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SUPREME COURT OF INDIA
DINESH MAHESHWARI, J.B. PARDIWALA, JJ.
Kerala State Electricity Board & Ors. – Appellants
Versus
Thomas Joseph Alias Thomas M.J. & Ors. – Respondents
Civil Appeal Nos. 9256-9257 of 2022 @ SLP(C) Nos. 7886-7887 of 2018 Civil Appeal Nos. 9254-9255 of 2022 @ SLP(C) Nos. 7875-7876 of 2018 Civil Appeal Nos. 9262 -9263 of 2022 @ SLP(C) Nos. 7880-7881 of 2018 Civil Appeal Nos. 9264 -9265 of 2022 @ SLP(C) Nos. 7863-7864 of 2018 Civil Appeal Nos. 9266 -9267 of 2022 @ SLP(C) Nos. 7882-7883 of 2018 Civil Appeal Nos. 9268 -9269 of 2022 @ SLP(C) Nos. 7884-7885 of 2018 Civil Appeal Nos. 9270 -9271 of 2022 @ SLP(C) Nos. 7870-7871 of 2018 Civil Appeal Nos. 9258 -9259 of 2022 @ SLP(C) Nos. 7873-7874 of 2018 Civil Appeal Nos. 9260-9261 of 2022 @ SLP(C) Nos. 7878-7879 of 2018, Civil Appeal Nos. 9252-9253 of 20222 (arising out of SLP(C) Nos. 7860-7861 of 2018)
Decided on : 16-12-2022
(A) Electricity Act, 2003 – Sections 126(6) and 45(3)(a) – Kerala Electricity Supply Code, 2014 – Regulation 153(15) – Unauthorised use of electricity – Overdrawal may lead to a disastrous situation being prejudicial to public at large – Overdrawal of electricity in excess of sanctioned/connected load may disturb entire supply system, undermining its efficiency, efficacy and even-increasing voltage demand – Charges for electricity certified by a distribution licensee include fixed charges, in addition to charges for actual electricity supplied and consumed – In such circumstances, tariff includes both, fixed charges and energy charges and once assessing officer arrives at conclusion that unauthorised use of electricity has taken place, he is obliged to make assessment charge equal to twice tariff applicable which includes dues payable towards energy charges also – Regulation making power cannot be used to bring into existence substantive rights which are not contemplated under Act 2003 – Regulation 153(15) of Code 2014 declared to be invalid being inconsistent with provision of Section 126 of Act 2003. (Paras 56, 63, 82, 88 and 92)
(B) Statute Law – Delegated Legislation – If a rule goes beyond rule making power conferred by Statute, same has to be declared invalid – If a rule supplants any provision for which power has not been conferred, it becomes invalid – Basic test is to determine and consider source of power which is relatable to rule – Similarly, a rule must be in accord with parent statute as it cannot travel beyond it – Doctrine of ultra vires envisages that a rule making body must function within purview of rule making authority conferred on it by parent Act – As body making rules or regulations has no inherent power of its own to make rules, but derives such power only from statute, it has to necessarily function within purview of statute – Delegated legislation should not travel beyond purview of parent Act – If it does, it is ultra vires and cannot be given any effect – It is function of courts to keep all authorities within confines of law by supplying doctrine of ultra vires – Court, considering validity of a subordinate legislation, will have to consider nature, object and scheme of enabling Act, and also area over which power as has been delegated under the Act and then decide whether subordinate legislation conforms to parent statute – Rules or regulation cannot be made to supplant provisions of enabling Act but to supplement it – What is permitted is delegation of ancillary or subordinating legislative functions. (Paras 64, 65, 67, 78 and 80)
Facts of the case:
Neat question of law that falls for the consideration of this Court is whether consumption of electricity by the respondents (consumers) in excess of the connected load/contracted load would amount to ‘unauthorised use of electricity’ under explanation (b) to Section 126(6) of Act, 2003.
Findings of Court:
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.
Result : Appeals allowed.
JUDGMENT :
J.B. PARDIWALA, J.
1. Leave granted in all the captioned Special Leave Petitions.
2. Since the issues raised in all the captioned petitions are the same and the challenge is also to the self-same judgment and order passed by the High Court of Kerala dated 12.04.2017 deciding a batch of writ applications filed by the respondents herein, those were taken up for hearing analogously and are being disposed by this common judgment and order.
3. This batch of petitions is at the instance of the Kerala State Electricity Board (“Board” or “KSEB”) and is directed against the judgment and order passed by Division Bench of the High Court of Kerala dated 12.04.2017 in Writ Petition (C) No. 22644 of 2015 and allied petitions by which the High Court declared that in case of unauthorised use of electricity in a higher tariff the assessment shall be made at the rate equal to twice the tariff applicable for the relevant category of services attracting such higher tariff for which electricity supplied was unauthorisedly used and not the relevant category of services to which the consumer belongs. The High Court proceeded further to hold that the exception to the above would be in the case of a consumer who is guilty of overdrawal of electricity in excess of the 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, which consumption has already been metered and paid by the consumer, as such use being not by any artificial means or through the tampered meter, the assessment under Section 126(6) of the Electricity Act 2003 (for short, ‘the Act 2003’) could only be called to twice the fixed charges payable and such consumer cannot be saddled with the liability to pay twice the energy charges applicable for the relevant category of services, unless regularisation of such additional connected load or enhancements of contract demand necessitates upgradation of the existing distribution system or enhancement of the voltage level of supply.
FACTUAL MATRIX
4. The neat question of law that falls for the consideration of this Court is whether the consumption of electricity by the respondents (consumers) in excess of the connected load/contracted load would amount to ‘unauthorised use of electricity’ under explanation (b) to Section 126(6) of the Act 2003.
5. The appellant Board is a company incorporated under the Companies Act, 1956 (for short, ‘the Act 1956’) and is controlled by the Government of Kerala. It is engaged in the business of generation, transmission and distribution of electricity in the State of Kerala.
6. In the present litigation, all the respondents are commercial/industrial consumers having LT (Law Tension) connections. It is not in dispute that at the time of the inspection undertaken by the officials of the Appellant Board, all the consumers were found to be drawing electricity in excess of the connected/contracted load. The issue that arises is whether the respondents (consumers) can be assessed at the rate equal to twice the tariff applicable as stipulated in Section 126(6) of the Act 2003?
7. The consumers went before the High Court of Kerala and preferred respected writ petitions seeking an authoritative pronouncement on the quantification of penalty under Section 126(6) of the Act 2003. It may not be out of place to state at this stage that the Division Bench of the High Court took up the petitions for hearing on the strength of an order of reference made by a learned Single Judge of the High Court dated 17.08.2015 observing that an authoritative pronouncement on the quantification of penalty under Section 126(6) of the Act 2003 was necessary as everyday many petitions were being filed in the High Court with a challenge to the orders imposing penalty involving ‘excess/additional load’ falling under explanation (b)(ii) to Section 126 of the Act 2003 and ‘unauthorised use of electricity’ falling under expla
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