1. Appeal under Section 125 of Electricity Act, 2003 against Appellate Tribunal order setting aside Commission's directions on supplementary bills. (Para 1 , 2 , 3 , 4 , 5 )
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2007 Supreme(SC) 1068
Supreme Court Of India
A.K. Mathur and Markandey Katju, JJ.
MAHARASHTRA ELECTRICITY REGULATORY COMMISSION - Appellant
Versus
RELIANCE ENERGY LTD - Respondent
With Civil Appeal 3551 Of 2006
Decided On : 08/14/2007
Advocates Appeared :
A.S.BHASME, ABHISHEK RAO, ALTAF AHMAD, ANAND K.GANESAN, J.J.BHAT, JAYASREE SINGH, K.V.BALAKRISHNAN, K.V.MOHAN, M.G.Ramachandran, M.V.KINI, NITESH JAIN, PRASHANT BHUSHAN, RAJESH KUMAR, Rajiv Shakdhar, Ramji Srinivasan, RAVI KINI, RUKHSANA CHAUDHARY, SHEFALI JAIN, Shyam Divan, SMIEETAA INNA, SUNITA CHANDURKAR, SWATI SINHA, SYED NAQVI, U.A.RANA, V.B.Joshi, VARUN THAKUR
The State Regulatory Commission can issue general directions for statutory compliance, but cannot order blanket refunds for consumer billing grievances without follow-up investigation under Section 128. Individual disputes must be resolved through the licensee and the statutory forum under Section 42(5).
Headnote:(A) Electricity Act, 2003 - Sections 86, 128(6), 42(5), and 42(6) - Power of State Regulatory Commission to issue directions to licensees - The Commission has general power to supervise licensees and issue directions to ensure that the public is not harassed and that rules and regulations are properly complied with (Paras 15, 16) - However, a blanket direction for refunding amounts collected through supplementary or amended bills without conducting an investigation under Section 128(1) and obtaining a report under Section 128(5) is unsustainable and exceeds the Commission's jurisdiction (Paras 17, 18).
(B) Adjudication of Consumer Grievances - Under Section 86(1)(f), the Commission's adjudicatory function is limited to disputes between licensees and generating companies (Para 12) - Individual consumer grievances must be addressed through the appropriate forum established under Section 42(5) and, if necessary, the Ombudsman under Section 42(6) (Paras 17, 18).
Facts of the case:
The Regulatory Commission issued a notice to licensees regarding the practice of raising supplementary or amended bills based on criteria other than actual meter readings. Following submissions from the licensees, the Commission directed that such bills be withdrawn and amounts refunded to consumers if due meter testing had not been performed. This order was set aside by the Appellate Tribunal, which directed that individual consumers should approach the forum created under Section 42(5) of the Act.
Findings of Court:
The court found that while the Commission is empowered to issue general directions to licensees to ensure compliance with the law and prevent harassment of the public, it cannot order blanket refunds for individual billing grievances without following the statutory process of investigation and reporting. The right of the distribution companies to recover costs for electricity supplied must be balanced against the protection of consumers from arbitrary billing.
Issues: The primary issues were whether the Regulatory Commission had the power to issue general directions to its licensees and whether the Commission could order a blanket refund of amounts collected via supplementary bills without conducting a case-by-case investigation.
Ratio Decidendi: The court ruled that the Commission's power to issue general directions does not extend to ordering blanket refunds for individual consumer grievances without a formal investigation under Section 128 of the Act. Redressal for such grievances must follow the hierarchy of the licensee's internal review, the forum under Section 42(5), and the Ombudsman under Section 42(6).
Result: Appeal disposed of. The blanket refund order was held to be unsustainable, and licensees were directed to issue public notices inviting consumers to represent their grievances for individual resolution.
Legal Category Hierarchy
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electricity law
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regulatory commission
- powers and functions
- billing and metering
- licensing
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consumer protection
- grievance redressal
- practice and procedure
- administrative law
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regulatory commission
Table of Contents
2. Commission claimed power to issue general directions; licensees disputed that power and opposed blanket refund order. (Para 7 )
3. Commission has power to issue general directions but cannot pass blanket refund orders without proper investigation under Section 128. (Para 12 , 14 , 15 , 16 , 17 , 18 )
4. Commission can enforce licence conditions generally but cannot adjudicate individual consumer disputes or order blanket refunds without investigation. (Para 15 , 17 , 18 )
5. Appeal disposed; licensees must issue public notice, hear individual grievances, then consumers may approach forum under Section 42(5). (Para 19 , 20 )
6. Does the State Electricity Regulatory Commission have power to issue general directions to licensees?
Yes, the Commission has power under Section 128(6) and other provisions to issue directions to enforce licence conditions and prevent public harassment. (Para 12 , 14 , 15 , 16 )
7. Can the Commission pass a blanket order directing refund of all supplementary bills without investigation?
No, a blanket refund order is unsustainable without proper investigation under Section 128 and a report; individual cases require due process. (Para 17 , 18 )
8. Can the Commission adjudicate disputes between consumers and licensees?
No, under Section 86(1)(f) the Commission can only adjudicate disputes between licensees and generating companies, not individual consumer grievances. (Para 12 )
9. What is the proper procedure for consumers aggrieved by supplementary bills?
Consumers should first approach the licensee for redressal, then if unsatisfied, approach the forum under Section 42(5) and thereafter the Ombudsman under Section 42(6). (Para 18 , 19 )
10. Is the Commission required to follow investigation procedure under Section 128 before issuing coercive directions?
Yes, before passing directions like refund, the Commission must get an investigation report under Section 128(5) after inquiry under Section 128(1). (Para 17 )
( 1 ) THIS appeal under Section 125 of the of the Electricity Act, 2003 (hereinafter for short "the Act") is directed against the judgment and order dated 29th March, 2006 passed by the appellate Tribunal for Electricity whereby the appellate Tribunal has allowed the appeals filed by the distribution companies and set aside the orders passed by the Maharashtra electricity Regulatory Commission (hereinafter for short "the Commission") dated 23. 2. 2005. The Commission on 3. 8. 2004 addressed a notice to all its licensees/distribution companies in Maharashtra and made an inquiry from them with regard to raising of the bills by the said licensees/distribution companies on the basis other than the actual meter reading for the relevant period, when large variations in consumption were noticed, or for other reasons. The notice dated 3. 8. 2004 sent by the Commission to all its licensees/distribution companies reads as under :-
"several instances have come to the commission's notice of so-called "amendment", "supplementary" or other such bills being raised by some licensees to consumers, often several years later, on a basis other than the actual meter reading for the relevant period, when large variations in consumption are noticed, or for other reasons. Computerised systems have sometimes been put in place which generate such bills automatically. Wide variations observed in recorded consumption and other such apparent anomalies may be useful for monitoring, checking/testing of meters and for taking corrective action. However, billing on a basis other than recorded consumption, and raising amended bills accordingly (often after several years later, and without giving reasons), is not mandated by law. The electricity statutes (in the past, and at present) provide inter alia that, in case of metered consumers, energy consumption charges have to be billed on the basis of meter readings. Moreover, the licensee, and not the consumer, is responsible for maintaining, rectifying, or having such meters replaced where necessary. Thus, no "amendment" bills of the kind referred to above can be raised, and any additional billing has to follow due process and the provision of law. In the context of such "amendment" bills, I am directed to ask that the billing practices followed be immediately reviewed and brought into conformity with the statutory provisions. An affidavit stating the corrective action taken (including withdrawal of all such pending bills, and refund, though adjustment in energy bills or otherwise, of amounts received from consumers on or after 10/6/2003) may be furnished by 3rd september, 2004. "
( 2 ) IN response to the said notice all the licensees/distribution companies in maharashtra made their respective submissions before the Commission explaining under what circumstances the supplementary/ amended bills were sent to the consumers. They tried to justify raising of such bills and stated that the these bills were rightly sent as they found that some time the meters were not registering proper consumption and on that basis they tried to justify their action.
( 3 ) THE Commission examined the matter in detail and vide its order dated 23/2/2005 in para 46 directed as under:-
"46. After considering all these factors and the submissions made, the Commission directs that the supplementary/amendment bills issued in the circumstances set out at para 42 and 43 above from 10th June, 2003 (the date of coming into force of EA, 2003) and upto notification of the Supply code. a. should be withdrawn, if due meter testing has not been done with the results intimated to the consumer. b. any amounts collected should be refunded to the concerned consumers (without interest considering the earlier lack of clarity on this meter on the part of the licensees); c. where meters have been found to be defective upon subsequent due testing (and the results intimated to the consumer), the bills may be adjusted for upto 3 months prior to the date of tes
