Distribution Company Limited & Anr vs Union Of India & Anr on 7 April, 2026

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    Calcutta High Court (Appellete Side)

    Distribution Company Limited & Anr vs Union Of India & Anr on 7 April, 2026

    Author: Ravi Krishan Kapur

    Bench: Ravi Krishan Kapur

                           IN THE HIGH COURT AT CALCUTTA
                             Constitutional Writ Jurisdiction
                                     Appellate Side
    
    BEFORE:
    The Hon'ble Justice Ravi Krishan Kapur
    
                                 WPA No. 15487 of 2024
                                    CAN 1 of 2025
    
                               West Bengal State Electricity
                           Distribution Company Limited & Anr.
                                            Vs.
                                   Union of India & Anr.
    
    
    For the petitioners                   : Mr. Kishore Dutta, Learned Advocate General.
                                            Mr. Chayan Gupta, Advocate
                                            Mr. Debayan Sen, Advocate
                                            Mr. Niket Ojha, Advocate
    
    For Union of India                    : Mr. Asok Kumar Chakraborty,
                                            Learned Additional Solicitor General of India,
                                            Mr. Sukumar Bhattacharya, Advocate
                                            Mr. Sukanta Ghosh, Advocate
                                            Mr. Arijit Majumdar, Advocate
                                            Ms. Shreyashi Sarkar, Advocate
    
    
    For the intervenor in CAN 2 of 2026 : Mr. Pratik Dhar, Senior Advocate
                                          Mr. Ambuj Dixit, Advocate
                                          Md. Dilwar Khan, Advocate
    
    For the intervenor in CAN 3 of 2026 : Mr. Subhrajyoti Dey, Advocate
                                          Mr. Arya Banerjee, Advocate
                                          Mr. Ankur Sood, Advocate
                                          Ms. Romila Mondal, Advocate
    
    Heard on                              : 07.04.2026
    
    Judgment on                           : 07.04.2026
    
    Ravi Krishan Kapur, J.:
    

    1. This is an application seeking interim reliefs in a pending writ petition.
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    2. The writ petition as originally framed was inter alia for a declaration that

    SPONSORED

    the Notifications dated 12 March 2007 and 20 October 2023 as amended

    from time to time were contrary to section 14 sub-clause (e), (n) and (x) of

    the Energy Conservation Act 2001 (the Act) and for consequential reliefs.

    3. Subsequently, this application was filed seeking restraint orders from any

    compliance under the Act in respect of Renewable Consumption Obligations

    (RCO) and Renewable Purchase Obligations (RPO) on the basis of the above

    Notifications. Upon the filing of this application, a Coordinate Bench had by

    an order dated 24 September 2025 granted an order in terms of the prayer

    (c) of the application which for convenience is set out below:

    (c) “An order of injunction restraining the respondents from publishing any
    new notification on Renewable Consumption Obligation on the basis of
    the proposed draft Gazette notification on Renewable Consumption
    Obligation dated 5th August, 2025 or publish any other notification on
    Renewable Consumption Obligation pending disposal of the present writ
    petition.”

    4. Thereafter, the parties were directed to exchange affidavits. Upon exchange

    of affidavits the matter was taken up for hearing.

    5. A notable subsequent event which had transpired during the pendency of

    the writ petition and after the filing of this application was the issuance of a

    Notification dated 27 September 2025. By such Notification, the

    Government of India had in supersession of a prior Notification dated 20

    October 2023 specified the minimum share of electrical energy

    consumption from renewable energy for designated consumers who were
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    electricity distribution licensees, open access consumers and captive users.

    For convenience, clauses 8, 11, 12, 16 of the 2025 Notification are set out

    below:

    8. For designated consumers who are distribution licensees, the Renewable
    Consumption Obligation shall be calculated based on the electrical energy
    supplied to consumers within the periphery of the distribution licensee. This
    supply shall not include the consumption of open access users from the
    sources other than the distribution licensee and the electricity generated and
    self- consumed by captive users.

    11. The Bureau shall monitor compliance of this notification and submit
    periodic report to the Central Government with a copy to the respective State
    Electricity Regulatory Commissions. For compliance monitoring, all the
    designated consumers shall furnish the required information in the format
    provided in the Annexure-II attached to this notification, duly certified by the
    State Load Dispatch Center for distribution licensees, and by a Bureau
    empanelled accredited energy auditing firm for all other designated
    consumers.

    12. Designated consumers shall submit their duly certified energy accounts
    for the year 2024-2025 by 31st October, 2025, and by 31st July for each
    subsequent year. They shall submit compliance report after meeting the
    shortfalls in Renewable Consumption Obligations through purchase of
    Renewable Energy Certificates or payment of buyout price, if any, by 31st
    March 2026 for the year 2024-2025, and by 31st December for each
    subsequent year.

    16. For all designated consumers under the Act, no additional Renewable
    Purchase Obligation shall apply under the Electricity Act, 2003 (36 of 2003),
    and the State-level Renewable Purchase Obligation targets shall be subsumed
    within the Renewable Consumption Obligation targets specified in this
    notification.

    6. Pursuant to the above Notification, the petitioner had also sought an

    amendment to the writ petition to incorporate a specific challenge to the

    Notification dated 27 September 2025. By an order dated 11 February
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    2026, the application for amendment was allowed and the petitioner has

    since incorporated such amendments to the writ petition.

    7. On behalf of the petitioner it is submitted that, the interim order dated 25

    September 2025 should be confirmed and the writ petition be heard on

    merits. There is a serious questions of jurisdiction which arises for

    consideration inasmuch as the petitioner cannot be treated as a ‘designated

    consumer’ under the Act. There is also a question of impossibility and

    impracticability in complying with the Renewable Consumption Obligations

    (RCO) as stipulated under the Act. The peculiar factors pertaining to the

    State of West Bengal have not been taken into consideration while fixing

    such targets. There are no renewable resources available whereby the

    petitioner can possibly fulfill its requirements as stipulated in the impugned

    communication.

    8. On behalf respondent Union of India, it is submitted that the order dated

    25 September 2025 is causing immense hardship and inconvenience and

    has paralyzed the working of the Act. In any event, in view of the fact that

    the 2023 Notification stood superseded, this application has been rendered

    futile and purely academic. Any examination of whether the petitioner

    company falls within the scope and ambit of the Act can only be tested in

    the light of the extant 2025 Notification and not the 2023 Notification.

    Moreover, the provisions under section 14 of the Act are wide enough and

    there has been no jurisdictional error in issuing any of the impugned

    Notifications. It is further contended that Articles 14 and 21 of the
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    Constitution of India include preservation and maintenance of a clean

    environment and any interference with the functioning of the Act would

    bring the same to a stalemate.

    9. On behalf of the intervenors it is submitted that the interim order is

    founded on a Notification which no longer exists and the same is liable to

    be vacated on that ground alone. There is no challenge to the Act itself

    which contemplates ‘distribution licensees’ as designated consumers. In

    any event both on the grounds of balance of convenience and in public

    interest the interim order is liable to be vacated and the application be

    dismissed. In support of such contentions, the intervenors rely on Skill

    Lotto Solutions (P) Ltd. V. Union of India and Ors. (2021) 15 SCC 667, Dulari

    Devi & Ors. vs. State of Rajasthan & Ors. (2015) SCC OnLine Raj 2175,

    Haryana Pharmaceuticals Manufacturers Association (Regd.) Vs. Union of

    India & Ors. (2014) SCC OnLine P&H 14586, Indofer Society & Ors. vs.

    Director General of Foreign Trade (2001) SCC OnLine Cal 26, M.K. Ranjitsinh

    & Ors. vs. Union of India & Ors. (2024) 19 SCC 139, Akshay N. Patel vs.

    Reserve Bank of India and another (2022) 3 SCC 649 and Gujrat Urja Vikas

    Nigam Limited vs. Amit Gupta and others. (2021) 7 SCC 209.

    10. Before adverting to the facts of the case, it is pertinent to mention that the

    Act was enacted to provide for efficient use of energy and its conservation

    and for matters connected therewith and incidental thereto. The objective of

    the Act is aimed towards promotion of energy efficiency and conservation

    across industries, reduce energy intensity, support and strengthen India’s
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    climate commitments to include carbon markets and border energy

    efficiency mechanisms. Over a period of time, the demand for electricity and

    fossil fuel has substantially increased and energy efficient measures have

    been conceived of to reduce energy consumption. It is in this background,

    that there was a need for statutory measures. In 2002, there was a

    significant amendment (which came into force on 1 January, 2023) whereby

    radical changes like (a) Carbon credit trading, (b) Obligation to use non-

    fossil sources of energy, (c) Energy conservation Code for building, (d)

    Standards for vehicles and vessels and (e) Penalty provisions were

    introduced. It is pertinent to mention that such changes were introduced

    with the aim of inter-alia helping fulfil India’s COP-26 Commitments

    (Conference of Parties-26 at Glasgow 2021), with special focus on

    promotion of new and renewable energy in view of the National Green

    Hydrogen Mission.

    11. The Regulatory mechanism under the Act is implemented by the Bureau of

    Energy Efficiency (BEE) (sections 3 to 11). The focus of the Act primarily is

    to be found in areas which include energy efficiency standard for industries

    and appliances, regulations for designated consumer i.e. using energy. The

    Act stipulates for energy audits and energy managers, energy conservation

    building code and carbon credit trading schemes introduced by the 2022

    amendment (section 13). The Central Government is empowered to specify

    any user or class of users of energy as a ‘designated consumer’ [section

    14(e)]. The enforcement mechanism under the Act is to be found by way of
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    statutory compliances monitored by BEE and designated agencies (sections

    15 to 18 of the Act). The penalties for failure to meet efficiency targets are to

    be found in sections 26 to 29 of the Act. There is also an Adjudicating

    Officer and an Appellate Tribunal as provided for under Chapter IX of the

    Act. The Schedule to the Act expressly classifies transmission and

    distribution companies as energy intensive industries.

    12. A perusal of the impugned communication dated 14 August 2025 indicates

    that the same has been issued to DISCOM’s all over India. The respondent

    authorities had through prior letters dated 20 November 2023, 1 February

    2024 and 26 September 2024 respectively repeatedly called upon the

    petitioner company to comply with their obligations to ensure timely

    fulfillment of the Renewable Purchase Obligations (RPO) and Renewable

    Consumption Obligations (RCO). There has been no challenge to any of

    these letters. In this background, the petitioners were again reminded by

    the impugned communication to comply with their RPO and RCO

    compliances for the current and forthcoming financial years.

    13. The entire basis of this application and the interim order dated 25

    September 2025 was founded on the 2023 Notification. This Notification

    has been superseded. Prima facie, any examination of whether the

    petitioner is a designated consumer under the Act has to now be examined

    inter alia on the touchstone of the Act read with the different notifications.

    The 2025 Notification has not been challenged (even by way of amendment)

    in this application. The Notification dated 27 September 2025 treats
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    distribution licensees as designated consumers. The supersession of the

    2023 Notification in 2025, clearly obliterates the same and in effect,

    destroys the very basis of this application. Any examination of whether the

    petitioner company as a distribution licensee falls within the scope and

    ambit of a “designated consumer” or not would now have to be also

    examined in the light of the 2025 Notification against which there is no

    challenge in this application. In effect, any order in this application would

    be on the basis of a superseded Notification which is legally untenable.

    [Skill Lotto Solutions (P) Ltd. vs. Union of India & Ors. (2021) 15 SCC 667,

    Dulari Devi & Ors. vs. State of Rajasthan & Ors. (2015) SCC OnLIne Raj 2175

    (DB), Haryana Pharmaceuticals Manufacturers Association (Regd.) vs. Union

    of India & Ors. (2014) SCC OnLine P&H 14586 (DB) and Indofer Society &

    Ors. vs. Director General of Foreign Trade (2001) SCC OnLine Cal 26].

    14. It also appears from the Act itself that the definition of a designated

    consumer under section 2(g) and the powers under Section 14 empower the

    Central Government to specify any user or class of users as designated

    consumers has been expressly provided for. Section 2(s) of the Act defines

    Schedule as the Schedule appended to the Act. Serial No. 14 to the

    Schedule expressly includes ‘Thermal power stations, hydel power station,

    electricity transmission company and the distribution company’ within the

    ambit of the Act. In such circumstances, on a reading of the Act and the

    extant Notifications it is clear that WBSEDCL is prima facie a designated

    consumer. There is nothing manifestly unjust or glaringly unconstitutional
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    which warrants interference at this interim stage. It is now well settled that

    there is always a presumption in favour of the constitutional validity of any

    legislation unless the same is found to be unconstitutional. The system of

    check and balances has to be utilized in a balanced manner which does not

    render legislation ineffective.

    15. The underlying element of public interest cannot also be undermined.

    Article 51-A(g) of the Constitution of India also enshrines a fundamental

    duty on citizens to protect and improve the natural environment. Prima

    facie, there is nothing in the impugned Act or the Notifications issued

    pursuant thereto which can said to be restrictive or violative of the

    fundamental rights conferred on the petitioner either under Article 14 or

    19(1)(g) of the Constitution of India. The provisions of a statute cannot be

    made ineffective by passing interim orders which virtually bring to a

    standstill the entire working of an Act. (Hindustan Zinc Limited vs.

    Rajasthan Electricity Regulatory Commission (2015) 12 SCC 611, Bhavesh D.

    Parish And Others vs. Union Of India And Another (2000) 5 SCC 471 and

    Health For Millions vs. Union Of India And Others (2014) 14 SCC 496).

    16. Prima facie, the jurisdiction exercised by the respondent authorities is in

    consonance and conformity with the Act and the powers contained therein.

    There is no challenge to the definition of designated consumer [section 2(g)],

    2(s)], powers of the Central Government to specify any user or class of users

    as designated consumers [section 14(e)] or the Schedule (serial no.14)
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    which includes transmission and distribution companies. DISCOM’s have

    long been held to be within the meaning of the designated consumer under

    the Act. In such circumstances, the petitioners have been unable to

    disclose any prima facie case warranting inference with the impugned

    communication dated 14 February 2025.

    17. Even on the grounds of balance of convenience, irreparable injury and

    conduct the petitioners are not entitled to any relief. The impugned

    communication has an all India impact on DISCOMs. In such

    circumstances, any interim order would have a drastic impact with the

    working of the Act inasmuch as the compliance monitoring would be

    paralyzed, penalty jurisdiction frustrated, and implementation Guidelines

    impeded.

    18. There has also been no attempt to raise an objection of whether the

    petitioner can be treated as a ‘designated consumer’ or whether it is

    “impossible” to achieve the obligations as stipulated under the Act before

    the ‘Designated Authority’ under the Act. Ordinarily, such matters (save

    and except the question of vires) require specialized, technical, scientific

    and commercial considerations and are best left to the statutory

    authorities. [Akshay N. Patel vs. Reserve Bank of India (2022)3 SCC 694 @

    para 62].

    19. There is also inordinate delay in the petitioners approaching this Court. The

    impugned communication dated 14 August 2025 refers to correspondence
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    which had been exchanged as far back as on 28 November 2023, 1

    February, 2024 and 26 September 2024 respectively. The petitioner has

    been treated as a designated consumer for a considerable period of time

    and has done nothing about it. Initially, by a Notification dated 29

    December 2015, all distribution licensees were classified as designated

    consumers. The petitioners have been sleeping over their rights. The

    question of being suddenly impacted by a huge monetary liability cannot be

    the guiding factor in such matters moreso keeping in view the objectives of

    the Act [M.K. Ranjitsinh & Ors. vs. Union of India & Ors. (2024) 19 SCC 139].

    20. The impugned Notifications cannot even prima facie be held to be ultra

    vires, unconstitutional or beyond the legislative competence. There is no

    violation of any fundamental right guaranteed under the Constitution

    which can be said to have been infringed. Similarly, there is nothing in the

    impugned notifications which even prima facie can be held to be ultra vires

    or beyond the powers of the enabling any Act under which they have been

    framed. In any event, in the absence of any notice served under Order

    XXVII A of the Code of Civil Procedure 1908 there is a serious issue of

    maintainability of the writ petition.

    21. In view of the fact that the application is now being finally heard after

    completion of affidavits, reference to the ad interim order dated 25

    September 2005 is of little assistance. The controversial submissions made

    on behalf of the Union of India at the time when the interim order was

    passed are equally irrelevant and need not be gone into. Insofar as an issue
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    has been raised as to the Coordinate Bench having determination or not,

    there appears to be concurrent determination and hence, there is no need

    to dilate on the same.

    22. In the above circumstances, the petitioners have been unable to disclose

    any prima facie case warranting reliefs. The balance of convenience and

    irreparable injury is also against any orders being passed at this stage. CAN

    1 of 2025 stands dismissed. The interim order stands vacated.

    (Ravi Krishan Kapur,J.)



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