No regulatory powers to over-ride the provisions of a Contract

The Supreme Court has clarified its previous decision in Energy Watchdog and held that the Regulatory Commissions do not have any plenary regulatory power to interfere with existing terms and conditions of a contract. This puts to rest not only this long pending dispute, but also many other cases pending at various forums wherein relief is either claimed or has also been granted in exercise of regulatory powers, de-hors the specific terms of the contract entered into between the parties.

The judgment not only reiterates the settled principles of bid conditions being binding, the provisions of the contract being binding on the parties, and how allegations of misrepresentations are to be considered under Section 18 and 19 of the Contract Act when specific disclaimers are provided for in the bid, the judgment also settles the powers of Regulatory Commissions to interfere with such rights and obligations of the parties in the course of performance of the contract.

The judgment can be accessed at https://main.sci.gov.in/pdfdate/index1.php?filename=supremecourt/2018/44916/44916_2018_3_52_43246_Judgement_06-Apr-2023.pdf&dno=449162018&dt=2023-04-06