Delhi Electricity Regulatory Commission vs Forum of Regulators Central Electricity Regulatory Commission & Ors. on 27 May 2026

1. The Secretary Forum of Regulators Central Electricity Regulatory Commission 6th-8th Floors, World Trade Centre, Nauroji Nagar, New Delhi – 110023 Email: secy@cercind.gov.in

2. The Secretary Uttarakhand Electricity Regulatory Commission Vidyut Niyamak Bhawan Near ISBT PO Majra Dehradun, Uttarakhand – 248171 Email: secy.uerc@gov.in

3. The Secretary Madhya Pradesh Electricity Regulatory Commission 5th Floor Metro Plaza, Arera Colony Bittan Market, Madhya Pradesh, Bhopal – 462016 Email: secretary@mperc.nic.in

4. The Secretary Chhattisgarh State Electricity Regulatory Commission Raipur, Irrigation Colony, Shanti Nagar, Raipur Chhattisgarh – 492001 Email: cserc.sec.cg@nic.in

5. The Secretary Kerala State Electricity Regulatory Commission KPFC Bhavanam, C V Raman Pillai Road, Vellayambalam, Thiruvananthapuram, Kerala – 695010 Email: kserc@erckerala.org

6. The Secretary Maharashtra Electricity Regulatory Commission World Trade Centre, Centre No. 1, 13th Floor, Cuffe Parade, Maharashtra – 400005 Email: mercindia@merc.gov.in

7. The Secretary Bihar Electricity Regulatory Commission Ground Floor, Vidyut Bhawan-II, BSEB Campus, J.L. Nehru Marg (Bailey Road), Patna, Bihar – 800021 Email: bercpat@berc.co.in

8. The Secretary Odisha Electricity Regulatory Commission Bidyut Niyamak Bhawan Plot No. 4, Chunokoili, Shailashree Vihar, Chandrasekharpur, Bhubaneswar, Odisha – 751021 Email: orierc@gmail.com orierc@rediffmail.com

9. The Secretary Punjab State Electricity Regulatory Commission Site No. 3, Sector 18, Madhya Marg,

Chandigarh – 160018 Email: secretarypsercchd@gmail.com

10. The Secretary Karnataka Electricity Regulatory Commission No. 16, C-1, Millers Tank Bund Road, Yellappa Garden, Bed Area, Vasanth Nagar, Bengaluru – 560052 Email: kerc-ka@nic.in

Also at:

The Secretary Karnataka Electricity Regulatory Commission No. 9/2, 6th 7 7th Floor, Mahalaxmi Chambers, M.G. Road, Bangalore, Karnataka – 560001 Email: kerc-ka@nic.in

11. The Secretary Tamil Nadu Electricity Regulatory Commission 4th Floor, SIDCO Corporate Office Building, Thiru Vi Ka Industrial Estate Guindy, Chennai, Tamil Nadu – 600032 Email: tnerc@nic.in

12. The Secretary Himachal Pradesh Electricity Regulatory Commission Vidyut Aayog Bhawan, Block No. 37, SDA Complex, Kasumpti, Himachal Pradesh – 171009 Email: secy-hperc@hp.gov.in

13. The Secretary Uttar Pradesh Electricity Regulatory Commission Vidyut Viniyamak Bhawan, Vibhuti Khand, Gomti, Nagar, Uttar Pradesh – 226010 Email: secretary@uperc.org

14. The Secretary Telangana State Electricity Regulatory Commission 5th Floor, 11-4-660, Singarenu Bhavan, Red Hills, Hyderabad, Andhra Pradesh – 500004 Email: secy@tserc.gov.in

15. The Secretary Haryana Electricity Regulatory Commission Bays No. 33-36, Sector-4, Haryana – 134112 Email: secretary.herc@nic.in & herc-chd@nic.in

16. The Secretary Gujarat Electricity Regulatory Commission 6th Floor GIFT One Road, 5-C Zone 5 Gift City, Gandhinagar, Gujarat – 382355 Email: secretary@gercin.org & gerc@gercin.org

17. The Secretary West Bengal Electricity Regulatory Commission Plot No. AH/5 (2nd and 4th floor), Premises No. MAR 16-1111, Action Area 1A, New Town, Rajarhat, Kolkata, West Bengal – 700163 Email: cp-wberc@gov.in & wberc99@gmail.com

18. The Secretary Andhra Pradesh Electricity Regulatory Commission 4th Floor, 11-4-660, Singareni Bhawan, Red Hills, Khairathabad, Hyderabad, Andhra Pradesh – 500004 Email: commn-secy@aperc.in & commn-secy@aperc.gov.in Also at:

The Secretary Andhra Pradesh Electricity Regulatory Commission

Vidyut Niyantrana Bhawan, Adjacent to 220/132/33/11KV, AP Carbides SS, Dinnedevarapadu Road, Kurnool, Andhra Pradesh – 518002 Email: commn-secy@aperc.in

19. The Secretary Rajasthan Electricity Regulatory Commission Vidyut Niyamak Bhawan, Near Motor Garage, Sahakar Marg, Rajasthan – 302001 Email: rercjpr@yahoo.co.in

20. The Secretary Joint Electricity Regulatory Commission (For the State of Goa and Union Territories) Andaman and Nicobar Islands, Chandigarh, Dadra and Nagar Haveli, Daman and Diu, Goa, Lakshadweep, Pondicherry 3rd and 4th Floor, Plot No. 55-56, Phase IV, Service Road, Udyog Vihar, Sector 18 Gurugram, Haryana – 122015 Email: secy.jercuts@gov.in

21. The Secretary Assam Electricity Regulatory Commission Bidyut Niyamak Bhawan, G.S. Rd, A.S.E.B. Campus, Dwarandhar, Six Mile, Assam – 781022 Email: aercghy@hotmail.com

22. The Secretary Nagaland Electricity Regulatory Commission Upper Agri Colony, House No. 341, Old MLA Hostel Complex, Kohima, Nagaland – 797001 Email: nerckohima@yahoo.com

23. The Secretary Arunachal Pradesh State Electricity Regulatory Commission O.T. Building, 2nd Floor, Niti Vihar Market, T.T. Marg,

Itanagar, Arunachal Pradesh – 791111 Email: secy-apserc-arn@gov.in & www.apserc.nic.in

24. The Secretary Jharkhand State Electricity Regulatory Commission New Police Line Road, Opposite to C.M. House Kanke Road, Ranchi – 834008 Email: secretary@jserc.org & info@jserc.org Also at:

The Secretary Jharkhand State Electricity Regulatory Commission 1st Floor, Jharkhand State Housing board, Old Building, Harmu Housing Colony, Ranchi – 834002 Email: secretary@jserc.org

25. The Secretary Sikkim State Electricity Regulatory Commission Deorali Behind Lekha Priksha Bhavan (AG Office), P.O Tadong, Gangtok, Sikkim – 737102 Email: Sikkim.serc@gmail.com

26. The Secretary Meghalaya State Electricity Regulatory Commission 1st Floor, Front Block, Left Wing New Administrative Bldg., Lower Lachumiere Shilong, East Khasi Hills, District, Meghalaya – 793001 Email: mmserc@gmail.com

27. The Secretary Tripura Electricity Regulatory Commission Bidyut Bhavan Complex, Bhutoria, Banamalipur, Agartala, Tripura (West), Tripura – 799001 Email: secy.terc-tr@tripura.gov.in & chairman.terc-tr@tripura.gov.in

28. The Secretary

Joint Electricity Regulatory Commission J and K and Ladakh Railway Road, Ambedkar (Panama) Chowk, Jammu & Kashmir – 180016 Email: secretary-jercjkl@gov.in & jercjkl@gmail.com

29. The Secretary Joint Electricity Regulatory Commission (for the states of Manipur and Mizoram) Aizawl Mizoram TBL Bhawan, 2nd-5th Floor, E-18, Peters Street, Khatla, Aizwal, Manipur – 796001 Email: jerc.mm@gmail.com

30. The Secretary Jammu and Kashmir J & K State Electricity Regulatory Commission J & K State Electricity Regulatory Commission PDC Complex, Ashok Nagar, Satwari, Jammu – 180003 Email: jkserc@nic.in

31. BSES Yamuna Power Ltd. The Chief Executive Building, Karkardooma Shakti Kiran Building, Karkardooma, Delhi – 110032 Email: sameer.singh@relianceada.com

32. BSES Rajdhani Power Ltd. The Chief Executive Officer BSES Bhawan, Nehru Place, New Delhi – 110019 Email: megha.bajpeyi@relianceada.com

33. Tata Power Delhi Distribution Limited Through its Head Legal NDPL House, Hudson Lines Kingsway Camp, Delhi – 110009 Email: Shri.venkatesh@skvlawoffices.com,

Delhi.office@skvlawoffices.com

… Respondent (s)

Counsel for the Petitioner(s) : B. P. Patil, Sr. Adv. Abiha Zaidi for Petitioner Counsel for the Respondent(s) : Amit Kapur Anupam Varma Rahul Kinra Aditya Ajay Aditya Gupta Girdhar Gopal Khattar Adamya Ojha Yash Srivastava Mahima Kaur for Res. 31 & 32

Nikunj Bhatnagar Punyam Bhutani Tanishka Khatana Vedant Choudhary Shri Venkatesh Shryeshth Ramesh Sharma Kanika Chugh Ashutosh Kumar Srivastava Suhael Buttan Nihal Bhardwaj Priya Darshini Abhishek Nangia Akash Lamba Mohit Mansharamani Siddharth Nigotia Vineet Kumar Shourya Vir Das Surbhi Kapoor Aashwyn Singh Manu Tiwari Kunal Veer Chopra Aniket Kanhaua Adarsh Singh R Jatin Kattyar

Amol Rana Ananya Dutta Nuha Rahman Drishti Rathi Devishi Gupta Nilesh Purohit for Res. 33

ORDER

PER HON’BLE MR. VIRENDER BHAT, JUDICIAL MEMBER Review Petition No. 7 of 2026

1. By way of this application, the Delhi Commission has sought Review of order dated 20th April, 2026 in the Original Petition No. 01 of 2025 whereby we had quashed the approval accorded by the Lt. Governor vide communication dated 5th March, 2026 to entrusting of strict and intensive audit of Delhi Discoms by the Delhi Commission to CAG as per RA judgement dated 6th August, 2025 of the Hon’ble Supreme Court and had directed the Commission to appoint a chartered accountant within one week from the date of the order with these specific direction to conclude the strict and intensive audit of the Delhi Discoms within three months thereafter.

2. We have heard Mr. B.P. Patil, Learned Senior Counsel along with Ms. Abiha Zaidi, Learned Counsel for the Commission.

3. Mr. B.P. Patil, Learned Senior Counsel has referred to the orders dated 11th February, 2026 and 26th September, 2025 passed by this Tribunal in the original petition with regards to the Delhi Commission to submit that this Tribunal, in these orders, had not barred or declined the move of the Commission to conduct strict and intensive audit of Delhi Discoms by CAG and also directed the Commission to submit progressive report regarding such action thereby permitting the Commission to get such audit conducted by CAG and, therefore, the order dated 20th April, 2026 upholding the objection of Discoms to such audit and quashing the approval accorded by the Lt. Governor to such audit suffers from manifest error and therefore deserves to be reviewed on this aspect.

4. The relevant portions of the orders dated 11th February, 2026 and 26th September, 2025 , to which the Learned Senior Counsel had referred, have been extracted in para No. 4 & 5 of the application and we find it pertinent to extract those portions of these two orders hereunder also :- Order dated 11th February, 2026

“While the submissions urged on behalf of the Delhi Discoms that, in view of the judgment of the Delhi High Court, an audit by the CAG is impermissible, cannot be readily brushed aside, we see no reason to examine this contention in the present proceedings, that too at this stage when no auditor has as yet been appointed. While we may not be understood to have held that the DERC ought not to have the audit conducted by the CAG, we wish to emphasize that appointment of an auditor does not brook any further delay.” Order dated 26th September, 2025 “Regarding the steps taken to commence the intensive audit, State Commission submitted that they have approached the CAG to undertake this special audit and assured that in any case of no response/ or refusal from them, they shall initiate steps to appoint Auditor on their own and shall make efforts to get the same completed by 31.03.2026. State Commission to inform the progress in

this regard to this Tribunal by way of a progress report before the next date of hearing.”

5. It is limpid that in the order dated 11th February, 2026, this Tribunal observed that the objection of Delhi Discom that CAG audit is impressible, cannot be readily brushed aside, but refrained from examining this contention as no auditor had been appointed till that date by the Commission. In the subsequent order dated 26th September, 2025 this Tribunal has merely recorded the submission on behalf of the Commission that they have approached CAG to undertake the special audit of the Delhi Discoms and the assurance that in case no response/or refusal from CAG, they shall initiate steps to appoint auditors on their own.

6. Hence, there is nothing in these two orders to show or suggest that this Tribunal approved the action of the Commission to entrust the special audit of the Discoms to CAG, and thus, the interpretation which is sought to be given on behalf of the Commission is absolutely erroneous. Deriving of such conclusion by the Commission from these two orders of this Tribunal appears to be patently fallacious and pre-posterous.

7. Further, relying upon the order dated 29th January, 2021 passed by the Hon’ble Supreme Court in Civil Appeal Nos. 226-227 of 2021 – Andhra Pradesh State Load Despatch Centre Vs. M/s KSK Mahanadi Power Company Ltd. & Ors., it is argued by Learned Senior Counsel for the Commission that this Tribunal was not competent to decide dispute with regards to the entrustment of special audit of Delhi Discoms to CAG in this petition under Section 121 of the Electricity Act, 2003, and, therefore, the order dated 20th April, 2026 suffers from manifest error on this account also. In this regard, it is to be noted that these submissions were made during the hearing on 20th April, 2026 also and have been noted as well as discussed in paragraph Nos. 34 to 37 of the said order and, therefore, do not merit any fresh consideration. We hasten to add that reliance on the order of the Hon’ble Supreme Court in Civil Appeal Nos. 226 & 227 of 2021 in this regard is totally misplaced. In that case, the Company had filed a petition before the Central Electricity Regulatory Commission but during the pendency of the petition, this Tribunal took up the case and decided it on merits on the ground that since no legal member had been appointed to the Central Commission, the Central Commission was unable to decide the petition and, therefore, this Tribunal will

have to do so itself. Such course of action adopted by this Tribunal was held impermissible by the Hon’ble Supreme Court on the ground that Section 121 does not give any power to the Tribunal to decide any dispute pending before the regulatory Commissions and only empowers this Tribunal to, after hearing the concerned Commission as well as other interested parties, issue orders/instructions or directions to the Commission for performance of its statutory functions. That is not the case herein. No such dispute involving the Delhi Discom is pending before the Commission. The Commission had, in pursuance to RA judgement dated 6th August, 2025 of the Hon’ble Supreme Court proceeded to conduct special audit of Delhi Discoms by CAG for which approval was accorded by the Lt. Governor vide communication dated 5th March, 2026 but objection was raised by Delhi Discoms to such audit before this Tribunal. This Tribunal has been monitoring the conducting of intensive audit of discoms by the Regulatory Commissions throughout India in terms of the said judgement of the Hon’ble Supreme Court. Therefore, we have noted in para No. 36 of the order that it is implicit in the directions of the Hon’ble Supreme Court to this Tribunal to monitor the directions contained in paragraph No. 71 of the RA judgement that this Tribunal

must ensure that these directions are complied with by the Regulatory Commissions in tune with relevant Rules/Regulations/Statutory provisions. Once it is found that while complying with these directions, Regulatory Commissions have contravened any Rules/ Regulations/Statutory provisions, this Tribunal is duty bound to intervene and ensure that there is no violation of any such statutory provisions in complying with the directions of the Hon’ble Supreme Court. When this Tribunal found that the Delhi Commission, in directing audit of Delhi Discoms by CAG, has contravened the statutory provisions i.e. Section 21 of CAG Act, the Tribunal found it not only difficult but unlawful to endorse such action of the Commission as it would have been against the spirit of engrafting of Section 121 of the Electricity Act. This Tribunal found it duty bound to pass directions to ensure that the decisions of the Regulatory Commission are in line with the relevant statutory provisions.

8. Hence, the contention on behalf of the Delhi Commission that the order dated 20th April, 2026 of this Tribunal in this original petition suffers from any error on the face of the record appears to be only figment of imagination of the Commission itself which is not borne out

from the meaningful perusal of the said order. The contentions are absolutely fallacious and mis-conceived to say the least.

9. With respect to the prayer (b) in the application for grant of minimum period of 45 days to the Commission to complete the process of appointment of chartered accountant for conduct of strict and intensive audit of Delhi Discoms, it is to be noted even though in the order dated 20th April, 2026 we had directed the Commission to appoint a chartered accountant within one week from the date of that order, no steps in this regard appear to have been taken by the Commission till today during the period of one month which has elapsed after the passing of that order. It is submitted that certain requisite steps have to be followed in terms of Electricity Regulatory Commission (Appointment of Consultants) Regulations, 2001 for appointment of a chartered accountant which would require the minimum period of 45 days. In case, the Commission had initiated such process immediately after the order dated 20th April, 2026 was passed by this Tribunal, only 15 to 20 more days would have been required for completing such mandatory process. It again appears to us that the Commission is deliberately delaying the appointment of chartered accountant for conducting the audit of Delhi Discoms as

directed by the Hon’ble Supreme Court in the RA judgement. However, be that as it may, since as per the above noted Regulations, 45 days period would be required for completion of the process of a chartered accountant, we find it appropriate to grant such period to the Commission. We make it clear that no further extension of such period shall be granted to the Commission in future.

10. With these observations/directions, the Review Petition stands disposed of. Review Petition No. 8 of 2026

11. By way of this petition, the Delhi Commission has sought review/recall/modification of the order dated 20th April, 2026 to the extent it rejects the request of the Commission for commencing process of liquidation of regulatory assets w.e.f. 1st July, 2026. Further direction of this Tribunal to commence process of liquidation of regulatory assets within three weeks from 20th April, 2026 is also sought to be recalled/modified.

12. We note that the grounds on which review/recall/modification of the order dated 20th April, 2026 is sought by way of this petition have already been considered in paragraph Nos. 43 and 44 of the said

order and have been repelled by the observations contained in paragraph Nos. 48 & 49 of the order. Therefore, by way of the instant petition, the Commission only seeks fresh consideration on these contentions which is not permissible. There may be appropriate remedies available to the Commission in case it is not satisfied with such directions passed by us in the order dated 20th April, 2026. However, certainly the instant petition does not make out any ground for review/recall/modification of the said order.

13. We are constrained to note that considering the statutory procedure to be followed for issue of true-up order, as was conveyed to us during the hearing on 20th April, 2026, we had granted time to the Commission till 30th June, 2026 for passing true up order for Financial Year 2023-24. We hope and expect that the said true up order would be passed by the Commission on or before the said specified date. However, as we have noted in the order dated 20th April, 2026, there is no impediment as such in the way of the Commission in commencing the process of liquidation of regulatory assets of the Discoms. It cannot be gain said that such process cannot be completed in one year or a couple of years. Keeping in view the extent of regulatory assets which have tentatively been

quantified by the Commission itself as Rs.38,552/- crores, it would take several years to liquidate the same in terms of Supreme Court order. Therefore, it is in the interest of the consumers that the Commission must commence such process at the earliest without making any further excuses.

14. Considering that the period of three weeks for commencing of such process as fixed by us in the order dated 20th April, 2026 has already lapsed, we direct the Commission to commence the process of liquidation of regulatory assets of the discoms w.e.f. 16thJune, 2026 positively.

15. With these observations/directions, the review petition stands disposed of. Pronounced in the open court on this 27th day of May, 2026.

(Virender Bhat)

(Seema Gupta)

Judicial Member

Officiating Chairperson

✓ REPORTABLE / NON REPORTABLE

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