Supreme Court of India
KERALA STATE ELECTRICITY BOARD & ORS.versusTHOMAS JOSEPH ALIAS THOMAS M. J. & ORS.
- Citation
- 2022 INSC 1293
- Decided
- 16 December 2022
- Disposal
- Appeal(s) allowed
- Bench
- DINESH MAHESHWARI
Holding
Section 126 of the Electricity Act, 2003, read purposively, deems excess consumption over the sanctioned load as unauthorised use of electricity, liable to assessment at twice the applicable tariff, and Regulation 153(15) of the Kerala Electricity Supply Code, 2014 is ultra vires and invalid.
Summary
The Kerala State Electricity Board (KSEB) appealed against a Kerala High Court judgment that held excess consumption of electricity within the same premises and tariff does not constitute "unauthorised use" for the purpose of imposing a double‑tariff penalty. The Supreme Court examined whether drawing electricity beyond the sanctioned or contracted load falls within explanation (b)(iv) of Section 126(6) of the Electricity Act, 2003, and whether Regulation 153(15) of the Kerala Electricity Supply Code, 2014 exceeds the rule‑making authority of the Act. The Court held that Sections 126 and 127 of the Act form a complete code and that any overdrawal, even without a tariff change, is unauthorised use, attracting assessment at twice the applicable tariff for both fixed and energy charges. It further declared Regulation 153(15) ultra vires and invalid because it frustrates the purpose of Section 126. Consequently, the appeals were allowed, the High Court’s finding set aside, and the regulation struck down.
Issues considered
- Whether consumption of electricity in excess of the sanctioned/connected load amounts to "unauthorised use of electricity" under explanation (b)(iv) to Section 126(6) of the Electricity Act, 2003.
- Whether Regulation 153(15) of the Kerala Electricity Supply Code, 2014 is consistent with, or ultra vires of, Section 126 of the Electricity Act, 2003.
- Whether the assessment for unauthorised use must include both fixed and energy charges at twice the tariff.
- Whether the High Court erred in holding that overdrawal without a tariff change does not attract double energy charges.
Legislation cited
- Companies Act, 1956
- Electricity Act, 2003s. 126, s. 127, s. 181, s. 45(3)(a), s. 50
- Electricity (Amendment) Act, 2007s. 126(5), s. 126(6)
Subjects
Electricity Act 2003Unauthorised use of electricityOverdrawalConnected loadTariff assessmentDelegated legislationUltra viresRegulation 153(15)Consumer liabilityPower supply code
Judgment
[2022] 9 S.C.R. 85 85
KERALA STATE ELECTRICITY BOARD & ORS. A
v.
THOMAS JOSEPH
ALIAS THOMAS M. J. & ORS.
(Civil Appeal Nos. 9252-9253 of 2022) B
DECEMBER 16, 2022
[DINESH MAHESHWARI AND J. B. PARDIWALA, JJ.]
Electricity Act, 2003: ss.126 and 127 – Unauthorised use of
electricity – Consumption of electricity by consumers in excess of C
the connected load/contracted load whether amount to
‘unauthorised use of electricity’ under explanation (b) to s.126(6)
– Held: ss.126 and 127 of the Act constitute a complete code in
themselves – The expression ‘unauthorised use of electricity’ means
as it appears in s.126 – The purpose of s.126 is to ensure stoppage
D
of misuse/unauthorised use of electricity as well as to ensure
prevention of revenue loss – Consumption of electricity in excess of
sanctioned/connected load in very same premise and for the very
same purpose without change in tariff constitutes ‘unauthorised
use of electricity’ under explanation (b) (iv) to s. 126 of the Act –
Kerala Electricity Supply Code, 2014 – r. 153. E
Administrative law: Delegated Legislation – Rule making
power – If a rule goes beyond the rule making power conferred by
the statute, the same has to be declared invalid – If a rule supplants
any provision for which power has not been conferred, it becomes
invalid – The basic test is to determine and consider the source of F
power, which is relatable to the rule – A delegated power to legislate
by making rules or regulations cannot be exercised so as to bring
into existence the substantive rights or obligations or disabilities
not contemplated by the provisions of the Electricity Act, 2003.
Kerala Electricity Supply Code, 2014: Regn.153(15) – G
Whether Regn.153(15) is ultra vires of s.126 of Electricity Act, 2003
– Held: A rule making body must function within the purview of the
rule making authority conferred on it by the parent Act – The body
making rules or regulations has no inherent power of its own to
make rules, but derives such power only from the statute, it has to
H
85
86 SUPREME COURT REPORTS [2022] 9 S.C.R.
A necessarily function within the purview of the statute – If
Regn.153(15) is to be given effect, then the same would frustrate
the very object of s.126 of the Act – Therefore, Regn.153(15) is
invalid on the ground that same is inconsistent with the provisions
of s.126 of the Electricity Act, 2003 – Doctrine of ultra vires.
B Allowing the appeals, the Court
HELD: 1. It is not just a matter of overdrawal of electricity
in excess of sanctioned/connected load in the very same premises
and for the very same purpose, which does not involve any change
in the tariff applicable for the relevant category of services. The
C tariff applicable may remain the same; the overdrawal may be in
the same premises and for the very same purpose, there may not
be any loss of revenue but it may lead to a disastrous situation
being prejudicial to the public at large, as such overdrawal of
electricity in excess of sanctioned/connected load may disturb
the entire supply system, undermining its efficiency, efficacy and
D even-increasing voltage demand. High Court have erred in
coming to the conclusion that the consumer cannot be charged
twice the energy charges if the consumer uses in excess of the
sanctioned/connected load in the very same premises and for
the very same purpose, which do not involve any change in the
E tariff. [Paras 56 and 58][136-B-C; 137-A-B]
2. It is settled law that the regulation making power cannot
be used to bring into existence substantive rights, which are not
contemplated under the Act 2003. If a rule goes beyond the rule
making power conferred by the statute, the same has to be
F declared invalid. If a rule supplants any provision for which power
has not been conferred, it becomes invalid. The basic test is to
determine and consider the source of power, which is relatable
to the rule. Similarly, a rule must be in accord with the parent
statute, as it cannot travel beyond it. [Paras 63 and 64][139-E-H]
G 3. The doctrine of ultra vires envisages that a rule making
body must function within the purview of the rule making authority
conferred on it by the parent Act. As the body making rules or
regulations has no inherent power of its own to make rules, but
derives such power only from the statute, it has to necessarily
H
KERALA STATE ELECTRICITY BOARD & ORS. v. THOMAS 87
JOSEPH
function within the purview of the statute. Delegated legislation A
should not travel beyond the purview of the parent Act. If it does,
it is ultra vires and cannot be given any effect. Ultra vires may
arise in several ways; there may be simple excess of power over
what is conferred by the parent Act; delegated legislation may be
inconsistent with the provisions of the parent Act or statute law
B
or the general law; there may be noncompliance with the
procedural requirement as laid down in the parent Act. [Para 65]
[140-B-D]
4. A delegated power to legislate by making rules or
regulations ‘for carrying out the purpose of the Act’, is a general
delegation without laying down any guidelines; it cannot be C
exercised so as to bring into existence the substantive rights or
obligations or disabilities not contemplated by the provisions of
the Act 2003 itself. Rules or regulation cannot be made to supplant
the provisions of the enabling Act but to supplement it. What is
permitted is the delegation of ancillary or subordinating legislative D
functions, or, what is fictionally called, a power to fill up details. [
Paras 78 and 80][144-H; 145-A, D]
5. Regulation 153(15) of the Code 2014 framed by the
Commission is inconsistent with Section 126 of the Act 2003. If
the Regulation 153(15) is to be given effect, then the same would E
frustrate the very object of Section 126 of the Act 2003. It is not
just the question of loss of revenue. At the cost of repetition, we
emphasis on the fact that overdrawal of electricity is prejudicial
to the public at large as it may throw out of gear the entire supply
system, undermining its efficiency, efficacy and even-increasing
voltage fluctuations. [Para 82][148-B-C] F
Sukhdev Singh and Others v. Bhagatram Sardar Singh
Raghuvanshi and Another (1975) 1 SCC 421 : [1975]
3 SCR 619 – followed.
Executive Engineer, Southern Electricity Supply G
Company of Orissa Limited (Southco) and Another v.
Sri Seetaram Rice Mill (2012) 2 SCC 108 : [2011] 15
SCR 211 – relied on.
H
88 SUPREME COURT REPORTS [2022] 9 S.C.R.
A Punjab State Electricity Board v. Vishwa Caliber
Builders Private Limited (2010) 4 SCC 539; Uttar
Pradesh Power Corporation Limited and Others v. Anis
Ahmad (2013) 8 SCC 491 : [2013] 13 SCR 388;
Additional District Magistrate (Rev.) Delhi Admn. v. Siri
Ram (2000) 5 SCC 451 : [2000] 3 SCR 1019; State of
B
Karnataka and Another v. H. Ganesh Kamath and
Others (1983) 2 SCC 402 : [1983] 2 SCR 665; Kunj
Behari Lal Butail and Others v. State of H.P. and Others
(2000) 3 SCC 40 : [2000] 1 SCR 1054; St. Johns
Teachers Training Institute v. Regional Director,
C National Council for Teacher Education and Another
(2003) 3 SCC 321 : [ 2003] 1 SCR 975; Global Energy
Limited and Another v. Central Electricity Regulatory
Commission (2009) 15 SCC 570 : [2009] 9 SCR 22;
State of T.N. and Another v. P. Krishnamurthy and Others
(2006) 4 SCC 517 : [2006] 3 SCR 396; Pratap
D
Chandra Mehta v. State Bar Council of Madhya
Pradesh and Others (2011) 9 SCC 573 : [2011] 11
SCR 965; Dr. Mahachandra Prasad Singh v. Chairman,
Bihar Legislative Council and Others (2004) 8 SCC
747 : [2004] 5 Suppl. SCR 692; McEldowney v. Forde
E (1971) AC 632 : (1969) 3 WLR 179 – referred to.
“Delegated Legislation” in Francis Bennion’s Statutory
Interpretation, 3rd Edn.) – referred to.
Case Law Reference
F [2011] 15 SCR 211 relied on Para 15
(2010) 4 SCC 539 referred to Para 59
[2013] 13 SCR 388 referred to Para 62
[2000] 3 SCR 1019 referred to Para 67
G [1975] 3 SCR 619 followed on Para 68
[1983] 2 SCR 665 referred to Para 69
[2000] 1 SCR 1054 referred to Para 70
[2003] 1 SCR 975 referred to Para 71
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KERALA STATE ELECTRICITY BOARD & ORS. v. THOMAS 89
JOSEPH
[2009] 9 SCR 22 referred to Para 72 A
[2006] 3 SCR 396 referred to Para 74
[2011] 11 SCR 965 referred to Para 75
[2004] 5 Suppl. SCR 692 referred to Para 76
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos.9252- B
9253 of 2022.
From the Judgment and Order dated 12.04.2017 of the High Court
of Kerala at Ernakulam in WP (C) No.22644 of 2015 and dated
21.08.2017 in Review Petition No.598 of 2017 in WP (C) No.22644 of
2015. C
With
Civil Appeal Nos. 9256-9257, 9254-9255, 9262-9263, 9264-9265,
9266-9267, 9268-9269, 9270-9271, 9258-9259 and 9260-9261 of 2022.
Basant R., Sr. Adv., Raghenth Basant, P. V. Dinesh, Vishnu D
Pazhanganat, Ajay Krishna, Rahul Raj Mishra, Ashwini Kumar Singh,
Dineesh K., Advs. for the Appellants.
Nishe Rajen Shonker, Sriram P., Abraham C. Mathew, Anu K.
Joy, Alim Anvar, Mohammed Sadique T.A., Kuriakose Varghese, V.
Shyamohan, Akshat Gogna, Ms. Aishwarya Hariharan, M/s. Kmnp Law, E
Dhananjaya Mishra, C. K. Sasi, Abdulla Naseeh. V. T., Ms. Meena k.
Poulose, Advs. for the Respondents.
The Judgment of the Court was delivered by
J. B. PARDIWALA, J.
F
1. Leave granted in all the captioned Special Leave Petitions.
2. Since the issues raised in all the captioned petitions are the same
and the challenge is also to the self-same judgment and order passed by
the High Court of Kerala dated 12.04.2017 deciding a batch of writ
applications filed by the respondents herein, those were taken up for
G
hearing analogously and are being disposed by this common judgment
and order.
3. This batch of petitions is at the instance of the Kerala State
Electricity Board (“Board” or “KSEB”) and is directed against the
judgment and order passed by Division Bench of the High Court of
H
90 SUPREME COURT REPORTS [2022] 9 S.C.R.
A Kerala dated 12.04.2017 in Writ Petition (C) No. 22644 of 2015 and
allied petitions by which the High Court declared that in case of
unauthorised use of electricity in a higher tariff the assessment shall be
made at the rate equal to twice the tariff applicable for the relevant
category of services attracting such higher tariff for which electricity
supplied was unauthorisedly used and not the relevant category of
B
services to which the consumer belongs. The High Court proceeded
further to hold that the exception to the above would be in the case of a
consumer who is guilty of overdrawal of electricity in excess of the
sanctioned/connected load in the very same premises and for the very
same purpose which does not involve any change in the tariff applicable
C for the relevant category of services, which consumption has already
been metered and paid by the consumer, as such use being not by any
artificial means or through the tampered meter, the assessment under
Section 126(6) of the Electricity Act 2003 (for short, ‘the Act 2003’)
could only be called to twice the fixed charges payable and such consumer
cannot be saddled with the liability to pay twice the energy charges
D
applicable for the relevant category of services, unless regularisation of
such additional connected load or enhancements of contract demand
necessitates upgradation of the existing distribution system or
enhancement of the voltage level of supply.
FACTUAL MATRIX
E
4. The neat question of law that falls for the consideration of this
Court is whether the consumption of electricity by the respondents
(consumers) in excess of the connected load/contracted load would
amount to ‘unauthorised use of electricity’ under explanation (b) to Section
126(6) of the Act 2003.
F
5. The appellant Board is a company incorporated under the
Companies Act, 1956 (for short, ‘the Act 1956’) and is controlled by the
Government of Kerala. It is engaged in the business of generation,
transmission and distribution of electricity in the State of Kerala.
G 6. In the present litigation, all the respondents are commercial/
industrial consumers having LT (Law Tension) connections. It is not in
dispute that at the time of the inspection undertaken by the officials of
the Appellant Board, all the consumers were found to be drawing electricity
in excess of the connected/contracted load. The issue that arises is
whether the respondents (consumers) can be assessed at the rate equal
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KERALA STATE ELECTRICITY BOARD & ORS. v. THOMAS 91
JOSEPH [J. B. PARDIWALA, J.]
to twice the tariff applicable as stipulated in Section 126(6) of the Act A
2003?
7. The consumers went before the High Court of Kerala and
preferred respected writ petitions seeking an authoritative pronouncement
on the quantification of penalty under Section 126(6) of the Act 2003. It
may not be out of place to state at this stage that the Division Bench of B
the High Court took up the petitions for hearing on the strength of an
order of reference made by a learned Single Judge of the High Court
dated 17.08.2015 observing that an authoritative pronouncement on the
quantification of penalty under Section 126(6) of the Act 2003 was
necessary as everyday many petitions were being filed in the High Court
with a challenge to the orders imposing penalty involving ‘excess/additional C
load’ falling under explanation (b)(ii) to Section 126 of the Act 2003 and
‘unauthorised use of electricity’ falling under explanation (b)(iv) to Section
126 of the Act 2003, in which cases, the energy charges are already
metered and paid by the consumers. The learned Single Judge of the
High Court while passing an order of reference observed that a different D
yardstick may have to be applied to cases falling under the explanation
(b)(i), (iii) and (v) to Section 126 of the Act 2003 as the energy charges
are not metered.
8. The Division Bench of the Kerala High Court heard all the
consumers concerned and held as under: E
“7.16. Accordingly, in Para. 87 of the judgment in Seetharam
Rice Mill’s case (supra), the Three-Judge Bench of the Apex
Court concluded that, wherever the consumer commits the
breach of the terms of the agreement, Regulations and the
provisions of the Act by consuming electricity in excess of the F
sanctioned and connected load, such consumer would be ‘in
blame and under liability’ within the ambit and scope of Section
126 of the Electricity Act, 2003. The expression ‘unauthorised
use of electricity means’ as appearing in Section 126 of the
Act is an expression of wider connotation and has to be
construed purposively in contrast to contextual interpretation G
while keeping in mind the object and purpose of the Act. The
cases of excess load consumption than the connected load
inter alia would fall under Explanation (b)(iv) to Section 126
of the Act, besides it being in violation of Regulations 82 and
106 of the Regulations and terms of the agreement. H
92 SUPREME COURT REPORTS [2022] 9 S.C.R.
A 8. Following the law laid down by the Apex Court in
Seetharam Rice Mill’s case (supra), a Division Bench of this
Court in which one among us (AKN J) was a member, held in
M/s. Classic Color Lab v. Assistant Engineer and others (2014
(3) KLT 57) that, while interpreting the provisions of Section
126 of the Electricity Act, 2003 this Court would have to apply
B
the principle of purposive interpretation in preference to
textual interpretation, keeping in mind the purpose to be
achieved by that Section, i.e., to put an implied restriction on
unauthorised use of electricity. Therefore, a construction
which will improve the workability of the Statute, to be more
C effective and purposive, would have to be preferred to any
other interpretation which may lead to undesirable results.
8.1. In Classic Color Lab’s case (supra), in the site inspection
conducted on 3.3.2005, unauthorised use of electricity was
detected by the APTS in the premises in question where the
D appellant/consumer was having a Colour Photo Processing
Unit and Lab. The APTS found that the appellant/consumer
was misusing electricity for industrial purpose under LT-IV
tariff for commercial use, attracting higher tariff under LT-
VIIA. Accordingly, the appellant/consumer was issued with a
demand notice, demanding energy charges at a rate equal to
E one and a half times LT-VIIA tariff for a period of 6 months,
less the amount already paid under LT-IV tariff.
8.2. After referring to Explanation (b) to Section 126 of the
Act, this Court held that, once it is found that the appellant/
consumer had indulged in unauthorised use of electricity, the
F penal assessment contemplated under Section 126 of the Act
has to follow. As per Section 126(6), as it stood prior to the
Amendment Act 26 of 2007, such assessment shall be made at
a rate equal to one and a half times the tariff applicable for
the relevant category of services specified in sub-section (5).
G 8.3. In Classic Color Lab’s case (supra), it was contended on
behalf of the appellant/consumer that, assessment under
Section 126 of the Act should be made at a rate equal to one
and a half times the tariff applicable for industrial connection.
Per contra, it was contended on behalf of the Board that,
H such assessment should be made at a rate equal to one and a
KERALA STATE ELECTRICITY BOARD & ORS. v. THOMAS 93
JOSEPH [J. B. PARDIWALA, J.]
half times the tariff applicable for commercial connection, A
for which a higher tariff is applicable.
8.4. After taking note of the law laid down by the Apex Court
in Seetharam Rice Mill’s case (supra), this Court held that,
once it is found that the appellant/consumer had indulged in
unauthorised use of electricity supplied under industrial tariff, B
the entire consumption in that service connection will have to
be assessed under Section 126(6) of the Act and as such, the
contention of the appellant/consumer that the consumption
through the light meter alone should have been charged under
LT-VIIA is untenable. This Court held further that, the only
interpretation that can be given to Section 126(6) of the Act C
is that, in an assessment under Section 126 for unauthorised
use of electricity, assessment shall be made at a rate equal to
one and a half times (two times with effect from 15.6.2007)
the tariff applicable for the relevant category of services
attracting higher tariff for which the electricity supplied was D
unauthorisedly used, and not the relevant category of service
to which the consumer belongs. Paras.15 and 16 of the
judgment read thus;
“15. On 3.3.2005, the appellant’s premises was inspected
by the APTS. As evident from Ext. P1 site mahazar, the APTS E
found that, the power supply through the light meter under
industrial tariff LT- IV was being used for the neon lights
and air conditioners in the studio, which are under
commercial tariff LT-VIIA. The finding in Ext. P1 site
mahazar is to the effect that, the appellant was indulging
in unauthorised use of electricity for industrial purpose F
under the tariff LT-IV for commercial purpose, attracting
a higher tariff under LT-VIIA. As the appellant used the
electricity supplied for industrial use under LT-IV tariff
for commercial use under LT- VIIA tariff it amounts to
‘unauthorised use of electricity’ falling under Clause (b) G
to the Explanation to Section 126. For such unauthorised
use the appellant is liable to be assessed under Section
126(6), as it stood prior to the Amendment Act 26 of 2007,
at a rate equal to one and half times the tariff applicable
for the relevant category of service. On 27.10.2005, the
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94 SUPREME COURT REPORTS [2022] 9 S.C.R.
A appellant segregated the commercial load in the industrial
connection and thereafter, the connected load of service
connection under commercial tariff was enhanced from 5KW
to 28KW and the connected load of service connection
under industrial tariff was reduced from 88KW to 44KW.
This makes it abundantly clear that, the appellant was
B
indulging in unauthorised use electricity, thereby using a
major portion of the electricity supplied under industrial
tariff for commercial use. Once it is found that, the appellant
had indulged in unauthorised use of the electricity supplied
under industrial tariff the entire consumption in that service
C connection will have to be assessed under Section 126(6).
Therefore, the contention of the appellant that the
consumption through the light meter alone should have
been charged under LT-VIIA is absolutely untenable.
16. The KSEB is supplying electricity for industrial
D purpose, under LT-IV tariff, at a subsidised rate, whereas,
supply of electricity for commercial purpose, under LT-VIIA
tariff attracts a higher rate. As evident from the calculations
made in Ext.P5 demand, the commercial tariff under LT-
VIIA during the relevant period was Rs. 8.25 per unit. As
pointed out by the learned Standing Counsel for the KSEB,
E the industrial tariff under LT-IV during the relevant period
was only Rs.4.25 per unit. Therefore, if the appellant is
assessed under Section 126(6) for the unauthorised use of
electricity, taking LT-IV industrial tariff @Rs. 4.25 per unit
as the basis for calculating the rate equal to one and half
F times the tariff applicable for the relevant category of
service, then the appellant need pay only Rs. 6.37 per unit
for unauthorised use of electricity for commercial purpose,
as against the prevailing rate of Rs.8.25 per unit applicable
for the commercial tariff under LT-VIIA. If such an
interpretation is given, it would defeat the very purpose
G that Section 126 has to achieve, i.e., to put an implied
restriction on unauthorised consumption of electricity. On
the other hand, if the appellant is assessed for the
unauthorised use of electricity, taking LT-VIIA industrial
tariff @Rs.8.25 per unit as the basis for calculating the
H rate equal to one and half times the tariff applicable for
KERALA STATE ELECTRICITY BOARD & ORS. v. THOMAS 95
JOSEPH [J. B. PARDIWALA, J.]
the relevant category of service, the appellant has to pay A
only Rs.12.37 per unit for unauthorised use of electricity
for commercial purpose, as against the prevailing rate of
Rs.8.25 per unit applicable for the commercial tariff under
LT-VIIA. Therefore, the only interpretation that can be given
to Section 126(6) of the Electricity Act, 2003, is that, in an
B
assessment under Section 126 for unauthorised use of
electricity, assessment shall be made at a rate equal to one
and half times (two times with effect from 15.6.2007) the
tariff applicable for the relevant category of service
attracting higher tariff for which the electricity supplied
was unauthorisedly used and not the relevant category of C
service to which the consumer belongs, and we hold so.”
8.5. In Classic Color Lab’s case (supra), after taking note of
the arguments advanced on behalf of the appellant/consumer
relying on the judgment of this Court in J.D.T. Islam
Orphanage Committee v. Assistant Engineer, KSEB (2007 (3) D
KLT 388) and that of the Calcutta High Court in Sk. Jafar
Ali v. West Bengal State Electricity Distribution Company
Limited (AIR 2010 Cal. 84) this Court observed that, J.D.T.
Islam Orphanage Committee’s case (supra) is a case under
the Electricity Act, 1910, in which an orphanage under LT-VI
tariff was assessed for unauthorised extension, by levying E
LT-VIII tariff applicable to temporary extension. It was not a
case in which electricity supplied under LT-VI tariff was used
by the consumer for any other purpose attracting higher tariff.
That decision was rendered on an entirely different set of facts
and it does not in any way support the case of the appellant/ F
consumer.
8.6. In Sk. Jafar Ali’s case (supra) the electricity supplied
under domestic tariff was used for commercial purpose
attracting a higher tariff. The Court found that the meter used
for commercial purpose situated in the consumer’s premises G
has not been tampered with and it is the meter relating to
domestic consumption that has been tampered with. The
learned Judges of the Calcutta High Court, interpreting
Section 126(6) of the Act held that, the phrase ‘applicable
for the relevant category of the services specified in sub-section
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96 SUPREME COURT REPORTS [2022] 9 S.C.R.
A (5)’ appearing in Section 126 should be reasonably construed
as the rate ‘applicable for the relevant category of the services
to which the consumer belongs’. Though, the judgment of the
Calcutta High Court does support the view as propounded
by the learned counsel for the appellant/consumer, the Division
Bench of this Court disagreed with that view of the Calcutta High
B
Court, stating that, if the above interpretation is accepted, a
consumer under LT-V Agriculture tariff at the rate of around
` 1/- per unit need pay only ` 1.50 per unit for unauthorised
use of electricity for commercial purpose, as against the
prevailing rate of ` 8.25 per unit applicable for LT-VIIA
C commercial tariff.
9. In Maria Plana Society v. KSEB and others (judgment dated
21.5.2009 in W.P.(C). No. 12068 of 2009) a learned Judge
of this Court held that, as can be seen from Section 126 of
the Electricity Act, 2003 as amended, once the assessing officer
D reaches the conclusion that unauthorised use of electricity
has taken place, the assessment shall be made for the entire
period and the assessment shall be at the rate equal to twice
the tariff applicable for the relevant category of services. A
reading of Section 45(3)(a) of the Act shows that, charges
for electricity supplied by a distribution licensee include fixed
E charges in addition to the charges for the actual electricity
supplied and consumed. In the light of the above statutory
provisions, the irresistible conclusion is that, tariff includes
both fixed charges and energy charges and that, once the
assessing officer has reached the conclusion that
F unauthorised used of electricity has taken place, he is bound
to make assessment at the rate equal to twice the tariff
applicable, which includes the dues payable towards energy
charges also. In the judgment dated 3.4.2014 in W.A.No.1149
of 2009 arising out of the judgment in W.P.(C).No.12068 of
2009 the Division Bench, without interfering with the judgment
G of the learned Single Judge, disposed of the Writ Appeal
leaving open the question of law as to whether the penalty
under Section 126 of the Act is applicable to energy charges
also in the case of unauthorised additional load.
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KERALA STATE ELECTRICITY BOARD & ORS. v. THOMAS 97
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10. In Seetharam Rice Mill’s case (supra) the Apex Court A
has stated that, Section 126 of the Act, which embodies a
complete process for assessment, determination and demand
has a purpose to achieve, i.e., to put an implied restriction on
such unauthorised consumption of electricity. The provisions
of Section 126 of the Act are self- explanatory, which are
B
intended to cover situations other than the situations
specifically covered under Section 135 of the Act; which would
be applicable to cases where there is no theft of electricity
but the electricity is being consumed in violation of the terms
and conditions of supply leading to malpractices, which may
squarely fall within the expression ‘unauthorised use of C
electricity’. Section 135 of the Act deals with an offence of
theft of electricity, which squarely falls within the dimensions
of criminal jurisprudence, and mens rea is one of the relevant
factors for finding a case of theft. On the contrary, Section
126 of the Act does not speak of any criminal intendment,
D
which does not have features or elements which are traceable
to the criminal concept of mens rea. Thus, the expression
‘unauthorised use of electricity’ under Section 126 of the Act
deals with cases of unauthorised use, even in absence of
intention. As such, intention is not the foundation for invoking
powers of the competent authority and passing of an order of E
assessment under Section 126 of the Act.
11. As held by the Apex Court in Seetharam Rice Mill’s case
(supra), ‘unauthorised use of electricity’ means the usage of
electricity by the means and for the reasons stated in
Explanation (b)(i) to (v) to Section 126 of the Act, which would F
mean what is stated under that Explanation, as well as such
other unauthorised use, which is squarely in violation of the
statutory or contractual provisions in the Act, Regulations
framed thereunder and the terms and conditions of supply in
the form of contract or otherwise. Unauthorised use of
electricity brings the consumer ‘under liability and in blame’ G
within the ambit and scope of Section 126 of the Act. The
blame is in relation to excess load while the liability is to pay
on a different tariff for the period prescribed in law and in
terms of an order of assessment passed by the assessing officer.
H
98 SUPREME COURT REPORTS [2022] 9 S.C.R.
A 12. After referring to the expression ‘means’ used in
Explanation (b) to Section 126 of the Act, the Apex Court
held that, the primary object of that expression is intended to
explain the term ‘unauthorised use of electricity’ which, even
from the plain reading of the provisions of the Act or on a
common sense view cannot be restricted to the examples given
B
in the Explanation. Section 126(5) and clause (iv) of
Explanation (b) to Section 126 of the Act were amended by
the Electricity (Amendment) Act, 2007 with a purpose and
object of preventing unauthorised use of electricity not
amounting to theft of electricity within the meaning of Section
C 135 of the Act, which has to be given its due meaning, which
will fit into the scheme of the Act and would achieve its object
and purpose.
13. Taking note of the fact that electricity supply to a consumer
is restricted and controlled by the terms and conditions of
D supply, Regulations and the provisions of the Act, the Apex
Court held that, unauthorised use of electricity cannot be
restricted to the stated clauses under Explanation to Section
126 but has to be given a wider meaning so as to cover cases
of violation of terms and conditions of supply and the
Regulations and provisions of the Act governing such supply.
E Therefore, the Apex Court concluded that, consumption of
electricity in excess of the sanctioned/connected load shall be an
‘unauthorised use of electricity’ in terms of Section 126 of the
Act, since overdrawal of electricity amounts to breach of the terms
and conditions of the contract and the statutory conditions; besides
F such overdrawal being prejudicial to the public at large, as it is
likely to throw out of gear the entire supply system, undermining
its efficiency, efficacy and even increasing voltage fluctuations.
14. The provisions under Section 126 of the Act, as it stood
prior to the amendment by the Electricity (Amendment) Act,
G 2007 provided for assessment of unauthorised use of electricity
‘one and a half times’ the tariff applicable for the relevant
category of service, for a period of three months immediately
preceding the date of inspection in the case of domestic and
agricultural services and for a period of six months
immediately preceding the date of inspection for all other
H
KERALA STATE ELECTRICITY BOARD & ORS. v. THOMAS 99
JOSEPH [J. B. PARDIWALA, J.]
categories of services, unless the onus is rebutted by the A
person, occupier or possessor of such premises or place.
15. In tune with the provisions under Section 126 of the Act,
Regulation 51(1) of the Conditions of Supply, 2005 provides
for assessment of unauthorised additional load in terms of
Regulation 50(5) and (6), i.e., at a rate equal to one and half B
times the tariff applicable for the relevant category of services
specified in Regulation 50(5), for a period of three months
immediately preceding the date of inspection in case of
domestic and agricultural services and for a period of six
months immediately preceding the date of inspection for all
other categories of services, unless the onus is rebutted by C
the person/occupier or possessor of such premises or place.
Though Regulation 51(1) of the Conditions of Supply, 2005
employs the term ‘penalised’, what is contemplated under the
said Regulation is only assessment of unauthorised use of
electricity in terms of Section 126 of the Act for the period D
specified in Section 126(5) and at the rate specified in Section
126(5) of the Act. In that view of the matter, Regulation 51(1)
of the Conditions of Supply, 2005 is neither ultra vires the
provisions of Section 126 of the Act nor unenforceable, and
we hold so.
E
16. The provisions under Section 126 of the Act underwent a
substantial change by the Electricity (Amendment) Act, 2007.
After the amendment, if the period during which unauthorised
use of electricity has taken place cannot be ascertained by
the assessing officer, such period shall be limited to a period
of ‘twelve months’ immediately preceding the date of inspection F
and assessment shall be made at a rate equal to ‘twice’ the
tariff applicable for the relevant category of services specified
in sub-section (5). The said amendment made to Section 126(5)
and (6) of the Act, with a purpose and object of preventing
unauthorised use of electricity not amounting to theft of G
electricity within the meaning of Section 135 of the Act has to
be given its due meaning, which will fit into the scheme of the
Act and would achieve its object and purpose. In the absence
of any challenge against the said amendment made to Section
126(5) of the Act, the petitioners/consumers cannot now
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100 SUPREME COURT REPORTS [2022] 9 S.C.R.
A contend that the period of ‘twelve months’ prescribed therein
is unreasonable, in as much as, for theft of electricity the period
prescribed in Section 135 of the Act is only ‘three months’.
17. When ‘unauthorised use of electricity’ under Section 126
of the Act deals with cases of unauthorised use even in absence
B of intention, it cannot be contended that, in the absence of
mens rea, assessment at the maximum rate, i.e. at the rate equal
to twice the tariff applicable to the relevant category of service
is legally impermissible. In all cases of ‘unauthorised use of
electricity’ falling under Explanation (b) to Section 126 of
the Act, the assessing officer is empowered to assess such
C unauthorised use of electricity, at the rate prescribed in
Section 126(6) and for the period specified in Section 126(5),
as amended by the Electricity (Amendment) Act, 2007. In that
view of the matter, we find no merit in the contention of the
learned counsel for the petitioners/consumers, relying on the
D judgment of a Division Bench of this Court in KSEB and
others v. M/s. Alukkas Jewellery (judgment dated 9.11.2005
in W.A.No.1262 of 2004) that, in cases where no damage has
been caused to the Board’s installation due to overdrawal of
electricity, assessment at the rate equal to twice the tariff
applicable to the relevant category of service is unwarranted.
E
18. In Seetharam Rice Mill’s case (supra) the Three-Judge
Bench of the Apex Court laid down that, consumption of
electricity in excess of the sanctioned/connected load would
be squarely covered under Explanation (b)(iv) to Section 126
of the Act. Once this factor is established, then the assessing
F officer has to pass the final order of assessment in terms of
Section 126(6) of the Act, which shall be at a rate equal to
twice the tariff applicable for the relevant category of services
specified in sub-section (5).
19. In PTC India Ltd. v. Central Electricity Regulatory
G Commission (2010 (4) SCC 603) the Apex Court held that,
the term ‘tariff ’, though not defined in the Electricity Act,
2003, it includes within its ambit not only the fixation of rates
but also the rules and regulations relating to it.
20. Section 45(1) of the Act provides that, subject to the
H provisions of Section 45, the prices to be charged by a
KERALA STATE ELECTRICITY BOARD & ORS. v. THOMAS 101
JOSEPH [J. B. PARDIWALA, J.]
distribution licensee for the supply of electricity by him in A
pursuance of Section 43 shall be in accordance with such
tariffs fixed from time to time and conditions of his licence.
Section 45(3) provides further that, the charges for electricity
supplied by a distribution licensee may include a fixed charge
in addition to the charge for the actual electricity supplied;
B
and a rent or other charges in respect of any electric meter or
electrical plant provided by the distribution licensee.
21. The provisions under Section 45(3) of the Act makes it
explicitly clear that, the term ‘tariff ’ in Section 45(1), which
is the price to be charged by the distribution licensee for the
supply of electricity, includes the fixed charge in addition to C
the charge for the actual electricity supplied. If that be so, it
can be safely concluded that, the term ‘tariff ’ in Section 126(6)
of the Act includes both fixed charges and charges for the
electricity supplied, which has to be assessed in the case of a
consumer indulged in unauthorised use of electricity, at a D
rate equal to twice the tariff applicable for the relevant
category of services specified in sub-section (5). Therefore,
once the assessing officer has reached the conclusion that
the consumer has indulged in unauthorised use of electricity,
he is bound to make assessment of such consumer at the rate
equal to twice the tariff applicable, which includes both fixed E
charges and energy charges.
22. Relying on the decisions in JDT Islam Orphanage
Committee v. Assistant Engineer, KSEB (2007 (3) KLT 388),
George Joseph and another v. KSEB and others (2008 (4)
KLT 610), etc. the petitioners/consumers contended that, when F
the energy consumed through meter having been billed and
payment having been made, assessment of penal charges for
such consumption of energy is legally impermissible and the
only liability that can be fastened upon the consumers found
indulging in unauthorised use of electricity is penal charges G
on fixed charges. The said contention can only be repelled in
view of our finding made hereinbefore, with reference to the
provisions under Sections 45 and 126 of the Act and the law
laid down by the Apex Court in Seetharam Rice Mill’s case
(supra) and that laid down by this Court in Classic Color
H
102 SUPREME COURT REPORTS [2022] 9 S.C.R.
A Lab’s case (supra) that, the assessment of a consumer Section
126(6) of the Act, at the rate equal to twice the tariff
applicable, includes both fixed charges and energy charges.
23. In Board Order dated 7.2.2008, which was made
applicable with effect from 15.6.2007, it was ordered that,
B the field officers shall strictly follow the provisions of Section
126(5) and (6) of the Act, as amended by the Electricity
(Amendment) Act, 2007, i.e., two times the respective tariff
for the entire period, and in case the said period cannot be
ascertained for a period of twelve months, for assessing
penalty in the case of misuse of energy including unauthorised
C additional load, unauthorised extension and meter tampering
cases detected. It was also made clear that, the penalty rate
shall be applicable to both fixed and energy charges for the
unauthorised use. Penalty charges for current charges shall
be levied for proportionate energy charge and normal current
D charge collected shall be deducted.
24. Though Board Order dated 7.2.2008 employs the term
‘penalty’, what is contemplated under the said order is only
assessment of unauthorised use of electricity in terms of
Section 126 of the Act, as amended by the Electricity
E (Amendment) Act, 2007, for the period specified in Section
126(5) and at the rate specified in Section 126(6) of the Act.
In that view of the matter, Board Order dated 7.2.2008 is
neither ultra vires the provisions of Section 126 of the Act nor
unenforceable, and we hold so.
F 25. In Seetharam Rice Mill’s case (supra) the Apex Court
was dealing with a case in which the tariff applicable to the
consumer was changed from ‘medium industry’ to tariff
applicable for ‘large industry’. Similarly, in Classic Color Lab’s
case (supra) this Court was dealing with a case in which
electricity supplied at a subsidised rate for industrial purpose
G under LT-IV tariff, was unauthorisedly used for commercial
purpose, which attracts a higher rate under LT- VIIA tariff.
In the said decision, while upholding the demand for fixed
charges and energy charges made under Section 126(6) of
the Act, this Court held that, in an assessment under Section
H 126 for unauthorised use of electricity, assessment shall be
KERALA STATE ELECTRICITY BOARD & ORS. v. THOMAS 103
JOSEPH [J. B. PARDIWALA, J.]
made at a rate equal to one and a half times (two times with A
effect from 15.6.2007) the tariff applicable for the relevant
category of services attracting higher tariff for which the
electricity supplied was unauthorisedly used, and not the
relevant category of service to which the consumer belongs.
26. As far as domestic consumers are concerned, the fixed B
charge for single phase connection is ` 20/- per month and it
is ` 60/- per month for three phase connection, irrespective
of the connected load. Therefore, a domestic consumer is
paying fixed charge at the specified rate irrespective of the
connected load and the energy charge for the actual
consumption at the rates specified in the tariff order. Even if C
there is excess connected load in the premises of a domestic
consumer, the electricity charges realisable from the consumer
do not change and as such, additional connected load would
not result in any financial loss to the licensee as per the terms
and conditions of the tariff orders in force. That may be the D
reason which persuaded the Electricity Regulatory Commission
not to penalise domestic consumers for additional loads in
their premises, by incorporating Regulation 153(15) of the
Supply Code, 2014, which provides that, unauthorised
additional load in the same premises and under same tariff
shall not be reckoned as unauthorised use of electricity. Such E
domestic consumers will have the option either to regularise
such additional load or to get such additional load removed
at the discretion of the licensee. If the consumer fails to remove
the additional load as directed by the licensee, the supply to
the premises can be disconnected by the licensee. F
27. Regulation 153(15) of the Supply Code, 2014 has
undergone amendment by the Kerala Electricity Supply
(Amendment) Code 2016, which came into force on 4.2.2016,
by adding the words ‘except in the case of consumers billed on
the basis of connected load’ at the end of that sub-regulation. G
Such an amendment was made when it was found that, the
application of Regulation 153(15) to the consumers who are
charged on connected load basis, would result in the licensees
incurring financial loss in as much as, for the additional
connected load the licensees are entitled for charges
demanded on connected load basis. H
104 SUPREME COURT REPORTS [2022] 9 S.C.R.
A 28. In cases falling under Explanation (b) to Section 126 of
the Act, the assessing officer is empowered to assess
unauthorised use of electricity at the rate prescribed in Section
126(6) and for the period specified in Section 126(5), as
amended by the Electricity (Amendment) Act, 2007 for both
fixed charges and energy charges. Penalty charges for current
B
charges shall be levied for proportionate energy charge and
normal current charge collected shall be deducted. In case of
unauthorised use of electricity in a higher tariff, such
assessment shall be made at the rate equal to twice the tariff
applicable for the relevant category of services attracting
C such higher tariff for which electricity supply was
unauthorisedly used and not the relevant category of service
to which the consumer belongs.
29. A different yardstick has to be applied in cases of
consumption of electricity in excess of the sanctioned/
D connected load in the very same premises and for the very
same purpose, which do not involve any change in tariff
applicable for the relevant category of services, which
consumption has already been metered and paid by the
consumer, since such usage being not by any artificial means
or through a tampered meter. This is for the reason that, in
E such cases request made by the consumer for regularisation
of unauthorised connected load or enhancement of contract
demand will be acceded to by the Board, as a matter of course,
once the consumer fulfills the statutory requirements, unless
such regularisation of connected load or enhancement of
F contract demand necessitates upgradation of the existing
distribution system or enhancement of voltage level of supply.
30. As held by the Apex Court in Seetharam Mill’s case
(supra), in the case of unauthorised use of electricity, the
blame on the consumer is in relation to excess load while the
G liability is to pay on a different tariff for the period prescribed
in law and in terms of the order of assessment passed by the
assessing officer under the provisions of Section 126 of the
Act. In that view of the matter, in the case of a consumer, who
is blamed with overdrawal of electricity in excess of sanctioned/
connected load in the very same premises and for the very
H
KERALA STATE ELECTRICITY BOARD & ORS. v. THOMAS 105
JOSEPH [J. B. PARDIWALA, J.]
same purpose, which do not involve any change in tariff A
applicable for the relevant category of services, which
consumption has already been metered and paid by the
consumer, since such usage being not by any artificial means
or through a tampered meter, assessment under Section 126(6)
of the Act can only be equal to twice the fixed charges payable
B
and such consumer cannot be saddled with the liability to
pay twice the energy charges applicable for the relevant
category of services, unless regularisation of such additional
connected load or enhancement of contract demand
necessitate upgradation of the existing distribution system or
enhancement of voltage level of supply.” C
(Emphasis supplied)
9. After holding as aforesaid, the High Court summarised its final
conclusion, as under:
“31. For the reasons stated hereinbefore, we hold as follows; D
(i) The presence of the assessing officer at the time of
inspection and detection of unauthorised use of electricity in
the premises of a consumer is not a mandatory requirement
for initiating assessment proceedings under Section 126(1)
of the Act. E
(ii) The expression ‘unauthorised use of electricity’ under Section
126 of the Act deals with cases of unauthorised use even in
the absence of intention. Hence, the intention of the consumer
is not the foundation for invoking powers of the competent
authority and passing of an order of assessment under Section F
126 of the Act.
(iii) Whenever a consumer commits the breach of the terms of
the agreement, Regulations and the provisions of the Act by
consuming electricity in excess of the sanctioned/connected
load, such consumer would be in blame and under liability to
G
pay at the rate equal to twice the tariff applicable for the
relevant category of services in terms of Section 126 of the
Act.
(iv) The term ‘tariff ’ in Section 126(6) of the Act includes both
fixed charges and charges for the electricity supplied, which
H
106 SUPREME COURT REPORTS [2022] 9 S.C.R.
A has to be assessed in the case of a consumer indulged in
unauthorised use of electricity, at a rate equal to twice the
tariff applicable for the relevant category of services specified
in sub-section (5).
(v) In case of unauthorised use of electricity in a higher tariff,
B such assessment shall be made at the rate equal to twice the
tariff applicable for the relevant category of services
attracting such higher tariff for which electricity supplied was
unauthorisedly used and not the relevant category of service
to which the consumer belongs.
C (vi) However, in the case of a consumer, who is blamed with
overdrawal of electricity in excess of sanctioned/connected
load in the very same premises and for the very same purpose,
which do not involve any change in tariff applicable for the
relevant category of services, which consumption has already
been metered and paid by the consumer, since such usage
D being not by any artificial means or through a tampered meter,
assessment under Section 126(6) of the Act can only be equal
to twice the fixed charges payable and such consumer cannot
be saddled with the liability to pay twice the energy charges
applicable for the relevant category of services, unless
E regularisation of such additional connected load or
enhancement of contract demand necessitates upgradation
of the existing distribution system or enhancement of voltage
level of supply.
(vii) In all other cases falling under Explanation (b) to Section
F 126 of the Act, the assessing officer is empowered to assess
unauthorised use of electricity at the rate prescribed in Section
126(6) and for the period specified in Section 126(5), as
amended by the Electricity (Amendment) Act, 2007 for both
fixed charges and energy charges. Penalty charges for current
charges shall be levied for proportionate energy charge and
G normal current charge collected shall be deducted.
(viii) Though Regulation 51(1) of the Conditions of Supply,
2005 employs the term ‘penalised’, what is contemplated
under the said Regulation is only assessment of unauthorised
use of electricity in terms of Section 126 of the Act for the
H
KERALA STATE ELECTRICITY BOARD & ORS. v. THOMAS 107
JOSEPH [J. B. PARDIWALA, J.]
period specified in Section 126(5) and at the rate specified A
in Section 126(6) of the Act. As such, Regulation 51(1) of the
Conditions of Supply, 2005 is neither ultra vires the provisions
of Section 126 of the Act nor unenforceable.
(ix) What is contemplated under Board Order dated 7.2.2008
is only assessment of unauthorised use of electricity in terms B
of Section 126 of the Act, as amended by the Electricity
(Amendment) Act, 2007, for the period specified in Section
126(5) and at the rate specified in Section 126(5) of the Act.
As such, the said Board Order is neither ultra vires the
provisions of Section 126 of the Act nor unenforceable.”
C
(Emphasis supplied)
10. Thus, the High Court, as evident from para 31(vi) as above,
took the view that ‘unauthorised additional load’ in the same premises
and under the same tariff shall not be reckoned as ‘unauthorised use of
electricity’ except in cases of consumers billed on the basis of the D
connected load. The High Court took such view, relying upon Regulation
153(15) of the Kerala Electricity Supply Code, 2014 (for short, ‘the Code
2014’).
11. The appellant Board being dissatisfied with the judgment and
order passed by the High Court, preferred review applications in the E
individual writ petitions filed by the consumers. The review applications
also came to be rejected, wherein, the High Court held as under:
“10. What follows from the above is that, in order to come within
the purview of clause (vi) of Para.31 of the judgment, a consumer
who is blamed with overdrawal of electricity in excess of F
sanctioned/connected load must satisfy the following conditions;
(i) Such overdrawal of electricity should be in the very same
premises and for the very same purpose, which do not involve
any change in tariff applicable for the relevant category of
services;
G
(ii) Such consumption must have already been metered and
paid by the consumer, since such usage being not by any
artificial means or through a tampered meter; and
(iii) Regularisation of such additional connected load or
enhancement of contract demand should not necessitate H
108 SUPREME COURT REPORTS [2022] 9 S.C.R.
A upgradation of the existing distribution system or
enhancement of voltage level of supply.”
12. Being dissatisfied with the judgment and order passed by the
High Court in the main matter as well as the order passed in the review
applications, the appellant Board has come up with the present appeals.
B SUBMISSIONS ON BEHALF OF THE APPELLANT
BOARD
13. Mr. R. Basant, the learned Senior Counsel appearing for the
appellant Board vehemently submitted that the High Court committed a
serious error in deciding the issue in question by relying upon Regulation
C 153(15) of the Code 2014. He pointed out that the State Regulations
have been enacted in exercise of the powers conferred under Section
50 read with Section 181 of the Act 2003. The principal argument of Mr.
Basant is that while framing Regulation 153(15), the Kerala State
Electricity Regulatory Commission (“Commission”) could be said to have
D transgressed into the realm of Section 126 of the Act 2003 which is not
provided for either under Section 50 or Section 181. In other words,
the argument of the learned Senior Counsel is that if Section 50 and
Section 181 resply, of the Act are read closely, then, the two Sections do
not provide any power for such clarification/explanation. The learned
Senior Counsel invited the attention of this Court to Regulation 153(15)
E which provides that an unauthorised additional load in the same premises
and under the same tariff shall not be reckoned as ‘unauthorised use of
electricity’ except in cases of consumers billed on the basis of connected
load.
14. The learned Senior Counsel further submitted that the regulation
F making power cannot be used to bring into existence substantive rights
which are not contemplated under the Act 2003.
15. The learned Senior Counsel invited the attention of this Court,
to a three- Judge Bench decision of this Court in the case of Executive
Engineer, Southern Electricity Supply Company of Orissa Limited
G (Southco) and Another v. Sri Seetaram Rice Mill reported (2012) 2
SCC 108, wherein, this Court in clear terms has said that cases of excess
load consumption other than the connected load would fall within the
Explanation (b)(iv) to Section 126 Act 2003.
16. The learned Senior Counsel would argue that this Court in
H Seetaram Rice Mill (supra) has said so many words that Section 126 of
KERALA STATE ELECTRICITY BOARD & ORS. v. THOMAS 109
JOSEPH [J. B. PARDIWALA, J.]
the Act 2003 is a complete code in itself. Consumption in excess of A
sanctioned/connected load is unauthorised use under Section 126 of the
Act 2003. Such an act of consumption in excess of the sanctioned/
connected load is prejudicial to the public at large, as the same would
affect the entire system.
17. The learned Senior Counsel further submitted that the finding B
of the High Court in para 31(vi) of the impugned judgment is erroneous
and if upheld may result in the entire collapse of the grid. He would
argue that the appellant Board needs to plan its affairs and ensure that it
is able to supply the required electricity to its consumers. The connected
load/contracted load ensures that the Board knows how much electricity
is to be supplied to each consumer. C
18. The learned senior counsel further submitted that the
overdrawal of excess electricity from the grid would result into a penalty
to the Board, while purchasing electricity from the Central grid. The
connected load is calculated based on the number of devices connected
by the consumer at its premises. The same would become evident during D
inspection. Therefore, if the consumer agrees for a connected load of 10
KW and thereafter, connects many more devices resulting in the
connected load, becoming 20 KW, the same would amount to ‘unauthorised
use of electricity’ under Section 126(6) of the Act 2003 in accordance
with the dictum laid by this Court in Seetaram Rice Mill (supra). E
19. The learned Senior Counsel made us understand something
important. According to Mr. Basant, the finding of the High Court that it
becomes unauthorised use only if the said usage leads to necessitation
of upgradation of the system, could be termed as perverse as the same
will end up penalising only the last consumer responsible for causing the F
disruption of distribution system and not the collective lot of consumers
who are also unauthorised users. The learned Senior Counsel submitted
that the collapse of the system would be as a result of many consumers
drawing electricity in excess of the connected load/ contracted load and
therefore, to penalise only the last consumer/customer for the collapse
of the system would be unworkable and would not act as a deterrent for G
the consumers from drawing excess electricity.
20. In such circumstances referred to above, Mr. Basant, the
learned Senior Counsel prays that there being merit in his appeals, those
may be allowed and the impugned judgment and order passed by the
H
110 SUPREME COURT REPORTS [2022] 9 S.C.R.
A High Court to the extent, it relies upon Regulation 153(15) of the Code
2014 may be set aside.
SUBMISSIONS ON BEHALF OF THE RESPONDENT
(CONSUMERS)
21. The submissions canvassed on behalf of the respondent
B (consumers) may be summarised, as under:-
1. The learned counsel appearing for the respondent (consumers)
vehemently submitted that no error not to speak of any error of
law could be said to have been committed by the High Court in
taking the view that if the overdrawal of electricity is detected in
C the same premises and for the very same purpose, then, the same
would not amount to unauthorised use of electricity within the
meaning of Section 126 of the Act 2003.
2. Moreover, the Regulation 153 of the 2014 Code deals with
estimation and regularisation of unauthorised additional load. The
D regulation defines the threshold for the additional loads to be
considered as unauthorised additional load. It is also provided that
the licensee may, suo motu or on an application from the consumer,
regularise such additional load mentioned in clause (a) and clause
(b) of Regulation 153(4).
E 3. Regulation 153(15) provides further that the unauthorised
additional load in the same premises and under the same tariff
shall not be reckoned as unauthorised use of electricity, except in
the case of consumers billed on the basis of connected load.
Regulation 153(15) of the Code 2014 has undergone amendment
F by way of the Kerala Electricity Supply (Amendment) Code 2016,
which came into force on 04.02.2016, by adding the words ‘except
in the case of consumers billed on the basis of connected load’ at
the end of that sub-regulation. Such an amendment was made
when it was found that, the application of Regulation 153(15) to
the consumers who are charged on connected load basis, would
G result in the licensees incurring financial loss in as much as, for
the additional connected load the licensees are entitled for charges
demanded on connected load basis. Even this amendment as on
date is sought to be rendered nugatory by the appellant Board
with its plea to strike down the Regulation (s) as ultra vires.
H
KERALA STATE ELECTRICITY BOARD & ORS. v. THOMAS 111
JOSEPH [J. B. PARDIWALA, J.]
4. To understand the letter and spirit of the impugned judgment it A
is imperative to note that at paragraph 26 of the impugned
judgement, the High Court has observed that as far as domestic
consumers are concerned, the fixed charges are imposed at a
specified rate irrespective of the connected load or the energy
charges for actual consumption. It is stated by the Court that
B
even if there is excess connected load in the premises of a domestic
consumer, the electricity charges realisable from the consumer
do not change and as such, additional connected load would not
result in any financial loss to the licensee. Essentially the domestic
consumer would have to pay for the actual energy consumed.
Notably, there is no variation in the fixed charges. C
5. The Regulations in the Code 2014 seek to contextualise the
Act 2003 to the prevalent local conditions and a conjoint (purposive)
reading of the Act and the Code is paramount. Any other reading
(including reading as ultra vires) renders the Code 2014 an empty
vessel. The aforesaid reasoning of the High Court does not supplant D
the provisions of either Section 126 or Section 135, but only seeks
to supplement the same, by reading (in conjunction) the relevant
Regulations of the Code 2014.
6. Regulation 2(24) of the Code 2014 states that “connected load”
expressed in KW or KVA means aggregate of the rated capacities E
of all energy consuming devices or apparatus which can be
simultaneously used, excluding the standby load if any, in the
premises of the consumer, which are connected to the service
line of the distribution licensee. Regulation 2(78) defines
‘unauthorised connected load’ to mean the connected load in
excess of the contract connected load and Regulation 2(79) defines F
‘unauthorised use of electricity’ to mean the usage of
electricity as explained in Section 126 of the 2003 Act. As shall
be shown Regulation 2(78) is connected load which is in excess
of [Regulation 2 (24)]. And Regulation 2(78) is unauthorised use
of electricity. The distinction is crucial and has been analysed by G
the High Court at Para 5.18 of the impugned judgment.
7. The High Court was well within its scope when it rendered the
Regulations intra vires. This Court has emphasised that the
Legislature and its delegate are the sole repositories of the power
to take decisions. Further, there is no scope of interference by the H
112 SUPREME COURT REPORTS [2022] 9 S.C.R.
A Court unless the particular provision impugned suffers from (i)
any legal infirmity, or (ii) being wholly beyond the scope of
regulation-making power, or (iii) being inconsistent with any of
the provisions of the parent enactment. The impugned judgment
of the High Court correctly read and applied the law in the light of
the settled judicial position.
B
8. The stance of the appellant Board that the regularisation is
ultra vires, is against its very own Full Board decision. A Full
Board of the KSEB, as early as on 27.07.2002 decided to modify
Regulation 42(d) of the Conditions of Supply, 1990 for relaxation
of penalty in the case of unauthorised additional loads in the
C following manner:
(i)[...]
(ii) In the case of LT customers other than domestic consumers,
the penalty for unauthorised additional load shall be levied
D at the rate of twice the fixed charges per KW of additional
load per month or part thereof till the said unauthorised
additional load is removed or regularised as per rules.
(iii) In the case of HT and EHT consumers the penalty for
unauthorised additional load shall be levied at the rate of
E twice the demand charges per KVA for the additional load till
the said unauthorised additional load is removed or
regularised as per rules.
9. In such circumstances referred to above, learned counsel
appearing for the respondent (consumers) prayed that there being no
F merit in the appeals filed by the appellant Board, those may be dismissed.
SUBMISSIONS ON BEHALF OF THE KERALA STATE
ELECTRICITY REGULATORY COMMISSION
(RESPONDENT NO. 3)
22. It is submitted on behalf of the Commission i.e., respondent
G No. 3 in SLP (C) No. 7886-7887 of 2018, that there are two kinds of
billing contemplated:
(a) Connected load based billing – in case of connected load based
billing, if additional/excess load is connected, then the same
would be treated as unauthorised use. The same is indicated
H in Regulation 153(15) itself, as amended on 11.01.2016.
KERALA STATE ELECTRICITY BOARD & ORS. v. THOMAS 113
JOSEPH [J. B. PARDIWALA, J.]
(b) Contract demand based billing – It is submitted however that A
in case of contract demand based billing, connecting additional
load will not amount to “unauthorised use” under Section
126 of the Act.
23. It is further submitted that contract demand is the maximum
demand that is agreed to be supplied by the licensee to the consumer. B
The same is indicative of the maximum load that can be drawn at the
premises of the consumer at any given point of time. It is possible that
the maximum demand of a consumer may be higher than the contract
demand at any given point of time. However, as per Regulation 153(15),
such excess demand will not be construed as unauthorised use of
electricity. Rather, Regulation 101 of the Code 2014 provides the C
consequences where the maximum demand exceeds the contract
demand. The said regulation stipulates that if the maximum demand
exceeds the contract demand in 3 billing periods during the previous
financial year, the distribution licensee shall issue a notice of enhancement
of contract demand to such consumer. Furthermore, as already indicated, D
the present Tariff Order provides that where maximum demand exceeds
contract demand, the Fixed/Demand Charges will be collected at 150%
of the applicable demand charges for such excess demand. Insofar as
Energy Charges are concerned, the consumer would be billed as per
actual usage. Furthermore, as per Regulation 153(12) of the Code 2014
where the infrastructure does not allow for the excess load of a consumer E
to be regularised or the contract demand to be enhanced, such consumers
are required to disconnect such load or restrict their demand to the contract
limit, failing which supply of electricity can be disconnected. Therefore,
the Code 2014 and the Tariff Order adequately address concerns of
both (i) revenue loss; and (ii) infrastructural constraints in cases of excess F
load / excess demand. The exception is where such excess load/ excess
demand results in change of purpose or change of tariff, in which case,
it would fall within the ambit of Section 126 of the Act 2003. It is relevant
to point out that there is no challenge to the vires of any of the provisions
of the Code 2014 in the present proceedings.
G
24. It is further submitted that the observations of this Court in
Seetaram Rice Mill (supra) were made specifically in the context of
the Orissa Electricity Regulatory Commission Distribution (Conditions
of Supply) Regulations, 2004 and the Standard Agreement Form for
Supply of Electrical Energy by the Grid Corporation of Orissa Ltd. The
H
114 SUPREME COURT REPORTS [2022] 9 S.C.R.
A observations made in the said judgement cannot be uniformly applied to
the present matter. The Explanation to Section 126 of the Act 2003 is
reproduced as below (emphasis supplied):
“Explanation.- For the purposes of this section,- (b)”unauthorised
use of electricity” means the usage of electricity-
B (i) by any artificial means; or
(ii) by a means not authorised by the concerned person or
authority or licensee; /or
(iii) through a tampered meter; or
C (iv) for the purpose other than for which the usage of electricity
was authorised; or
(v) for the premises or areas other than those for which the
supply of electricity was authorized.”
25. It is evident that insofar as Kerala is concerned, the Code
D
2014 specifically provides a certain leeway for excess load / excess
demand, within the same premises and under the same tariff, subject to
the rigours of Regulation 101 and Regulation 153, and penal demand
charges at 1.5 times the regular rates in respect of the excess demand
under the relevant Tariff Order. It is submitted that the supply regulations
E applicable to the State of Orissa may not be applied in a straitjacketed
manner to Kerala. Each State has its own generation, supply and
distribution capacities and other relevant considerations before the Supply
Code regulations are framed by the respective State Commissions.
26. In such circumstances referred to above, the learned counsel
F appearing for the Commission prayed that there being no merit in the
appeals filed by the Board, those may be dismissed.
ANALYSIS
27. Having heard the learned counsel for the parties and having
gone through the materials on record, the only question that falls for our
G consideration is whether the High Court committed any error in passing
the impugned judgment and order more particularly, the finding recorded
in para 31(vi) of the impugned judgment?
28. It is necessary for us to clarify at this stage itself that the
appeals have been filed by the appellant Board, essentially, being
H
KERALA STATE ELECTRICITY BOARD & ORS. v. THOMAS 115
JOSEPH [J. B. PARDIWALA, J.]
aggrieved and dissatisfied with the finding recorded by the High Court in A
para 31(vi) of the impugned judgment. The High Court, over and above
para 31(vi), has dealt with many other issues arising between the parties.
There is no cross appeal at the instance of any of the consumers. We
propose to look into and decide only the legality and validity of the finding
recorded by the High Court so far as para 31(vi) is concerned. We shall
B
not go into any other issue decided by the High Court other than para
31(vi).
29. Before adverting to the rival submissions canvassed on either
side, we must look into the scheme and various relevant provisions of
the Act 2003 as well as the Code 2014 framed by the Commission in
exercise of the powers conferred by the Section 50 read with Section C
181 of the Act 2003.
ELECTRICITY ACT, 2003
30. Before the enactment of the Act 2003, the Indian electricity
sector was governed by the Indian Electricity Act, 1910, the Electricity D
(Supply) Act, 1948 and the Electricity Regulatory Commissions Act, 1998.
The Indian Electricity Act, 1910 created a basic framework for the
electricity supply industry in India. The Electricity (Supply) Act, 1948
mandated the creation of State Electricity Boards, which had the
responsibility of facilitating supply of electricity within states. However,
the State Electricity Boards were unable to use their power to fix tariffs E
judiciously. It was noted that the State Governments were in practice
fixing tariffs. To distance the State Governments from the exercise of
tariff fixation, the Electricity Regulatory Commissions Act, 1998 was
enacted.
31. Parliament enacted the Act 2003 to consolidate the laws relating F
to generation, transmission, distribution, trading and use of electricity; to
develop the electricity industry; and to promote competition. The Act
2003 was enacted with the objective of encouraging the participation of
the private sector in the generation, transmission, and distribution of
electricity, and to harmonise and consolidate the provisions into a self- G
contained code. The Statement of Objects of Reasons for the Act 2003
reads as follows :
“With the policy of encouraging private sector participation in
generation, transmission and distribution and the objectives of
distancing the regulatory responsibilities from the Government to
H
116 SUPREME COURT REPORTS [2022] 9 S.C.R.
A the Regulatory Commissions, the need for harmonising and
rationalising the provisions of the Electricity Act 1910, the Electricity
(Supply) Act 1948 and the Electricity Regulatory Commissions
Act 1948 in a new self-contained comprehensive legislation arose.”
32. The long title of the Act 2003 indicates that its object is to
B consolidate the laws relating to generation, transmission, distribution,
trading, and use of electricity and to take measures conducive to the
development of the electricity industry; promote competition and protect
the interests of consumers; ensure the supply of electricity to all areas;
rationalise electricity tariffs and ensure transparent policies. The
Statement of Objects and Reasons of the Act 2003 states that “it gives
C the States enough flexibility to develop their power sector in the manner
they consider appropriate.”
33. Section 3 of the Act 2003 provides for the formulation of a
National Electricity Policy and National Tariff Policy:
D “3. National Electricity Policy and Plan.—(1) The Central
Government shall, from time to time, prepare the National Electricity
Policy and tariff policy, in consultation with the State Governments
and the Authority for development of the power system based on
optimal utilisation of resources such as coal, natural gas, nuclear
substances or materials, hydro and renewable sources of energy.
E
(2) The Central Government shall publish National Electricity
Policy and tariff policy from time to time.
(3) The Central Government may, from time to time, in
consultation with the State Governments and the Authority,
F review or revise, the National Electricity Policy and tariff
policy referred to in sub-section (1) .
(4) The Authority shall prepare a National Electricity Plan in
accordance with the National Electricity Policy and notify
such plan once in five years:
G Provided that the Authority while preparing the National
Electricity Plan shall publish the draft National Electricity
Plan and invite suggestions and objections thereon from
licensees, generating companies and the public within such
time as may be prescribed:
H
KERALA STATE ELECTRICITY BOARD & ORS. v. THOMAS 117
JOSEPH [J. B. PARDIWALA, J.]
Provided further that the Authority shall – A
(a) notify the plan after obtaining the approval of the Central
Government;
(b) revise the plan incorporating therein the directions, if any,
given by the Central Government while granting approval
under clause (a). B
(5) The Authority may review or revise the National Electricity
Plan in accordance with the National Electricity Policy.”
In terms of the above provision, the Union Government has to
formulate the National Electricity Policy and National Tariff Policy, in C
consultation with the State Governments and the Central Electricity
Authority.
34. Part III of the Act 2003 deals with the generation of the
electricity; Part IV deals with licensing; Part V with transmission; Part
VI with distribution and Part VII with tariff. D
35. Section 38 of the Act 2003 provides that the Central
Government may notify any government company as the Central
Transmission Utility (CTU). The CTU is statutorily empowered to
undertake the transmission of electricity through inter-State transmission
systems. The CTU has to also discharge functions of planning and
E
coordination relating to inter-State transmission systems. For this purpose,
the CTU is required to coordinate with the State Transmission Utility
(STU), Central and State Governments, generating companies, authorities
and licensees.
36. Section 39 of the Act 2003 stipulates that the State Government
F
may notify the Board or any government company as the STU. The
STU shall undertake transmission of electricity through the intra-State
transmission system and discharge functions relating to the planning and
coordination of the intra- State transmission system. While discharging
its functions, the STU is required to reflect the planning initiatives of
intra-State transmission system by publishing a five-year plan periodically. G
37. Sections 76 and 82 of the Act 2003 constitute the Central
Electricity Regulatory Commission and State Electricity Regulatory
Commission respectively. The Central and State Electricity Regulatory
Commissions shall among other functions, determine and regulate the
tariff for inter-State transmission of electricity and intra-State transmission H
118 SUPREME COURT REPORTS [2022] 9 S.C.R.
A of electricity respectively. Sections 79(3) & (4) and 86(3) & (4) of the
Act 2003 stipulate that the Central and State Commissions shall while
discharging their functions ensure transparency, and ‘shall be guided’ by
the National Electricity Policy, National Electricity Plan and Tariff Policy.
The Central and State Commissions also discharge advisory functions,
whereby they advise the Central Government and State Government
B
respectively on, inter alia, promotion of competition in activities related
to the electricity industry and in matters concerning generation,
transmission, and distribution of electricity. Section 25 states that the
Central Government may make a region-wise demarcation of the country
for the purpose of integrated transmission of electricity to facilitate inter-
C State, regional and inter-regional transmission of electricity. Section 30
provides that the State Commission shall facilitate and promote
transmission, wheeling and inter- connection arrangements within its
territorial jurisdiction for the transmission and supply of electricity.
38. Section 14 of the Act 2003 envisages that the Appropriate
D Commission, defined in Section 2(4) to mean the Central or as the case
may be the State Regulatory Commission, may grant a licence to any
person:
(a) to transmit electricity as a transmission licensee; or
(b) to distribute electricity as a distribution licensee; or
E
(c) to undertake trading in electricity as an electricity trader, in any
area as may be specified in the licence.
39. Section 15 of the Act 2003 prescribes the procedure to be
followed for the grant of licence. The application for a licence under
F Section 14 has to be filed in such a form and in such manner as may be
prescribed by the Appropriate Commission. The person who has applied
for the grant of a licence must publish a notice of the application. The
licence shall not be granted by the Appropriate Commission until the
objections, if any received, are considered by the Appropriate Commission.
The application shall also be forwarded to the CTU or the STU, as the
G case may be. The CTU or STU must send its recommendations to the
Appropriate Commission. The recommendations of the CTU or the STU
are however, not binding on the Appropriate Commission. The Appropriate
Commission is also required to publish a notice of the application if it
proposes to issue the licence. The Appropriate Commission has to
H
KERALA STATE ELECTRICITY BOARD & ORS. v. THOMAS 119
JOSEPH [J. B. PARDIWALA, J.]
consider the objections and the recommendations of the Transmission A
Utility before granting the licence.
40. In enacting the above provisions of law, the Parliament has
made a clear demarcation between intra-state and inter-state transmission
of electricity. While the CTU, Central Government and the Central
Regulatory Commission are responsible for the facilitation of inter-state B
transmission of electricity, the State Commission and the STU have been
granted full autonomy with respect to intrastate transmission of electricity.
41. Part VII of the Act 2003 deals with Tariff. Part VII comprises
of Section 61(Tariff regulations), Section 62 (Determination of tariff),
Section 63 (Determination of tariff by bidding process), Section 64 C
(Procedure for tariff order), Section 65 (Provision of subsidy by the State
Government) and Section 66 (Development of market). In terms of
Section 61, the Appropriate Commission is entrusted, subject to the
provisions of the Act 2003, to specify the terms and conditions for the
determination of tariff. While specifying the terms and conditions, the
Appropriate Commission shall be guided by the requirements specified D
in clauses (a) to (i). Amongst them, in clause (i) is the National Electricity
Policy and tariff policy, while clause (c) emphasises the need to
encourage competition, efficiency, economical use of the resources, good
performance and optimum investments. Section 62(1) empowers the
Appropriate Commission to determine the tariff “in accordance with E
the provisions of this Act” for :
a. supply of electricity by a generating company to a distribution
licensee;
b. transmission of electricity;
F
c. wheeling of electricity;
d. retail sale of electricity.
Section 63 provides that notwithstanding anything contained in
Section 62, the Appropriate Commission shall adopt the tariff determined
through the bidding process if the tariff has been determined through a G
transparent process in accordance with the guidelines issued by the
Central Government.
42. However, what is relevant for our purpose is Section 50, Section
126 and Section 181 resply of the Act 2003. Section 50 is in regard to the
Electricity Supply Code. The same reads thus: H
120 SUPREME COURT REPORTS [2022] 9 S.C.R.
A “50. The Electricity Supply Code.–The State Commission shall
specify an Electricity Supply Code to provide for recovery of
electricity charges, intervals for billing of electricity charges,
disconnection of supply of electricity for non-payment thereof,
restoration of supply of electricity, measures for preventing
tampering, distress or damage to electrical plant or electrical line
B
or meter, entry of distribution licensee or any person acting on his
behalf for disconnecting supply and removing the meter, entry for
replacing, altering or maintaining electric lines or electrical plants
or meter and such other matters.”
43. Section 126 falls in Part XII of the Act 2003. Part XII is in
C regard to investigation and enforcement. Section 126 provides for
assessment. Section 126 reads thus:
“126. Assessment.–(1) If on an inspection of any place or
premises or after inspection of the equipments, gadgets, machines,
devices found connected or used, or after inspection of records
D maintained by any person, the assessing officer comes to the
conclusion that such person is indulging in unauthorised use of
electricity, he shall provisionally assess to the best of his judgment
the electricity charges payable by such person or by any other
person benefited by such use.
E (2) The order of provisional assessment shall be served upon
the person in occupation or possession or in charge of the
place or premises in such manner as may be prescribed.
(3) The person, on whom an order has been served under
sub- section (2), shall be entitled to file objections, if any,
F against the provisional assessment before the assessing officer,
who shall, after affording a reasonable opportunity of hearing
to such person, pass a final order of assessment within thirty
days from the date of service of such order of provisional
assessment, of the electricity charges payable by such person.
G (4) Any person served with the order of provisional assessment
may, accept such assessment and deposit the assessed amount
with the licensee within seven days of service of such
provisional assessment order upon him.
(5) If the assessing officer reaches to the conclusion that
H unauthorised use of electricity has taken place, the assessment
KERALA STATE ELECTRICITY BOARD & ORS. v. THOMAS 121
JOSEPH [J. B. PARDIWALA, J.]
shall be made for the entire period during which such A
unauthorised use of electricity has taken place and if, however,
the period during which such unauthorised use of electricity
has taken place cannot be ascertained, such period shall be
limited to a period of twelve months immediately preceding
the date of inspection.
B
(6) The assessment under this section shall be made at a rate
equal to twice the tariff applicable for the relevant category
of services specified in sub-section (5).
Explanation.%For the purposes of this section,—
(a) “assessing officer” means an officer of a State C
Government or Board or licensee, as the case may be,
designated as such by the State Government;
(b) “unauthorised use of electricity” means the usage of
electricity%
D
(i) by any artificial means; or
(ii) by a means not authorised by the concerned person
or authority or licensee; or
(iii) through a tampered meter; or
(iv) for the purpose other than for which the usage of E
electricity was authorised; or
(v) for the premises or areas other than those for which the
supply of electricity was authorised.”
44. Section 181 of the Act 2003 confers powers to the State F
Commissions to frame regulations. Section 181(2)(x) reads thus:
“181. Powers of State Commissions to make regulations.—
xx xx xx
(2) In particular and without prejudice to the generality of the
G
power contained in sub-section (1), such regulations may provide
for all or any of the following matters, namely:-
xx xx xx
(x) electricity supply code under section 50;….”
H
122 SUPREME COURT REPORTS [2022] 9 S.C.R.
A 45. We shall now look into the Code 2014. Regulation 1 reads
thus:
“1. Short title, extent and commencement. - (1) This Code
shall be called the Kerala Electricity Supply Code, 2014.
(2) This Code shall be applicable to,-
B
(i) all distribution licensees including deemed licensees and
all consumers and users in the State of Kerala; and
(ii) all other persons and institutions who are exempted under
Section 13 of the Act.
C (3) It shall come into force with effect from the first day of
April, 2014.”
46. Regulation 2 provides for the definitions. The phrase ‘contracted
connected load’ as defined under Regulation 2(27) reads thus:
“2. Definitions. - In this Code, unless it is repugnant to the
D
context,-
xx xx xx
(27) “contracted connected load” means the connected load
installed by the consumer at the time of executing the service
E connection agreement and recorded in kW / kVA in the
schedule to the said agreement or the connected load duly
revised thereafter;”
47. Regulation 2(28) defines the terms ‘contracted load’ or
‘contract demand’. The same reads thus:
F “2. Definitions.- In this Code, unless it is repugnant to the
context,-
xx xx xx
(28) “contracted load” or “contract demand” means the
maximum demand in kW or kVA, agreed to be supplied by the
G
distribution licensee and indicated in the agreement executed
between the licensee and the consumer; or the contracted
load or contract demand duly revised thereafter;”
48. Regulation 2(78) defines the phrase ‘unauthorised connected
load’. The same reads thus:
H
KERALA STATE ELECTRICITY BOARD & ORS. v. THOMAS 123
JOSEPH [J. B. PARDIWALA, J.]
“2. Definitions.- In this Code, unless it is repugnant to the A
context,-
xx xx xx
(78) “unauthorised connected load” means the connected load
in excess of the contracted connected load;”
B
49. Regulation 2(79) defines the phrase ‘unauthorised use of
electricity’. The same reads thus:
“2. Definitions.- In this Code, unless it is repugnant to the
context,-
xx xx xx C
(79) “unauthorised use of electricity” means the usage of
electricity as explained in Section 126 of the Act;”
50. Regulation 153 falls within Chapter IX of the Code 2014.
Chapter IX is in respect of theft, unauthorised use and other irregularities.
The Regulation 153 reads thus: D
“153. Estimation and regularisation of unauthorised
additional load.-(1) If it is detected, on inspection, that
additional load in excess of the sanctioned load has been
connected to the system without due sanction from the licensee,
further action shall be taken in accordance with the following E
subregulations.
(2) The difference between the total connected load in the
premises of the consumer at the time of inspection and the
sanctioned load of the consumer shall be reckoned as
unauthorised additional load.
F
(3) Connected load shall be determined as per the following
clauses:-
(a) the rated capacities of all energy consuming devices and
apparatus which can be simultaneously used, excluding stand-
by load if any, in the premises of the consumer and found G
connected to the system shall be considered for estimating the
total load of the consumer;
(b) while estimating the total load of a consumer, the loads of
the following equipment and apparatus shall not be taken
into account:-
H
124 SUPREME COURT REPORTS [2022] 9 S.C.R.
A i. standby equipment of consumers, when they are operated
through a change over switch;
ii. firefighting equipment;
iii. un-interrupted power supply equipment (UPS), switch
mode power supply system (SMPS), transformer, voltage
B stabilizer, inverter, rectifier and measuring devices:
Provided that the rated capacities of the equipment and
apparatus connected to the UPS or SMPS or voltage stabilizer
or inverter or rectifier shall be considered for computation of
the connected load.
C
(4) (a) If the additional load in the case of domestic consumers
is of and below twenty percent of the sanctioned load it shall
not be reckoned as unauthorised additional load.
(b) If the additional load in the case of other consumers is of
D and below ten percent of the sanctioned load, it shall not be
reckoned as unauthorised additional load.
(c) The licensee may, suo motu or on application from the
consumer, regularise such additional load mentioned in clause
(a) and clause (b) above.
E (5) When the load in excess of sanctioned load exceeds the
limit as provided in subregulation (4) above, the entire load
in excess of the sanctioned load shall be treated as
unauthorised additional load, if express sanction or deemed
sanction under clause (c) of subregulation (4) has not been
obtained for it.
F
(6) In the case of consumers billed under demand based tariff,
the total load declared in the test cum completion report of the
installation of the consumer, submitted at the time of availing
connection or the load mentioned in the energisation
approval granted by the Electrical Inspector or the load at
G the time of revising contract demand or revising the connected
load may be taken as the sanctioned connected load.
(7) If it is found that any additional load has been connected
without due authorisation from the licensee or in violation
of any of the provisions of the Central Electricity Authority
H (Measures relating to safety and electric supply) Regulations,
KERALA STATE ELECTRICITY BOARD & ORS. v. THOMAS 125
JOSEPH [J. B. PARDIWALA, J.]
2010, as amended from time to time, the licensee shall direct A
the consumer to disconnect forthwith such additional load
and the consumer shall comply with such direction, failing
which the supply of electricity to the consumer shall be
disconnected by the licensee.
(8) If it is found that no additional load has been connected B
and recorded maximum demand has been exceeded, the demand
charges may be collected for the recorded maximum demand
at the rates as approved by the Commission and steps may be
initiated to enhance the contract demand as specified in
regulation 99 of the Code.
C
(9) If it is found that additional load has been connected
without any increase in the contract demand, steps may be
initiated to regularise the connected load in accordance with
the provisions in the agreement within a time frame as
stipulated by the licensee.
D
(10) If it is found that additional load has been connected
without due authorisation from the licensee and contract
demand has been exceeded, steps may be initiated to
regularise the additional load and to enhance the contract
demand in addition to collection of demand charges as per
the agreement conditions, for the recorded maximum demand E
at the rates approved by the Commission:
Provided that such regularisation of additional load and
enhancement of contract demand shall be done only after
ensuring that wiring has been done in conformity with the
provisions of Central Electricity Authority (Measures relating F
to safety and electric supply) Regulations, 2010 as amended
from time to time.
(11) The proceedings specified in subregulations (9) and (10)
above, are applicable in the cases where the regularisation
of unauthorised connected load or enhancement of contract G
demand will not necessitate enhancement of voltage level of
supply or upgradation of the existing distribution system or
both.
(12) In case such regularisation of unauthorised connected
load or enhancement of contract demand will necessitate
upgradation of the existing distribution system or H
126 SUPREME COURT REPORTS [2022] 9 S.C.R.
A enhancement of voltage level of supply, the licensee shall direct
the consumer to disconnect forthwith such additional load
and to restrict the contract demand within the agreed limit
and the consumer shall comply with such direction, failing
which the supply of electricity to the consumer shall be
disconnected by the licensee.
B
(13) The regularisation of unauthorised additional load as
per the subregulations (9) and (10) above shall be subject to
realisation of a fee at the rates notified by the Commission in
schedule 1 of the Code.
C (14) The provisions relating to unauthorised additional load
in subregulations (1) to (13) above shall not be applicable to
any domestic consumer if his total connected load including
the additional load detected is of and below 10kW.
(15) Unauthorised additional load in the same premises and
D under same tariff shall not be reckoned as ‘unauthorised use
of electricity’.”
51. We shall now look into the decision of this Court in the case of
Seetaram Rice Mill (supra).
52. The respondent in Seetaram Rice Mill (supra) was a
E partnership firm engaged in the production of rice. For supply of
electricity, it had entered into an Agreement dated 09.12.1997 with the
appellant therein. The respondent therein was classified as ‘Medium
industry’ category, which dealt with contract demand of 99 KVA and
above but below 110 KVA. On 10.06.2009, the Executive Engineer,
Jeypore Electrical Division and SDO, Electrical MRT Division, Jeypore
F
inspected the business premises of the respondent’s unit and dump was
conducted. On 25.07.2009, provisional assessment order was issued by
the appellant therein to the respondent therein. Intimation was issued to
the respondent therein that there was unauthorised use of electricity
falling squarely within the ambit of Section 126 of the Act 2003. In the
G dump report, it was stated that there was unauthorised use of electricity
and maximum demand had been consumed upto 142 KVA. On this basis,
the provisional assessment order was passed by taking the contracted
demand as that applicable to large industry. The respondent therein did
not file objections but challenged the provisional assessment order on
H
KERALA STATE ELECTRICITY BOARD & ORS. v. THOMAS 127
JOSEPH [J. B. PARDIWALA, J.]
the ground of lack of authority and jurisdiction on the part of the Executive A
Engineer to frame the provisional assessment by alleging unauthorised
use of electricity since 04.06.2008. The respondent therein contended
that since it was classified as medium scale industry, provisional
assessment could not have been made on the basis of the dump charges
relating to large industry. The High Court held that overdrawal of
B
maximum demand would not fall within the scope of ‘unauthorised use
of electricity’ as defined by sub-clause (b) to the Explanation to Section
126 of the said Act. The High Court set aside the provisional assessment
order. While dealing with the challenge to the High Court’s order, this
Court, inter alia, examined the scope of Sections 126, 127 and 135
resply of the said Act against the backdrop of the scheme of the Act C
2003 and summed up its conclusions as under:
“1. Wherever the consumer commits the breach of the terms
of the Agreement, Regulations and the provisions of the Act
by consuming electricity in excess of the sanctioned and
connected load, such consumer would be “in blame and under D
liability” within the ambit and scope of Section 126 of the
2003 Act.
2. The expression “unauthorised use of electricity means” as
appearing in Section 126 of the 2003 Act is an expression of
wider connotation and has to be construed purposively in E
contrast to contextual interpretation while keeping in mind
the object and purpose of the Act. The cases of excess load
consumption than the connected load inter alia would fall
under Explanation (b)(iv) to Section 126 of the 2003 Act,
besides it being in violation of Regulations 82 and 106 of the
Regulations and terms of the Agreement. F
3. In view of the language of Section 127 of the 2003 Act,
only a final order of assessment passed under Section 126(3)
is an order appealable under Section 127 and a notice-cum-
provisional assessment made under Section 126(2) is not
appealable. G
4. Thus, the High Court should normally decline to interfere
in a final order of assessment passed by the assessing officer
in terms of Section 126(3) of the 2003 Act in exercise of its
jurisdiction under Article 226 of the Constitution of India.
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128 SUPREME COURT REPORTS [2022] 9 S.C.R.
A 5. The High Court did not commit any error of jurisdiction in
entertaining the writ petition against the order raising a
jurisdictional challenge to the notice/provisional assessment
order dated 25-07-2009. However, the High Court
transgressed its jurisdictional limitations while travelling into
the exclusive domain of the assessing officer relating to passing
B
of an order of assessment and determining the factual
controversy of the case.
6. The High Court having dealt with the jurisdictional issue,
the appropriate course of action would have been to remand
the matter to the assessing authority by directing the consumer
C to file his objections, if any, as contemplated under Section
126(3) and require the authority to pass a final order of
assessment as contemplated under Section 126(5) of the 2003
Act in accordance with law.”
53. In our opinion, the first two conclusions quoted hereinabove
D completely support the appellant Board. The learned counsel appearing
for the consumers and the Commission tried to distinguish Seetaram
Rice Mill (supra) from the present case on the ground that there was a
change in the classification/category which is not so in this case inasmuch
as here the consumers remain commercial/industrial having LT connection
E and, therefore, there is no issue of unauthorised use within the meaning
of Section 126 of the Act 2003. We see no force in the submission that
change of category would not attract Section 126 of the Act 2003. In
Seetaram Rice Mill (supra), it was contended that only cases of change
of user would be covered under Section 126 of the Act 2003. While
rejecting such contention, this Court clarified that the explanation to
F Section 126 is not exhaustive and any use of electricity which is not
permissible and beyond the contract demand amounts to unauthorised
use of electricity and the blame contemplated under Section 126 of the
Act 2003 is not dependent on whether the overdrawal transgresses into
another tariff category or not. We may quote the relevant paragraphs
G from Seetaram Rice Mill (supra):
“18. It is true that fiscal and penal laws are normally
construed strictly but this rule is not free of exceptions. In
given situations, this Court may, even in relation to penal
statutes, decide that any narrow and pedantic, literal and
H lexical construction may not be given effect to, as the law
KERALA STATE ELECTRICITY BOARD & ORS. v. THOMAS 129
JOSEPH [J. B. PARDIWALA, J.]
would have to be interpreted having regard to the subject- A
matter of the offence and the object that the law seeks to
achieve. The provisions of Section 126, read with Section 127
of the 2003 Act, in fact, become a code in themselves. Right
from the initiation of the proceedings by conducting an
inspection, to the right to file an appeal before the appellate
B
authority, all matters are squarely covered under these
provisions. It specifically provides the method of computation
of the amount that a consumer would be liable to pay for
excessive consumption of the electricity and for the manner
of conducting assessment proceedings. In other words, Section
126 of the 2003 Act has a purpose to achieve i.e. to put an C
implied restriction on such unauthorised consumption of
electricity.
Xxx xxx xxx
22. The relevancy of objects and reasons for enacting an Act
is a relevant consideration for the court while applying various D
principles of interpretation of statutes. Normally, the court
would not go behind these objects and reasons of the Act.
The discussion of a Standing Committee to a Bill may not be a
very appropriate precept for tracing the legislative intent but
in given circumstances, it may be of some use to notice some E
discussion on the legislative intent that is reflected in the
substantive provisions of the Act itself. The Standing Committee
on Energy, 2001, in its discussion said, “the Committee feels
that there is a need to provide safeguards to check the misuse
of these powers by unscrupulous elements”. The provisions
of Section 126 of the 2003 Act are self-explanatory, they are F
intended to cover situations other than the situations
specifically covered under Section 135 of the 2003 Act. This
would further be a reason for this Court to adopt an
interpretation which would help in attaining the legislative
intent. G
Xxx xxx xxx
24. Upon their plain reading, the marked differences in the
contents of Sections 126 and 135 of the 2003 Act are obvious.
They are distinct and different provisions which operate in
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130 SUPREME COURT REPORTS [2022] 9 S.C.R.
A different fields and have no common premise in law. We have
already noticed that Sections 126 and 127 of the 2003 Act
read together constitute a complete code in themselves covering
all relevant considerations for passing of an order of
assessment in cases which do not fall under Section 135 of the
2003 Act.
B
Xxx xxx xxx
37. Wherever the assessing officer arrives at the conclusion
that unauthorised use of electricity has taken place, the
assessment shall be made for the entire period during which
C such unauthorised use of electricity has taken place and if
such period cannot be ascertained, it shall be limited to a
period of 12 months immediately preceding the date of
inspection and the assessment shall be made at the rate equal
to twice the tariff applicable for the relevant category of
service specified under these provisions. This computation
D has to be taken in terms of Sections 126(5), 126(6) and 127
of the 2003 Act. The complete procedure is provided under
these sections. Right from the initiation of the proceedings till
preferring of an appeal against the final order of assessment
and termination thereof, as such, it is a complete code in itself.
E Xxx xxx xxx
44. The unauthorised use of electricity in the manner as is
undisputed on record clearly brings the respondent “under
liability and in blame” within the ambit and scope of Section
126 of the 2003 Act. The blame is in relation to excess load
F while the liability is to pay on a different tariff for the period
prescribed in law and in terms of an order of assessment passed
by the assessing officer by the powers vested in him under
the provisions of Section 126 of the 2003 Act.
Xxx xxx xxx
G
50. In other words, the purpose sought to be achieved is to
ensure stoppage of misuse/unauthorised use of the electricity
as well as to ensure prevention of revenue loss. It is in this
background that the scope of the expression “means” has to
be construed. If we hold that the expression “means” is
H
KERALA STATE ELECTRICITY BOARD & ORS. v. THOMAS 131
JOSEPH [J. B. PARDIWALA, J.]
exhaustive and cases of unauthorised use of electricity are A
restricted to the ones stated under Explanation (b) of Section
126 alone, then it shall defeat the very purpose of the 2003
Act, inasmuch as the different cases of breach of the terms
and conditions of the contract of supply, Regulations and the
provisions of the 2003 Act would escape the liability sought
B
to be imposed upon them by the legislature under the provisions
of Section 126 of the 2003 Act. Thus, it will not be appropriate
for the courts to adopt such an approach.
Xxx xxx xxx
60. The expressions “means”, “means and includes” and C
“does not include” are expressions of different connotation
and significance. When the legislature has used a particular
expression out of these three, it must be given its plain meaning
while even keeping in mind that the use of other two
expressions has not been favoured by the legislature. To put
it simply, the legislature has favoured non-use of such D
expression as opposed to other specific expression. In the
present case, the Explanation to Section 126 has used the
word “means” in contradistinction to “does not include” and/
or “means and includes”. This would lead to one obvious
result that even the legislature did not intend to completely E
restrict or limit the scope of this provision.
61. Unauthorised use of electricity cannot be restricted to the
stated clauses under the Explanation but has to be given a
wider meaning so as to cover cases of violation of terms and
conditions of supply and the Regulations and provisions of F
the 2003 Act governing such supply. “Unauthorised use of
electricity” itself is an expression which would, on its plain
reading, take within its scope all the misuse of the electricity
or even malpractices adopted while using electricity. It is
difficult to restrict this expression and limit its application by
the categories stated in the Explanation. It is indisputable that G
the electricity supply to a consumer is restricted and controlled
by the terms and conditions of supply, the Regulations framed
and the provisions of the 2003 Act.
Xxx xxx xxx
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132 SUPREME COURT REPORTS [2022] 9 S.C.R.
A 64. Minimum energy charges are to be levied with reference
to “contract demand” at the rate prescribed under the terms
and conditions. These clauses of the Agreement clearly show
that the charges for consumption of electricity are directly
relatable to the sanctioned/connected load and also the load
consumed at a given point of time if it is in excess of the
B
sanctioned/connected load. The respondent could consume
electricity up to 110 kVA but if the connected load exceeded
that higher limit, the category of the respondent itself could
stand changed from “medium industry” to “large industry”
which will be governed by a higher tariff.
C 65. Chapter VIII of the Conditions of Supply classifies the
consumers into various categories and heads. The electricity
could be provided for a domestic, LT industrial, LT/HT
industrial, large industry, heavy industries and power
intensive industries, etc. In terms of Regulation 80, the industry
D would fall under LT/HT category, if it relates to supply for
industrial production with a contract demand of 22 kVA and
above but below 110 kVA. However, it will become a “large
industry” under Regulation 80(10) if it relates to supply of
power to an industry with a contract demand of 110 kVA and
above but below 25,000 kVA. Once the category stands
E changed because of excessive consumption of electricity, the
tariff and other conditions would stand automatically changed.
The licensee has a right to reclassify the consumer under
Regulation 82 if it is found that a consumer has been classified
in a particular category erroneously or the purpose of supply
F as mentioned in the agreement has changed or the consumption
of power has exceeded the limit of that category etc. The
Conditions of Supply even place a specific prohibition on
consumption of excessive electricity by a consumer.
66. Regulation 106 of the Conditions of Supply reads as under:
“106. No consumer shall make use of power in excess of
G
the approved contract demand or use power for a purpose
other than the one for which agreement has been executed
or shall dishonestly abstract power from the licensee’s
system.”
67. On the cumulative reading of the terms and conditions of
H supply, the contract executed between the parties and the
KERALA STATE ELECTRICITY BOARD & ORS. v. THOMAS 133
JOSEPH [J. B. PARDIWALA, J.]
provisions of the 2003 Act, we have no hesitation in holding A
that consumption of electricity in excess of the sanctioned/
connected load shall be an “unauthorised use of electricity”
in terms of Section 126 of the 2003 Act. This, we also say for
the reason that overdrawal of electricity amounts to breach
of the terms and conditions of the contract and the statutory
B
conditions, besides such overdrawal being prejudicial to the
public at large, as it is likely to throw out of gear the entire
supply system, undermining its efficiency, efficacy and even
increasing voltage fluctuations.
Xxx xxx xxx
C
71. Consumption in excess of sanctioned load is violative of
the terms and conditions of the agreement as well as of the
statutory benefits. Under Explanation (b)(iv), “unauthorised
use of electricity” means if the electricity was used for a
purpose other than for which the usage of electricity was
authorised. Explanation (b) (iv), thus, would also cover the D
cases where electricity is being consumed in excess of
sanctioned load, particularly when it amounts to change of
category and tariff. As is clear from the agreement deed, the
electric connection was given to the respondent on a
contractual stipulation that he would consume the electricity E
in excess of 22 kVA but not more than 110 kVA. The use of the
negative language in the condition itself declares the intent
of the parties that there was an implied prohibition in
consuming electricity in excess of the maximum load as it would
per se be also prejudiced. Not only this, the language of
Regulations 82 and 106 also prescribe that the consumer is F
not expected to make use of power in excess of approved
contract demand otherwise it would be change of user falling
within the ambit of “unauthorised use of electricity”.
72. Again, there is no occasion for this Court to give a
restricted meaning to the language of Explanation (b)(iv) of G
Section 126. According to the learned counsel appearing for
the respondent, it is only the actual change in purpose of use
of electricity and not change of category that would attract
the provisions of Section 126 of the 2003 Act. The contention
is that where the electricity was provided for a domestic
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134 SUPREME COURT REPORTS [2022] 9 S.C.R.
A purpose and is used for industrial purpose or commercial
purpose, then alone it will amount to change of user or
purpose. The cases of excess load would not fall in this
category. This argument is again without any substance and,
in fact, needs to be noticed only to be rejected.
B Xxx xxx xxx
87. Having dealt with and answered determinatively the
questions framed in the judgment, we consider it necessary to
precisely record the conclusions of our judgment which are
as follows:
C 1. Wherever the consumer commits the breach of the terms of
the Agreement, Regulations and the provisions of the Act by
consuming electricity in excess of the sanctioned and
connected load, such consumer would be “in blame and under
liability” within the ambit and scope of Section 126 of the
D 2003 Act.
2. The expression “unauthorised use of electricity means” as
appearing in Section 126 of the 2003 Act is an expression of
wider connotation and has to be construed purposively in
contrast to contextual interpretation while keeping in mind
E the object and purpose of the Act. The cases of excess load
consumption than the connected load inter alia would fall
under Explanation (b)(iv) to Section 126 of the 2003 Act,
besides it being in violation of Regulations 82 and 106 of the
Regulations and terms of the Agreement….”
F 54. The principles of law discernible from the aforesaid may be
summarised as under:
(1) The provisions of Section 126, read with Section 127 of the
Act 2003 become a Code in themselves. It specifically provides the method
of computation of the amount that a consumer would be liable to pay for
excessive consumption of electricity and for the manner of conducting
G
assessment proceeding. Section 126 of the Act 2003 has been enacted
with a purpose to achieve i.e., to put an implied restriction on such
unauthorised consumption of electricity.
(2) The purpose of Section 126 of the Act 2003 is to provide
safeguards to check the misuse of powers by unscrupulous elements.
H
KERALA STATE ELECTRICITY BOARD & ORS. v. THOMAS 135
JOSEPH [J. B. PARDIWALA, J.]
The provisions of Section 126 of the Act 2003 are self-explanatory. A
They are intended to cover situations, other than, the situations specifically
covered under Section 135 of the Act 2003. In such circumstances, the
Court should adopt an interpretation which should help in attaining the
legislative intent.
(3) The purpose sought to be achieved with the aid of the provisions B
of Section 126 of the Act 2003 is to ensure stoppage of misuse/
unauthorised use of the electricity as well as to ensure prevention of
revenue loss.
(4) The overdrawal of electricity is prejudicial to the public at
large, as it is likely to throw out of gear the entire supply system, C
undermining its efficiency, efficacy and even-increasing voltage
fluctuations.
(5) The expression ‘unauthorised use of electricity’ means as it
appears in Section 126 of the Act 2003. It is an expression of wider
connotation and principle construed purposively in contrast to contextual D
interpretation, while keeping in mind the object and purpose of the Act
2003.
55. Having read and re-read the decision of this Court in the case
of Seetaram Rice Mill (supra), we are clear in our mind that the High
Court in its impugned judgment has carved out an exception, which does E
not find a place in Section 126(6) of the Act 2003. Paras 18 & 37 resply
of the judgment, in the case of Seetaram Rice Mill (supra) referred to
above categorically hold that Section 126 and 127 resply of the Act 2003
read together constitute a complete code in themselves. Para 50 of the
said judgment holds that the purpose of Section 126 is to ensure stoppage
of misuse/ unauthorised use of electricity. Para 61 of Seetaram Rice F
Mill (supra) referred to above makes the picture abundantly clear.
56. In para 67 of Seetaram Rice Mill (supra) referred to above,
it was categorically held that the consumption of electricity in excess of
the sanctioned/connected load shall be an ‘unauthorised use of electricity’
in terms of Section 126 of the Act 2003. According to us, the observations G
made by this Court in Seetaram Rice Mill (supra) as contained in para
67 goes to the root of the matter. Seetaram Rice Mill (supra) in para 67
has said in so many words that overdrawal of electricity amounts to
breach of the terms and conditions of the contract and the statutory
conditions, besides such overdrawal being prejudicial to the public at
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136 SUPREME COURT REPORTS [2022] 9 S.C.R.
A large, as it is likely to throw out of gear the entire supply system
undermining its efficiency, efficacy and even-increasing voltage
fluctuations. This aspect of the matter has been completely overlooked
by the High Court. It is not just a matter of overdrawal of electricity in
excess of sanctioned/connected load in the very same premises and for
the very same purpose, which does not involve any change in the tariff
B
applicable for the relevant category of services. The tariff applicable
may remain the same; the overdrawal may be in the same premises and
for the very same purpose, there may not be any loss of revenue but it
may lead to a disastrous situation being prejudicial to the public at large,
as such overdrawal of electricity in excess of sanctioned/connected load
C may disturb the entire supply system, undermining its efficiency, efficacy
and even-increasing voltage demand.
57. In para 72 of Seetaram Rice Mill (supra), a contention was
raised by the consumer that it is only the actual change in purpose of use
of electricity that would attract Section 126 of the Act 2003. The
D contention was that where the electricity was provided for domestic
purpose but was actually used for industrial or commercial purpose, then
alone it will amount to change of user or purpose and accordingly a
contention was raised that a case of usage of excess load would not fall
in this category. This Court rejected the said contention in para 72. Para
72 states as follows:
E
“72. Again, there is no occasion for this Court to give a
restricted meaning to the language of Explanation (b)(iv) of
Section 126. According to the learned counsel appearing for
the respondent, it is only the actual change in purpose of use
of electricity and not change of category that would attract
F the provisions of Section 126 of the 2003 Act. The contention
is that where the electricity was provided for a domestic
purpose and is used for industrial purpose or commercial
purpose, then alone it will amount to change of user or
purpose. The cases of excess load would not fall in this
G category. This argument is again without any substance and,
in fact, needs to be noticed only to be rejected.”
(Emphasis supplied)
58. In view of para 72 of Seetaram Rice Mill (supra) referred to
above, the High Court could be said to have erred in coming to the
H
KERALA STATE ELECTRICITY BOARD & ORS. v. THOMAS 137
JOSEPH [J. B. PARDIWALA, J.]
conclusion that the consumer cannot be charged twice the energy charges A
if the consumer uses in excess of the sanctioned/connected load in the
very same premises and for the very same purpose, which do not involve
any change in the tariff. Para 87(2) in Seetaram Rice Mill (supra)
categorically holds that consumption in cases of the connected load would
fall in Explanation (b)(iv) to Section 126 of the Act 2003.
B
59. This Court in Punjab State Electricity Board v. Vishwa
Caliber Builders Private Limited reported in (2010) 4 SCC 539 had
the occasion to consider the Punjab State Electricity Regulatory
Commission (Forum and Ombudsman) Regulations, 2005. In the said
case, the challenge was to the order passed by a Division Bench of the
Punjab and Haryana High Court whereby it had dismissed the writ petition C
filed by the appellant therein against the order of Ombudsman, Electricity,
Punjab who in turn reversed the decision of the Disputes Settlement
Authority and directed refund of the amount recovered from the
respondent therein towards Advance Consumption Deposit (ACD)
service connection charges and load sur charge. In para 13, 14 and 15 D
this Court observed as under:
“13. We have considered the arguments of the learned counsel
and agree with him that in the absence of any provision in
the Act or the Regulations framed by the appellant, the
Ombudsman committed jurisdictional error by directing E
regularisation of unauthorised use of electricity by the
respondent and refund of the alleged excess amount charged
by the appellant.
14. The fact that the appellant could not release connection
with a load of 2548 kW on account of non-availability of F
transformer necessary for transfer of 8 MVA load from 66 kV
Sub-Station, GT Road, Ludhiana had no bearing on the issue
of consumption of electricity by the respondent beyond the
sanctioned load. Undisputedly, in terms of the request made
by the respondent, the Chief Engineer had sanctioned
connection on the existing system with a load of 1500 kW, but G
the respondent used excess load to the tune of 481.637 kW
and this amounted to unauthorised use of electrical energy.
15. It is also not in dispute that after installation of a new
transformer, the respondent could not avail the balance load
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138 SUPREME COURT REPORTS [2022] 9 S.C.R.
A within the stipulated time of six months and when the authority
concerned issued notice dated 13-12-2001 and reminder dated
23-5-2002, its representative refused to submit fresh A&A form
necessary for release of the balance load. This being the
position, the fault, if any, for non-release of the balance load
lay at the doors of the respondent and the Ombudsman
B
committed serious error by directing the appellant to refund
the alleged excess amount collected from the respondent on
account of use of electricity over and above the sanctioned
load.”
(Emphasis supplied)
C
60. Thus, in the aforesaid case, the excess load to the tune of
481.637 KW was assessed as unauthorised use of electrical energy.
REGULATION 153(15) OF THE CODE 2014
61. We shall now look into the main limb of the submission
D canvassed on behalf of the consumers that the Regulation 153(15) of
the Code 2014 makes all the difference and the ratio and the principles
as propounded in Seetaram Rice Mill (supra) should be understood in
the light of the Regulation 153(15) of the Code 2014. We have quoted
Regulation 153(15) of the Code 2014 in the earlier part of our judgment.
E We do not find any merit in the submission canvassed on behalf of the
consumers in regard to the applicability of Regulation 153(15) of the
Code 2014. The Code 2014 is framed under Section 50 read with Section
181(x) of the Act 2003.
62. This Court in Uttar Pradesh Power Corporation Limited
F and Others v. Anis Ahmad reported in (2013) 8 SCC 491, held that the
Supply Code cannot provide for nor does it relate to assessment of charges
for ‘unauthorised use of electricity’ under Section 126 of the Act 2003.
Paras 53 and 54 resply of the said judgment state as follow:
“53. Section 50 of the Electricity Act, 2003 empowers the
State Commission to specify an Electricity Supply Code to
G
provide for recovery of electricity charges, intervals for billing
of electricity charges, measures for preventing damage to
electrical plant or electrical line or meter, entry of distribution
licensee, etc. and it reads as follows:
H
KERALA STATE ELECTRICITY BOARD & ORS. v. THOMAS 139
JOSEPH [J. B. PARDIWALA, J.]
“50. The Electricity Supply Code.—The State Commission A
shall specify an Electricity Supply Code to provide for
recovery of electricity charges, intervals for billing of
electricity charges, disconnection of supply of electricity
for non-payment thereof, restoration of supply of electricity,
measures for preventing tampering, distress or damage to
B
electrical plant or electrical line or meter, entry of
distribution licensee or any person acting on his behalf
for disconnecting supply and removing the meter, entry for
replacing, altering or maintaining electric lines or electrical
plants or meter and such other matters.”
54. From reading Section 50, it is clear that under the C
Electricity Supply Code provisions are to be made for recovery
of electricity charges, billing of electricity charges,
disconnection, etc. and measures for preventing tampering,
distress or damage to the electrical plant or line or meter, etc.
But the said Code need not provide provisions relating to it/ D
do not relate to assessment of charges for “unauthorised use
of electricity” under Section 126 or action to be taken against
those committing “offences” under Sections 135 to 140 of
the Electricity Act, 2003.”
(Emphasis supplied) E
63. Thus, reliance on Regulation 153(15) of the Code 2014 framed
under Section 50 of the Act 2003 by the respondent (consumers) is
thoroughly misconceived, as the same does not conform to the provisions
of the Act 2003. In any event, Regulation 153(15) travels much beyond
Section 126 and Section 50 resply of the Act 2003. It is settled law that F
the regulation making power cannot be used to bring into existence
substantive rights, which are not contemplated under the Act 2003.
64. At this stage, it is apposite to state about the rule making
powers of a delegating authority. If a rule goes beyond the rule making
power conferred by the statute, the same has to be declared invalid. If G
a rule supplants any provision for which power has not been conferred,
it becomes invalid. The basic test is to determine and consider the source
of power, which is relatable to the rule. Similarly, a rule must be in accord
with the parent statute, as it cannot travel beyond it.
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140 SUPREME COURT REPORTS [2022] 9 S.C.R.
A 65. Delegated legislation has come to stay as a necessary
component of the modern administrative process. Therefore, the question
today is not whether there ought to be delegated legislation or not, but
that it should operate under proper controls so that it may be ensured
that the power given to the Administration is exercised properly; the
benefits of the institution may be utilised, but its disadvantages minimised.
B
The doctrine of ultra vires envisages that a rule making body must
function within the purview of the rule making authority conferred on it
by the parent Act. As the body making rules or regulations has no inherent
power of its own to make rules, but derives such power only from the
statute, it has to necessarily function within the purview of the statute.
C Delegated legislation should not travel beyond the purview of the parent
Act. If it does, it is ultra vires and cannot be given any effect. Ultra
vires may arise in several ways; there may be simple excess of power
over what is conferred by the parent Act; delegated legislation may be
inconsistent with the provisions of the parent Act or statute law or the
general law; there may be non- compliance with the procedural
D
requirement as laid down in the parent Act. It is the function of the
courts to keep all authorities within the confines of the law by supplying
the doctrine of ultra vires.
66. In this context, we may refer with profit to the decision in
General Officer Commanding-in-Chief and Another v. Dr. Subhash
E Chandra Yadav and Another reported in (1988) 2 SCC 351, wherein it
has been held as follows:-
“14. ….before a rule can have the effect of a statutory
provision, two conditions must be fulfilled, namely, (1) it must
conform to the provisions of the statute under which it is
F framed; and (2) it must also come within the scope and purview
of the rule making power of the authority framing the rule. If
either of these two conditions is not fulfilled, the rule so framed
would be void…..”
67. In Additional District Magistrate (Rev.) Delhi Admn. v.
G Siri Ram reported in (2000) 5 SCC 451, it has been ruled that it is a well
recognised principle that the conferment of rule-making power by an
Act does not enable the rule-making authority to make a rule which
travels beyond the scope of the enabling Act or which is inconsistent
therewith or repugnant thereto.
H
KERALA STATE ELECTRICITY BOARD & ORS. v. THOMAS 141
JOSEPH [J. B. PARDIWALA, J.]
68. In Sukhdev Singh and Others v. Bhagatram Sardar Singh A
Raghuvanshi and Another reported in (1975) 1 SCC 421, the
Constitution Bench has held that:
“18. …. These statutory bodies cannot use the power to make
rules and regulations to enlarge the powers beyond the scope
intended by the Legislature. Rules and regulations made by B
reason of the specific power conferred by the statute to make
rules and regulations establish the pattern of conduct to be
followed. …”
69. In State of Karnataka and Another v. H. Ganesh Kamath
and Others reported in (1983) 2 SCC 402, it has been stated that: C
“7. It is a well-settled principle of interpretation of statutes
that the conferment of rule-making power by an Act does not
enable the rule-making authority to make a rule which travels
beyond the scope of the enabling Act or which is inconsistent
therewith or repugnant thereto.” D
70. In Kunj Behari Lal Butail and Others v. State of H.P.
and Others reported in (2000) 3 SCC 40, it has been ruled thus:-
“13. It is very common for the legislature to provide for a
general rule-making power to carry out the purpose of the
Act. When such a power is given, it may be permissible to find E
out the object of the enactment and then see if the rules framed
satisfy the test of having been so framed as to fall within the
scope of such general power confirmed. If the rule-making
power is not expressed in such a usual general form then it
shall have to be seen if the rules made are protected by the F
limits prescribed by the parent act…….”
71. In St. Johns Teachers Training Institute v. Regional Director,
National Council for Teacher Education and Another reported in
(2003) 3 SCC 321, it has been observed that:
“10. A regulation is a rule or order prescribed by a superior G
for the management of some business and implies a rule for
general course of action. Rules and regulations are all
comprised in delegated legislation. The power to make
subordinate legislation is derived from the enabling Act and it
is fundamental that the delegate on whom such a power is
H
142 SUPREME COURT REPORTS [2022] 9 S.C.R.
A conferred has to act within the limits of authority conferred
by the Act. Rules cannot be made to supplant the provisions
of the enabling Act but to supplement it. What is permitted is
the delegation of ancillary or subordinate legislative
functions, or, what is fictionally called, a power to fill up
details…..”
B
72. In Global Energy Limited and Another v. Central Electricity
Regulatory Commission reported in (2009) 15 SCC 570, this Court
was dealing with the validity of clauses (b) and (f) of Regulation 6-A of
the Central Electricity Regulatory Commission (Procedure, Terms and
Conditions for Grant of Trading Licence and other Related Matters)
C Regulations, 2004. In that context, this Court expressed as under:-
“25. It is now a well-settled principle of law that the rule-
making power “for carrying out the purpose of the Act” is a
general delegation. Such a general delegation may not be
held to be laying down any guidelines. Thus, by reason of
D such a provision alone, the regulation-making power cannot
be exercised so as to bring into existence substantive rights
or obligations or disabilities which are not contemplated in
terms of the provisions of the said Act.
73. In the aforementioned case, while discussing further about the
E discretionary power, delegated legislation and the requirement of law,
the Bench observed thus:
“73. The image of law which flows from this framework is its
neutrality and objectivity: the ability of law to put sphere of
general decision-making outside the discretionary power of
F those wielding governmental power. Law has to provide a basic
level of “legal security” by assuring that law is knowable,
dependable and shielded from excessive manipulation. In the
contest of rule- making, delegated legislation should establish
the structural conditions within which those processes can
G function effectively. The question which needs to be asked is
whether delegated legislation promotes rational and
accountable policy implementation. While we say so, we are
not oblivious of the contours of the judicial review of the
legislative Acts. But, we have made all endeavours to keep
ourselves confined within the well- known parameters.”
H
KERALA STATE ELECTRICITY BOARD & ORS. v. THOMAS 143
JOSEPH [J. B. PARDIWALA, J.]
74. In this context, it would be apposite to refer to a passage from A
State of T.N. and Another v. P. Krishnamurthy and Others reported
in (2006) 4 SCC 517 wherein it has been held thus:-
“16. The court considering the validity of a subordinate
legislation, will have to consider the nature, object and scheme
of the enabling Act, and also the area over which power has B
been delegated under the Act and then decide whether the
subordinate legislation conforms to the parent statute. Where
a rule is directly inconsistent with a mandatory provision of
the statute, then, of course, the task of the court is simple and
easy. But where the contention is that the inconsistency or
non-conformity of the rule is not with reference to any specific C
provision of the enabling Act, but with the object and scheme
of the parent Act, the court should proceed with caution before
declaring invalidity.”
75. In Pratap Chandra Mehta v. State Bar Council of Madhya
Pradesh and others reported in (2011) 9 SCC 573, while discussing D
about the conferment of extensive meaning, it has been opined that:
“58. ….The Court would be justified in giving the provision a
purposive construction to perpetuate the object of the Act,
while ensuring that such rules framed are within the field
circumscribed by the parent Act. It is also clear that it may not E
always be absolutely necessary to spell out guidelines for
delegated legislation, when discretion is vested in such
delegatee bodies. In such cases, the language of the rule
framed as well as the purpose sought to be achieved, would
be the relevant factors to be considered by the Court.” F
76. In Dr. Mahachandra Prasad Singh v. Chairman, Bihar
Legislative Council and Others reported in (2004) 8 SCC 747, this
Court explained the concept of delegated legislation thus:
“13. …..Underlying the concept of delegated legislation is
the basic principle that the legislature delegates because it G
cannot directly exert its will in every detail. All it can in practice
do is to lay down the outline. This means that the intention of
the legislature, as indicated in the outline (that is the enabling
Act), must be the prime guide to the meaning of delegated
legislation and the extent of the power to make it. The true
H
144 SUPREME COURT REPORTS [2022] 9 S.C.R.
A extent of the power governs the legal meaning of the delegated
legislation. The delegate is not intended to travel wider than
the object of the legislature. The delegate’s function is to serve
and promote that object, while at all times remaining true to
it. That is the rule of primary intention. Power delegated by
an enactment does not enable the authority by regulations to
B
extend the scope or general operation of the enactment but is
strictly ancillary. It will authorise the provision of subsidiary
means of carrying into effect what is enacted in the statute
itself and will cover what is incidental to the execution of its
specific provision. But such a power will not support attempts
C to widen the purposes of the Act, to add new and different
means of carrying them out or to depart from or vary its ends.
(See Section 59 in chapter “Delegated Legislation” in Francis
Bennion’s Statutory Interpretation, 3rd Edn.)…….”
77. In McEldowney v. Forde reported in (1971) AC 632 : (1969)
D 3 WLR 179, Lord Diplock explained the role of the Courts in this area in
the following words :
“The division of functions between Parliament and the courts
as respects legislation is clear. Parliament makes laws and
can delegate part of its power to do so to some subordinate
E authority. The courts construe laws whether made by
Parliament directly or by a subordinate authority acting under
delegated legislative powers. The view of the courts as to
whether particular statutory or subordinate legislation
promotes or hinders the common weal is irrelevant. The
decision of the courts as to what the words used in the statutory
F or subordinate legislation mean is decisive. Where the validity
of subordinate legislation made pursuant to powers delegated
by Act of Parliament to a subordinate authority is challenged,
the court has a threefold task: first, to determine the meaning
of the words used in the Act of Parliament itself to describe
G the subordinate legislation which that authority is authorised
to make, secondly, to determine the meaning of the
subordinate legislation itself and finally to decide whether
the subordinate legislation complies with that description.”
78. A delegated power to legislate by making rules or regulations
H ‘for carrying out the purpose of the Act’, is a general delegation without
KERALA STATE ELECTRICITY BOARD & ORS. v. THOMAS 145
JOSEPH [J. B. PARDIWALA, J.]
laying down any guidelines; it cannot be exercised so as to bring into A
existence the substantive rights or obligations or disabilities not
contemplated by the provisions of the Act 2003 itself. The Court,
considering the validity of a subordinate legislation, will have to consider
the nature, object and scheme of the enabling Act, and also the area
over which power as has been delegated under the Act and then decide
B
whether the subordinate legislation conforms to the parent statute.
79. It is important to keep in mind that where a rule or regulation
is directly inconsistent with a mandatory provision of the statute, then, of
course, the task of the Court is simple and easy. But where the contention
is that the inconsistency or non-conformity of the rule is not with reference
to any specific provision of the enabling Act, but with the object and C
scheme of the parent Act, the Court should proceed with caution before
declaring the same to be invalid.
80. Rules or regulation cannot be made to supplant the provisions
of the enabling Act but to supplement it. What is permitted is the delegation
of ancillary or subordinating legislative functions, or, what is fictionally D
called, a power to fill up details.
81. A Constitution Bench of this Court in the case of Sukhdev
Singh (supra), while explaining the fine distinction between a rule and
regulation and also the power of the delegate authority to frame such
rules or regulations has made few very important observations which E
we must take notice of and quote as under:
“11. The contentions on behalf of the employees are these.
Regulations are made under the statute. The origin and source
of the power to make regulations is statutory. Regulations
are self- binding in character. Regulations have the force of F
law inasmuch as the statutory authorities have no right to
make any departure from the regulations.
12. Rules, regulations, schemes, bye-laws, orders made under
statutory powers are all comprised in delegated legislation.
The need for delegated legislation is that statutory rules are G
framed with care and minuteness when the statutory authority
making the rules is after the coming into force of the Act in a
better position to adapt the Act to special circumstances.
Delegated legislation permits utilisation of experience and
H
146 SUPREME COURT REPORTS [2022] 9 S.C.R.
A consultation with interests affected by the practical operation
of statutes.
xx xx xx
14. Subordinate legislation is made by a person or body by
virtue of the powers conferred by a statute. By-laws are made
B in the main by local authorities or similar bodies or by
statutory or other undertakings for regulating the conduct of
persons within their areas or resorting to their undertakings.
Regulations may determine the class of cases in which the
exercise of the statutory power by any such authority
C constitutes the making of statutory rules.
15. The words “rules” and “regulations” are used in an Act
to limit the power of the statutory authority. The powers of
statutory bodies are derived, controlled and restricted by the
statutes which create them and the rules and regulations
D framed thereunder. Any action of such bodies in excess of
their power or in violation of the restrictions placed on their
powers is ultra vires. The reason is that it goes to the root of
the power of such corporations and the declaration of nullity
is the only relief that is granted to the aggrieved party.
E xx xx xx
18. The authority of a statutory body or public administrative
body or agency ordinarily includes the power to make or adopt
rules and regulations with respect to matters within the province
of such body provided such rules and regulations are not
F inconsistent with the relevant law. In America a “public
agency” has been defined as an agency endowed with
governmental or public functions. It has been held that the
authority to act with the sanction of Government behind it
determines whether or not a governmental agency exists. The
rules and regulations comprise those actions of the statutory
G or public bodies in which the legislative element predominates.
These statutory bodies cannot use the power to make rules
and regulations to enlarge the powers beyond the scope
intended by the Legislature. Rules and regulations made by
reason of the specific power conferred on the statute to make
H
KERALA STATE ELECTRICITY BOARD & ORS. v. THOMAS 147
JOSEPH [J. B. PARDIWALA, J.]
rules and regulations establish the pattern of conduct to be A
followed. Rules are duly made relative to the subject-matter
on which the statutory bodies act subordinate to the terms of
the statute under which they are promulgated. Regulations
are in aid of the enforcement of the provisions of the statute.
Rules and regulations have been distinguished from orders
B
or determination of statutory bodies in the sense that the orders
or determination are actions in which there is more of the
judicial function and which deal with a particular present
situation. Rules and regulations on the other hand are actions
in which the legislative element predominates.
xx xx xx C
136. The regulations framed under the regulation-making
power conferred by the three Acts in question are not the
regulations as defined in the General Clauses Act. In
interpreting Indian statutes it is unnecessary and might
sometimes be misleading to refer to the provisions of English D
law in connection with subordinate legislation. We have to
refer only to the General Clauses Act and the Indian
legislative practice. Though “rule” is defined as including a
regulation made as a rule, it cannot be said that regulation-
making power conferred on the three organisations in E
question is a rule-making power. Under the legislative practice
in India the rule-making power is conferred on the State and
the power to make regulations is conferred on bodies or
organisations created by the statute.
xx xx xx F
161. I have gone through the various statutes only to point
out that under the Indian legislative practice rules are what
the Central Government or the State Governments make and
the regulations are made by any institution or organisation
established by a statute and where it is intended that the G
regulation should have effect as law the statute itself says so.
It is, therefore, as I stated earlier, unnecessary and may be
even misleading to refer to the English practice in interpreting
the word ‘regulation’.”
(Emphasis supplied)
H
148 SUPREME COURT REPORTS [2022] 9 S.C.R.
A 82. If we have to set right the impugned judgment and order of
the High Court and bring in tune with the principles embodied in the
decision of this Court in the case of Seetaram Rice Mill (supra), then
we have no other option but to declare that Regulation 153(15) of the
Code 2014 framed by the Commission is inconsistent with Section 126
of the Act 2003. If the Regulation 153(15) is to be given effect, then the
B
same would frustrate the very object of Section 126 of the Act 2003.
The High Court in its impugned judgment says that Regulation 153(15)
does not lead to any loss of revenue. The stance of the Commission also
is that there is no loss of revenue if the Regulation 153(15) is permitted
to be operated. However, we are of the view that it is not just the question
C of loss of revenue. At the cost of repetition, we emphasis on the fact
that overdrawal of electricity is prejudicial to the public at large as it may
throw out of gear the entire supply system, undermining its efficiency,
efficacy and even-increasing voltage fluctuations.
83. The material on record indicates something very startling.
D During the year 2014-15, total unauthorised use of electricity in the State
of Kerala was detected in 1662 units and the total amount assessed
comes to Rs.14,40,82,176/- (Rupees Fourteen Crore Forty Lakhs Eighty
Two Thousand One Hundred and Seventy Six only). The corresponding
figures during the years 2015-16 and 2016-17 were 1262 and 1875 units
resply and the total amount assessed comes to around Rs.10,63,76,776/
E - (Rupees Ten Crore Sixty Three Lakhs Seventy Six Thousand Seven
Hundred and Seventy Six only) and Rs. 34,64,80,421/- (Rupees Thirty
Four Crore Sixty Four Lakh Eighty Thousand Four Hundred and Twenty
One only) resply.
84. In the revenue petitions filed by the appellant Board, it was
F pointed to the High Court that the total amount assessed for all the three
years referred to above, came to Rs.59,69,39,373/- (Rupees Fifty Nine
Crore Sixty Nine Lakh Thirty Nine Thousand Three Hundred and Seventy
Three only).
85. In addition to the above, an amount of Rs. 41,14,858/- (Rupees
G Forty One Lakh Fourteen Thousand Eight Hundred and Fifty Eight only)
and Rs.1,42,09,148/- (Rupees One Crore Forty Two Lakh Nine Thousand
and One Hundred Forty Eight only) were assessed during the years
2015-16 and 2016-17 resply, by Regional Audit Office (RAO) Inspection.
86. We are really taken by surprise that despite the aforesaid, the
High Court while rejecting the review applications declared that the
H
KERALA STATE ELECTRICITY BOARD & ORS. v. THOMAS 149
JOSEPH [J. B. PARDIWALA, J.]
regularisation of additional connected load or enhancement of contract A
demand should not necessitate upgradation of the existing distribution
system.
87. At this stage, we may also refer to Section 45(3)(a) of the Act
2003. The same reads thus:
“45. Power to recover charges. % B
xx xx xx
(3) The charges for electricity supplied by a distribution
licensee may include%
(a) a fixed charge in addition to the charge for the actual
electricity supplied;” C
88. A plain reading of Section 45(3)(a) of the Act 2003 referred to
above would indicate that the charges for electricity certified by a
distribution licensee include the fixed charges, in addition to the charges
for the actual electricity supplied and consumed. In such circumstances,
it can be said that the tariff includes both, fixed charges and energy D
charges and once the assessing officer arrives at the conclusion that
unauthorised use of electricity has taken place, he is obliged to make the
assessment charge equal to twice the tariff applicable, which includes
the dues payable towards the energy charges also.
89. In overall view of the matter, we have reached to the conclusion
E
that the finding recorded by the High Court in para 31(vi) is not sustainable
in law. We have also reached to the conclusion that the Regulation
153(15) deserves to be declared invalid being inconsistent with the
provisions of Section 126 of the Act 2003.
90. The order passed by the High Court in the review applications
more particularly para 10(i), 10(ii) and 10(iii) resply is also hereby set F
aside.
91. In the result, all the appeals succeed and are hereby allowed
to the aforesaid extent. The declaration issued by the High Court, as
contained in para 31(vi) of the impugned judgment is hereby set aside.
92. Regulation 153(15) of the Code 2014 is declared to be invalid G
being inconsistent with the provision of Section 126 of the Act 2003.
93. No order as to costs.
Devika Gujral Appeals allowed.
(Assisted by : Preetam Bharti, LCRA)
H
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