Gujarat High Court
Deputy Engineer (O And M), Dakshin ... vs Kishorchandra N Nanavati on 23 February, 2023
Author: Biren Vaishnav
Bench: Biren Vaishnav
NEUTRAL CITATION
C/SCA/20205/2021 ORDER DATED: 23/02/2023
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 20205 of 2021
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DEPUTY ENGINEER (O AND M), DAKSHIN GUJARAT VIJ COMPANY
LIMITED
Versus
KISHORCHANDRA N NANAVATI & 1 other(s)
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Appearance:
MS LILU K BHAYA(1705) for the Petitioner(s) No. 1
NOTICE SERVED for the Respondent(s) No. 1
MR ROHAN SHAH, AGP for the Respondent(s) No. 2
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CORAM:HONOURABLE MR. JUSTICE BIREN VAISHNAV
Date : 23/02/2023
ORAL ORDER
1. Though served, none appears for respondent no. 1.
Heard Ms. Lilu Bhaya, learned advocate for the petitioner and Mr. Rohan Shah, learned AGP for respondent no. 2.
2. By way of this petition, under Article 226 of the Constitution of India, the petitioner has prayed to quash and set aside the judgement and order dated 07.06.2021 passed by the Appellate Authority and Assistant Electrical Inspector, Surat in Appeal No. 11/2018-19 whereby the bill issued by the petitioner for Rs. 90,662.88 was set aside and the petitioner was directed to refund the Page 1 of 19 Downloaded on : Sun Sep 17 22:08:05 IST 2023 NEUTRAL CITATION C/SCA/20205/2021 ORDER DATED: 23/02/2023 undefined amount paid by respondent no. 1.
3. It is the case of the petitioner that the respondent no. 1 is an NRGP consumer of the petitioner having contracted load of 28KW. On the complaint of respondent no. 1 about burnt meter, the connection of respondent no. 1 was checked on 13.09.2018. The meter was replaced with a new one and on checking the total connected load, it was found that there was connected load of 54.34 KW. The respondent no. 1 was therefore booked for unauthorised use of electricity under section 126 of the Electricity Act and a provisional bill was issued on 14.09.2018 for Rs.90,662.88. After hearing the respondent no. 1 and considering his objections, the final bill of the same amount was issued to the respondent no.
1 on 28.09.2018. Being aggrieved by the same, the respondent no. 1 preferred an appeal under Section 127 of the Electricity Act which was accordingly allowed.
Hence the petition.
4. Ms. Lilu Bhaya, learned advocate appearing for the Page 2 of 19 Downloaded on : Sun Sep 17 22:08:05 IST 2023 NEUTRAL CITATION C/SCA/20205/2021 ORDER DATED: 23/02/2023 undefined petitioner company would submit that the appellate authority has failed to appreciate clause no. 7.41 of the Electricity Supply Code, 2015 which provides that if the connected load is found in excess of load contracted, then the fixed charges shall be charged for the excess load at twice the applicable fixed charge as per the tariff. She submits that the case on hand is one of unauthorised use of electricity and therefore the appellate authority has misinterpreted the provisions of clause no. 4.95 of the Supply Code. She would submit that clause no. 4.95 is applicable where the load is 25% more than the contracted load whereas in this case the connected load was more than almost 100% of the contracted load.
4.1 Ms. Bhaya, learned advocate for the petitioner would further submit that section 126 of the Act contains the method of computing the amount that a consumer would be liable to pay for excessive consumption of electricity, being in the nature of unauthorized use of electricity. In support of her submissions, Ms. Bhaya would rely on a Page 3 of 19 Downloaded on : Sun Sep 17 22:08:05 IST 2023 NEUTRAL CITATION C/SCA/20205/2021 ORDER DATED: 23/02/2023 undefined decision of this court rendered in Special Civil Application No. 9035 of 2018 with Special Civil Application No. 11589 of 2018 on 01.02.2023.
5. Having heard learned advocate for the petitioner and having gone through the records, it is undisputed that the connected load was more than the contracted load. In this connection, it shall be relevant to peruse the decision relied upon by learned advocate for the petitioner in Special Civil Application No. 9035 of 2018, relevant paragraphs of which read as under:
"7. Now coming to the second question about applicability of Section 4.95 of the Supply Code to cases of excessive consumption of electricity covered under Section 126 of the Act, it has been argued by Mr. Nanavati on behalf of the distribution licensee that Section 4.95 has no application in cases of excessive drawal of electricity by the consumer, beyond the maximum of contracted demand / sanctioned load / demanded load. According to his submission, the provision applies to those cases where the maximum demand is recorded in excess of 5% or more for at least four times in the previous financial year. Maximum demand Page 4 of 19 Downloaded on : Sun Sep 17 22:08:05 IST 2023 NEUTRAL CITATION C/SCA/20205/2021 ORDER DATED: 23/02/2023 undefined has been defined in the Supply Code, and means "an average kW / kVA supplied during consecutive 30 / 15 minutes period of maximum use where such meter with the features of reading the maximum demand in kW / kVA directly has been provided". The cases covered are those of supply of electricity in excess of the demand and that too intermittently and for short duration of time. There is force in his submission.
7.1 However, the issue regarding applicability of Section 4.95 now needs to be examined in light of the observations made by the Hon'ble Supreme Court in the decision of Kerala State Electricity Board (supra). In this case, the Court was examining the corrects of decision of Division Bench of the Kerala High Court. The Division Bench, in light of the decision of the Hon'ble Supreme Court in Sri Seetharam Mills (supra) held that excessive consumption of electricity amounts to unauthorised use of electricity. However, by relying upon Regulation 153(15) of the Kerala Electricity Supply Code, 2014 took a view that consumption of additional load by a consumer within the same premises and under the same tariff category (residential / commercial / industrial) shall not be reckoned as unauthorised use of electricity, except in cases where the consumer is billed on the basis of connected load. The Court examined the scheme of the Act and analysed the provisions of the Act, particularly Section 50, Section 126 Page 5 of 19 Downloaded on : Sun Sep 17 22:08:05 IST 2023 NEUTRAL CITATION C/SCA/20205/2021 ORDER DATED: 23/02/2023 undefined and 181 of the Act. The Court then proceeded to hold thus:
"....57. 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.
58. In para 67 of Seetaram Rice Mill (supra) referred to above, it was categorically held that the 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, 2003. According to us, the observations made by this Court in Seetaram Rice Mill (supra) as contained in para 67 goes to the root of the matter. Seetaram Rice Mill Page 6 of 19 Downloaded on : Sun Sep 17 22:08:05 IST 2023 NEUTRAL CITATION C/SCA/20205/2021 ORDER DATED: 23/02/2023 undefined (supra) in para 67 has said in so many words that 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 throw out of gear the entire supply system undermining its efficiency, efficacy and even-increasing voltage fluctuations. This aspect of the matter has been completely overlooked by the High Court. It is not just a matter of overdrawal of electricity in excess of sanctioned/connected load in the very same premises and for the very same purpose, which does not involve any change in the tariff applicable for the relevant category of services. The tariff applicable may remain the same; the overdrawal may be in the same premises and for the very same purpose, there may not be any loss of revenue but it may lead to a disastrous situation being prejudicial to the public at large, as such overdrawal of electricity in excess of sanctioned/connected load may disturb the entire supply system, undermining its efficiency, efficacy and even-increasing voltage demand.
59. In para 72 of Seetaram Rice Mill (supra), a contention was raised by the consumer that it is only the actual Page 7 of 19 Downloaded on : Sun Sep 17 22:08:05 IST 2023 NEUTRAL CITATION C/SCA/20205/2021 ORDER DATED: 23/02/2023 undefined change in purpose of use of electricity that would attract Section 126 of the Act, 2003. The contention was that where the electricity was provided for domestic purpose but was actually used for industrial or commercial purpose, then alone it will amount to change of user or purpose and accordingly a contention was raised that a case of usage of excess load would not fall in this category. This Court rejected the said contention in para 72. Para 72 states as follows:
"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.
Page 8 of 19 Downloaded on : Sun Sep 17 22:08:05 IST 2023NEUTRAL CITATION C/SCA/20205/2021 ORDER DATED: 23/02/2023 undefined 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)
60. 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.
63. We shall now look into the main limb of the submission canvassed on 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) Page 9 of 19 Downloaded on : Sun Sep 17 22:08:05 IST 2023 NEUTRAL CITATION C/SCA/20205/2021 ORDER DATED: 23/02/2023 undefined 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.
64. This Court in Uttar Pradesh Power Corporation Limited 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 distribution licensee, etc. and it reads as follows: "50.
The Electricity Supply Code.
Page 10 of 19 Downloaded on : Sun Sep 17 22:08:05 IST 2023 NEUTRAL CITATION C/SCA/20205/2021 ORDER DATED: 23/02/2023 undefined --The State Commission
shall specify an Electricity Supply Code to provide for recovery of electricity charges, intervals for billing of electricity charges, disconnection of supply of electricity for non-payment thereof, restoration of supply of electricity, measures for preventing tampering, distress or damage to electrical plant or electrical line or meter, entry of distribution licensee or any person acting on his behalf for disconnecting supply and removing the meter, entry for replacing, altering or maintaining electric lines or electrical plants or meter and such other matters."
54. From reading Section 50, it is clear that under the Electricity Supply Code provisions are to be made for recovery of electricity charges, billing of electricity charges, disconnection, etc. and measures for preventing tampering, distress or damage to the electrical plant or line or meter, etc. But the said Code need not provide provisions relating Page 11 of 19 Downloaded on : Sun Sep 17 22:08:05 IST 2023 NEUTRAL CITATION C/SCA/20205/2021 ORDER DATED: 23/02/2023 undefined to it/do not relate to assessment of charges for "unauthorised use of electricity" under Section 126 or action to be taken against those committing "offences" under Sections 135 to 140 of the Electricity Act, 2003." (Emphasis supplied) 65. Thus, reliance on Regulation 153(15) of the Code 2014 framed under Section 50 of the Act, 2003 by the respondent (consumers) is thoroughly misconceived, as the same does not conform to the provisions of the Act, 2003.
In any event, Regulation 153(15) travels much beyond Section 126 and Section 50 resply of the Act, 2003. It is settled law that the regulation making power cannot be used to bring into existence substantive rights, which are not contemplated under the Act, 2003.
65. Thus, reliance on Regulation 153(15) of the Code 2014 framed under Section 50 of the Act, 2003 by the respondent (consumers) is thoroughly misconceived, as the same does not conform to the provisions of Page 12 of 19 Downloaded on : Sun Sep 17 22:08:05 IST 2023 NEUTRAL CITATION C/SCA/20205/2021 ORDER DATED: 23/02/2023 undefined the Act, 2003. In any event, Regulation 153(15) travels much beyond Section 126 and Section 50 resply of the Act, 2003. It is settled law that the regulation making power cannot be used to bring into existence substantive rights, which are not contemplated under the Act, 2003.
66. At this stage, it is apposite to state about the rule making powers of a delegating authority. If a rule goes beyond the rule making power conferred by the statute, the same has to be declared invalid. If a rule supplants any provision for which power has not been conferred, it becomes invalid. The basic test is to determine and consider the source of power, which is relatable to the rule. Similarly, a rule must be in accord with the parent statute, as it cannot travel beyond it.
67. Delegated legislation has come to stay as a necessary component of the modern administrative process. Therefore, the question today is not whether there ought to be 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 Page 13 of 19 Downloaded on : Sun Sep 17 22:08:05 IST 2023 NEUTRAL CITATION C/SCA/20205/2021 ORDER DATED: 23/02/2023 undefined 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 non- compliance 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 vires.
81. 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 Page 14 of 19 Downloaded on : Sun Sep 17 22:08:05 IST 2023 NEUTRAL CITATION C/SCA/20205/2021 ORDER DATED: 23/02/2023 undefined 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.
82. Rules or regulation cannot be made to supplant the provisions of the enabling Act but to supplement it. What is permitted is the delegation of ancillary or subordinating legislative functions, or, what is fictionally called, a power to fill up details.
84. 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 (supra), 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 Page 15 of 19 Downloaded on : Sun Sep 17 22:08:05 IST 2023 NEUTRAL CITATION C/SCA/20205/2021 ORDER DATED: 23/02/2023 undefined 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.
91. In overall view of the matter, we have reached to the conclusion that the finding recorded by the High Court in para 31(vi) is not sustainable in law. We have also reached to the conclusion that the Regulation 153(15) deserves to be declared invalid being inconsistent with the provisions of Section 126 of the Act, 2003..."
8. Examining Section 4.95 of our Supply Code, it can be seen that the provision brings into existence a substantive right in favour of consumer of being served with a notice for enhancement of load capacity if it is observed that the consumer is drawing and consuming electricity in excess of the connected load / sanctioned load / contracted demand. Such notice is not envisaged by Section 126 of the Act. The regulation making power could not Page 16 of 19 Downloaded on : Sun Sep 17 22:08:05 IST 2023 NEUTRAL CITATION C/SCA/20205/2021 ORDER DATED: 23/02/2023 undefined have been exercised so as to bring into existence substantive rights or obligations or disabilities which are not contemplated in terms of the provisions of the Act. The regulation therefore clearly travels beyond Section 126. The regulation is otherwise inconsistent with the plain language of Section 126, and in any case conflicts with the scope and ambit of Section 126 as also interpretation placed on its language by the Hon'ble Supreme Court. Additionally, it is debatable as to whether the said provision comes within the scope and purview of the rule making power of the authority framing the rule. The Hon'ble Supreme Court has clearly held that Supply Code, prepared by the Electricity Regulatory Commission, "need not provide provisions relating to it / do not relate to assessment of charges for "unauthorised use of electricity"
under Section 126 or action to be taken against those committing "offences" under Section 135 to 140 of the Electricity Act, 2003". Therefore, considering the nature, object and scheme of the Act, particularly in the context of cases of unauthorised use of electricity under Section 126 of the Act, it becomes clear that Section 4.95 of the Supply Code, referred to and relied upon by the Appellate Authority to quash and set aside the assessment made under Section 126 of the Act for unauthorised use of electricity, is inconsistent with the mandatory provision of the statute, namely Section 126 of the Act. Permitting the view taken by the Appellate Authority of distribution licensee being required to issue a notice to the Page 17 of 19 Downloaded on : Sun Sep 17 22:08:05 IST 2023 NEUTRAL CITATION C/SCA/20205/2021 ORDER DATED: 23/02/2023 undefined consumer who is otherwise to be blamed with overdrawal of electricity in excess of connected load / sanctioned load / contracted demand would not just be contrary and inconsistent with Section 126 of the Act but would also result in defeating the intent and object of Section 126 of the Act. The impugned orders therefore deserve to be quashed and set aside being bad in law.
9. In view of the above, the order dated 29.01.2018 passed in Special Civil Application No. 9035 of 2018 and the order dated 17.04.2018 passed in Special Civil Application No. 11589 of 2018 are hereby quashed and set aside. The petitions are allowed accordingly. Rule is made absolute accordingly."
6. In view of the above, it is clear that the case of the petitioner is squarely governed by the law laid down in the above decision. Considering the nature, object and scheme of the Act, particularly in the context of cases of unauthorised use of electricity under Section 126 of the Act, it becomes clear that Section 4.95 of the Supply Code, referred to and relied upon by the Appellate Authority to quash and set aside the assessment made under Section 126 of the Act for unauthorised use of Page 18 of 19 Downloaded on : Sun Sep 17 22:08:05 IST 2023 NEUTRAL CITATION C/SCA/20205/2021 ORDER DATED: 23/02/2023 undefined electricity, is inconsistent with the mandatory provision of the statute, namely Section 126 of the Act. Permitting the view taken by the Appellate Authority of distribution licensee being required to issue a notice to the consumer who is otherwise to be blamed with overdrawal of electricity in excess of connected load / sanctioned load / contracted demand would not just be contrary and inconsistent with Section 126 of the Act but would also result in defeating the intent and object of Section 126 of the Act.
7. In view of the above, the petition is allowed. The impugned judgement and order dated 07.06.2021 passed by the Appellate Authority and Assistant Electrical Inspector, Surat is quashed and set aside. No costs.
(BIREN VAISHNAV, J) DIVYA Page 19 of 19 Downloaded on : Sun Sep 17 22:08:05 IST 2023