TaxTMI 
TaxTMI 
2022 (12) TMI 1533
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....v. For the Respondent : Mr. Nishe Rajen Shonker, AOR, Mr. Mohammed Sadique T.a., AOR, M/S. Kmnp Law Aor, AOR, Mr. C. K. Sasi, AOR, Mr. Dhananjaya Mishra, AOR. JUDGMENT J.B. PARDIWALA, J. 1. Leave granted in all the captioned Special Leave Petitions. 2. Since the issues raised in all the captioned petition 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 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 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 unauthorisedl....
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....te at this stage that the Division Bench of 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 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 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: "7.16. Accordingly, in Para. 87 of the judgment in Seetharam Rice Mill's case (supra), th....
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....t, this Court held that, once it is found that the appellant/consumer had indulged in unauthorised use of electricity, the 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). 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, such assessment should be made at a rate equal to one and a half times the tariff applicable for commercial connection, for which a higher tariff is applicable. 8.4. After taking note of the law laid down by the Apex Courtin 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, the entire consumption in that....
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.... supplied under industrial tariff the entire consumption in that service 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 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, 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 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 pre....
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....ose situated in the consumer's premises has not been tampered with and itis 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 (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 Courtdoes 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 Court, stating that, if the above interpretation is accepted, a consumer under LT-V Agriculture tariff at the rate of around Rs.1/- per unit need pay only Rs.1.50 per unit for unauthorised use of electricity for commercial purpose, as against the prevailing rate of Rs. 8.25 per unit applicable for LT-VIIA 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 s....
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....ve 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 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 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' 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 a....
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....is rebutted by the 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 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 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 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 Secti....
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....unwarranted. 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 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 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 provisions of Section 45, the prices to be charged by a distribution licensee for the supply of electricity by him in 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 f....
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....tly 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 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 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 o funauthorised use of electricity in terms 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(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. 25....
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....d by the licensee. 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. Such an amendment was made when itwas 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. 28. In cases falling under Explanation (b) to Section 126 of the Act, the assessing officer is empowered to assess unauthorised use o felectricity 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 normal current charge collected shall be deducted. In case of unauthorised use of electricity in a higher tariff, such assessment s....
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....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; (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. (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 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 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 t....
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....tra 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 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." (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 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 individual writ petitions filed by the consumers. The review applications also came to be rejected, wherein, the H....
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....hat the regulation 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 (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 Seetaram Rice Mill (supra) has said so many words that Section 126 of the Act 2003 is a complete code in itself. Consumption in excess of 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 of the High Court in para 31(vi) of the impugned judgment is erroneous and if upheld may result i....
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....f 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 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 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). 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 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 c....
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.... 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 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 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. 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, 199....
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....ensee shall issue a notice of enhancement of contract demand to such consumer. Furthermore, as already indicated, 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 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 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 t....
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....en filed by the appellant Board, essentially, being aggrieved and dissatisfied with the finding recorded by the High Court in 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 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 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 (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 I....
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....ents 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. (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, 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: 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: Provided further that the Authority shall - (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 Centra....
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....nt and State Government 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-State, regional and inter-regional transmission of electricity. Section 30 provides that the State Commission shall facilitate and promote transmission, wheeling and interconnection arrangements within its territorial jurisdiction for the transmission and supply of electricity. 38. Section 14 of the Act 2003 envisages that the Appropriate 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 (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 ....
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.... a. supply of electricity by a generating company to a distribution licensee; b. transmission of electricity; 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 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: "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 or meter, entry of distribution licensee or any person acting on his behalf for disconnecting supply and removing the....
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....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 ─ (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 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 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 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;...." 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....
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....nction from the licensee, further action shall be taken in accordance with the following 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. (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 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:- 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 stabilizer, inverter, rectifier and measuring devices: Provided that the rated capacities of the equipment and apparatu....
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....mand, 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. (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 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 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 demand will not necessitate enhancement of voltage level of supply or upgradation of the existing distribution system or both. ....
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....round of lack of authority and jurisdiction on the part of the Executive 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 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 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 liability" within the ambit and scope of Section 126 of the ....
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....f 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 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 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 lexical construction may not be given effect to, as the law would have to be interpreted having regard to the subject-matter of the offence and the object that the law seeks to achieve. The provisions of Section 126, read wit....
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....period during which 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 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. 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 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. ....
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....amed and the provisions of the 2003 Act. Xxx xxx xxx 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 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. 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 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 ind....
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....onsume the electricity 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 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 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 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 an....
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....s 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. (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 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 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 Mill (supra) referred to above makes the picture abundantly clear. 56. In para 6....
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.... that would attract 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 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 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 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. 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 (F....
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....E CODE 2014 61. We shall now look into the main limb of the submission 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. 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 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 provide for recovery of electricity charges, intervals for billing of electric....
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....on 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. 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. 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 noncompliance with the procedural requirement as laid dow....
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....ent 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 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 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 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....." 72. In Global Ener....
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.... 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 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 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 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." 76. In Dr. Mahachandra Prasad Singh v. Chairman, Bihar Legislative Council and Others repo....
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....ask: first, to determine the meaning of the words used in the Act of Parliament itself to describe 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 'for carrying out the purpose of the Act', is a general delegation without laying down any guidelines; it cannot be exercised so as to bring into 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 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 th....
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....s and regulations 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. 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 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 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 ....
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....mission is inconsistent with Section 126 of the Act 2003. If the Regulation 153(15) is to be given effect, then the 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 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. 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 assesse....