JBVNL power dues: Supreme Court refuses to halt Energy Watchdog’s role in Rs 284.91-crore case
SUMAN K SHRIVASTAVA RANCHI, September 4: The Supreme Court has refused to halt Energy Watchdog’s participation in proceedings before Jharkhand Bijli Vitran…
SUMAN K SHRIVASTAVA
RANCHI, September 4: The Supreme Court has refused to halt Energy Watchdog’s participation in proceedings before Jharkhand Bijli Vitran Nigam Limited (JBVNL) over alleged cross-subsidy surcharge (CSS) dues of Rs 284.91 crore, allowing an interim arrangement ordered by the Jharkhand High Court to continue.
The apex court was hearing a challenge filed by Amalgam Steels and Power Ltd and another against the Jharkhand High Court’s February 5, 2026 order, which had allowed Energy Watchdog to participate in the proceedings arising from show-cause notices issued by JBVNL.
The Supreme Court, however, made it clear that its order does not decide the merits of the dispute, the companies’ liability, or the correctness of the alleged dues. It also left open for the High Court to examine the scope and extent of third-party participation under the Electricity Act.
Dispute centres on Rs 284.91 crore in power dues
The dispute relates to an agreement entered into in 2012 between Amalgam Steels and Power Ltd and JBVNL for the supply of surplus power from a captive power plant. The arrangement was subsequently renewed in 2017 and 2023.
Energy Watchdog complained to the state government in April 2024, alleging that power was being supplied and used without the required open-access approval and valid captive-user status under the Electricity Rules, 2005.
Following the complaint, the government and JBVNL initiated a fact-finding exercise.
JBVNL subsequently issued show-cause notices in August 2025, alleging violations of the captive power agreement and other conditions. It also raised demands for CSS of Rs 176.74 crore against one petitioner and Rs 108.17 crore against the other, taking the total to Rs 284.91 crore.
Jharkhand HC allowed watchdog to participate
Energy Watchdog had approached the Jharkhand High Court through a public interest litigation seeking investigation into the alleged irregularities and recovery of losses suffered by the state power utility.
The companies challenged the maintainability of the PIL, arguing that Energy Watchdog was a stranger to the contractual arrangement and had no legal injury or locus to participate in the proceedings. They also contended that the Electricity Act provides a comprehensive statutory framework for dealing with such disputes.
The High Court rejected the maintainability challenge, describing the objections as vague. It noted that several complaints had allegedly been made to the authorities before the PIL was filed but that action was initiated only subsequently.
The High Court also observed that the JBVNL affidavit disclosed prima facie substance in the allegations and that the utility had itself formed a prima facie view that Rs 284.91 crore was payable as CSS dues.
Court cites public interest and possible public funds
The Jharkhand High Court held that the fact that Energy Watchdog was not a party to the underlying agreements did not, at the interim stage, prevent it from placing its contentions before JBVNL.
The court reasoned that JBVNL is a State instrumentality under Article 12 and that amounts legitimately payable to the utility constitute public funds. It said public authorities have a responsibility to act as trustees of public property and funds.
The High Court therefore directed that Energy Watchdog be heard along with the companies before JBVNL disposed of the show-cause notices.
It also permitted Energy Watchdog to submit its version explaining why it believed the dues should be higher than Rs 284.91 crore, while allowing the companies to respond.
Companies challenge third-party participation in SC
Before the Supreme Court, the petitioners argued that Energy Watchdog had no legal standing to participate in proceedings arising from their contractual relationship with JBVNL.
They contended that the Electricity Act is a self-contained statutory framework and that the High Court could not create a separate tripartite process by allowing an outside entity to participate.
Energy Watchdog, on the other hand, maintained that its complaints had triggered the inquiry and that the companies had not paid the CSS allegedly due to JBVNL.
SC says HC’s interim direction cannot be termed perverse
The Supreme Court examined the limited question of whether the High Court’s interim direction permitting Energy Watchdog to participate warranted interference under Article 136 of the Constitution.
Referring to earlier judgments on the regulatory framework under the Electricity Act, the apex court noted that the statutory scheme gives regulatory authorities defined powers and responsibilities.
However, it found no reason at this stage to interfere with the High Court’s interim arrangement.
The Supreme Court observed that the material before the High Court appeared to have created an impression that “all is not well” with the manner in which the JBVNL inquiry had progressed. The High Court had also taken note of the circumstances surrounding the delayed action on the complaints.
Although Energy Watchdog was not a party to the original power agreement, the High Court had considered it necessary to have the complete facts placed before JBVNL through a party other than the companies themselves. The Supreme Court said this interim measure could not be termed perverse so as to warrant interference.
JBVNL must take its own decision
The apex court stressed that the participation of Energy Watchdog should not turn the JBVNL proceedings into a court or tribunal-like exercise.
Instead, the oral hearing should serve as a means for JBVNL to gather relevant information before taking a decision in accordance with law.
The Supreme Court directed that JBVNL must independently consider the material and take its decision after due deliberation and caution.
The court also clarified that it was not expressing any opinion on the merits of the allegations, the amount claimed, the liability of the companies or the ultimate legality of Energy Watchdog’s intervention.
The Supreme Court disposed of the special leave petition on September 3, 2026.
Final decision on dues yet to come
The Rs 284.91-crore demand, therefore, remains part of the proceedings before JBVNL and has not been finally adjudicated by the Supreme Court.
The Jharkhand High Court had earlier declined to determine whether the amount calculated by JBVNL was correct or whether a higher amount should be recovered, holding that such calculations could give rise to disputed factual and technical issues.
The immediate effect of the Supreme Court order is that Energy Watchdog can continue to place its submissions before JBVNL, while the utility remains responsible for taking the final decision in accordance with the applicable statutory and regulatory framework.
