Remand Does Not Freeze Legal Position

Source: Supreme Court

Why in News?

The bench of Justices Manoj Misra and Joymalya Bagchi in the case of RattanIndia Power Limited v. Maharashtra State Electricity Distribution Company Limited and Another (2026) held that observations made during remand cannot be treated as binding determinations unless the issue was expressly and finally adjudicated, and fresh decisions must apply current binding law.

What was the Background of RattanIndia Power Limited v. Maharashtra State Electricity Distribution Company Limited and Another (2026) Case? 

• RattanIndia Power Limited (RPL) entered into two long-term Power Purchase Agreements in 2010 for the supply of 450 MW and 750 MW of power. 
• Subsequently, Change in Law events occurred, particularly the levy of a cess by the State of Chhattisgarh, which resulted in increased operational costs for the generator. 
• RPL sought compensation to neutralize this financial impact and also claimed Carrying Cost, meaning interest on the delayed payment of such compensation. 
• RPL contended that mere reimbursement without interest would not restore it to its original economic position. 
• RPL further argued that the interest should be calculated at the Late Payment Surcharge rate prescribed under the PPA and on a compounding basis. 
• In 2018, the Maharashtra Electricity Regulatory Commission allowed Change in Law compensation but denied Carrying Cost, prompting RPL to approach APTEL. 
• In 2022, APTEL remanded the matter for determination of compensation to restore RPL's economic position. 
• On remand, MERC in 2023 granted Carrying Cost at simple interest using the Interest on Working Capital rate, leading to further appeals before APTEL. 
• In the impugned 2023 order, APTEL held that Carrying Cost must be paid at the contractual Late Payment Surcharge rate but rejected RPL's claim for compounding interest. 
• APTEL cited the absence of a specific direction in the 2022 remand order with respect to awarding compound interest as the basis for rejection. 
• The issue before the Supreme Court was whether APTEL's denial of compound interest on the ground that its earlier remand order did not provide for such interest would preclude the Tribunal from subsequently granting it, even though the question had been left open and had not been finally adjudicated.

What were the Court's Observations? 

• The Supreme Court answered in the negative, holding that APTEL erred in treating the absence of a specific direction on compounding in the remand order as a bar to granting it. 
• The Court emphasized that observations made while remanding a matter cannot be treated as binding determinations unless the issue was expressly and finally adjudicated. 
• The Court noted that when a remand order does not itself settle an issue, the issue remanded is alive and has to be decided as per law applicable on the date of the decision. 
• The bench provided an illustrative example: if the Supreme Court declares binding law after a remand order, that declaration must be followed despite any general observations in the remand order, since the remand order did not settle the issue. 
• Since the question of compounding interest had never been finally decided in the earlier round, it remained open for consideration. 
• The Court held that when a Court or Appellate Tribunal remands a matter for fresh decision and refers to certain decisions, the subordinate court or adjudicating body is not bound by those decisions if the law has changed or developed in the interim. 
• The Court clarified that such directions must be given due consideration unless the binding law on the subject requires otherwise. 
• Accordingly, the Court remanded the limited issue of compounding of Carrying Cost back to APTEL for fresh adjudication on merits. 
• The appeal was allowed in terms of the aforesaid observations.

What is Remand?

About:  

• Remand is the custody (police or judicial) of an accused person during the investigation period before filing of chargesheet 
• Purpose is NOT punitive but investigative - to gather evidence and prevent tampering/absconding 
• Two types: Police Custody (for interrogation) and Judicial Custody (detention in jail) 

Remand Under CrPC, 1973 (Section 167) 

Basic Procedure: 

• Arrested person must be produced before Magistrate within 24 hours. 
• Magistrate can extend custody only as per Section 167 procedure. 
• Police must apply for police custody remand; otherwise accused sent to judicial custody. 
• Magistrate must record reasons for extending remand period. 

Time Limits: 

• Maximum police custody: 15 days total (can be broken into separate periods but only within first 15 days of presentation before Magistrate). 
• Total pre-chargesheet remand: 60 days (for offences with punishment less than 10 years) or 90 days (for offences with minimum 10 years sentence). 
• After 15 days, only judicial custody permitted. 
• Accused has right to apply for bail at any stage. 

Settled Legal Position: 

• State v. Dharampal (1980): Police custody only within first 15 days. 
• CBI v. Anupam J. Kulkarni (1992): Police detention "generally disfavoured by law" to protect accused from overzealous officers. 
• Exception: UAPA allows 30 days police custody. 

Recent Reconsideration: 

• CBI v. Vikas Mishra (2023) and V. Senthil Balaji (2023) reconsidered whether police custody possible after initial 15 days if not availed earlier. 

Remand Under BNSS, 2023 (Section 187) 

Effective Date: July 1, 2024 (replaces CrPC) 

Key Changes: 

• Sub-section (2): Maximum 15 days police custody, breakable into separate periods BUT can be granted "at any time during the initial 40 days or 60 days" (out of total 60/90 days). 
• This removes the restriction of police custody only within first 15 days 
• Sub-section (3): Magistrate may authorize detention "beyond fifteen days" if adequate grounds exist. 
• Critical ambiguity: Does not specify if this extended detention is police or judicial custody - open to interpretation.