NEW DELHI: The Supreme Court has ruled that it is not "mandatory" to appoint a high court judge as the chairperson of State Electricity Regulatory Commission (SERC), which determines power tariff, in the states.

The path-breaking verdict put to rest the vexatious question that had come to light due to conflicting judgements of Gujarat and the Madras high courts on the interpretation of a provision of the Electricity Act on the appointment of the Chairperson of the State Electricity Regulatory Commission.

Section 84 (2) of the Act said that the state government "may" appoint "any person as the chairperson from amongst the persons, who is, or has been, a Judge of the High Court".

The Madras High Court, on February 7, 2014, held that that there was no such mandatory requirement to appoint a high court judge as the chairperson of Tamil Nadu State Electricity Commission. However, there was an option to appoint a judge, it had said.

On the contrary, the Gujarat High Court, in a similar case, on October 8, 2015, held that it was mandatory to appoint a high court judge as the chairperson of Gujarat State Regulatory Commission.

Settling the issue emanating due to divergent opinions on the law, a bench of justices J Chelameswar and Sanjay Kishan Kaul said, "Section 84(2) of the said Act is only an enabling provision to appoint a High Court Judge as a Chairperson of the State Commission of the said Act and it is not mandatory to do so."

"Both the golden rule and the literal rule of statutory construction are well established that a statute must be read as it is framed by the legislature. It is not the function of the Court to supplant or read into the statute something which is not provided," Justice Kaul, writing the judgement for the bench, said.

"We are, thus, inclined to accept the line of reasoning advanced by lawyers and the Attorney General that the plain reading of the provision leaves no doubt that the legislature only envisaged a possibility of appointment of a chairperson from the pool of sitting or retired Judges of the high court," the judgement said.

The court, however, held that it was mandatory that there should be a person of legal background as a member of SERCs.

The person should possess professional qualifications with substantial experience in the practice of law and should have the requisite qualifications to have been appointed as a judge of the high court or a district judge, it said.

The top court said it is mandatory to have a SERC member, having legal expertise, if the panel is adjudicating a dispute.

It made clear that the apex court verdict would be applicable with prospective affect and would deal be made applicable to past decisions on the issues decided by it.

The bench made clear that if any vacancy arises in SERCs, which do not have a legal member, then that post has to be filed by person of the legal background.