MAHARASHTRA STATE ELECTRICITY DISTRIBUTION CO. LTD. vs UNION OF INDIA

The Supreme Court upheld the decision of the Maharashtra State Electricity Regulatory Commission (MERC) which quashed several circulars issued by the Maharashtra State Electricity Distribution Company Limited (MSEDCL) that imposed 'take or pay' obligations and minimum off-take requirements on captive power plant holders. The Court found that these circulars lacked MERC's approval as mandated by the Electricity Regulatory Act, 1998, thus establishing that regulatory compliance is essential for the validity of such obligations. The Court directed MSEDCL to refund amounts collected under these invalid circulars, emphasizing the need for adherence to statutory provisions in regulatory matters.