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
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.)