On July 16, Justice L. Narasimha Reddy withdrew from the one-man commission inquiring into alleged irregularities in the Power Purchase Agreements (PPAs) between Telangana and Chattisgarh from 2014-15. Earlier that day, the Supreme Court indicated there was an impression of bias from the commission which was immediately followed by Justice Reddy’s withdrawal. Justice Reddy held a press conference on the status of the inquiry on June 11. Former Telangana Chief Minister K. Chandrashekar Rao, who led the government when the agreements were finalised, then filed a case challenging the current Telangana government’s March 2024 order for creating the commission. In a petition before the SC, KCR said, “It boggles the imagination of even an ordinary person unaware of judicial propriety that…a former Chief Justice has decided to hold a “press conference” even before the inquiry could begin”. Here’s what happened. How was the commission appointed? The commission was appointed in March this year under Section 3(1) of the Commissions of Inquiry Act, 1952. Section 3(1) empowers the state government to “appoint a Commission of Inquiry for the purpose of inquiring into any definite matter of public importance”. It would imply a fact-finding inquiry where the commission reports its findings and leaves it to the government to decide whether to take action. However, Telangana went a step further and tasked the commission with conducting a “judicial inquiry”, allowing it to form an enforceable opinion on whether there were irregularities in the power procurement process. KCR argued that under the 1952 Act, “the Commission of Inquiry at best can be a fact-finding Inquiry but not a Judicial Inquiry”. The petition referred to the case of Krishna Dalmia v S.R. Tendolkar (1958) to cement this point. In that case, the court held that the purpose of a commission created under the Act “is merely to investigate and record its findings and recommendations without having any power to enforce them”. Enforcing the findings of such a commission would be a “judicial function” and empowering a commission with such powers would result in the “usurpation by Parliament or the Government of the powers of the judicial organs of the Union of India”. The Act also only allows the government to create a commission of inquiry for issues that are a “definite matter of public importance”. KCR argued that the government failed to fulfil this requirement as the commission was not tasked with suggesting any “necessary administrative or legislative measures” to address the issue, and instead directed it to “fix the responsibility” for any irregularities found. Why KCR opposed the Reddy Commission After a separate Telangana state was created in 2014, the KCR government made several agreements with Chhattisgarh to purchase power to ease the power shortage. There were allegations that the Telangana government had done so at high prices. On March 31, 2017, the Telangana State Electricity Regulatory Commission (TSERC) heard several objections to the PPAs on account of alleged irregularities, including those submitted by then MLA and current Telangana Chief Minister Revanth Reddy. Invoking its powers under the Electricity Act, 2003, the TSERC approved the PPA, though it noted that the agreement did not include a tariff on the power procured from Chattisgarh. In his petition, KCR referred to Section 168 of the Electricity Act, which states, “No suit, prosecution or other proceeding shall lie against…the Appropriate Commission…for anything done or in good faith purporting to be done under this Act or the rules or regulations made thereunder”. He argued that the TSERC already decided the issues that the commission was tasked with inquiring into, and were therefore “immune” from being called into question again. The Electricity Act also provides an avenue to appeal against SERC decisions. KCR’s petition said it should have been used instead of creating a commission of inquiry. Section 111 allows parties to approach the Appellate Tribunal for Electricity to appeal an SERC order within 45 days of receiving its copy. Even afterwards, if a party wants to appeal an order passed by the Appellate Tribunal, Section 125 of the Electricity Act allows them to approach the Supreme Court within 60 days of receiving the order. KCR’s criticism of the Justice Reddy press conference On April 14, 2024, Justice Reddy asked former CM KCR to submit a written version of his view on the “role played” by him in the power procurement process within 15 days. KCR was also asked to visit the office to present his “oral version”. With the Lok Sabha elections due, KCR asked for an extension until the end of June, though the commission only granted an extension till June 15. Before KCR could fulfil the commission’s requirements, Justice Reddy conducted a press conference on June 11, informing reporters of the commission's progress. He mentioned that “as per the record” the Marwa power plant in Chhattisgarh, the source of the power procurement, is “not in existence, it is under construction, it was started somewhere in the year 2017, it was supplied for three to four years, after that it was also stopped. We need to check in the entire process how much loss occurred.” He also noted shortcomings in the power plants constructed in Manuguru and Damarcherla. KCR then challenged the March 14 order of the state’s Congress-led government, on appointing the Justice Reddy Commission, at the Telangana High Court. However, the HC dismissed his petition, leading to his appeal before the Supreme Court. In his petition, KCR condemned the press conference, claiming that Justice Reddy “spells out his imaginary findings as if he had already inquired and found the Petitioner guilty”. He claimed there is a “conflict of interest” and a “real likelihood of bias” as the Telangana state “has continuously been engaging him (Justice Reddy) as its counsel before this Hon’ble Court”.
