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Municipal Corporation of Delhi v. Gagan Narang & Ors. Etc.

Civil Appeal · 2025 INSC 2Decided 2 Jan 2025
C.A. No.-007463-007464 - 2023
Justice B.R. Gavai · Justice K.V. Viswanathan

Background

The Municipal Corporation of Delhi (MCD) ran a competitive tariff-based bidding process to set up a Waste-to-Energy power project at Narela Bawana, Delhi, and obtained approval of the resulting tariff from the Delhi Electricity Regulatory Commission (DERC). Respondent Gagan Narang challenged this before the Appellate Tribunal for Electricity (APTEL), which set aside the DERC's approvals, reasoning that MCD, not itself a licensed power generator or distributor, had no standing to conduct such bidding and was effectively a "stranger" to the process under Section 63 of the Electricity Act.

Decision Breakdown

The Supreme Court allowed MCD's appeal and restored the DERC's orders. It held that APTEL had wrongly treated MCD as a stranger: the waste-to-energy project was built on a Design-Build-Finance-Operate model, with ownership always meant to rest with MCD, which was fulfilling its own statutory solid-waste-management obligations. Section 63 only requires the regulatory Commission to satisfy itself that the tariff emerged from a transparent, government-guideline-compliant bidding process, which had happened here, not that the bidder be a licensed power company. The Court found the DERC had properly weighed all relevant factors (waste management rules, financial evaluation, transparency certification, and mandatory procurement by distribution companies) in approving the tariff.

Lesson Learnt

A public body carrying out a statutory public-welfare project (like municipal waste management) can validly run its own tariff bidding process for the power generated, and regulators/tribunals should judge such bids on whether the bidding was transparent, not disqualify the public body merely because it isn't a conventional power company.

Official source (sci.gov.in)View Judgment (PDF)

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