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The Appellate Tribunal for Electricity ("APTEL"), through its Order dated 31.10.2025 in Gujarat Urja Vikas Nigam Limited v. CERC & Ors.1 held that the jurisdiction of an appropriate commission under Section 11(2) of the Electricity Act, arises only after a generating company has actually suffered an adverse financial impact pursuant to directions issued under Section 11(1) of the Electricity Act.
APTEL clarified that anticipation of future losses cannot justify the exercise of such jurisdiction. It emphasized that the existence of an actual adverse financial impact is a sine qua non for invoking Section 11(2). Therefore, when a Petition is filed by a generating company under Section 11(2) of the Electricity Act, the appropriate commission must first ascertain whether the directions under Section 11(1) of the Electricity Act have caused any adverse financial impact.
APTEL observed that permitting pre-emptive relief would effectively allow the commission to nullify the directions under Section 11(1) during their operation, which is impermissible. The APTEL further held that at best, the appropriate commission could possibly direct that, adverse financial impact may be off set till the date on which it passes an order under Section 11(2) of the Electricity Act.
Footnote
1 Appeal No. 122 of 2025 & IA No. 635 of 2025.
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