Bombay High Court Examines MERC Order Dispute On Solar Tariffs And Natural Justice Principles

The High Court of Judicature at Bombay delivered an important judgment on April 24, 2026, in a case involving solar power developers and state electricity regulators in Maharashtra. The dispute was brought by the Distributed Solar Power Association, along with AMPIN Energy Green Fifteen Pvt Ltd and Radiance MH Sunrise Nine Private Limited, against the Maharashtra Electricity Regulatory Commission.

The case revolves around an order issued by the commission on March 25, 2026, following a review of the Multi-Year Tariff framework for the period 2025 to 2030. The petitioners challenged this order, claiming it failed to follow directions given earlier by the High Court in its November 3, 2025, ruling.

According to the petitioners, the earlier ruling had sent the matter back to the commission with clear instructions to follow the principles of natural justice. This required the regulator to properly hear all stakeholders and consider their objections before making a final decision. However, the petitioners argued that although hearings were conducted, their concerns were not meaningfully addressed.

They claimed the commission’s order lacked proper reasoning and did not explain why specific objections—particularly those related to Time of Day tariffs and banking provisions—were rejected. The petitioners described the order as “unreasoned” and “non-speaking,” suggesting it did not meet legal standards.

The petitioners also argued that the commission wrongly used its inherent powers to bypass established regulations, despite earlier restrictions imposed by the court. On this basis, they approached the High Court under Article 226 of the Constitution, seeking direct relief for what they described as violations of procedural fairness.

In response, the commission and the Maharashtra State Electricity Distribution Company Limited opposed the petition. They argued that the High Court should not hear the case because an alternative legal remedy is available. Under the Electricity Act 2003, aggrieved parties can appeal such decisions before the Appellate Tribunal for Electricity.

The respondents emphasized that the commission had conducted public hearings and reviewed submissions from more than 2,000 stakeholders before issuing its order. They also noted that the Supreme Court had earlier recognized the remand process and allowed parties to approach the appellate tribunal if they were dissatisfied with the outcome.

While acknowledging its broad powers under Article 226, the High Court focused on whether it should exercise its discretion in this case. The key issue before the court is whether the alleged lack of detailed reasoning in the commission’s order amounts to a violation of natural justice significant enough to justify bypassing the established appellate process.