'Multi-Year Tariff Cannot Be Amended Without Hearing Stakeholders': Bombay High Court Sets Aside Electricity Regulatory Commission Order
The Bombay High Court held that the Maharashtra Electricity Regulatory Commission (MERC) could not amend or review a Multi-Year Tariff (MYT) order without first providing notice and a meaningful opportunity of hearing to all affected stakeholders. The Court observed that when the due procedure was followed by the MERC in passing the original MYT order, the same procedure should have been...
The Bombay High Court held that the Maharashtra Electricity Regulatory Commission (MERC) could not amend or review a Multi-Year Tariff (MYT) order without first providing notice and a meaningful opportunity of hearing to all affected stakeholders. The Court observed that when the due procedure was followed by the MERC in passing the original MYT order, the same procedure should have been followed whilst reviewing the MYT order, or else it would lead to grave injustice and chaos.
Justice B.P. Colabawalla and Justice Firdosh P. Pooniwalla were hearing a batch of petitions filed challenging MERC's order dated 25 June 2025, by which the Commission had reviewed and modified portions of the MYT Order dated 28 March 2025. The Petitioners contended that the review was undertaken on the basis of a review application filed by the distribution licensee, but without providing notice to stakeholders who were originally heard during the MYT proceedings.
The Court noted that under the concerned Regulations, if any review/amendment is to be made to a MYT order, notice to the affected parties has to be issued allowing them to make their submissions and/or representations to the proposed amendments/rectifications. The Court emphasised that there is no question of invoking inherent powers, as inherent powers cannot be invoked to bypass the Act or Regulations. It observed:
“… when the original MYT order was passed by MERC [on a Tariff Petition filed by MSEDCL], it followed the procedure… the same procedure be followed whilst reviewing the MYT order, or else it would lead to grave injustice and chaos… it would be absurd to suggest that those very stakeholders, whose objections and suggestions were invited and considered, are not to be heard when the same MYT order is sought to be amended/reviewed”.
The Court further observed that the rationale offered by MERC could not be sustained. It held that the very nature of the modifications indicated that they were substantive and therefore could not be categorised as mere corrections of errors.
“… the impugned review order is not one which seeks to correct any arithmetical or typographical mistake or any error that has crept in by virtue of any accidental slip or omission. The impugned review order has far-reaching implications on all stakeholders, including the consumers,” the Court observed.
The Court remarked that even if one were to assume that the function of MERC, whilst passing the MYT order, is a regulatory function and not an adjudicatory function, it would not in any way change the fact that notice ought to have been given to all the stakeholders before passing the impugned review order.
Accordingly, the High Court set aside the review order dated 25 June 2025 and remanded the matter to MERC for fresh consideration.
Case Title: O2 Renewable Energy VII Private Limited v. Maharashtra Electricity Regulatory Commission & Anr. [WRIT PETITION (L) NO.19437 OF 2025]