'Unauthorised use of Electricity' defined by Supreme Court

(Question of jurisdiction of the court in electricity matters)

 

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.

Fine distinction between a rule and regulation and also the power of the delegate authority to frame such rules or regulation if not maintained Ultra vires may arise and delegated legislation may be inconsistent with the provisions of the parent Act-Said SC while declaring Regulation 153(15) of the Code 2014 to be invalid being inconsistent with the provision of Section 126 of Electricity Act 2003.

Kerala State Electricity Board vs. Thomas Joseph Alias Thomas (SC) 16 Dec 2022|

Dr Prem Lata ,Legal Head Voice

A long pending issue before the Hon’ble Supreme court was finally settled with a landmark judgement in the matter of U.P. Power Corporation Ltd.& others V/s Anis Ahmad & others in 2013  along with eight more cases of similar nature.

The issues before the court were as to-

·         Whether complaints filed by the consumers against   Electricity Boards are maintainable before the consumer courts constituted under Consumer Protection Act

·         Whether the consumer forums have  the jurisdiction to entertain a complaint filed by a consumer or a person against assessment made for unauthorized use of electricity  under section 126 of the Electricity act 2003 or action taken by billing with penal rates  under sec. 135 to 140 of the Electricity act 2003.

.Supreme court in its final verdict held as hereunder;

    1.  In case of any inconsistency between the electricity act 2003 and the Consumer Protection Act 1986,the provisions of consumer protection act will prevail with regard to the matters of services defined under sec. 2(1)(o) or complaint under sec. 2(1)(c) of the consumer protection act 1986.

  2.  A complaint against the assessment made for unauthorized use of electricity under section 126 of electricity act or action taken by billing with penal rates under sec. 135 to 140 cannot be challenged before the consumer courts established under consumer protection act

3. The Electricity Act 2003 and Consumer Protection Act runs parallel for giving redressal to consumers who fall within the definition of consumer and complainant under the Consumer Protection Act under sections 2(1 )(c)&(d) of the act .

 

 In view of the above judgment, Complaints against the assessment made under section 126 of electricity act or action taken under sec 135 to 140 are clearly barred under all circumstances but if service provider has charged a price in excess of the price fixed by any law is opened to challenge before the consumer court meaning thereby consumer can file a complaint before the forum for excess billing if he has not been booked for unauthorized use of electricity or theft of electricity

 

But there is twist and turn in the latest Judgment by SC on the issue of unauthorised consumption of electricity in case of Kerala State Electricity Board V/S Thomas Joseph Alias Thomas 2022 (SC) decided on 16 December 2022

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 and also declared Regulation 153(15) of the Kerala Electricity Supply Code, 2014 as invalid for being inconsistent with the provision of Section 126 of Electricity Act 2003

Facts leading to dispute:

An appeal was 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'

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 and Another V/S  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."

Statutory provision in the Act -

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 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.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 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."

In view of the above discussions and Supreme Court latest as above verdict, following principal is established:

1.      Cases of excess load consumption other than the connected load would amount to 'Unauthorised use of Electricity'

2.      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.

 

 

 

 

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