Supreme Court Reaffirms Restrictive Scope For Appellate Review Of Specialized Tribunals

The Supreme Court, on Tuesday, reinforced the principle that constitutional courts should exercise restraint when reviewing decisions made by specialized tribunals, particularly those involving technical expertise and sector-specific knowledge.

Importance of restrictive scope for appellate jurisdiction

Justices PS Narasimha and Pankaj Mithal, in their ruling, emphasized the importance of a restrictive scope for appellate jurisdiction in matters handled by specialized tribunals and statutory regulators. This approach, they noted, ensures that these bodies can develop sectoral laws through a consistent and principled framework.

“The restrictive scope of appellate jurisdiction is a product not only of statutory preconditions but also a necessary measure to enable freedom to statutory regulators and tribunals to develop sectoral laws through a principled and consistent approach,” stated the judgment authored by Justice Narasimha.

The Court’s decision underscores the judiciary’s recognition of the need for specialized bodies to interpret and apply laws in a manner that fosters clarity and consistency, thus supporting the systematic evolution of sector-specific legal frameworks. By limiting its appellate jurisdiction, the Supreme Court allows these entities to evolve legal principles and maintain consistent approaches within their domains.

Case under review

The case under review involved a dispute regarding the extension of the scheduled commissioning date under a 2015 power purchase agreement (PPA). The central issue was whether the extension was justified under the force majeure clause of the PPA and if the reduction in the tariff for a solar power developer and their special purpose vehicle was appropriate.

The solar power developer experienced delays attributed to external factors, including delays by government agencies in providing necessary approvals. Initially, the Karnataka Electricity Regulatory Commission (KERC) ruled in 2018 that the delay was due to the power developer’s own negligence. However, in 2021, the Appellate Tribunal for Electricity (APTEL) overturned this decision, concluding that the delays were caused by factors beyond the developer’s control and that the force majeure clause applied.

The Bangalore Electricity Supply Company, a power distribution entity, contested APTEL’s decision before the Supreme Court, arguing that the tribunal had misjudged the facts and that the delay should not have been excused under the force majeure clause.

Supreme Court upheld APTEL’s decision

The Supreme Court upheld APTEL’s decision, citing the limited scope of its appellate jurisdiction under Section 125 of the Electricity Act, 2003. The Court emphasized that its role is confined to cases involving a “substantial question of law.”

Drawing comparisons with past rulings, including the interpretation of Section 15Z of the SEBI Act, which governs the Supreme Court’s appellate jurisdiction in cases from the Securities Appellate Tribunal (SAT), the judgment highlighted the necessity of granting tribunals like APTEL the autonomy to interpret and apply the law within their specialized fields. This ensures the consistent and coherent development of sectoral laws.

Court’s findings

The Court found that APTEL had appropriately reappreciated the evidence, including delays caused by government authorities. The bench concluded that APTEL’s findings were reasonable and justified, with no substantial legal question warranting Supreme Court intervention.

The judgment also addressed the appellant’s concerns about a late payment surcharge directed to the solar power developer. It affirmed APTEL’s decision, noting that the surcharge was explicitly outlined in the PPA terms and aligned with the parties’ intentions.

In summary, the Court affirmed its stance of non-interference in the factual findings of specialized tribunals, unless there is a clear legal error or a substantial question of law arising from the tribunal’s decision.