- within Strategy, Transport, Litigation and Mediation & Arbitration topic(s)
Introduction
The period from April to June 2026 witnessed significant legislative, regulatory, and judicial developments across India's energy, infrastructure, and natural resources sectors, reflecting the Government's continued focus on strengthening regulatory frameworks, facilitating ease of doing business, accelerating infrastructure development, and advancing the country's energy transition.
Notable developments included key reforms across the power, renewable energy, mining, coal, petroleum, highways, ports, and maritime sectors, alongside measures to strengthen infrastructure delivery, environmental governance, industrial safety, and energy security. The period also witnessed important judicial and regulatory pronouncements clarifying issues relating to statutory interpretation, regulatory jurisdiction, competitive bidding, change in law, and contractual rights.
Key Regulatory Updates
Ministry of Power
Introduction of Insurance Surety Bonds as an Alternative to Bank Guarantees/Bid Security Across All Power Procurement Frameworks dated April 6, 2026 (Link)
The Ministry of Power (the "MoP"), issued an office memorandum introducing insurance surety bonds (the "ISBs") as an alternative to bank guarantees/bid security across all power procurement frameworks. The memorandum operationalises the amendment to Rules 170(i) and 171(i) of the General Financial Rules, 2017 (the "GFRs"), as notified by the Ministry of Finance on February 2, 2022, formally recognising ISBs as acceptable instruments for bid security and performance security. All state governments, union territories, and procuring utilities have been directed to amend their bidding documents accordingly.
Notification of Implementation of the Jan Vishwas (Amendment of Provisions) Act, 2026 in respect of the Electricity Act, 2003 dated May 18, 2026 (Link)
The MoP, through a notification, appointed June 1, 2026, as the effective date for amendments to the Electricity Act, 2003 introduced under Serial No. 58 of the Schedule to the Jan Vishwas (Amendment to Provisions) Act, 2023 (the "Jan Vishwas Act"). The amendments, forming part of the broader decriminalisation initiative, replace imprisonment for certain offences with monetary penalties, enhance penalties for non-compliance and damage to electrical works, introduce continuing penalties for ongoing violations, and omit obsolete provisions.
Central Electricity Authority
Central Electricity Authority (Installation and Operation of Meters) Amendment Regulations, 2026 dated April 1, 2026. (Link)
The Central Electricity Authority (the "CEA") notified the Central Electricity Authority (Installation and Operation of Meters) Amendment Regulations, 2026 (the "Metering Amendment"), amending the Central Electricity Authority (Installation and Operation of Meters) Regulations, 2006. The Metering Amendment mandates Smart Meters for consumers in areas with adequate communication networks, permits prepayment meters elsewhere subject to State Electricity Regulatory Commission approval, and requires all advanced metering infrastructure to include prepayment functionality and interoperability. It also clarifies meter placement rules for consumers connected to the inter-state and intra-state transmission and distribution systems, distinguishing between voltage levels above and below 650 volts.
Office Memorandum, regarding General implementation timelines for Inter-State Transmission System (ISTS) projects dated April 15, 2026. (Link)
The CEA issued an Office Memorandum (the "Memorandum") prescribing standardised implementation timelines for inter-state transmission system (the "ISTS") projects. Greenfield substations at 765 kV/400 kV are to be completed within 36 months; those at 220 kV/132 kV within 24 months; and HVDC systems within 48–54 months. Projects in difficult terrains such as the Northeastern Region, Jammu & Kashmir, Ladakh, and Himachal Pradesh may be granted an additional 6–12 months. For multi-component projects, the timeline is determined by the longest-duration component.
Grid Controller of India Limited
Procedure for Grant of Temporary General Network Access (T-GNA) to the inter-state Transmission system through National Open Access Registry (NOAR) dated June 24, 2026. (Link)
The Grid Controller of India, through the National Load Despatch Centre, has issued a procedural framework for the grant of temporary general network access (the "T-GNA") to the ISTS via the National Open Access Registry (the "NOAR"), pursuant to the CERC (Connectivity and General Network Access to the Inter-State Transmission System) Regulations, 2022. T-GNA may be granted for durations from a single time block up to eleven months, covering bilateral and collective transactions, with a separate category—T-GNARE—for renewable energy transactions. The two-step process requires registration on NOAR and issuance of standing clearance by the relevant Load Despatch Centre.
Ministry of New and Renewable Energy
Clarification on the Non‑Requirement of No‑Objection Certificate in Existing or Future Bids/PPAs under FDRE Bidding Guidelines in Cases Where Energy Storage System is Charged Using Power Other Than Renewable Energy dated April 11, 2026. (Link)
The Ministry of New and Renewable Energy (the "MNRE") clarified that no objection certificates (the "NOC") under firm and dispatchable renewable energy (the "FDRE") bids and power purchase agreements are not required where an energy storage system (the "ESS") is charged using non-renewable grid power and no renewable energy generating component has been commissioned. MNRE reiterated that energy discharged from an ESS charged with non-renewable power does not qualify as renewable energy. The right of first refusal and NOC provisions under Clause 14.5 of the FDRE standard bidding documents are triggered only upon commissioning of at least one qualifying renewable energy component.
Update to ALMM List-I under the Approved Models and Manufacturers of Solar Photovoltaic Modules (Requirements for Compulsory Registration) Order, 2019 dated May 1, 2026 (Link)
The MNRE issued an update to List-I of the Approved Models and Manufacturers (the "ALMM") under the Approved Models and Manufacturers of Solar Photovoltaic Modules (Requirements for Compulsory Registration) Order, 2019. The revision includes enlistment of new domestic manufacturers, approval of additional module models, enhancement of manufacturing capacities, amendments to validity periods linked to Bureau of Indian Standards certification, and corrections to existing records. Only modules and manufacturers enlisted under ALMM List-I are eligible for use in government, open access, and net metering projects under Section 63 of the Electricity Act, 2003.
Operational Guidelines for the Small Hydro Power Development Scheme for 1 MW to 25 MW Capacity dated May 15, 2026. (Link)
The MNRE issued Operational Guidelines (the "Guidelines") for the Small Hydro Power (the "SHP") Development Scheme for FY 2026–27 to FY 2030–31, with a total outlay of ₹2,584.6 Crore, targeting approximately 1,500 MW of new capacity. The Guidelines provide for central financial assistance (the "CFA") of up to 20% of Central Electricity Regulatory Commission benchmark cost (maximum ₹20 Crore) is available for projects in general areas, with enhanced CFA of up to 30% (maximum ₹30 Crore) for north-eastern states and specified border regions. Projects must have commenced construction on or after March 18, 2026. CFA is disbursed on a milestone basis linked to physical progress and commissioning.
Office Memorandum for No Blanket Extension of ALMM List dated May 25, 2026 (Link)
Through an office memorandum the MNRE confirmed that there will be no blanket extension of the June 1, 2026, deadline for mandatory compliance with ALMM List-I (solar photovoltaic modules) and ALMM List-II (solar photovoltaic cells) for net metering and open access projects. However, recognising genuine developer concerns, MNRE has introduced a limited, case-by-case relaxation mechanism specifically for ALMM List-II compliance, available only to projects that demonstrated substantial progress prior to the deadline and supported by documentary evidence. Compliance with ALMM List-I remains mandatory without exception.
Ministry of Coal
Guidelines for Preparation and Approval of Mining Plan for Coal and Lignite Blocks / Mines for Underground Gasification, 2026 dated April 6, 2026. (Link)
The Ministry of Coal (the "MoC") issued the Guidelines for Preparation and Approval of Mining Plan for Coal and Lignite Blocks/Mines for Underground Gasification, 2026 (the "Guidelines for Mining Plan"). All coal or lignite blocks proposed for underground coal gasification must obtain a valid mining plan approved by the competent authority prior to commencement of gasification activities. The Guidelines for Mining Plan aim to optimise extraction through in-situ syngas conversion with minimal environmental impact, mandate continuous monitoring to mitigate subsidence, fire, and water contamination risks, and integrate progressive mine closure and post-closure monitoring into gasification operations.
Coal Exchange Rules, 2026 dated June 4, 2026. (Link)
The MoC notified the Coal Exchange Rules, 2026 (the "Coal Exchange Rules") under Section 18B of the Mines and Minerals (Development and Regulation) Act, 1957 (the "MMDR Act"). The Coal Exchange Rules establish a statutory framework for a dedicated Coal Exchange—defined as a mineral exchange under Section 3(af) of the MMDR Act—for online coal trading. Drawing from the securities market regulatory architecture, the Coal Exchange Rules introduce concepts of insider trading, market manipulation, cartelisation, and circular trading. Existing electronic coal trading platforms must register within the prescribed transition period.
Ministry of Mines
Minerals (Other than Atomic and Hydro-carbons Energy Minerals) Concession (Third Amendment) Rules, 2026 notified dated April 10, 2026. (Link).
The Ministry of Mines (the "MoM") notified the Minerals (Other than Atomic and Hydro-Carbons Energy Minerals) Concession (Third Amendment) Rules, 2026 (the "Minerals Concession Amendment Rules"), amending the Minerals (Other than Atomic Carbons Energy Minerals) Concession Rules, 2016 (the "Minerals Concession Rules"). The Mineral Concession Amendment Rules insert a new proviso to Rule 39(1) of Mineral Concession Rules clarifying that where processing of run-of-mine decreases its economic value, royalties are levied on lumps and fines from initial screening rather than on the processed mineral. Further a new Sub-Rule 12 to Rule 45 has been inserted by the Mineral Concession Amendment Rules which prescribes the formula for computing average sale price for metallurgical grade bauxite, limestone, tungsten, and other specified minerals.
Ministry of Petroleum and Natural Gas
Revised Liquified Petroleum Gas Maintenance Order dated April 1, 2026. (Link)
The Ministry of Petroleum and Natural Gas (the "MoPNG") issued the Revised Liquified Petroleum Gas Maintenance Order (the "Revised LPG Maintenance Order") under the Petroleum (Maintenance of Production, Storage and Supply) Order 1999 and the Essential Commodities Act, 1955. The Revised LPG Maintenance Order directs all domestic oil refining companies and petrochemical complexes to maximise production of liquified petroleum gas (the "LPG") from C3 and C4 streams and supply the same exclusively to public sector oil companies. Diversion to other downstream derivatives is prohibited except for specified petrochemical products approved by the Centre for High Technology. The Revised LPG Maintenance Order supersedes the order dated March 9, 2026.
Aviation Turbine Fuel (Regulation of Marketing) Amendment Order, 2026 dated April 17, 2026. (Link)
The MoPNG issued the Aviation Turbine Fuel (Regulation of Marketing) Amendment Order (the "Aviation Turbine Fuel Amendment") to amend the Aviation Turbine Fuel (Regulation of Marketing) Order 2001 (the "Aviation Turbine Fuel Order"). The Aviation Turbine Fuel Amendment redefines aviation turbine fuel to mean a complex mixture of hydrocarbons conforming to IS 1571 specification or its blend with synthesised hydrocarbons per IS 17081. It also substitutes Clause 8(c) of the Aviation Turbine Fuel Order to incorporate the search and seizure provisions of Section 103 of the Bharatiya Nagarik Suraksha Sanhita, 2023, as applicable to proceedings under the Aviation Turbine Fuel Order.
Natural Gas and Petroleum Products Distribution (Through Laying, Building, Operation and Expansion of Pipeline and Other Facilities) Amendment Order, 2026 dated May 4, 2026. (Link)
The MoPNG issued the Natural Gas Distribution Amendment Order, 2026 (the "Natural Gas Distribution Order"), providing for a dedicated portal for submission of applications and grant of right of way (the "RoW") or right of use permissions. The Natural Gas Distribution Order further requires entities undertaking city gas distribution network works in public areas outside the jurisdiction of an urban authority to operate on a dig-and-restore basis and to furnish a performance bank guarantee to the relevant public entity.
Liquified Petroleum Gas (Regulation of Supply and Distribution) Order 2000 dated May 25, 2026 (Link)
The MoPNG issued the Liquified Petroleum Gas (Regulation of Supply and Distribution) Amendment Order, 2026 (the "LPG Regulation Order") to amend the Liquified Petroleum Gas (Regulation of Supply and Distribution) Order 2000. The LPG Regulation Order provides that a person or household holding a domestic liquified petroleum gas connection who subsequently obtains a piped natural gas connection shall no longer be eligible for a refill of domestic liquified petroleum gas cylinders. Such persons must either apply for termination of the liquified petroleum gas connection or obtain a transfer voucher for a future liquified petroleum gas connection in a non-piped natural gas area.
Oilfields (Regulation and Development) Act, 1948 dated June 4, 2026. (Link)
The MoPNG issued amendments (the "Amendment") to the Oilfields (Regulation and Development) Act, 1948 (the "Oilfield Act"), revising royalty rates applicable to crude oil and casing head condensate across nomination blocks, pre- New Exploration Licensing Policy (the “NELP”) blocks, NELP blocks, and blocks under the Discovered Small Field Policy and Hydrocarbon Exploration and Licensing Policy. The Amendment rationalises royalty computation by specifying onshore blocks where royalty continues on a cum-royalty basis, while royalty for all offshore areas and other onshore blocks is computed on an ex-royalty basis. These changes are deemed to have come into force with effect from May 11, 2026.
Ministry of Environment, Forest and Climate Change
Delegation of authority under Solid Waste Management Rules, 2026 dated May 18, 2026. (Link)
On May 18, 2026, the Ministry of Environment, Forest and Climate Change (the "MoEFCC") delegated powers vested under Section 5 of the Environment (Protection) Act, 1986 to all district collectors across India for a period of one year, for the purpose of supervising, administering, and implementing the Solid Waste Management Rules, 2026 within their respective jurisdictions.
Ministry of Commerce and Industry
Gas Cylinder Amendment Rules, 2026 dated April 27, 2026. (Link)
The Department for Promotion of Industry and Internal Trade (the "DPIIT"), under the Ministry of Commerce and Industry (the "MoCI"), issued the Gas Cylinders (Amendment) Rules, 2026 (the "Amendment Rules") amending the Gas Cylinders Rules, 2016. The Amendment Rules expand permitted imports to include cylinders and valves for use by the Ministry of Defence, Department of Space, and their public sector undertakings, and remove the requirement for prior permission for importing empty cylinders, approved valves, and liquified petroleum gas regulators under a valid licence, thereby reducing procedural requirements and facilitating ease of import.
Static and Mobile Pressure Vessels (Unfired) (Amendment) Rules, 2026 dated June 5, 2026. (Link)
The DPIIT under the MoCI notified the Static and Mobile Pressure Vessels (Unfired) (Amendment) Rules, 2026 (the "Amendment Rules") under the Explosives Act, 1884. The Amendment Rules permit use of International Organization for Standardization (the "ISO") tank containers for above-ground storage of compressed gases subject to proper anchoring and structural certification, increase the allowable number of mounded storage vessels per group from six to nine, extend permissions to cover import and/or transportation of compressed gas in ISO tank containers, and introduce a revised Form LS-2B permission regime allowing renewals of up to ten years.
Ministry of Road, Transport and Highways
Circular on Normative Construction Period of National Highways Projects dated April 6, 2026. (Link)
The Ministry of Road Transport and Highways (the "MoRTH") issued a circular revising the framework for determining construction periods for National Highway projects. The revised framework bases construction timelines on total civil cost rather than project length, prescribing graded timelines from 12 months (projects up to ₹300 Crore) to 30 months (projects exceeding ₹1,500 Crore). Additional time is permitted for structural complexity—including tunnels, flyovers, and elevated corridors—and for projects in difficult terrains such as the Himalayan region, North-Eastern states, Western Ghats, and Andaman & Nicobar Islands.
Notification on Force Majeure Clause for National Highway Works dated June 5, 2026. (Link)
The MoRTH issued a notification on the applicability of force majeure for national highway works following the Department of Expenditure's categorisation of the West-Asia situation as a "war." Concessionaires under Build-Operate-Transfer, Toll-Operate-Transfer, and Infrastructure Investment Trust projects may defer renewal layer works by up to five months; however, no concession period extensions are available as toll collection remains unaffected. For Engineering, Procurement and Construction (the "EPC"), Hybrid Annuity Model (the "HAM"), and Performance-Based Maintenance Contracts (the "PBMC") contractors, the force majeure benefit and the April 2026 price adjustment circulars are mutually exclusive. The provisions apply from April 29, 2026, to June 30, 2026.
Circular on Cost Escalation Compensation Mechanism for National Highway projects due to significant increase in rates of Bulk Petroleum, Oil and Lubricant products dated June 17, 2026. (Link)
The MoRTH issued a circular (the "Circular") introducing a price escalation compensation mechanism for Petroleum, Oil and Lubricants (the "POL") cost increases arising from the West Asia crisis. For EPC projects, price adjustment follows existing contractual provisions with base and current diesel prices calculated using Indian Oil Corporation's published bulk rates. For PBMC, HAM, and other contracts without escalation clauses, the POL component is assumed at 10% of project cost and a standard formula applies. Claims must be supported by original invoices. The mechanism applies to works executed between May 1, 2026, and June 30, 2026.
National Highways Authority of India
Accelerated Approval Framework for City Gas Distribution (CGD) Infrastructure with reduced timelines for granting Right of Way Permissions and Access Permissions dated March 31, 2026. (Link)
The National Highways Authority of India (the "NHAI") adopted an Accelerated Approval Framework (the "Approval Framework") as a temporary three-month measure to expedite RoW and access permissions for CGD infrastructure along national highways. Under the Approval Framework, right of way (the “RoW”) proposals for CGD pipelines will be decided within 15 days, with the public domain publication requirement temporarily waived. Access permission applications for compress natural gas stations will be processed within 30 days. All applications must be submitted through the Rajmarg Pravesh Portal.
Clarification on Interest Rate Applicable to Hybrid Annuity Model (HAM) Projects under Clause 23.6.4 of the Amended Model Concession Agreement dated April 7, 2026. (Link)
The NHAI clarified that the interest rate applicable to HAM projects under Clause 23.6.4 of the model concession agreement is the average one-year Marginal Cost of Funds Based Lending Rate (the "MCLR") of the top five Scheduled Commercial Banks—State Bank of India, HDFC Bank, ICICI Bank, Bank of Baroda, and Punjab National Bank—plus 1.25%. For the quarter April 1 to June 30, 2026, the average MCLR is 8.57% per annum, making the applicable rate 9.82% per annum.
Cost Escalation Compensation Mechanism for National Highway Projects due to Surge in Fuel, Construction Material Prices and Logistics Cost dated April 8, 2026. (Link)
The NHAI adopted the MoRTH's Cost Escalation Compensation Mechanism (the "Cost Escalation Compensation Mechanism") as a temporary measure effective April 1, 2026, to June 30, 2026, to mitigate rising crude oil, construction material, and logistics costs. The mechanism allows monthly payments in EPC and HAM projects to ease contractor cash flow. For EPC contracts, the wholesale price index for construction machinery, cement, mild steel, and other materials will be based on prices one month before the interim payment certificate month, rather than three months earlier.
Office Memorandum for Streamlining of Access Permission and Right of Way Applications through the Revamped Rajmarg Pravesh Portal issued dated 13, 2026. (Link)
The NHAI circulated an office memorandum requiring all access permission and RoW applications to be submitted and processed exclusively through the revamped, fully digital Rajmarg Pravesh Portal. No physical or manual processes are permitted. The mandate includes digital submission of inspection reports, electronic bank guarantees, and electronic execution of licence agreements.
Cost Escalation Compensation Mechanism for National Highway Projects on EPC / HAM / PBMC due to significant increase in Bitumen Prices dated May 16, 2026. (Link)
The NHAI introduced a special price adjustment mechanism for significant increases in bitumen prices applicable to EPC, HAM, and PBMC projects. The benefit is limited to works executed between April 1, 2026, and June 30, 2026, for projects with bid due dates on or before March 31, 2026, and with existing contractual price escalation provisions. Compensation is calculated monthly based on actual bitumen consumed in bituminous works (subject to approved mix design limits) and the differential between the base rate as at the project base date and the prevailing monthly rate.
Circular regarding revised requirements for Additional Performance Security in NHAI projects dated June 19, 2026. (Link)
The NHAI issued a circular (the "Circular") revising additional performance security (the "APS") requirements to address risks from abnormally low bids. Where a bid price is more than 15% below the estimated project cost, the bidder must furnish APS calculated as the difference between the percentage below the bid and the 15% threshold, multiplied by the quoted bid price, in the form of an irrevocable and unconditional bank guarantee.
Ministry of Ports, Shipping and Waterways
Merchant Shipping (Marine Incident and Emergency Response) Rules, 2026 dated May 12, 2026. (Link)
The Ministry of Ports, Shipping and Waterways (the "MoPSW") issued the Merchant Shipping (Marine Incident and Emergency Response) Rules, 2026 (the "Marine Incident Rules") under the Merchant Shipping Act, 2025. The Marine Incident Rules define "marine casualty" broadly to include death or injury, ship loss, collisions, grounding, and environmental damage. A designated nodal authority is responsible for coordinating emergency responses and is empowered to issue directions to ship owners, crew, port authorities, insurers, and other stakeholders to safeguard vessels, persons, property, and the marine environment.
Coastal Shipping (Strategic Plan and National Database) Rules, 2026 dated May 13, 2026. (Link)
The MoPSW introduced the Coastal Shipping (Strategic Plan and National Database) Rules, 2026 (the "Coastal Shipping Rules"), applicable to all vessels engaged in coastal trade and their operators, excluding defence and inland waterway vessels. Vessels must submit voyage commencement reports at least 24 hours before departure and voyage completion reports within 24 hours of arrival via a centralised digital porta.
Amended Guidelines for Implementation of Shipbuilding Financial Assistance Policy dated May 14, 2026. (Link)
The MoPSW issued amended guidelines (the "Amendment Guidelines") for the Shipbuilding Financial Assistance Policy, which provides financial assistance to Indian shipyards for vessels under eligible contracts executed between April 1, 2016, and March 31, 2026. The Amendment Guidelines rationalise eligibility conditions to support larger series-based orders, structure delivery timelines by number and type of vessels within a contract and retain the existing formula for computing financial assistance based on the lower of the contract price, fair price, or actual payment received, converted at exchange rates prevailing on the contract date.
Merchant Shipping (Radiocommunication) Rules, 2026 dated May 20, 2026. (Link)
The MoPSW issued the Merchant Shipping (Radiocommunication) Rules, 2026 (the "Radiocommunication Rules"), applicable to passenger ships, cargo vessels of 300 GT and above, high-speed craft, and mobile offshore drilling units in Indian waters, excluding warships and non-commercial government vessels. Ships must comply with the Global Maritime Distress and Safety System framework, maintain at least two independent communication systems for ship-to-shore and ship-to-ship distress communication, and be equipped with approved satellite systems. Operational sea areas are classified into Areas A1 to A4, with equipment requirements varying accordingly.
Merchant Shipping Prevention of Pollution by garbage from Vessels Rules, 2026 dated May 20, 2026. (Link)
The MoPSW notified the Merchant Shipping (Prevention of Pollution by Garbage from Vessels) Rules, 2026 (the "Pollution Rules"), regulating marine pollution from ship-generated waste. The Pollution Rules broadly define "garbage" to include food waste, domestic waste, plastics, cargo residues, and operational waste, and impose a complete prohibition on discharge of plastics at sea. A general prohibition on dumping applies, subject to limited exceptions. Ports must provide adequate reception facilities, and ships must maintain a garbage management plan, a garbage record book, and mandatory onboard placards.
Draft National Water Metro Guidelines, 2026 dated June 25, 2026. (Link)
The MoPSW on issued the Draft National Water Metro Guidelines, 2026 (the "Draft Guidelines") for stakeholder consultation. The Draft Guidelines define a Water Metro system as a mechanised mass public transport service on rivers, canals, lakes, and coastal waters. Key principles include adoption of green and low-emission propulsion technologies, standardisation of vessel design, promotion of indigenisation, and seamless integration with other urban transport modes. Financing models include joint central-state funding, state-funded projects, public-private partnership arrangements, and, in exceptional cases, full central funding.
Key Judicial Pronouncements
| SUPREME COURT OF INDIA | ||
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The present appeal was filed before the Hon’ble Supreme Court challenging the judgement passed by the Appellate Tribunal for Electricity (the “APTEL”), whereby Indian Railways was held not to qualify as a deemed distribution licensee under the third proviso to Section 14 of the Electricity Act, 2003 (the “Electricity Act”). The third proviso to Section 14 of the Electricity Act stipulates that where an Appropriate Government (as defined under the Electricity Act) transmits electricity, distributes electricity, or undertakes trading in electricity, such Appropriate Government shall be deemed to be a licensee under the Electricity Act. APTEL held that Indian Railways did not qualify as a deemed distribution licensee under the third proviso to Section 14 of the Electricity Act. As a consequence of this finding, Indian Railways was denied the exemptions available to distribution licensees and was held liable to pay cross-subsidy surcharge and additional surcharge for availing open access. Aggrieved by the aforesaid judgement and the denial of deemed distribution licensee status, Indian Railways preferred the present appeal before the Hon’ble Supreme Court. Before the Hon’ble Supreme Court, the Indian Railways contended that it qualified as a deemed distribution licensee by virtue of being an entity of the Central Government and further argued that Sections 11(g) and 11(h) of the Railways Act, 1989 (the “Railways Act”), independently authorized it to undertake transmission and distribution activities in connection with railway operations. The principal issue for consideration before the Hon’ble Supreme Court was whether the activities undertaken by Indian Railways under Section 11 of the Railways Act constitute ’distribution’ of electricity within the meaning of the Electricity Act. The Hon’ble Supreme Court observed that a distribution licensee under the Electricity Act must satisfy two essential requirements: (i) operation and maintenance of a distribution system; and (ii) supply of electricity to consumers within its area of supply. It held that the railway electricity network, being a closed system used exclusively for traction and other operational purposes, does not constitute a ’distribution system’ under Section 2(19) of the Electricity Act, as it does not involve supply of electricity to consumers for consideration. Accordingly, the Hon’ble Supreme Court held that mere conveyance of electricity within the railway network does not amount to ‘distribution’ under the Electricity Act. Accordingly, the Hon’ble Supreme Court upheld APTEL’s judgement and held that, not being a deemed distribution licensee under the Electricity Act, Indian Railways is liable to pay cross-subsidy surcharge and additional surcharge while availing open access. |
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| BOMBAY HIGH COURT | ||
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The petitioner filed a national phase patent application for an invention titled "Ultra Supercritical Boiler Header Alloy and Method of Preparation" — a high-temperature nickel–cobalt–chromium alloyfor ultra-supercritical boiler header pipe applications. On a prima facie view that the invention may relate to atomic energy, the Deputy Controller referred the application to the Department of Atomic Energy (the “DAE”). By its order dated April 6, 2021, the DAE concluded that the invention did relate to Atomic Energy and directed refusal. The petitioner argued that the original Section 65 of the Patents Act, 1970 (the “Patents Act”) conferred a two-fold power on the Central Government: (i) to refuse a patent application at the pre-grant stage, or (ii) to revoke the patent post-grant. However, pursuant to the Patents (Amendment) Act, 2005 (the “2005 Amendment”), Section 65 of the Patents Act was substituted such that it now operates only in respect of granted patents. Since the amended provision omits any reference to refusal of pending applications, the petitioner argued that the Central Government no longer had the statutory power to reject an application at the examination stage, and that the only course now available is to first grant the patent and thereafter consider revocation, if warranted. The Hon’ble Bombay High Court rejected this contention. It noted that Section 4 of the Patents Act places an absolute bar on the grant of patents for inventions relating to atomic energy as defined under Section 20(1) of the Atomic Energy Act, 1962, (the “Atomic Energy Act”) and that under Section 20(6) of the Atomic Energy Act, the Controller of Patents may refer such applications to the Central Government, whose decision is final. Against this statutory background, the Hon’ble Bombay High Court rejected the petitioner’s argument and held that the 2005 Amendment to Section 65 of the Patents Act does not dilute the prohibition under Section 4 thereof. The Hon’ble Bombay High Court also took note of the enactment of the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India Act, 2025, which relaxes the absolute prohibition for welfare purposes, but declined to apply it as it had not yet been brought into force. |
Back to table of contents: Key Judicial Pronouncements
| APPELLATE TRIBUNAL FOR ELECTRICITY | ||
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The present appeal was filed before the APTEL by Uttar Pradesh Jal Vidyut Nigam Limited (the “Appellant”) challenging the order dated July 11, 2018 (the “Impugned Order”) passed by the CERC in a review petition, arising from certain earlier proceedings concerning tariff and compensation for power supply. By its earlier order dated October 12, 2017 (the “Earlier Order”) Uttar Pradesh Electricity Regulatory Commission (the “UPERC”) directed filing of tariff petitions only for the period 2014–15 onwards. In review, while maintaining this position, CERC nevertheless introduced an additional direction requiring payment of operation and maintenance charges for the period April 1, 2008, to March 31, 2014, in line with UPERC tariff orders. The Appellant challenged the Impugned Order inter alia on the grounds that: (i) CERC exceeded its review jurisdiction by modifying the Earlier Order in the absence of any specific prayer; and (ii) the direction was issued without affording an opportunity of hearing, in violation of principles of natural justice. The Hon’ble APTEL held CERC’s modification to be impermissible, noting that review powers cannot be exercised suo motu and are confined to correcting errors apparent on record. The Hon’ble APTEL also noted that the modification was made without hearing the Appellant, thereby violating the principle of audi alteram partem. Accordingly, the Hon’ble APTEL allowed the appeal and set aside the Impugned Order, to the extent of the modification made to Earlier Order. |
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ACME Dayakara Solar Power Private Limited (the “Appellant”) filed an appeal before the APTEL challenging the order of the Telangana State Electricity Regulatory Commission (the “TSERC”), which had held that levy of entry tax did not constitute a “Change in Law” event under the power purchase agreement dated March 3, 2015 (the “PPA”). The dispute must be understood in light of the regulatory and judicial timeline relating to the levy of entry tax. The Andhra Pradesh Tax on Entry of Goods into Local Areas Act, 2001 was declared unconstitutional by the Hon’ble High Court of Andhra Pradesh on December 31, 2007 (W.P. No. 615 of 2006). This judgement was challenged before the Hon’ble Supreme Court and remained pending at the time of the bidding process. During this period, the Request for Selection was issued on August 27, 2014, the Appellant submitted its bid on October 31, 2014, the Letter of Intent was issued on January 23, 2015, and the PPA was executed on March 3, 2015. Accordingly, at the time of bid submission and execution of the PPA, the levy of entry tax was not in force. Subsequently, the Supreme Court in Jindal Stainless Steel Limited v. State of Haryana (2017) upheld the validity of entry tax laws, resulting in the imposition of entry tax and an additional financial burden on the Appellant. APTEL held that since entry tax was not applicable at the time of bid submission and execution of the PPA, and its subsequent enforceability arose due to a change in the legal position, the same constituted a “Change in Law” event under the PPA. Accordingly, the appeal was allowed and TSERC’s order was set aside. |
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Several Battery Energy Storage System (the "BESS") developers filed appeals before the APTEL challenging an order of the Maharashtra Electricity Regulatory Commission (the "MERC") adopting the tariff discovered by Maharashtra State Electricity Distribution Company Limited (the "MSEDCL") under a competitive bidding process for procurement of 2000 MW/4000 MWh BESS capacity. The appeals arose after the Ministry of Power, subsequent to the completion of the bidding process, issued a communication requiring MSEDCL to retain the contractual right to utilise the BESS for at least 6300 cycles during the contract period, despite the bid documents having contemplated operation at one cycle per day. APTEL held that the post-bid introduction of the 6300-cycle condition materially altered the terms of the tender and effectively changed the rules of the bidding process after bids had been submitted. APTEL rejected MSEDCL's contention that the condition was merely clarificatory and further held that it’s undertaking to compensate bidders in the event of denial of viability gap funding lacked legal sanctity. Accordingly, APTEL set aside MERC's tariff adoption order, quashed the bidding process and directed MSEDCL to return the bidders' security deposits and bank guarantees. |
| CENTRAL ELECTRICITY REGULATORY COMMISSION | ||
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Hindustan Power Exchange Limited (the "HPX") filed a petition before the CERC seeking a three-year period for PTC India Limited (the "PTC") to dilute its shareholding in HPX from 22.62% to 5% after becoming a trader member, as required under Regulation 15(1)(b) of the CERC (Power Market) Regulations, 2021 (the "PMR 2021"). HPX contended that the relaxation was warranted inter-alia in view of the concentrated nature of the power exchange market, difficulties in identifying buyers for its unlisted shares and the precedent of similar relief having been granted to another power exchange. The CERC rejected the petition, holding that the 5% shareholding cap is a mandatory requirement intended to preserve the demutualised and conflict-free ownership structure of power exchanges. It further observed that HPX had previously undertaken to reduce PTC's shareholding before it became a Trader Member, it further had sufficient time to comply with the regulatory requirement, and it moreover had failed to demonstrate any genuine efforts towards dilution. Accordingly, the CERC held that PTC must first reduce its shareholding to 5% before becoming a trader member of HPX and that commercial considerations could not justify relaxation of a mandatory regulatory provision. |
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TRN Energy Private Limited (the "TRNEPL") filed a petition before the CERC seeking additional capacity charges, refund of penalties and late payment surcharge arising from the regulation of its power supply by the transmission utility due to non-payment of transmission charges. TRNEPL contended that capacity charges were payable on the basis of declared availability notwithstanding the regulation of power supply, and that the regulation resulted from delays by PTC India Limited (the "PTC") in reimbursing transmission charges under the back-to-back contractual arrangement. The CERC dismissed the petition, holding that a declaration of available capacity must be meaningful and capable of actual scheduling, and that a generator cannot claim capacity charges for power that could not be supplied due to its own default in payment of transmission charges. The CERC further held that TRNEPL's remedy, if any, lay in claiming late payment surcharge for delayed reimbursement rather than withholding payment of transmission charges, and consequently rejected its claims for additional capacity charges, refund of penalties and late payment surcharge. |
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ReNew AP2 Private Limited and ReNew Power Private Limited (the "Petitioners") filed a petition before the CERC seeking to set aside transmission charges raised by Central Transmission Utility of India Limited (the "CTUIL") following the termination of a PPA with Solar Energy Corporation of India Limited (the "SECI"). The Petitioners contended that the PPA had been terminated due to force majeure arising from delays in land allotment by the Government of Gujarat and the COVID-19 pandemic, and that the transmission agreements stood discharged along with the PPA, relieving them of liability to pay transmission charges. The CERC dismissed the petition, holding that the transmission agreements and the PPA were independent contracts with separate rights and obligations, and that termination of the PPA did not extinguish the Petitioners' liability under the transmission arrangements. The CERC further held that transmission charges become payable from the operationalisation of long-term access, that the waiver of Inter State Transmission System charges under the Ministry of Power's directions applies only to the post-commercial operation period, and that the applicable sharing regulations are determined by the period for which charges accrue and not the date of invoicing. |
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