Consumption Of Electricity In Excess Of Connected/Contracted Load Would Amount To 'Unauthorised Use Of Electricity' : Supreme Court

The Supreme Court held that the consumption of electricity in excess of the connected load/contracted load would amount to 'unauthorised use of electricity' under explanation (b) to Section 126(6) of the Electricity Act, 2003.

The bench of Justices Dinesh Maheshwari and J B Pardiwala also declared Regulation 153(15) of the Kerala Electricity Supply Code, 2014 as invalid for being inconsistent with the provision of Section 126.

The court held thus while allowing an appeal filed by Kerala State Electricity Board against the Kerala HC judgment which had held 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. 

Statutory Provisions 

As per explanation (b) to Section 126(6), the "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.

However Regulation 153(15) of Supply Code 2014 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.

Sri Seetaram Rice Mil

In appeal, the KSEB brought to the notice of the Court a three Judges Bench decision in the case of Executive Engineer, Southern Electricity Supply Company of Orissa Limited (Southco) and Another v. Sri Seetaram Rice Mill  (2012) 2 SCC 108, had held that cases of excess load consumption other than the connected load would fall within the Explanation (b)(iv) to Section 126. Referring to this case, the bench summarized the principles laid down in the said judgment.

(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 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. The provisions of Section 126 of the Act 2003 are self-explanatory. They are intended to cover 46 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 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, 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.

The bench, therefore, observed:

"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."

On Regulation 153(15), the bench observed that a delegated legislation should not travel beyond the purview of the parent Act and if it does it is ultra vires and cannot be given any effect. It observed:

"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 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."

Case details

Kerala State Electricity Board vs Thomas Joseph Alias Thomas M J | 2022 LiveLaw (SC) 1034 | CA 9252-9253 OF 2022 | 16 December 2022 | Justices Dinesh Maheshwari and JB Pardiwala

For Appellant(s) Mr. R. Basant, Sr. Adv. Mr. Raghenth Basant, Adv. Mr. P. V. Dinesh, AOR Mr. Vishnu Pazhanganat, Adv. Ms. Roopali Lakhotia, Adv. Mr. Ajay Krishna, Adv. Mr. Bineesh K., Adv. Mr. Rahul Raj Mishra, Adv.

For Respondent(s) 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

Headnotes

Electricity Act, 2013 ; Section 126(6) - Consumption of electricity in excess of the connected load/contracted load would amount to 'unauthorised use of electricity' under explanation (b) to Section 126(6) - Followed Executive Engineer, Southern Electricity Supply Company of Orissa Limited (Southco) vs Sri Seetaram Rice Mill (2012) 2 SCC 108. (Para 54-58)

Electricity Act, 2013 ; Section 126 -  Kerala Electricity Supply Code, 2014 ; Regulation 153(15) - Regulation 153(15) of the Code 2014 is declared to be invalid being inconsistent with the provision of Section 126. (Para 82,89)

Delegated legislation - 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 -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 called, a power to fill up details - Fine distinction between a rule and regulation and also the power of the delegate authority to frame such rules or regulation - Referred to Sukhdev Singh v. Bhagatram Sardar Singh Raghuvanshi (1975) 1 SCC 421 (Para 64-81)

Doctrine of Ultra Vires - 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 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. (Para 65)

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