Supreme Court Upholds Order Allowing Energy Watchdog In JBVNL's ₹285 Crore Cross-Subsidy Surcharge Proceedings

The Supreme Court on Thursday declined to interfere with a Jharkhand High Court interim order allowing Energy Watchdog to participate in proceedings initiated by Jharkhand Bijli Vitran Nigam Limited (JBVNL) against Amalgam Steels and Power Limited and another company.

JBVNL had raised cross-subsidy surcharge demands totalling about ₹285 crore against the two companies.

"While we decline to interfere with the interim order passed by the High Court, we make it clear that we have not expressed any opinion on merits of the matter. At the time of final hearing, the High Court will consider all aspects of the matter, including the scope and ambit of third-party intervention in proceedings arising under the Electricity Act," the court observed.

A Division Bench of Justice Pamidighantam Sri Narasimha and Justice Alok Aradhe observed that, given the peculiar facts of the case, the High Court's interim measure could not be termed perverse.

It therefore did not warrant interference by the Supreme Court at this stage.

The dispute concerns a May 17, 2012 agreement between Amalgam Steels and JBVNL. Under the arrangement, surplus power from Amalgam Steels' captive power plant was to be supplied to another company. The agreement was renewed in 2017 and 2023.

Energy Watchdog complained to the Jharkhand government in April 2024, alleging unauthorised use of power from Amalgam Steels' captive power plant. The complaint led to a fact-finding inquiry by the government and Jharkhand Bijli Vitran Nigam Limited.

In August 2025, JBVNL issued show-cause notices alleging breach of the power supply agreement. It also raised cross-subsidy surcharge demands of ₹176.74 crore and ₹108.17 crore against the two companies. The Jharkhand High Court later rejected an objection to the maintainability of Energy Watchdog's public interest litigation

It also directed that Energy Watchdog be heard along with the two companies in the proceedings pending before JBVNL.

Before the Supreme Court, the companies argued that Energy Watchdog was not a party to the agreement and had suffered no legal injury. They contended that it therefore had no right to participate in the proceedings.

The companies also argued that the Electricity Act provides a comprehensive framework for the electricity sector. According to them, the High Court could not introduce a form of third-party participation not contemplated by that framework.

The top court, however, observed that the facts placed before the High Court by Energy Watchdog appeared to have given it an impression that “all is not well” with the inquiry. It noted that the High Court had referred in detail to the circumstances in which action was not taken despite a long-standing complaint.

The bench also acknowledged that Energy Watchdog was not a party to the agreement. However, the High Court had considered it necessary, given the peculiar facts of the case, to bring the full facts before JBVNL through a party other than the two companies. This would enable JBVNL to reach an appropriate decision, the Supreme Court noted. It found that the interim measure adopted by the High Court could not be termed perverse.

The Supreme Court observed that JBVNL would take its own decision after due deliberation and caution. It added that the direction for an oral hearing should be a means of collecting information. The proceedings should not be converted into those of a court or tribunal.

Declining to interfere with the interim order, the Supreme Court clarified that it had expressed no view on the merits of the dispute.

At the final hearing, the Jharkhand High Court will consider all aspects of the matter. This will include the scope and extent of third-party intervention in proceedings arising under the Electricity Act

For Petitioner: A.M. Singhvi, Sajan Poovayya, Sr. Advocates, Advocates Mahesh Agarwal, Gaurav Khanna, Madhavi Agrawal, Naman Agarwal, Palash Maheshwari, Raksha Agarwal, Sindura N Swamy, E. C. Agrawala, AOR

For Respondent: Advocates Prashant Bhushan, Vimal Kirti Singh, Matrugupta Mishra, Neha Rathi, AOR, Akanksha V Ingole, Avantika Panwar, Kushagra Kundan, Kumar Anurag Singh, Tulika Mukherjee, AOR, Zain A. Khan, Ekta Bharati, Dev Aaryan, Mohd. Abran Khan, Nishant Kumar, AOR, Apoorva Misra, Gaurav Prakash Pathak, Aahish Kumar