When Person Fails To File Appeal, He Isn’t Aggrieved By Operative Part Of Order Against Which Appeal Is Filed By Other: Supreme Court
The Supreme Court said that statutory limitations cannot dilute the constitutional powers vested in the Supreme Court under Article 136 of the Constitution and though, powers under Articles 136 and 142 can be exercised by the Court even suo motu and/or to do complete justice in a lis, there have to be compelling circumstances for its exercise.
Justice Manoj Misra, Justice Joymalya Bagchi, Supreme Court
The Supreme Court explained that when a person fails to file an Appeal or a Cross-Appeal, he is not aggrieved by the operative part of the Order against which, or some part of which, the Appeal is filed by some other person.
The Court was hearing a Civil Appeal under Section 125 of the Electricity Act, 2003, challenging the Order of the Appellate Tribunal For Electricity (APTEL) in an Appeal to the extent it disallowed Carrying Cost to RattanIndia Power Limited (RPL) on compounding interest basis.
The two-Judge Bench comprising Justice Manoj Misra and Justice Joymalya Bagchi observed, “We are conscious that provisions of CPC are not strictly applicable to a statutory appeal under Section 125 of the 2003 Act, but general principles thereof can be applied, particularly, when powers under Section 125 of the 2003 Act are invocable by a person aggrieved through an appeal, filed within a specified time, on any one or more of the grounds specified in Section 100 CPC. … Besides above, when a person fails to file an appeal or a cross-appeal, it can be taken that he is not aggrieved by the operative part of the order against which, or some part of which, the appeal is filed by some other person.”
The Bench said that statutory limitations cannot dilute the constitutional powers vested in the Supreme Court under Article 136 of the Constitution of India and though, powers under Articles 136 and 142 can be exercised by the Court even suo motu and/or to do complete justice in a lis, there have to be compelling circumstances for its exercise.
AOR Syed Jafar Alam represented the Appellant, while Senior Advocate B.P. Patil represented the Respondents.
Brief Facts
The Appellant-RPL was supplying power to Maharashtra State Electricity Distribution Company Ltd. (Respondent-MSEDCL) under two long term Power Purchase Agreements (PPAs) for supply of 450 MW and 750 MW, respectively with MSEDCL. In connection therewith, RPL filed a Petition under Section 86 of the 2003 Act before the Maharashtra Electricity Regularity Commission (MERC) seeking compensation on account of various Change in Law events affecting the project from the date of commencement of supply of power by RPL along with the Carrying Cost, and requested MERC to allow the compensation with effect from the date of commencement of supply. MERC vide Order had allowed certain Change in Law claims. Aggrieved therewith, RPL filed an Appeal before APTEL, which was allowed. Pursuant to the remand order requiring MERC to compute the amounts payable by MSEDCL to RPL for restoring it to the same economic position as if the Change in Law event had not occurred, RPL filed an application before MERC.
Vide Order, MERC partly allowed the said application, modified its earlier Order, to the extent ruled in the Order, awarded Rs. 69.38 Cr. as Change in Law compensation including Carrying Cost, required RPL to raise supplementary bill and directed MSEDCL to pay the same as per the provisions of PPA. Further, in respect of the disputed amount of Rs. 1.56 Cr., a direction was issued requiring parties to reconcile in terms directed the Order. Thereafter, RPL preferred an Appeal before APTEL, which was partly allowed and the matter was remanded to enable MERC to compute and direct payment of Carrying Cost to RPL at LPS rates. Aggrieved by denial of LPS rate of interest on compounding basis, RPL was in Appeal before the Apex Court. Interestingly, no Appeal was preferred by MSEDCL.
Court’s Observations
The Supreme Court in view of the above facts, noted, “What is important is that, unlike APTEL, which can exercise suo motu powers under sub section (6) of Section 111 of the 2003 Act, the powers of this Court, under Section 125 of the 2003 Act, are invocable through an appeal filed by a person aggrieved. In consequence, if the aggrieved person does not file an appeal, or a cross-appeal/ cross-objection, under Section 125, impugning the order, or any portion of it, passed by APTEL, it cannot question the correctness of the same in an appeal preferred by another person questioning that much portion of the order with which it is aggrieved.”
The Court was of the view that the remand order had not decided the issue relating to grant of LPS though it did indicate, by referring to certain decisions, that compensation for increase in Carrying Cost is to be with LPS benefit.
“… though we do not find fault with the impugned order of APTEL that the remand order indicated grant of LPS benefit, we do not agree with the view of APTEL that MERC or APTEL were bound by those observations and could not have taken a decision qua LPS by taking notice of the law relating to grant of LPS benefit. Reason is simple, the issue regarding grant of LPS benefit on Carrying Cost was not decided. Rather, there was a remand whereunder MERC was required to decide the issue bearing in mind the observations in the judgment/order”, it added.
The Court remarked that when a matter is remanded the lis is alive, unless directed otherwise and therefore, the lis has to be decided in accordance with law.
“Rather, it is duty of a court, whether it is trying original proceedings or hearing an appeal, to take notice of the change in law affecting pending actions and to give effect to the same. No doubt, judicial discipline requires that directions of a higher court must be followed by the court subordinate to it. However, there may be a situation where following a direction may amount to violating the binding law laid down by a superior court or the Apex Court. In such a situation, where the lis is alive, the subordinate court or adjudicating body will have to apply and follow the law which holds the field on the day it decides the matter”, it observed.
The Court further enunciated that when a Court or Appellate Tribunal remands a matter to the subordinate court, or adjudicating body, for a fresh decision in the light of observations contained therein, and while doing so refers to certain decisions, it does not mean that the subordinate court or adjudicating body is bound by those decisions and can look no further, even if, in the interregnum, the law has changed or developed.
“We must not be understood as saying that such a direction has to be ignored. Rather, such a direction must be given due consideration unless the law on the subject, which is binding on the court or adjudicating body, requires otherwise”, it said.
The Court, therefore, held that APTEL, though rightly observed that the remand order indicated award of LPS benefit, erred in holding that it can look no further than the order of remand.
“In such circumstances, we are of the view that by not preferring an appeal or cross-appeal/objection against the order of APTEL, MSEDCL has given up its right to challenge the award of compensation to the appellant of Carrying Cost with interest at LPS rate”, it also noted.
Conclusion
The Court reiterated that statutory limitations cannot override constitutional powers of the Court under Articles 136 and 142 of the Constitution; however, in commercial matters, where a statutory regime is in place, exercise of constitutional powers should be in exceptional or rare circumstances and not as a matter of course.
“We do not find any such circumstances obtaining as to warrant exercise of those powers. … The argument on behalf of the first respondent that appellant had claimed carrying cost as per MYT Regulations before MERC and, therefore, cannot raise a claim at LPS rate has no legs to stand as no appeal has been preferred by the first respondent against the impugned order which allowed carrying cost with interest at LPS rate”, it added.
The Court concluded that since APTEL denied compounding of interest on the ground that it was not specifically provided for in the remand order, this issue would have to be decided afresh.
Accordingly, the Apex Court allowed the Appeal and remanded the case back to APTEL to decide the issue of compounding of interest.
Cause Title- RattanIndia Power Limited v. Maharashtra State Electricity Distribution Company Limited and Another (Neutral Citation: 2025 INSC 1502)
Appearance:
Appellant: AOR Syed Jafar Alam, Advocates Vishrov Mukerjee, Pratyush Singh, and Juhi Senguttuvan.
Respondents: Senior Advocate B.P. Patil, Advocates Udit Gupta, Vyom Chaturvedi, Pragya Gupta, Sneha Singh, Prachi Gupta, Shaily Gupta, Geet Ahuja, and Purnima Chanana.
