MUHAMMAD AZHAR SIDDIQUE vs FEDERATION OF PAKISTAN Proviso — 2024 CLC 744 LAHORE-HIGH-COURT-LAHORE

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MUHAMMAD AZHAR SIDDIQUE VS FEDERATION OF PAKISTAN Proviso---Scope---Proviso is intended to qualify main part of the provision and cannot carve out an exception from the same---Such provision does not operate independently. Citation Name: 2024 CLC 744 LAHORE-HIGH-COURT-LAHORE MUHAMMAD AZHAR SIDDIQUE VS FEDERATION OF PAKISTAN O. XXVII---Notice to authorities---Principle---When neither any legislative provision is under challenge nor interpretation of any constitutional provision is sought from High Court, then there is no legal justification for such notice. Citation Name: 2024 CLC 744 LAHORE-HIGH-COURT-LAHORE MUHAMMAD AZHAR SIDDIQUE VS FEDERATION OF PAKISTAN Ss. 3 & 31---[Constitution (Eighteenth amendment) act (X of 2010)]---National Electric Power Regulatory authority---Object, purpose and scope---Provincial autonomy---Under 18th amendment of the Constitution, the Provinces have been given authority in the field of Electricity Generation to adopt different modes and maintain their independence at different levels---Such platform is the NEPRa constituted in S. 3 of Regulation of Generation, Transmission and Distribution of Electric Power act, 1997, under which each province has to nominate one member to make it fully functional---Purpose is to provide opportunity to the federating units to sit and discuss on the issue and to evolve a policy with a participatory approval if not on consensus---Such unity in decision not only increases confidence of citizens of the country living in their respective provinces but also strengthens the Federation to determine and collect tariff with power and confidence---There is necessity of full strength of NEPRa---In determination, modification or revisions of rates, charges and other terms and conditions for the provision of electric power services, the authority is guided by National Electricity Policy, the National Electricity Plan and such guidelines as may be issued by Federal Government in order to give effect to National Electricity Policy and National Electric Plan. Citation Name: 2024 CLC 744 LAHORE-HIGH-COURT-LAHORE MUHAMMAD AZHAR SIDDIQUE VS FEDERATION OF PAKISTAN Ss. 3 & 31---Constitution of Pakistan, Art. 199---Constitutional petition---National Electric Power Regulatory Authority---Fuel Cost Component and Fuel Cost Adjustment---Principle---Circular debts---Reasons and causes---Petitioners assailed imposition of Fuel Price Adjustment and Quarter Tariff Adjustment---Validity---Tariff structure in Pakistan is not based on regional and consumer-specific long-run marginal costs---As such it is used as an instrument to achieve political and socio-economic objectives---Instead of regulating DISCOs, the burden is transferred to consumers---In NEPRA there is an abundance of lack of interest to fix the problem also due to engraved inadequate capabilities that do not match with the role of a good regulator---Regulator makes serious effort to minimize, if not eliminate, inefficiencies in public sector generation (GENCOs) and distribution companies (DISCOs)---Performance of GENCOs remained lacking in terms of all Key Performance Indicators (KPI) for the past many years---GENCOs are running below their net available capacities because desired maintenance and scheduled outages over the years (as per standard industry practices) are not in place---Lack of maintenance has increased their cost of generation---Such power plants have not only poor operational results, but also workforce, which is already on higher side on a per MW basis, and remained idle due to their closure and non-operation, contributing towards higher cost of generation---Framework of Economic Growth by PIDE (2020) reports a loss of Rs.251.6 billions due to inefficiency in public sector generation companies---National Electric Power Regulatory Authority's job as a regulator was to resolve all power sector problems, including system losses, rising costs, high tariffs, and generation capacity challenges---Outcome of regulatory oversight is that the circular debt emerged for the first time in 2006, since then, it has been there and rising---National Electric Power Regulatory Authority has not done anything to control this debt from rising in so many years---Increasing costs of generation and sector inefficiencies, anomalies in tariff methods and delays in tariff determinations are responsible for circular debt issue---If NEPRA had played an effective role, the power sector scenario could have been different---Overall assessment of NEPRA regulatory performance and its effectiveness indicates that its de jure performance is high; a regulatory system having many necessary requirements for power sector---However, de facto performance highlights a significantly poor regulatory functioning in practice---Regulatory reform required to transition towards competitive market has historically been resisted in Pakistan---National Electric Power Regulatory Authority, an autonomous organization (by law), has not made serious efforts to improve regulatory infrastructure in power sector---National Electric Power Regulatory Authority has been unsuccessful in developing and pursuing regulatory framework to guarantee reliable, efficient, and affordable electricity---Effective regulation creates a balance in the interests of all stakeholders---When investors achieve fair returns, consumers receive quality service, and governments are not allowed political exploitation---National Electric Power Regulatory Authority failed in creating such balance---Only institutional capacity of a regulator can ensure that all its' regulatory decisions and requirements are met effectively in timely and correct manner---This is possible only when regulator has qualified staff, well-coordinated organizational setup, sufficient funds, and powers to take decisions autonomously and balance all stakeholders---Regulator should also be accountable for all its decisions---High Court declared that demand of Fuel Price Adjustment, Quarter Tariff Adjustment, Change of status of tariff from Industrial to Commercial by NEPRA not constituted fully under S. 3 of Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997, was illegal, without lawful authority and coram non judice, having no legal effect---High Court directed NEPRA to inform consumers about charges on monthly basis and fuel price adjustment should not go beyond 07 days and Quarter Tariff Adjustment should not go beyond statutory period---High Court restrained NEPRA from charging any exorbitant tariff beyond paying capacity of domestic consumers---High Court directed NEPRA to fix responsibility of over-charging on the basis of line losses and less efficient power plants and financial burden would be shared by the companies under a rational proportion---High Court further directed the Authority to explore cheap modes of producing electricity and evolve mechanisms for its quick availability---High Court also directed to ensure smooth supply of electricity based on demand---High Court restrained the Authority from unilaterally changing type of tariff from Industrial to Commercial without hearing such consumers---High Court directed Federal Government to provide maximum subsidy to domestic consumers of 500 units per month---High Court restrained Federal Government from demanding extra ordinary taxes having no nexus with consumption of energy which could be recovered through other modes---High Court further directed Federal Government to further explore Solar, Hydal, Nuclear and Wind sources of producing electricity and arrange for cheap purchase of sources of electricity from other countries---Constitutional petition was disposed of accordingly. Citation Name: 2024 CLC 744 LAHORE-HIGH-COURT-LAHORE MUHAMMAD AZHAR SIDDIQUE VS FEDERATION OF PAKISTAN S. 3---Constitution of Pakistan, Arts. 184 (3) & 199---Fuel Cost Component and Fuel Cost Adjustment---Judicial review---Scope---Judicial review is conferred only upon High Courts and Supreme Court by virtue of the Constitution---Special Tribunals constituted to settle different matters between governmental departments do not have authority to exercise such power---Unfair regulations, bad workings and illegal / irregular proceedings of NEPRA and other Government institutions can be challenged before High Court also on the basis of mala fide---Process, methodology, assessment, observations, calculations of Fuel Cost Component (FCC) and claim of Fuel Cost Adjustment (FCA) in electricity bills which has been carried out without observance of procedure required by law deserve attention of High Court.

MUHAMMAD AZHAR SIDDIQUE vs FEDERATION OF PAKISTAN Proviso — 2024 CLC 744 LAHORE-HIGH-COURT-LAHORE

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