Only Consumer & Not Distribution Licensee Has Right To Make Representation Before Electricity Ombudsman: Supreme Court

The Supreme Court has recently observed that only "Consumers" and not Distribution Licensee have a right to make represenation before the Electricity Ombudsman.

The bench of Justices LN Rao, BR Gavai and BV Nagarathna was considering a civil appeal against the judgement dated April 3, 2019 passed by the Allahabad High Court ("Impugned Judgement").

In the impugned judgment, the High Court had declared Regulation 8.1 (i) of the Uttar Pradesh Electricity Regulatory Commission (Consumer Grievance Redressal Forum & Electricity Ombudsman) Regulations, 2007 ('CGRF Regulations') to be ultra vires sub- sections (5), (6) and (7) of Section 42 of the Electricity Act, 2003 ('Act') and Rule 7 of the Electricity Rules, 2005.

While dismissing the appeal and upholding the High Court's judgement, the bench in Uttar Pradesh Power Corporation Limited v. Kisan Cold Storage & Ice Factory & Ors observed that,

"It is trite law that subordinate legislation cannot override a statutory provision. Furthermore, when there is no ambiguity in a statutory provision literal construction has to be adopted. There is absolutely no confusion that Section 43 (6) enables only consumers and not a Distribution Licensee to prefer representations to an Ombudsman against a decision of the forum."

Factual Background

Kisan Cold Storage had filed a complaint before the Consumer Grievance Redressal Forum ('Forum') on the ground that the electricity bills were not in compliance with the applicable tariff. Since the complaint was allowed by the Forum on May 4, 2011, Madhyanchal Vidyut Vitran Nigam Ltd. preferred an appeal before the Ombudsman in terms of Regulation 8.1(i) of the CGRF Regulations.

Kisan Cold Storage raised an objection about the maintainability of the representation preferred by Madhyanchal Vidyut Vitran Nigam Ltd. before the Ombudsman. The Ombudsman on May 18, 2012 rejected the representation preferred by Madhyanchal Vidyut Vitran Nigam Ltd. which was challenged by Paschimanchal Vidyut Vitran Nigam Ltd. before the High Court.

Relying on the judgement in M/s Jindal Poly Films Ltd. v. U.P. Electricity Regulatory Commission, Lucknow the High Court on November 27, 2015 allowed the writ petition and directed the Ombudsman to decide the question of maintainability of the representation made by Madhyanchal Vidyut Vitran Nigam Ltd.

The Single Judge's judgement was challenged by Kisan Cold Storage before the Division Bench of the High Court. Due to conflict of opinion between a judgment of the learned Single Judge dated January 6, 2012 in Dakshinanchal Vidut Vitran Nigam Ltd. v. Vidut Lokpal Lucknow & Ors. and the judgment of the Division Bench in M/s Jindal Poly Films Ltd. v. U.P. Electricity Regulatory Commission, Lucknow, the Division Bench referred the following questions for decision by a Full Bench:

"(I) In view of the provisions of subsections (5) (6) and (7) of Section 42 of the Electricity Act, 2003, under which a consumer who is aggrieved by non-redressal of his grievance is permitted to make a representation before the Ombudsman and the Ombudsman is required to settle the grievance of the consumer, whether Regulation 8.1(i) of the Uttar Pradesh Electricity Regulatory Commission (Consumer Grievance Redressal Forum & Electricity Ombudsman) Regulations, 2007 is ultra vires the provisions of the Act;

(II) Whether the judgment of the Division Bench in M/s. Jindal Poly Films Ltd. vs. U.P. Electricity Regulatory Commission, Lucknow decided on 15 April, 2011 can be regarded as laying down the correct principle of law."

The Full Bench on April 3, 2019 declared Regulation 8.1 (i) of the CGRF Regulations to be ultra vires sub- sections (5), (6) and (7) of Section 42 of the Act and Rule 7 of the Electricity Rules, 2005.

The High Court had further opined that Section 42(6) of the Electricity Act restricted the representation against the decision of the forum constituted by a Distribution Licensee to consumers only. Therefore, the Regulation providing an opportunity to a Distribution Licensee to prefer a representation to the Ombudsman was ultra vires section 42(6) of the Act.

Submission Of The Counsels

Advocate Sitesh Mukherjee with Advocate(s) Prerna Priyadarshini and Abhishek Kumar appearing for Uttar Pradesh Power Corporation Limited submitted that the High Court committed an error in its interpretation of Regulation 8.1(i) of the CGRF Regulations by restricting the scope of a representation to be made against an order passed by the Forum constituted by the Distribution Licensee.

It was also his contention that 'complaint', defined under Regulation 2.1(e) of the CGRF Regulations, took into its fold a variety of issues that could be raised by consumers.

He further argued that in the event of a decision by the Forum allowing those complaints, a Licensee would not have a remedy if Regulation 8.1(i) was declared to be ultra vires the provisions of subsections (5) to (7) of Section 42 of the Act.

"A Distribution Licensee will be forced to pursue a remedy outside the statute by filing a writ petition under Article 226 of the Constitution of India. Sub-sections (5) to (7) of Section 42 of the Act have to be read along with the other provisions of the statute and it cannot be said that a Licensee will not have redressal with respect to grievances that may arise out of decisions of the Forum," Counsel further added.

He also relied upon the regulations to argue that the Forum was headed by a judicial member and though one of the members would be an officer of the Licensee, he would be discharging his duties by being a full-time member of the Forum. Counsel further argued that the Regulations provided the right to make a representation to the Licensee before the Ombudsman, in furtherance of the principles of natural justice and could not be treated only as an appeal.

Advocates Kumar Vaibhaw, Devina Sehgal and Mohd Ashaab appearing for Kisan Cold Storage & Ice Factory submitted that U.P. Electricity Regulatory Commission had published revised draft regulations, as per which there was no provision corresponding to Regulation 8.1(i) as far as providing Distribution Licensee the right to make representation before the Ombudsman was concerned. He also argued that the Forum had to consider the grievances of the consumers within the four corners of the Act and if there was any decision that was taken by the Forum which might have a bearing on the policies of the Distribution Licensee, the Distribution Licensee would always have an opportunity of taking redressal to other remedies available to it under the law.

Supreme Court's Observations

The bench observed that any guidelines to be framed by the State Commission should be in strict conformity with the said provisions of the Act.

"Section 43 (5), (6) and (7) provide for a mechanism by which a forum for redressal of grievances of consumers is established and an Ombudsman will decide the representations of the consumers who are aggrieved by a decision of the forum. Any guidelines to be framed by the State Commission should be in strict conformity with the said provisions of the Act. Section 43(6) makes it clear that a representation to the Ombudsman against a decision of the forum can be preferred only by a consumer. Regulation 8.1(i) providing a right of representation to a Distribution Licensee is completely contrary to Section 43(6) of the Act and, is, therefore, ultra vires," the Top Court had remarked while dismissing the appeal.

Case Title: Uttar Pradesh Power Corporation Limited v. Kisan Cold Storage & Ice Factory & Ors| Civil Appeal No.7465 Of 2021

Coram: Justices LN Rao, BR Gavai and BV Nagarathna

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