Power of disconnection for electricity supply under s 38(1) is not applicable once meter tampering is rectified, affirming the decision in Mayaria FC.

Azahar Mohamed CJM:

Introduction

[1] This appeal primarily relates to the statutory power of Tenaga Nasional Berhad ("TNB") to disconnect the supply of electricity to a consumer pursuant to s 38(1) of the Electricity Supply Act 1990 ("the ESA "). In essence, we are asked to decide the scope and limitations of TNB's power under the to lawfully terminate the supply of electricity to a customer's premises following the discovery of meter tampering which was subsequently remedied. The most important question in this appeal is whether the statutory power to discontinue electricity supply can be invoked by TNB in the absence of a continuing offence under s 37 of the or when the said offence is no longer extant. That is the question this judgment sets out to address.

[2] This appeal by TNB is brought from a judgment of the Court of Appeal, where leave to appeal had been granted by this Court on 22 June 2020. By its judgment, the Court of Appeal dismissed an appeal by TNB against a judgment of the High Court which had allowed the respondents' injunction application restraining TNB from disconnecting the electricity supply to the Respondents' premises.

The Parties

[3] TNB is a limited company incorporated under the Companies Act 1965. TNB is the sole licensee for the delivery and distribution of electricity under the ESA in Peninsular Malaysia. TNB's main business is the distribution and transmission of electrical power for domestic or industrial consumption. TNB is the sole provider of electricity in Peninsular Malaysia.

[4] The 1st respondent is the registered user of electricity supply at No 1541, Lorong Kerapu, Taman Sejahtera, 36400 Hutan Melintang, Perak ("the premises"), who had applied for and obtained the supply of electricity from TNB. The 1st respondent is a registered customer of TNB.

[5] At all material times, the 2nd Respondent is a commercial enterprise and carries out the business of seafood processing, freezing and cold storage at the premises. The 2nd respondent purchased the premises from the 1st Respondent in 2009. Nevertheless, the supply of electricity continued under the name of the 1st respondent, who remained the registered consumer with TNB.

Factual Background

[6] The factual background leading to this appeal is quite simple and straightforward. We will only highlight very briefly the pertinent facts in so far they are relevant to the issues which arise for our decision in this instant appeal. Not much was disputed although there was considerable disagreement flowing from the opposing contentions of the parties with regards to the implication of a particular undisputed fact, which is, that on 7 June 2018, TNB carried out an inspection on its meter installation at the premises and discovered that there had been a tampering of the meter. The meter tampering, according to TNB, meant that the impugned meter could not and therefore did not during the material times correctly record the actual utilisation of electricity by the 2nd respondent as supplied by TNB. The meter was then rectified by TNB. As we shall see later, this is an important point that should be kept in mind as it has a far reaching implication. After replacing the impugned meter and continued to supply electricity to the premises, TNB issued a Notice of Disconnection, intending to disconnect electricity on 3 July 2018. In the meantime, by way of a letter dated 8 June 2018, TNB informed the Energy Commission of its findings at the premises that that an offence has been committed under s 37(1), (3) or (14) of the ESA . This was done in compliance with TNB's obligation under s 38(1).

The High Court Proceedings

[7] Electricity is a basic necessity and the lifeblood of businesses. Consequently, concerned by the upcoming disconnection which would severely impact the 2nd respondent's business activities, the respondents as plaintiffs expeditiously on 27 June 2018 commenced an action in the High Court against TNB, inter alia, for the following reli