Application For Enhancing Electricity Load Doesn't Constitute Intimating Supplier About Change In Class Of Usage: Bombay High Court

The Aurangabad Bench of the Bombay High Court recently held that an electricity consumer's application for load enhancement of electricity does not constitute intimation to the electricity supplier of change in the class of electricity usage.

Justice SG Mehare restored a bill of over Rs. 23 lakhs levied on a landlord and tenant for unauthorized usage by MSEDCL after it found that the use of the concerned premises was changed from operating a printing press (industrial use) to running a coaching class (commercial use).

“Enhancing the load and changing the user of the electricity supply from one class to another class are apparently distinct. The load may be enhanced for any class of user of electricity for the purpose for which it was supplied. The consumer is bound to inform the supplier about any change in the class/tariff”, the court observed.

The court held that usage of electricity for a purpose other than for which it was supplied as per demand is unauthorized usage.

Maharashtra State Electricity Distribution Company Ltd (MSEDCL), had initiated proceedings against Ramchandra Madhavrao Naik, a consumer, for the unauthorized commercial use of electricity supplied to a premises initially intended for operating a printing press. In 2010, Naik leased the premises to Abhishek Gaike, who was operating coaching classes. The load was enhanced to the premises on Gaike's application in 2012.

MSEDCL personnel, upon inspection, found that Gaike was using the electricity supply for commercial purposes without changing the tariff, thus constituting unauthorized use under Explanation (b)(iv) to Section 126 of the Electricity Act, 2003. MSEDCL issued a provisional bill for the changed user, and after objections were raised, a final assessment order was passed, demanding payment of Rs. 23,35,321 within fifteen days.

Naik challenged the provisional assessment order through a writ petition, which was dismissed by the HC, directing him to avail the statutory remedy of appeal. Subsequently, he appealed to the appellate authority. Holding that MSEDCL can, at the most, recover the money for a period of two years as per Section 56 (disconnection of supply in default of payment) of the Act, the appellate authority reduced the amount to Rs. 10,67,670, holding both Naik and Gaike liable. MSEDCL filed the present writ petition challenging the reduction of the bill amount.

MSEDCL argued that though Gaike applied for enhancement of load, he never informed MSEDCL about the change in the nature of electricity usage. It also contested the application of Section 56 of the Act, arguing that it does not apply to the case at hand.

Naik and Gaike argued that the load enhancement application signified the MSEDCL's awareness of the usage change, and it erred in not applying the correct tariff. Additionally, there was no concrete evidence pinpointing when unauthorized usage began, and hence any assessment should be limited to twelve months prior to inspection, they argued.

The court observed that while the load was enhanced, there was no indication of a change in the class of users, and MSEDCL continued to bill the premises under the industrial tariff. Thus, it cannot be said that MSEDCL was aware of the change in user class.

In the bill revision report dated February 05, 2016, the reason code indicated was "7- THEFT 126". While theft is covered under Section 135, the court noted that the number 126 in the code suggested assessment for unauthorized use of electricity correctly under Section 126 of the Act.

“The petitioner had a simple case that the user class of the electricity was changed. It is unauthorized use”, the court said, holding that the date of unauthorized usage in the assessment was based on concrete evidence, including the leave and license agreement for the coaching center.

The court noted that the appellate authority invoked Section 56 without providing adequate justification, The court clarified that Section 56 would not apply to the present case and held that MSEDCL correctly assessed the bill under Section 126 of the Act.

Consequently, the court allowed the writ petition, quashing the appellate authority's order and restoring MSEDCL's final assessment order. However, it granted a stay on the order's execution for four weeks.

Case no. – Writ Petition No. 6725 of 2020

Case Title – Maharashtra State Electricity Distribution Company Ltd. v. Ramchandra s/o. Madhavrao Naik and Anr.