary sense with reference to other clauses of the Act or the Rules as the case may be, so far as possible, to make a consistent enactment of the whole statute or series of statutes/rules/regulations relating to the subject-matter.

Added to this, in construing a statute, the Court has to ascertain the intention of the law-making authority in the backdrop of the dominant purpose and the underlying intendment of the said statute and that every statute is to be interpreted without any violence to its language and applied as far as its explicit language admits consistent with the established rule of interpretation.”

27. In Sultana Begum v. Prem Chand Jain [Sultana Begum v. Prem Chand Jain, (1997) 1 SCC 373] , this Court observed thus : (SCC pp. 381-82, para 15)

“15. On a conspectus of the case-law indicated above, the following principles are clearly discernible:

(1) It is the duty of the courts to 29 avoid a head-on clash between two sections of the Act and to construe the provisions which appear to be in conflict with each other in such a manner as to harmonise them.

(2) The provisions of one section of a statute cannot be used to defeat the other provisions unless the court, in spite of its efforts, finds it impossible to effect reconciliation between them.

(3) It has to be borne in mind by all the courts all the time that when there are two conflicting provisions in an Act, which cannot be reconciled with each other, they should be so interpreted that, if possible, effect should be given to both. This is the essence of the rule of “harmonious construction”.

(4) The courts have also to keep in mind that an interpretation which reduces one of the provisions as a “dead letter” or “useless lumber” is not harmonious construction.

(5) To harmonise is not to destroy any statutory provision or to render it otiose.” (emphasis in original)

28. In Jagdish Singh v. Lt.

Governor [Jagdish Singh v. Lt. Governor, (1997) 4 SCC 435] , this Court observed thus : (SCC p. 441, para 7)

“7. … It is a cardinal principle of construction of a statute or the statutory rule 30 that efforts should be made in construing the different provisions, so that, each provision will have its play and in the event of any conflict a harmonious construction should be given. Further a statute or a rule made thereunder should be read as a whole and one provision should be construed with reference to the other provision so as to make the rule consistent and any construction which would bring any inconsistency or repugnancy between one provision and the other should be avoided. One rule cannot be used to defeat another rule in the same rules unless it is impossible to effect harmonisation between them.

The well-known principle of harmonious construction is that effect should be given to all the provisions, and therefore, this Court has held in several cases that a construction that reduces one of the provisions to a “dead letter” is not a harmonious construction as one part is being destroyed and consequently court should avoid such a construction.”

29. In CIT v. Hindustan Bulk Carriers [CIT v. Hindustan Bulk Carriers, (2003) 3 SCC 57] , this Court observed thus : (SCC pp. 73-74, paras 16-21)

“16. The courts will have to reject that construction which 31 will defeat the plain intention of the legislature even though there may be some inexactitude in the language used.

(See Salmon v. Duncombe [Salm on v. Duncombe, (1886) LR 11 AC 627 (PC) : 55 LJPC 69 : 55 LT 446] , AC at.

634, Curtis v. Stovin [Curtis v. S tovin, (1889) LR 22 QBD 513 (CA) : 58 LJQB 174 : 60 LT 772] referred to in S. Teja Singh case [CIT v. S. Teja Singh, AIR 1959 SC 352 : (1959) 35 ITR 408] .)

17. If the choice is between two interpretations, the narrower of which would fail to achieve the manifest purpose of the legislation, we should avoid a construction which would reduce the legislation to futility, and should rather accept the bolder construction, based on the view that Parliament would legislate only for the purpose of bringing about an effective result. (See Nokes v. Doncaster Amalgamated Collieries Ltd. [Nokes v. Doncaster Amalgamated Collieries Ltd., 1940 AC 1014 : (1940) 3 All ER 549 (HL) : 109 LJKB 865 : 163 LT 343] referred to in Pye v. Minister for Lands for New South Wales [Pye v. Minister for Lands for New South Wales, (1954) 1 WLR 1410 : (1954) 3 All ER 514 (PC)] .) The principles indicated in the said cases were reiterated 32 by this Court in Mohan Kumar Singhania v. Union of India [Mohan Kumar Singhania v. Union of India, 1992 Supp (1) SCC 594 : 1992 SCC (L&S) 455] .

18. The statute must be read as a whole and one provision of the Act should be construed with reference to other provisions in the same Act so as to make a consistent enactment of the whole statute.

19. The court must ascertain the intention of the legislature by directing its attention not merely to the clauses to be construed but to the entire statute; it must compare the clause with other parts of the law and the setting in which the clause to be interpreted occurs. (See R.S. Raghunath v. State of Karnataka [R.S. Raghunath v. State of Karnataka, (1992) 1 SCC 335 :

1992 SCC (L&S) 286] .) Such a construction has the merit of avoiding any inconsistency or repugnancy either within a section or between two different sections or provisions of the same statute. It is the duty of the court to avoid a head-on clash between two sections of the same Act. (See Sultana Begum v. Prem Chand Jain [Sultana Begum v. Prem Chand Jain, (1997) 1 SCC 33 373] .)

20. Whenever it is possible to do so, it must be done to construe the provisions which appear to conflict so that they harmonise. It should not be lightly assumed that Parliament had given with one hand what it took away with the other.

21. The provisions of one section of the statute cannot be used to defeat those of another unless it is impossible to effect reconciliation between them.

Thus a construction that reduces one of the provisions to a “useless lumber” or “dead letter” is not a harmonised construction. To harmonise is not to destroy.”

30. It could thus be seen that it is more than well settled that it is the duty of the Court to construe the statute as a whole and that one provision of the Act has to be construed with reference to other provisions so as to make a consistent enactment of the whole statute. It is the duty of the Court to avoid a head-on clash between two sections and construe the provisions which appear to be in conflict with each other in such a manner so as to harmonise them. It is further equally settled that while interpreting a particular statutory provision, it should not result into making the other provision a “useless lumber” or a “dead letter”. While construing the provisions, the Court will have to ascertain the intention of the law- making authority in the backdrop of 34 dominant purpose and the underlying intendment of the statute.”

44. We are, therefore, of the considered view that when the

provisions of Section 63 of the Act are read in harmony with

the provisions of Section 86(1)(b) of the Act, the powers of the

State Commission cannot be curtailed by interpreting that the

same can be invoked only by the Discoms or the generating

companies.

45. It will further be relevant to refer to the provisions of

Section 174 and 175 of the Act, which read thus:

“174. Act to have overriding effect.- Save as otherwise provided in section 173, the provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act.

175. Provisions of this Act to be in addition to and not in derogation of other laws.- The provisions of this Act are in addition to and not in derogation of any other law for the time being in force.”

46. A perusal of Section 174 of the Act would reveal that, save

as otherwise provided in Section 173, the provisions of the Act

shall have effect notwithstanding anything inconsistent

therewith contained in any other law for the time being in force

35 or in any instrument having effect by virtue of any law other

than the Act.

47. Section 175 of the Act provides that the provisions of the

said Act are in addition to and not in derogation of any other

law for the time being in force.

48. In our view, there is no inconsistency between the

provisions of Section 63 of the Act and Rule 15 of the SWM

Rules 2016. The provisions of Rule 15 of the SWM Rules 2016,

which are enacted under the Environment (Protection) Act,

1986, mandate the appellant to undertake WTE project(s).

49. It can thus be seen that insofar as the WTE projects are

concerned, the provisions under the Act will have to be read in

addition to the provisions under Rule 15 of the SWM Rules

2016 and not in derogation thereof.

50. Apart from that, Rule 6.4 of the Tariff Policy, which is

notified in compliance with the mandate of Section 63 of the

Act, the distribution licensees are mandated to compulsorily

procure 100% of the power produced from all the WTE plants

in the State in the ratio of their procurement of power from all

sources including their own. Not only that, the Appropriate

Commission is also required to provide suitable regulatory

36 framework for encouraging such other emerging renewable

energy technologies.

51. It will also be relevant to refer to the provisions of Section

86(1)(e) of the Act, which read thus:

“86. Functions of the State Commission.-(1) The State Commission shall discharge the following functions, namely:-

(a) ……………………………………………

(e) promote cogeneration and generation of electricity from renewable sources of energy by providing suitable measures for connectivity with the grid and sale of electricity from such sources, a percentage of the total consumption of electricity in the area of a distribution licensee;”

52. It can thus be seen that the provisions of Section 86(1)(e)

of the Act read with Rule 6.4 of the Tariff Policy provide for

promoting cogeneration and generation of electricity from

renewable sources of energy by providing suitable measures

for connectivity with the grid and sale of electricity from such

sources, a percentage of the total consumption of electricity in

the area of a distribution licensee.

53. We are of the considered view that the APTEL has failed

to take into consideration all these aspects of the matters.

37

54. In any case, the APTEL has grossly erred in treating the

present Appellant-MCD as a total stranger. The WTE project

was on Design, Build, Finance and Operate basis. The

ownership of the said Project was always to be with the

Appellant-MCD and the operation of the facility is required to

be transferred back to the Appellant-MCD after 25 years. The

reasoning given by the APTEL, that if the application of the

Appellant-MCD for adoption of tariff was held to be tenable,

then it would amount to permitting any stranger to apply

under Section 63 of the Act, is factually not correct. The APTEL

failed to take into consideration that the Appellant-MCD was

establishing the said Project in order to perform its statutory

obligations. The plain reading of Section 63 of the Act would

reveal that the Appropriate Commission has to adopt the tariff

only after being satisfied that such a tariff has been determined

through a transparent process of bidding in accordance with

the guidelines issued by the Central Government.

55. The DERC, after taking into consideration all the relevant

factors, had granted its approval to the tariff with certain

conditions. The relevant factors which were taken into

consideration by the DERC while granting the approval were:

38

(i) the mandate of Rule 15 of the SWM Rules 2016;

(ii) the financial evaluation report which was sent by the

Bidding Evaluation Committee;

(iii) the certificate on the conformity that the bidding

process had been completed by following the

transparent process; and

(iv) that there was a mandate under the NTP to the effect

that the entire power generated by the WTE project was

to be procured by the Discoms.

However, the same has been upset by the APTEL only on

a hyper-technical ground.

56. The APTEL also failed to take into consideration that the

WTE project in question was in the larger public interest

thereby providing for disposal of the huge quantity of waste

generated in the city of Delhi.

57. Since we are inclined to allow the appeals of the appellant

on the aforesaid grounds, we do not find it necessary to go into

the contention of the appellant with regard to locus of the

Respondent No.1 in filing the appeals before the APTEL.

58. In the result, we pass the following order:

(i) the appeals are allowed; 39 (ii) the Impugned common final judgment and order of the

Appellate Tribunal for Electricity at New Delhi dated

31st August 2023 passed in DFR No. 245 of 2023 and

DFR No. 247 of 2023 is quashed and set aside;

(iii) the orders of the Delhi Electricity Regulatory

Commission dated 6th March 2023 in Petition No. 65

of 2022 and 7th March 2023 in Petition No. 72 of 2022

are affirmed.

59. Pending application(s), if any, shall stand disposed of.

..............................J (B.R. GAVAI)

..............................J (K.V. VISWANATHAN)

NEW DELHI;

JANUARY 02, 2025

40