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2024 Supreme(SC) 493
SUPREME COURT OF INDIA
ABHAY S. OKA, UJJAL BHUYAN, JJ.
Maharashtra State Electricity Distribution Co. Ltd. – Appellant
Versus
M/s JSW Steel Ltd. and Another – Respondents
Civil Appeal No. 8413 of 2009
Decided On : 17-05-2024
For the Appellant(s) : Mr. Vikas Singh, Sr. Adv. Mr. Samir Malik, Adv. Ms. Nikita Choukse, Adv. Ms. Deepeika Kalia, Adv. Mr. Mahip Singh Sikarwar, Adv. Mr. Shaida Dass, Adv. Mr. Chandra Prakash, Adv. M/S. D.s.k. Legal, AOR
For the Respondent(s): Mr. P. S. Sudheer, AOR Mr. Rishi Maheshwari, Adv. Ms. Anne Mathew, Adv. Mr. Bharat Sood, Adv. Ms. Miranda Solaman, Adv.
The main legal point established in the judgment is that the imposition of a reliability charge must have a statutory basis, and consumers have the right to challenge the legality of such charges.
Headnote:
reliability charge - electricity distribution - Electricity Act, 2003, Section 62(3) - The court discussed the legality of the imposition of a reliability charge by the distribution licensee under the Electricity Act, 2003. It highlighted the provisions of Section 62(3) and the lack of statutory support for the levy of reliability charge, ultimately influencing the court's decision to dismiss the appeal.
Fact of the Case:
The case involved the legality of the imposition of a reliability charge by an electricity distribution licensee on a steel industry, which claimed to be one of the largest consumers of electricity supplied by the licensee. The licensee had imposed the reliability charge for implementing Zero Load Shedding (ZLS) in a specific area.
Finding of the Court:
The court found that the steel industry was not liable to pay the reliability charge as it had already been subjected to higher tariffs for continuous supply, and there was no statutory basis to support the levy of the reliability charge. The court also noted that the industry had raised objections and was entitled to challenge the legality of the order imposing the reliability charge.
Issues: The issues involved the legality of the imposition of a reliability charge, the applicability of higher tariffs for continuous supply, and the right of the industry to challenge the order imposing the reliability charge.
Ratio Decidendi: The court held that there was no statutory basis to support the levy of the reliability charge and that the industry was entitled to challenge the order imposing the charge. It also emphasized that the industry had already paid higher tariffs for continuous supply, indicating that it had been compensated for the continuous supply.
Final Decision: The court dismissed the appeal, finding no merit in the appellant's arguments.
JUDGMENT :
ABHAY S. OKA, J.
FACTUAL ASPECT
1. The issue involved in this appeal is about the legality of the imposition of a reliability charge by the appellant, a distribution licensee. The appellant is a company incorporated under the Companies Act, 1956. It is principally responsible for the distribution and supply of electricity in the entire State of Maharashtra, except the areas that expressly fall within the responsibility of the utilities like the Brihanmumbai Electric Supply and Transport Undertaking, TATA Power Company, Reliance Energy Limited, etc. The 1st respondent is a steel industry, which claims to be one of the largest consumers of electricity supplied by the appellant. The 1st respondent is exporting its end products and earning significant foreign exchange for the country.
2. On the petition filed by the appellant, the Maharashtra Electricity Regulatory Commission (for short ‘the Commission’) passed a tariff order on 20th October 2006, imposing additional supply charges for uninterrupted power supply to the bulk consumers like the 1st respondent. In the next tariff order passed on 20th June 2008, the Commission discontinued the additional supply charges with immediate effect. It directed the appellant to refund the additional supply charges collected from bulk industries during the financial years 2006-07 and 2007-08. According to the case of the 1st respondent, as it is a continuous process industry and a bulk consumer, the appellant did not subject them to load-shedding. Therefore, the tariff was specifically fixed slightly higher than that for HT non-continuous process industries.
3. The appellant submitted a petition before the Commission under the Electricity Act, 2003 (for short ‘the 2003 Act’) for approval of reliability charges to be recovered for implementing Zero Load Shedding (ZLS) in the area covered by Pen Circle in Maharashtra. Permission was sought to appoint the Humanist Consumer Council as an interim franchisee. As per the directions of the Commission, a public notice was published for inviting objections. The Commission conducted a public hearing. By the order dated 15th June 2009, the Commission allowed the petition filed by the appellant and imposed a reliability charge from 16th June 2009 to 31st March 2010 on account of ZLS, which was made payable by all the consumers in the Pen Circle area, including the 1st respondent. Being aggrieved by the said order of the Commission, an appeal was preferred by the 1st respondent before the Appellate Tribunal for Electricity (for short ‘the Tribunal’). By the impugned judgment, the order of the State Commission dated 15th June 2009 was set aside.
SUBMISSION
4. Learned senior counsel appearing for the appellant has taken us through the impugned order, and the order dated 15th June 2009 passed by the Commission. The learned senior counsel submitted that the reliability charge existed in Pune, Baramati, Vashi and Thane circles. Relying upon Section 62 (3) of the 2003 Act, he submitted that the Commission has adequate powers to bring in schemes to improve the nature of supply in a particular area. He submitted that though the Commission published a public hearing notice, the 1st respondent did not participate in the hearing. He submitted that non-participation in the public hearing amounts to consent given by the 1st respondent to pay the reliability charge. He would, therefore, urge that the 1st respondent had no locus to challenge the order of the Commission dated 15th June 2009, and its remedy was to apply for review. He pointed out that the reliability charge was imposed for a limited period between 16th June 2009 and 31st March 2010, and at the time of the extension of the scheme, the 1st respondent could have raised an objection. He submitted that the 1st respondent is a bulk electricity consumer, consuming about 45 per cent of the electricity consumed in Pen Circle. Still, the 1st respondent did not participate in the public hearing conducted by th
