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Electricity & Energy LawSupreme Court of India

Ramayana Ispat Pvt. Ltd. and Anr. v. State of Rajasthan and Ors.

Civil Appeal · 2025 INSC 424Decided 1 Apr 2025
C.A. No.-007964-007964 of 2019 (with connected C.A. Nos. 7965 and 7966 of 2019)
Justice Vikram Nath · Justice Prasanna B. Varale

Background

Captive power generators and large industrial consumers (including Hindustan Zinc Limited) challenged the Rajasthan Electricity Regulatory Commission's 2016 Open Access Regulations, which reduced a consumer's contracted power demand from the distribution licensee by the amount of power the consumer separately sourced through "open access," and imposed penalties for deviations. Two High Court benches (Jodhpur and Jaipur) had upheld the regulations, and the consumers appealed to the Supreme Court, arguing the rules were arbitrary and effectively foreclosed their statutory right to open access.

Decision Breakdown

The Supreme Court held that the Rajasthan Electricity Regulatory Commission had the statutory authority under Sections 42 and 181 of the Electricity Act, 2003 to frame regulations governing open access to ensure grid stability, fair pricing, and orderly scheduling. It found that the challenged conditions (reducing contracted demand, penalties for over/under-drawal, advance scheduling requirements) were reasonable regulatory safeguards rather than an outright denial of the right to open access, and that the appellants had failed to show the regulations were unconstitutional, ultra vires, or manifestly arbitrary. All three appeals were dismissed and the High Court orders upheld.

Lesson Learnt

A statutory right (like the right to open access to the power grid) can be subjected to reasonable regulatory conditions by the competent regulator without being treated as "foreclosed," so long as those conditions serve a legitimate purpose like grid stability and are not arbitrary or discriminatory.

Ramayana Ispat Pvt. Ltd. and Anr. v. State of Rajasthan and Ors. – Legal Case Shots | LegalAware