Trilegal secured Supreme Court ruling in deemed distribution licensee dispute involving Indian Railways
The leading law firm in India, Trilegal successfully spearheaded litigation on behalf of distribution licensees NBPDCL and SBPDCL before the Supreme Court of India in a significant matter concerning the deemed distribution licensee status of Indian Railways under the Electricity Act, 2003.
Case Background
The dispute arose from the question of whether the activities of Indian Railways under the Railways Act, 1989 could amount to distribution under the Electricity Act, 2003, thereby exempting it from liability to pay Cross Subsidy Surcharge (“CSS”) and Additional Surcharge (“AS”) to distribution licensees.
Supreme Court Ruling
The Supreme Court held that the activities of Indian Railways do not constitute distribution under the Electricity Act, 2003. Consequently, Indian Railways was held liable to pay Cross Subsidy Surcharge and Additional Surcharge to all distribution licensees across the country.
Financial Impact
The outstanding CSS and AS dues payable towards NBPDCL and SBPDCL are estimated at approximately INR 1600 crores, excluding interest, making this a significant financial and regulatory outcome for distribution utilities.
Significance of the Judgment
The ruling provides critical clarity on the applicability of electricity law provisions to statutory bodies and reinforces the obligation to comply with surcharge mechanisms under the Electricity Act, 2003.
Team
The Trilegal Dispute Resolution team was led by Shankh Sengupta (Partner) and Abhishek Kumar (Partner) and comprised Nived Veerapaneni (Counsel) and Shubham Mudgil (Senior Associate).
Conclusion
This landmark judgment strengthens regulatory discipline in the power sector and affirms the liability framework under the Electricity Act for statutory consumers availing open access electricity.
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