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TMI Blog2022 (12) TMI 1533X X X X Extracts X X X X X X X X Extracts X X X X ..... ring 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicable for the relevant category of services, which consumption has already been metered and paid by the consumer, as such use being not by any artificial means or through the tampered meter, the assessment under Section 126(6) of the Electricity Act 2003 (for short, the Act 2003 ) could only be called to twice the fixed charges payable and such consumer cannot be saddled with the liability to pay twice the energy charges applicable for the relevant category of services, unless regularisation of such additional connected load or enhancements of contract demand necessitates upgradation of the existing distribution system or enhancement of the voltage level of supply. FACTUAL MATRIX 4. The neat question of law that falls for the consideration of this Court is whether the consumption of electricity by the respondents (consumers) in excess of the connected load/contracted load would amount to unauthorised use of electricity under explanation (b) to Section 126(6) of the Act 2003. 5. The appellant Board is a company incorporated under the Companies Act, 1956 (for short, the Act 1956 ) and is controlled by the Government of Kerala. It is engaged in the business of generation, transm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eans as appearing in Section 126 of the Act is an expression of wider connotation and has to be construed purposively in contrast to contextual interpretation while keeping in mind the object and purpose of the Act. The cases of excess load consumption than the connected load inter alia would fall under Explanation (b)(iv) to Section 126 of the Act, besides it being in violation of Regulations 82 and 106 of the Regulations and terms of the agreement. 8. Following the law laid down by the Apex Court in Seetharam Rice Mill's case (supra), a Division Bench of this Court in which one among us (AKN J) was a member, held in M/s. Classic Color Lab v. Assistant Engineer and others (2014 (3) KLT 57) that, while interpreting the provisions of Section 126 of the Electricity Act, 2003 this Court would have to apply the principle of purposive interpretation in preference to textual interpretation, keeping in mind the purpose to be achieved by that Section, i.e., to put an implied restriction on unauthorised use of electricity. Therefore, a construction which will improve the workability of the Statute, to be more effective and purposive, would have to be preferred to any other interpretatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and a half times (two times with effect from 15.6.2007) the tariff applicable for the relevant category of services attracting higher tariff for which the electricity supplied was unauthorisedly used, and not the relevant category of service to which the consumer belongs. Paras 15 and 16 of the judgment read thus; 15. On 3.3.2005, the appellant's premises was inspected by the APTS. As evident from Ext. P1 site mahazar, the APTS found that, the power supply through the light meter under industrial tariff LT- IV was being used for the neon lights and air conditioners in the studio, which are under commercial tariff LT-VIIA. The finding in Ext. P1 site mahazar is to the effect that, the appellant was indulging in unauthorised use of electricity for industrial purpose under the tariff LT-IV for commercial purpose, attracting a higher tariff under LT-VIIA. As the appellant used the electricity supplied for industrial use under LT-IV tariff for commercial use under LT- VIIA tariff it amounts to unauthorised use of electricity falling under Clause (b) to the Explanation to Section 126. For such unauthorised use the appellant is liable to be assessed under Section 126(6), as it stood ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicable for the relevant category of service, the appellant has topay only Rs.12.37 per unit for unauthorised use of electricity for commercial purpose, as against the prevailing rate of Rs.8.25 per unit applicable for the commercial tariff under LT-VIIA. Therefore, the only interpretation that can be given to Section 126(6) of the Electricity Act, 2003, is that, in an assessment under Section 126 for unauthorised use of electricity, assessment shall be made at a rate equal to one and half times (two times with effect from 15.6.2007) the tariff applicable for the relevant category of service attracting higher tariff for which the electricity supplied was unauthorisedly used and not the relevant category of service to which the consumer belongs, and we hold so. 8.5. In Classic Color Lab's case (supra), after taking note of the arguments advanced on behalf of the appellant/consumer relying on the judgment of this Court in J.D.T. Islam Orphanage Committee v. Assistant Engineer, KSEB (2007 (3) KLT 388) and that of the Calcutta High Court in Sk. Jafar Ali v. West Bengal State Electricity Distribution Company Limited (AIR 2010 Cal. 84) this Court observed that, J.D.T. Islam Orphan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actual electricity supplied and consumed. In the light of the above statutory provisions, the irresistible conclusion is that, tariff includes both fixed charges and energy charges and that, once the assessing officer has reached the conclusion that unauthorised used of electricity has taken place, he is bound to make assessment at the rate equal to twice the tariff applicable, which includes the dues payable towards energy charges also. In the judgment dated 3.4.2014 in W.A.No. 1149 of 2009 arising out of the judgment in W.P.(C).No.12068 of 2009 the Division Bench, without interfering with the judgment of the learned Single Judge, disposed of the Writ Appeal leaving open the question of law as to whether the penalty under Section 126 of the Act is applicable to energy charges also in the case of unauthorised additional load. 10. In Seetharam Rice Mill's case (supra) the Apex Court has stated that, Section 126 of the Act, which embodies a complete process for assessment, determination and demand has a purpose to achieve, i.e., to put an implied restriction on such unauthorised consumption of electricity. The provisions of Section 126 of the Act are self- explanatory, which are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lectricity (Amendment) Act, 2007 with a purpose and object of preventing unauthorised use of electricity not amounting to theft of electricity within the meaning of Section 135 of the Act, which has to be given its due meaning, which will fit into the scheme of the Act andwould achieve its object and purpose. 13. Taking note of the fact that electricity supply to a consumer is restricted and controlled by the terms and conditions of supply, Regulations and the provisions of the Act, the Apex Court held that, unauthorised use of electricity cannot be restricted to the stated clauses under Explanation to Section 126 but has to be given a wider meaning so as to cover cases of violation of terms and conditions of supply and the Regulations and provisions of the Act governing such supply. Therefore, the Apex Court concluded that, consumption of electricity in excess of the sanctioned/connected load shall be an unauthorised use of electricity in terms of Section 126 of the Act, since overdrawal of electricity amounts to breach of the terms and conditions of the contract and the statutory conditions; besides such overdrawal being prejudicial to the public at large, as it is likely to thro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amendment made to Section 126(5) and (6) of the Act, with a purpose and object of preventing unauthorised use of electricity not amounting to theft of electricity within the meaning of Section 135 of the Act has to be given its due meaning, which will fit into the scheme of the Act and would achieve its object and purpose. In the absence of any challenge against the said amendment made to Section 126(5) of the Act, the petitioners/consumers cannot now contend that the period of twelve months prescribed therein is unreasonable, in as much as, for theft of electricity the period prescribed in Section 135 of the Act is only three months . 17 . When unauthorised use of electricity under Section 126 of the Act deals with cases of unauthorised use even in absence of intention, it cannot be contended that, in the absence of mens rea, assessment at the maximum rate, i.e. at the rate equal to twice the tariff applicable to the relevant category of service is legally impermissible. In all cases of unauthorised use of electricity falling under Explanation (b) to Section 126 of the Act, the assessing officer is empowered to assess such unauthorised use of electricity, at the rate prescribed i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 126(6) of the Act includes both fixed charges and charges for the electricity supplied, which has to be assessed in the case of a consumer indulged in unauthorised use of electricity, at a rate equal to twice the tariff applicable for the relevant category of services specified in sub-section (5). Therefore, once the assessing officer has reached the conclusion that the consumer has indulged in unauthorised use of electricity, he is bound to make assessment of such consumer at the rate equal to twice the tariff applicable, which includes both fixed charges and energy charges. 22. Relying on the decisions in JDT Islam Orphanage Committee v. Assistant Engineer, KSEB (2007 (3) KLT 388), George Joseph and another v. KSEB and others (2008 (4) KLT 610), etc. the petitioners/consumers contended that, when the energy consumed through meter having been billed and payment having been made, assessment of penal charges for such consumption of energy is legally impermissible and the only liability that can be fastened upon the consumers found indulging in unauthorised use of electricity is penal charges on fixed charges. The said contention can only be repelled in view of our finding made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed use of electricity, assessment shall be made at a rate equal to one and a half times (two times with effect from 15.6.2007) the tariff applicable for the relevant category of services attracting higher tariff for which the electricity supplied was unauthorizedly used, and not the relevant category of service to which the consumer belongs. 26. As far as domestic consumers are concerned, the fixed charge for single phase connection is ₹20/- per month and it is ₹ 60/- per month for three phase connection, irrespective of the connected load. Therefore, a domestic consumer is paying fixed charge at the specified rate irrespective of the connected load and the energy charge for the actual consumption at the rates specified in the tariff order. Even if there is excess connected load in the premises of a domestic consumer, the electricity charges realisable from the consumer do not change and as such, additional connected loadwould not result in any financial loss to the licensee as per the terms and conditions of the tariff orders in force. That may be the reason which persuaded the Electricity Regulatory Commission not to penalise domestic consumers for additional loads in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat, in such cases request made by the consumer for regularisation of unauthorised connected load or enhancement of contract demand will be acceded to by the Board, as a matter of course, once the consumer fulfills the statutory requirements, unless such regularisation of connected load or enhancement of contract demand necessitates upgradation of the existing distribution system or enhancement of voltage level of supply. 30. As held by the Apex Court in Seetharam Mill's case (supra), in the case of unauthorised use of electricity, the blame on the consumeris in relation to excess load while the liability is to pay on a different tariff for the period prescribed in law and in terms of the order of assessment passed by the assessing officer under the provisions of Section 126 of the Act. In that view of the matter, in the case of a consumer, who is blamed with overdrawal of electricity in excess of sanctioned/connected load in the very same premises and for the very same purpose, which do not involve any change in tariff applicable for the relevant category of services, which consumption has already been metered and paid by the consumer, since such usage being not by any artific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and for the very same purpose, which do not involve any change in tariff applicable for the relevant category of services, which consumption has already been metered and paid by the consumer, since such usage being not by any artificial means or through a tampered meter, assessment under Section 126(6) of the Act can only be equal to twice the fixed charges payable and such consumer cannot be saddled with the liability to pay twice the energy charges applicable for the relevant category of services, unless regularisation of such additional connected load or enhancement of contract demand necessitates upgradation of the existing distribution system or enhancement of voltage level of supply. (vii) In all other cases falling under Explanation (b) to Section 126 of the Act, the assessing officer is empowered to assess unauthorised use of electricity at the rate prescribed in Section 126(6) and for the period specified in Section 126(5), as amended by the Electricity (Amendment) Act, 2007 for both fixed charges and energy charges. Penalty charges for current charges shall be levied for proportionate energy charge and normal current charge collected shall be deducted. (viii) Though Reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12. Being dissatisfied with the judgment and order passed by the High Court in the main matter as well as the order passed in the review applications, the appellant Board has come up with the present appeals. SUBMISSIONS ON BEHALF OF THE APPELLANT BOARD 13. Mr. R. Basant, the learned Senior Counsel appearing for the appellant Board vehemently submitted that the High Court committed a serious error in deciding the issue in question by relying upon Regulation 153(15) of the Code 2014. He pointed out that the State Regulations have been enacted in exercise of the powers conferred under Section 50 read with Section 181 of the Act 2003. The principal argument of Mr. Basant is that while framing Regulation 153(15), the Kerala State Electricity Regulatory Commission ( Commission ) could be said to have transgressed into the realm of Section 126 of the Act 2003 which is not provided for either under Section 50 or Section 181. In other words, the argument of the learned Senior Counsel is that if Section 50 and Section 181 resply, of the Act are read closely, then, the two Sections do not provide any power for such clarification/explanation. The learned Senior Counsel invited the attention o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 2003 in accordance with the dictum laid by this Court in Seetaram Rice Mill (supra). 19. The learned Senior Counsel made us understand something important. According to Mr. Basant, the finding of the High Court that it becomes unauthorised use only if the said usage leads to necessitation of upgradation of the system, could be termed as perverse as the same will end up penalising only the last consumer responsible for causing the disruption of distribution system and not the collective lot of consumers who are also unauthorised users. The learned Senior Counsel submitted that the collapse of the system would be as a result of many consumers drawing electricity in excess of the connected load/ contracted load and therefore, to penalise only the last consumer/customer for the collapse of the system would be unworkable and would not act as a deterrent for the consumers from drawing excess electricity. 20. In such circumstances referred to above, Mr. Basant, the learned Senior Counsel prays that there being merit in his appeals, those may be allowed and the impugned judgment and order passed by the High Court to the extent, it relies upon Regulation 153(15) of the Code 2014 may be se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n if there is excess connected load in the premises of a domestic consumer, the electricity charges realisable from the consumer do not change and as such, additional connected load would not result in any financial loss to the licensee. Essentially the domestic consumer would have to pay for the actual energy consumed. Notably, there is no variation in the fixed charges. 5. The Regulations in the Code 2014 seek to contextualise the Act 2003 to the prevalent local conditions and a conjoint (purposive) reading of the Act and the Code is paramount. Any other reading (including reading as ultra vires) renders the Code 2014 an empty vessel. The aforesaid reasoning of the High Court does not supplant the provisions of either Section 126 or Section 135, but only seeks to supplement the same, by reading (in conjunction) the relevant Regulations of the Code 2014. 6. Regulation 2(24) of the Code 2014 states that connected load expressed in KW or KVA means aggregate of the rated capacities of all energy consuming devices or apparatus which can be simultaneously used, excluding the standby load if any, in the premises of the consumer, which are connected to the service line of the distributio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Commission i.e., respondent No. 3 in SLP (C) No. 7886-7887 of 2018, that there are two kinds of billing contemplated: (a) Connected load based billing in case of connected load based billing, if additional/excess load is connected, then the same would be treated as unauthorised use. The same is indicated in Regulation 153(15) itself, as amended on 11.01.2016. (b) Contract demand based billing It is submitted however that in case of contract demand based billing, connecting additional load will not amount to unauthorised use under Section 126 of the Act. 23. It is further submitted that contract demand is the maximum demand that is agreed to be supplied by the licensee to the consumer. The same is indicative of the maximum load that can be drawn at the premises of the consumer at any given point of time. It is possible that the maximum demand of a consumer may be higher than the contract demand at any given point of time. However, as per Regulation 153(15), such excess demand will not be construed as unauthorised use of electricity. Rather, Regulation 101 of the Code 2014 provides the consequences where the maximum demand exceeds the contract demand. The said regulation stipu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concerned, the Code 2014 specifically provides a certain leeway for excess load / excess demand, within the same premises and under the same tariff, subject to the rigours of Regulation 101 and Regulation 153, and penal demand charges at 1.5 times the regular rates in respect of the excess demand under the relevant Tariff Order. It is submitted that the supply regulations applicable to the State of Orissa may not be applied in a straitjacketed manner to Kerala. Each State has its own generation, supply and distribution capacities and other relevant considerations before the Supply Code regulations are framed by the respective State Commissions. 26. In such circumstances referred to above, the learned counsel appearing for the Commission prayed that there being no merit in the appeals filed by the Board, those may be dismissed. ANALYSIS 27. Having heard the learned counsel for the parties and having gone through the materials on record, the only question that falls for our consideration is whether the High Court committed any error in passing the impugned judgment and order more particularly, the finding recorded in para 31(vi) of the impugned judgment? 28. It is necessary for us to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sponsibilities from the Government to the Regulatory Commissions, the need for harmonising and rationalising the provisions of the Electricity Act 1910, the Electricity (Supply) Act 1948 and the Electricity Regulatory Commissions Act 1948 in a new self-contained comprehensive legislation arose. 32. The long title of the Act 2003 indicates that its object is to consolidate the laws relating to generation, transmission, distribution, trading, and use of electricity and to take measures conducive to the development of the electricity industry; promote competition and protect the interests of consumers; ensure the supply of electricity to all areas; rationalise electricity tariffs and ensure transparent policies. The Statement of Objects and Reasons of the Act 2003 states that it gives the States enough flexibility to develop their power sector in the manner they consider appropriate. 33. Section 3 of the Act 2003 provides for the formulation of a National Electricity Policy and National Tariff Policy: 3. National Electricity Policy and Plan. ─ (1) The Central Government shall, from time to time, prepare the National Electricity Policy and tariff policy, in consultation with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The STU shall undertake transmission of electricity through the intra-State transmission system and discharge functions relating to the planning and coordination of the intraState transmission system. While discharging its functions, the STU is required to reflect the planning initiatives of intra-State transmission system by publishing a five-year plan periodically. 37. Sections 76 and 82 of the Act 2003 constitute the Central Electricity Regulatory Commission and State Electricity Regulatory Commission respectively. The Central and State Electricity Regulatory Commissions shall among other functions, determine and regulate the tariff for inter-State transmission of electricity and intra-State transmission of electricity respectively. Sections 79(3) (4) and 86(3) (4) of the Act 2003 stipulate that the Central and State Commissions shall while discharging their functions ensure transparency, and shall be guided by the National Electricity Policy, National Electricity Plan and Tariff Policy. The Central and State Commissions also discharge advisory functions, whereby they advise the Central Government and State Government respectively on, inter alia, promotion of competition in ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... my with respect to intrastate transmission of electricity. 41. Part VII of the Act 2003 deals with Tariff. Part VII comprises of Section 61(Tariff regulations), Section 62 (Determination of tariff), Section 63 (Determination of tariff by bidding process), Section 64 (Procedure for tariff order), Section 65 (Provision of subsidy by the State Government) and Section 66 (Development of market). In terms of Section 61, the Appropriate Commission is entrusted, subject to the provisions of the Act 2003, to specify the terms and conditions for the determination of tariff. While specifying the terms and conditions, the Appropriate Commission shall be guided by the requirements specified in clauses (a) to (i). Amongst them, in clause (i) is the National Electricity Policy and tariff policy, while clause (c) emphasises the need to encourage competition, efficiency, economical use of the resources, good performance and optimum investments. Section 62(1) empowers the Appropriate Commission to determine the tariff in accordance with the provisions of this Act for : a. supply of electricity by a generating company to a distribution licensee; b. transmission of electricity; c. wheeling of electri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. (4) Any person served with the order of provisional assessment may, accept such assessment and deposit the assessed amount with the licensee within seven days of service of such provisional assessment order upon him. (5) If the assessing officer reaches to the conclusion that unauthorised use of electricity has taken place, the assessment shall be made for the entire period during which such unauthorised use of electricity has taken place and if, however, the period during which such unauthorised use of electricity has taken place cannot be ascertained, such period shall be limited to a period of twelve months immediately preceding the date of inspection. (6) The assessment under this section shall be made at a rate equal to twice the tariff applicable for the relevant category of services specified in sub-section (5). Explanation. ─ For the purposes of this section,─ (a) assessing officer means an officer of a State Government or Board or licensee, as the case may be, designated as such by the State Government; (b) unauthorised use of electricity means the usage of electricity ─ (i) by any artificial means; or (ii) by a means not authorised by the concerned pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e phrase unauthorised use of electricity . The same reads thus: 2. Definitions.- In this Code, unless it is repugnant to the context,- xx xx xx (79) unauthorised use of electricity means the usage of electricity as explained in Section 126 of the Act; 50. Regulation 153 falls within Chapter IX of the Code 2014. Chapter IX is in respect of theft, unauthorised use and other irregularities. The Regulation 153 reads thus: 153. Estimation and regularisation of unauthorised additional load.- (1) If it is detected, on inspection, that additional load in excess of the sanctioned load has been connected to the system without due sanction from the licensee, further action shall be taken in accordance with the following subregulations. (2) The difference between the total connected load in the premises of the consumer at the time of inspection and the sanctioned load of the consumer shall be reckoned as unauthorised additional load. (3) Connected load shall be determined as per the following clauses:- (a) the rated capacities of all energy consuming devices and apparatus which can be simultaneously used, excluding stand-by load if any, in the premises of the consumer and found connected to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disconnected by the licensee. (8) If it is found that no additional load has been connected and recorded maximum demand has been exceeded, the demand charges may be collected for the recorded maximum demand at the rates as approved by the Commission and steps may be initiated to enhance the contract demand as specified in regulation 99 of the Code. (9) If it is found that additional load has been connected without any increase in the contract demand, steps may be initiated to regularise the connected load in accordance with the provisions in the agreement within a time frame as stipulated by the licensee. (10) If it is found that additional load has been connected without due authorisation from the licensee and contract demand has been exceeded, steps may be initiated to regularise the additional load and to enhance the contract demand in addition to collection of demand charges as per the agreement conditions, for the recorded maximum demand at the rates approved by the Commission: Provided that such regularisation of additional load and enhancement of contract demand shall be done only after ensuring that wiring has been done in conformity with the provisions of Central Electric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act 2003. In the dump report, it was stated that there was unauthorised use of electricity and maximum demand had been consumed upto 142 KVA. On this basis, the provisional assessment order was passed by taking the contracted demand as that applicable to large industry. The respondent therein did not file objections but challenged the provisional assessment order on the ground of lack of authority and jurisdiction on the part of the Executive Engineer to frame the provisional assessment by alleging unauthorised use of electricity since 04.06.2008. The respondent therein contended that since it was classified as medium scale industry, provisional assessment could not have been made on the basis of the dump charges relating to large industry. The High Court held that overdrawal of maximum demand would not fall within the scope of 'unauthorised use of electricity' as defined by sub-clause (b) to the Explanation to Section 126 of the said Act. The High Court set aside the provisional assessment order. While dealing with the challenge to the High Court's order, this Court, inter alia, examined the scope of Sections 126, 127 and 135 resply of the said Act against the bac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o distinguish Seetaram Rice Mill (supra) from the present case on the ground that there was a change in the classification/category which is not so in this case inasmuch as here the consumers remain commercial/industrial having LT connection and, therefore, there is no issue of unauthorised use within the meaning of Section 126 of the Act 2003. We see no force in the submission that change of category would not attract Section 126 of the Act 2003. In Seetaram Rice Mill (supra), it was contended that only cases of change of user would be covered under Section 126 of the Act 2003. While rejecting such contention, this Court clarified that the explanation to Section 126 is not exhaustive and any use of electricity which is not permissible and beyond the contract demand amounts to unauthorised use of electricity and the blame contemplated under Section 126 of the Act 2003 is not dependent on whether the overdrawal transgresses into another tariff category or not. We may quote the relevant paragraphs from Seetaram Rice Mill (supra): 18. It is true that fiscal and penal laws are normally construed strictly but this rule is not free of exceptions. In given situations, this Court may, even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an order of assessment in cases which do not fall under Section 135 of the 2003 Act. Xxx xxx xxx 37. Wherever the assessing officer arrives at the conclusion that unauthorised use of electricity has taken place, the assessment shall be made for the entire period during which such unauthorised use of electricity has taken place and if such period cannot be ascertained, it shall be limited to a period of 12 months immediately preceding the date of inspection and the assessment shall be made at the rate equal to twice the tariff applicable for the relevant category of service specified under these provisions. This computation has to be taken in terms of Sections 126(5), 126(6) and 127 of the 2003 Act. The complete procedure is provided under these sections. Right from the initiation of the proceedings till preferring of an appeal against the final order of assessment and termination thereof, as such, it is a complete code in itself. Xxx xxx xxx 44. The unauthorised use of electricity in the manner as is undisputed on record clearly brings the respondent under liability and in blame within the ambit and scope of Section 126 of the 2003 Act. The blame is in relation to excess load whil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s stated in the Explanation. It is indisputable that the electricity supply to a consumer is restricted and controlled by the terms and conditions of supply, the Regulations framed and the provisions of the 2003 Act. Xxx xxx xxx 64. Minimum energy charges are to be levied with reference to contract demand at the rate prescribed under the terms and conditions. These clauses of the Agreement clearly show that the charges for consumption of electricity are directly relatable to the sanctioned/connected load and also the load consumed at a given point of time if it is in excess of the sanctioned/connected load. The respondent could consume electricity up to 110 kVA but if the connected load exceeded that higher limit, the category of the respondent itself could stand changed from medium industry to large industry which will be governed by a higher tariff. 65. Chapter VIII of the Conditions of Supply classifies the consumers into various categories and heads. The electricity could be provided for a domestic, LT industrial, LT/HT industrial, large industry, heavy industries and power intensive industries, etc. In terms of Regulation 80, the industry would fall under LT/HT category, if it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ectric connection was given to the respondent on a contractual stipulation that he would consume the electricity in excess of 22 kVA but not more than 110 kVA. The use of the negative language in the condition itself declares the intent of the parties that there was an implied prohibition in consuming electricity in excess of the maximum load as it would per se be also prejudiced. Not only this, the language of Regulations 82 and 106 also prescribe that the consumer is not expected to make use of power in excess of approved contract demand otherwise it would be change of user falling within the ambit of unauthorised use of electricity . 72. Again, there is no occasion for this Court to give a restricted meaning to the language of Explanation (b)(iv) of Section 126. According to the learned counsel appearing for the respondent, it is only the actual change in purpose of use of electricity and not change of category that would attract the provisions of Section 126 of the 2003 Act. The contention is that where the electricity was provided for a domestic purpose and is used for industrial purpose or commercial purpose, then alone it will amount to change of user or purpose. The cases o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 55. Having read and re-read the decision of this Court in the case of Seetaram Rice Mill (supra), we are clear in our mind that the High Court in its impugned judgment has carved out an exception, which does not find a place in Section 126(6) of the Act 2003. Paras 18 37 resply of the judgment, in the case of Seetaram Rice Mill (supra) referred to above categorically hold that Section 126 and 127 resply of the Act 2003 read together constitute a complete code in themselves. Para 50 of the said judgment holds that the purpose of Section 126 is to ensure stoppage of misuse/ unauthorised use of electricity. Para 61 of Seetaram Rice Mill (supra) referred to above makes the picture abundantly clear. 56. In para 67 of Seetaram Rice Mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Section 126 of the 2003 Act. The contention is that where the electricity was provided for a domestic purpose and is used for industrial purpose or commercial purpose, then alone it will amount to change of user or purpose. The cases of excess load would not fall in this category. This argument is again without any substance and, in fact, needs to be noticed only to be rejected. (Emphasis supplied) 58. 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. 59. This Court in Punjab State Electricity Board v. Vishwa Caliber Builders Private Limited reported in (2010) 4 SCC 539 had the occasion to consider the Punjab State Electricity Regulatory Commission (Forum and Ombudsman) Regulations, 2005. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... behalf of the consumers that the Regulation 153(15) of the Code 2014 makes all the difference and the ratio and the principles as propounded in Seetaram Rice Mill (supra) should be understood in the light of the Regulation 153(15) of the Code 2014. We have quoted Regulation 153(15) of the Code 2014 in the earlier part of our judgment. We do not find any merit in the submission canvassed on behalf of the consumers in regard to the applicability of Regulation 153(15) of the Code 2014. The Code 2014 is framed under Section 50 read with Section 181(x) of the Act 2003. 62. This Court in Uttar Pradesh Power Corporation Limited and Others v. Anis Ahmad reported in (2013) 8 SCC 491, held that the Supply Code cannot provide for nor does it relate to assessment of charges for unauthorised use of electricity under Section 126 of the Act 2003. Paras 53 and 54 resply of the said judgment state as follow: 53. Section 50 of the Electricity Act, 2003 empowers the State Commission to specify an Electricity Supply Code to provide for recovery of electricity charges, intervals for billing of electricity charges, measures for preventing damage to electrical plant or electrical line or meter, entry of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... delegated legislation or not, but that it should operate under proper controls so that it may be ensured that the power given to the Administration is exercised properly; the benefits of the institution may be utilised, but its disadvantages minimised. The doctrine of ultra vires envisages that a rule making body must function within the purview of the rule making authority conferred on it by the parent Act. As the body making rules or regulations has no inherent power of its own to make rules, but derives such power only from the statute, it has to necessarily function within the purview of the statute. 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. 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 v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it shall have to be seen if the rules made are protected by the limits prescribed by the parent act . 71. In St. Johns Teachers Training Institute v. Regional Director, National Council for Teacher Education and Another reported in (2003) 3 SCC 321, it has been observed that: 10. A regulation is a rule or order prescribed by a superior for the management of some business and implies a rule for general course of action. Rules and regulations are all comprised in delegated legislation. The power to make subordinate legislation is derived from the enabling Act and it is fundamental that the delegate on whom such a power is conferred has to act within the limits of authority conferred by the Act. Rules cannot be made to supplant the provisions of the enabling Act but to supplement it. What is permitted is the delegation of ancillary or subordinate legislative functions, or, what is fictionally called, a power to fill up details .. 72. In Global Energy Limited and Another v. Central Electricity Regulatory Commission reported in (2009) 15 SCC 570, this Court was dealing with the validity of clauses (b) and (f) of Regulation 6-A of the Central Electricity Regulatory Commission (Procedure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he parent Act, the court should proceed with caution before declaring invalidity. 75. In Pratap Chandra Mehta v. State Bar Council of Madhya Pradesh and others reported in (2011) 9 SCC 573, while discussing about the conferment of extensive meaning, it has been opined that: 58. .The Court would be justified in giving the provision a purposive construction to perpetuate the object of the Act, while ensuring that such rules framed are within the field circumscribed by the parent Act. It is also clear that it may not always be absolutely necessary to spell out guidelines for delegated legislation, when discretion is vested in such delegatee bodies. In such cases, the language of the rule framed as well as the purpose sought to be achieved, would be the relevant factors to be considered by the Court. 76. In Dr. Mahachandra Prasad Singh v. Chairman, Bihar Legislative Council and Others reported in (2004) 8 SCC 747, this Court explained the concept of delegated legislation thus: 13. ..Underlying the concept of delegated legislation is the basic principle that the legislature delegates because it cannot directly exert its will in every detail. All it can in practice do is to lay down the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 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. 79. It is important to keep in mind that where a rule or regulation is directly inconsistent with a mandatory provision of the statute, then, of course, the task of the Court is simple and easy. But where the contention is that the inconsistency or non-conformity of the rule is not with reference to any specific provision of the enabling Act, but with the object and scheme of the parent Act, the Court should proceed with caution before declaring the same to be invalid. 80. Rules or regulation cannot be made to supplant the provisions of the enabling Act but to supplem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dy or agency ordinarily includes the power to make or adopt rules and regulations with respect to matters within the province of such body provided such rules and regulations are not inconsistent with the relevant law. In America a public agency has been defined as an agency endowed with governmental or public functions. It has been held that the authority to act with the sanction of Government behind it determines whether or not a governmental agency exists. The rules and regulations comprise those actions of the statutory or public bodies in which the legislative element predominates. These statutory bodies cannot use the power to make rules and regulations to enlarge the powers beyond the scope intended by the Legislature. Rules and regulations made by reason of the specific power conferred on the statute to make rules and regulations establish the pattern of conduct to be followed. Rules are duly made relative to the subject-matter on which the statutory bodies act subordinate to the terms of the statute under which they are promulgated. Regulations are in aid of the enforcement of the provisions of the statute. Rules and regulations have been distinguished from orders or deter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stion 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. 83. The material on record indicates something very startling. During the year 2014-15, total unauthorised use of electricity in the State of Kerala was detected in 1662 units and the total amount assessed comes to Rs.14,40,82,176/- (Rupees Fourteen Crore Forty Lakhs Eighty Two Thousand One Hundred and Seventy Six only). The corresponding figures during the years 2015-16 and 2016-17 were 1262 and 1875 units resply and the total amount assessed comes to around Rs.10,63,76,776/- (Rupees Ten Crore Sixty Three Lakhs Seventy Six Thousand Seven Hundred and Seventy Six only) and Rs. 34,64,80,421/- (Rupees Thirty Four Crore Sixty Four Lakh Eighty Thousand Four Hundred and Twenty One only) resply. 84. In the revenue petitions filed by the appellant Board, it was pointed to the High Court that the total amount assessed for all the three years referred to above, came to Rs.59,69,39,373/- (Rupees Fifty Nine Crore Sixty ..... X X X X Extracts X X X X X X X X Extracts X X X X
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