2022 (12) TMI 1533 - SC - Indian Laws

Unauthorised use of electricity under explanation (b) to Section 126(6) of the Act 2003 - consumption of electricity by the respondents (consumers) in excess of the connected load/contracted load - explanation (b) to Section 126(6) of the Act 2003 - Validity of Regulation 153(15) of the Kerala Electricity Supply Code, 2014 in light of Section 126 of the Electricity Act, 2003 - HELD THAT - A delegated power to legislate by making rules or regulations for carrying out the purpose of the Act , is a general delegation without laying down any guidelines; it cannot be exercised so as to bring into existence the substantive rights or obligations or disabilities not contemplated by the provisions of the Act 2003 itself. The Court, considering the validity of a subordinate legislation, will have to consider the nature, object and scheme of the enabling Act, and also the area over which power as has been delegated under the Act and then decide whether the subordinate legislation conforms to the parent statute. A plain reading of Section 45(3)(a) of the Act 2003 would indicate that the charges for electricity certified by a distribution licensee include the fixed charges, in addition to the charges for the actual electricity supplied and consumed. In such circumstances, it can be said that the tariff includes both, fixed charges and energy charges and once the assessing officer arrives at the conclusion that unauthorised use of electricity has taken place, he is obliged to make the assessment charge equal to twice the tariff applicable, which includes the dues payable towards the energy charges also. The finding recorded by the High Court in para 31(vi) is not sustainable in law - the Regulation 153(15) deserves to be declared invalid being inconsistent with the provisions of Section 126 of the Act 2003. The declaration issued by the High Court, as contained in para 31(vi) of the impugned judgment is hereby set aside - Regulation 153(15) of the Code 2014 is declared to be invalid being inconsistent with the provision of Section 126 of the Act 2003 - appeal allowed.

Issues Involved:

1. Whether consumption of electricity in excess of the connected load/contracted load amounts to 'unauthorised use of electricity' under Section 126(6) of the Electricity Act, 2003.
2. Validity of Regulation 153(15) of the Kerala Electricity Supply Code, 2014 in light of Section 126 of the Electricity Act, 2003.

Issue-wise Detailed Analysis:

1. Whether consumption of electricity in excess of the connected load/contracted load amounts to 'unauthorised use of electricity' under Section 126(6) of the Electricity Act, 2003:

The Supreme Court examined whether the consumption of electricity by the respondents (consumers) in excess of the connected load/contracted load constitutes 'unauthorised use of electricity' under explanation (b) to Section 126(6) of the Electricity Act, 2003. The Kerala State Electricity Board (KSEB) challenged the High Court of Kerala's judgment which held that the assessment for unauthorised use of electricity should be at twice the tariff applicable for the relevant category of services attracting higher tariff, not the category to which the consumer belongs. The High Court further held that overdrawal of electricity in the same premises and for the same purpose, without involving any change in tariff, should only attract twice the fixed charges and not twice the energy charges unless it necessitates upgradation of the existing distribution system.

The Supreme Court referenced its decision in Executive Engineer, Southern Electricity Supply Company of Orissa Limited (Southco) and Another v. Sri Seetaram Rice Mill, which clarified that consumption in excess of the sanctioned/connected load amounts to 'unauthorised use of electricity.' The Court stated that Section 126 and Section 127 of the Electricity Act, 2003, read together, constitute a complete code in themselves, covering all relevant considerations for passing an order of assessment. The purpose of Section 126 is to ensure the stoppage of misuse/unauthorised use of electricity and to prevent revenue loss. The Court emphasized that overdrawal of electricity is prejudicial to the public at large as it may disrupt the entire supply system, undermining its efficiency and increasing voltage fluctuations.

The Supreme Court concluded that the High Court erred in carving out an exception that does not find a place in Section 126(6) of the Act. The consumption of electricity in excess of the sanctioned/connected load constitutes 'unauthorised use of electricity' and should be assessed at twice the tariff applicable for the relevant category of services.

2. Validity of Regulation 153(15) of the Kerala Electricity Supply Code, 2014 in light of Section 126 of the Electricity Act, 2003:

The Supreme Court examined the validity of Regulation 153(15) of the Kerala Electricity Supply Code, 2014, which states that unauthorised additional load in the same premises and under the same tariff shall not be reckoned as 'unauthorised use of electricity.' The appellant Board argued that this regulation transgresses into the realm of Section 126 of the Act, which is not provided for under Section 50 or Section 181 of the Act. The Court referenced its decision in Uttar Pradesh Power Corporation Limited and Others v. Anis Ahmad, which held that the Supply Code cannot provide for nor relate to the assessment of charges for 'unauthorised use of electricity' under Section 126 of the Act.

The Supreme Court held that Regulation 153(15) travels beyond Section 126 and Section 50 of the Act and is inconsistent with the provisions of the Act. The regulation-making power cannot be used to create substantive rights not contemplated under the Act. The Court emphasized that a rule must conform to the provisions of the statute under which it is framed and must not travel beyond the scope of the enabling Act.

The Supreme Court declared Regulation 153(15) of the Kerala Electricity Supply Code, 2014, invalid for being inconsistent with Section 126 of the Electricity Act, 2003. The Court set aside the High Court's judgment to the extent it relied on Regulation 153(15) and held that the consumption of electricity in excess of the sanctioned/connected load constitutes 'unauthorised use of electricity' and should be assessed at twice the tariff applicable for the relevant category of services.

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