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High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE K. CHANDRU
M/s.Hi-Tech Mineral Industries Covai (P) Limited & Others
Versus
The Tamil Nadu Electricity Regulatory Commission & Others
W.P.Nos.6968, 6969 of 2008, 6940 of 2006, 11585 of 2009, 23287 and 24478 of 2008 and 2078 of 2004 and M.P.NOs.1,1,2,2 and 3,3 of 2008, WPMP No.7536 of 2006, M.P.Nos.1 and 2 of 2009, 1 and 2 of 2008 and WPMP NO.159 OF 2009
Decided On : 11-11-2009
ELECTRICITY ACT - THEFT OF ELECTRICITY - AMENDMENT TO SECTION 135(1-A) - REGULATIONS FRAMED UNDER SECTION 50 - VALIDITY - WHETHER THE AMENDMENT AND REGULATIONS ARE ULTRA VIRES OF THE ACT - WHETHER THE AMENDMENT AND REGULATIONS ARE OPPRESSIVE AND UNREASONABLE - WHETHER THE AUTHORITIES SHOULD AWAIT FOR THE VERDICT OF THE SPECIAL COURT BEFORE EFFECTING THE LIABILITY ON THE CONSUMER.
Fact of the Case:
The petitioners challenged the vires of the amendment made to the Electricity Act, 2003 and the Regulations made thereunder. The amendment introduced Section 135(1A) which empowered the licensee or supplier to immediately disconnect the supply of electricity upon detection of theft of electricity. The petitioners contended that the amendment was arbitrary and violative of Article 14 of the Constitution as it gave unbridled power to the authorities without judicial approval. They also argued that the Regulations framed under Section 50 were excessive delegation of power and that the authorities should await the verdict of the Special Court before effecting the liability on the consumer.
Finding of the Court:
The Court held that the amendment to Section 135(1A) and the Regulations framed under Section 50 were intra vires of the Act and there was no unconstitutionality. The Court observed that the need to curb electricity theft was paramount and that the amendment and Regulations were necessary to address this issue. The Court further held that the amendment did not confer arbitrary and unbridled power to the authorities as it provided for a procedure to be followed, including lodging of complaint within 24 hours, assessment of the amount to be paid by the consumer, and restoration of power supply upon deposit of the assessed amount. The Court also held that the Regulations were not excessive delegation of power as they were framed in accordance with the provisions of the Act and were necessary to achieve the object of the Act.
Issues: 1. Whether the amendment to Section 135(1A) and the Regulations framed under Section 50 were ultra vires of the Act? 2. Whether the amendment and Regulations were oppressive and unreasonable? 3. Whether the authorities should await for the verdict of the Special Court before effecting the liability on the consumer?
Ratio Decidendi: 1. The amendment to Section 135(1A) and the Regulations framed under Section 50 were intra vires of the Act and there was no unconstitutionality. 2. The amendment and Regulations were not oppressive and unreasonable as they provided for a procedure to be followed and were necessary to achieve the object of the Act. 3. The authorities were not required to await for the verdict of the Special Court before effecting the liability on the consumer as the amendment provided for a mechanism for assessment of the amount to be paid by the consumer and restoration of power supply upon deposit of the assessed amount.
Final Decision: The writ petitions were dismissed.
"Large-scale theft of electricity is a very alarming problem faced by all the State Electricity Boards in our country, which is causing loss to the State revenue running in hundreds of crores of rupees every year. In our considered view, after proper adjudication of the cases of all those who are found to be guilty of the offence of committing theft of electricity; apart from the sentence of conviction, the court should invariably impose heavy fine making theft of electricity a wholly non-profitable venture. The most effective step to curb this tendency perhaps could be to discontinue the supply of electricity to those consumers temporarily or permanently who have been caught abstracting electricity in a clandestine manner on more than one occasion. The legislature may consider incorporating this suggestion as a form of punishment by amending Section 39 of the Electricity Act, 1910."
These observations made by the Supreme Court in Jagmodhan Mehatabsing Gujaral v. State of Maharashtra reported in (2006) 8 SCC 629 will set the tone for deciding the issues raised in these writ petitions questioning the vires of the amendment made to the Electricity Act, 2003 and the Regulations made thereunder.
2. These matters were grouped together and posted before this Court by the order of the Honble Chief Justice, dated 29.08.2009 and were finally heard on 14.09.2009.
3. Heard Mr.AR.L.Sundaresan, learned Senior Counsel representing for Mr.K.Seshadri and Mr.S.Parthasarathy, learned Senior Counsel representing for Mr.C.S.Krishnamoorthy appearing for petitioners and Mr.P.S.Raman, learned Advocate General assisted by Mr.A.Selvendhiran and Mr.J.Ravindran, learned Government Advocates.
4. In W.P.Nos.6968 and 6969 of 2008, the petitioner is one and the same person. The petitioner is a private limited company. Both the writ petitions is for a declaration that Section 135(1A) of the Electricity Act 2003 introduced by the Electricity (Amendment) Act 2007 as well as Regulation 1(C) under which Regulations 19 and 23 were amended on 16. 2007 and 12.09.2007 by the Tamil Nadu Electricity Supply (Amendment) Code 2007 and Tamil Nadu Electricity Supply (Second Amendment) Code 2007 and the proceedings of the third Executive Engineer, Salem Electricity Distribution Circle, dated 10.03.2008 as arbitrary, illegal, ultravires and unconstitutional.
.5. Both the writ petitions were admitted on 20.3.2008. The first writ petition related to the HT service connection No.128 and the second writ petition related to HT Service connection No.248 availed by the petitioner company. Pending those writ petitions, in both the writ petitions, this Court granted a direction to restore the supply of electricity on the petitioner depositing 25% of demand and balance 25% shall be deposited within a period of eight weeks, failing which disconnection of service connections may be made, by an order, dated 20.03.2008. Subsequently, applications were taken up in M.P.Nos.3 and 3 of 2008, seeking to modify the order, dated 20.3.2008. This Court granted time extension for paying the second installment.
6. In W.P.No.6940 of 2006, the challenge of the petitioner is to set aside the order, dated 3. 2006 passed by the Executive Engineer (O&M), Mylapore, where the petitioner was a lessee of a premise in No.7, Ramakrishna Mutt Road, Mylapore, Chennai-4. By the impugned order, the petitioners premises was found to commit energy theft and the petitioner compounded the offence by paying Rs.70,000/-. Subsequently, an assessment was made under Section 135 of the Electricity Act, 2003. Therefore, a penal levy was also made, which was directed to be paid in five installments. The first installment is at the rate of Rs.43,699/-and the other four installments is at the rate of Rs.43,698/- each.
7. Pending the writ petition, this Court granted an interim stay in WPMP No.7536 of 2006, dated 16. 2006 to pay a sum of Rs.50000/-as a condition for the grant of stay. While attacking the order
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