Summary
LT commercial and industrial consumers in Kerala were found drawing electricity beyond their connected or contracted load. The Kerala High Court held that where the overdrawal was in the same premises, for the same purpose and under the same tariff, and had been metered and paid for, Section 126(6) of the Electricity Act allowed only twice the fixed charges, not twice the energy charges. It relied on Regulation 153(15) of the Kerala Supply Code, 2014. The Supreme Court reversed this. Following Seetaram Rice Mill, excess-load consumption is unauthorised use under Explanation (b)(iv) to Section 126, even without any change of tariff, because it endangers the supply system. 'Tariff' includes both fixed and energy charges. Regulation 153(15) was declared invalid.
Issues
- Whether consumption of electricity in excess of the sanctioned or connected load, in the same premises, for the same purpose and under the same tariff, is 'unauthorised use of electricity' under Explanation (b) to Section 126 of the Electricity Act, 2003, assessable at twice the tariff including energy charges.
- Whether Regulation 153(15) of the Kerala Electricity Supply Code, 2014, which excludes such additional load from 'unauthorised use of electricity', is within the regulation-making power under Sections 50 and 181.
Provisions considered
- Section 126(5) and (6) and Explanation (b)(iv), Electricity Act, 2003Sections 126 and 127 form a complete code aimed at stopping unauthorised use and preventing revenue loss; overdrawal beyond the sanctioned or connected load is unauthorised use whether or not it changes the tariff category, and is assessed at twice the applicable tariff. (¶¶ 43, 53, 54, 55, 56, 57, 58)
- Section 45(3)(a), Electricity Act, 2003Charges for electricity may include a fixed charge in addition to the charge for actual electricity supplied, so 'tariff' in Section 126(6) covers both fixed and energy charges. (¶¶ 87, 88)
- Regulation 153(15), Kerala Electricity Supply Code, 2014Being framed under Sections 50 and 181(2)(x), the Supply Code cannot deal with assessment for unauthorised use under Section 126 (U.P. Power Corporation v. Anis Ahmad); Regulation 153(15) travels beyond the Act and was declared invalid. (¶¶ 61, 62, 63, 82, 89, 92)
Held
- Seetaram Rice Mill held that consumption in excess of the sanctioned or connected load is unauthorised use under Explanation (b)(iv), rejecting the contention that only an actual change of purpose attracts Section 126; the High Court therefore carved out an exception not found in Section 126(6), and its reliance on the absence of revenue loss overlooks that overdrawal may throw the whole supply system out of gear. (¶¶ 53, 54, 55, 56, 57, 58, 59, 60)
- A regulation made for carrying out the purposes of the Act cannot create substantive rights or obligations not contemplated by it, and must supplement, not supplant, the parent statute; Regulation 153(15), excluding unauthorised additional load under the same tariff from unauthorised use, would frustrate the object of Section 126 and is inconsistent with it. (¶¶ 63, 64, 65, 72, 78, 80, 82, 89)
- Since tariff includes fixed and energy charges, once unauthorised use is found the assessing officer must assess at twice the applicable tariff including energy charges; the finding in paragraph 31(vi) of the High Court judgment and the conditions in paragraph 10 of the review order, including the requirement that regularisation must necessitate upgradation of the distribution system, were set aside. (¶¶ 86, 88, 89, 90, 91)
Result
Civil Appeal Nos. 9252-9253 of 2022 and connected appeals allowed without costs; paragraph 31(vi) of the Kerala High Court judgment dated 12.04.2017 in WP (C) No. 22644 of 2015 and paragraph 10 of the review order dated 21.08.2017 set aside; Regulation 153(15) of the Kerala Electricity Supply Code, 2014 declared invalid as inconsistent with Section 126 of the Electricity Act, 2003.