KSEB's Failure to Process Load Enhancement Application Leads to Deemed Sanction Under Regulation 99 of Supply Code: Kerala High Court

Kerala HC Upholds ₹1.58 Cr Relief for Hospital, Faults KSEB for Procedural Lapses and Inaction

Ernakulam: The Kerala High Court has upheld a State Electricity Appellate Authority order that quashed a hefty penalty of ₹1.58 crore imposed by the Kerala State Electricity Board (KSEB) on Almas Hospital , Kottakkal. Justice Mohammed Nias C.P. ruled that KSEB's failure to act on the hospital's application for additional load within the statutory period resulted in a "deemed sanction" under the law, thereby invalidating the subsequent assessment for unauthorised usage.

The court dismissed the KSEB's challenge to the appellate order and allowed the hospital's plea for its implementation, directing the Board to refund the amount paid by the consumer or adjust it against future bills.

Case Background

The dispute originated from a surprise inspection by the KSEB's Anti-Power Theft Squad (APTS) on October 17, 2022. The squad found that Almas Hospital , a High Tension (HT) consumer, was using an alleged unauthorised additional load (UAL) of 683 kW over its sanctioned capacity. Consequently, the KSEB issued a provisional assessment of ₹1,58,75,161 under Section 126 of the Electricity Act, 2003, which was later confirmed.

The hospital appealed this decision, and on June 4, 2024, the Kerala State Electricity Appellate Authority set aside the assessment, citing significant procedural failures by the KSEB. The KSEB challenged this appellate order in the High Court, while the hospital filed a separate writ petition seeking its enforcement.

Arguments of the Parties

Almas Hospital 's Contentions: - The hospital, represented by Senior Counsel K.K. Chandran Pillai , argued that it had formally applied for an additional load and enhancement of its contract demand on December 13, 2019, well before the inspection. - They contended that KSEB never responded to this application as mandated by law. The hospital also highlighted that the additional electrical infrastructure was installed to cater to increased demand, especially after it was designated as a primary COVID-19 treatment centre by the government. - Crucially, the hospital disputed receiving a letter (Ext.P8) dated December 18, 2019, which the KSEB claimed was sent to request a 'scheme approval'. The hospital presented evidence from RTI applications showing KSEB had no records of processing their application and that the purported letter was absent from the official dispatch register.

KSEB's Contentions: - The KSEB, represented by Advocate Ajit Joy , maintained that the hospital had connected and used an unauthorised additional load without prior permission. - The Board claimed it had responded to the 2019 application via the disputed letter (Ext.P8) and that the hospital only submitted a complete application with all necessary approvals in August 2023, after the inspection and penalty. - They argued that the application for contract demand enhancement was irrelevant to the assessment for unauthorised connected load.

Court's Analysis and Legal Principles

Justice Mohammed Nias C.P. centered the analysis on Regulation 99 of the Kerala State Electricity Supply Code, 2014 , which governs the procedure for enhancing connected load or contract demand.

The court noted the pivotal provision of Regulation 99(8) , which states:

"If the licensee does not intimate its decision on the application for the enhancement of load within the above period [30 days], sanction for enhancement of load or contract demand, as the case may be, shall be deemed to have been granted..."

The High Court found the hospital's arguments credible and highlighted several key points from the judgment:

Failure to Process Application: "It is not in dispute that an application from the consumer was received by the Board on 13.12.2019... Admittedly, no orders have been passed by the Board intimating the consumer whether or not the enhancement of load was sanctioned."

Credibility of Evidence: The court found the hospital's evidence from RTI queries and the dispatch register compelling. It noted, "a reply was given stating that the requested details were not available in the office of the Board... Under such circumstances, the contention of the petitioner has to be accepted for want of any documents from the side of the Board."

Deemed Sanction: Given KSEB's inaction on the 2019 application, the court concurred with the Appellate Authority that the hospital was entitled to a deemed sanction under Regulation 99(8).

COVID-19 Context: The court also acknowledged the special circumstances under which the hospital operated. "It is also admitted that the Government had chosen the hospital for the treatment of COVID-19... when the facility in the main building became insufficient, it was at the direction of the Committee that functioning started in the new building... for which power and water were required."

Final Decision

Finding no reason to interfere with the "well-reasoned" order of the Appellate Authority, the High Court dismissed the KSEB's writ petition. It allowed the hospital's petition, directing the Board to implement the appellate order within six weeks. The load at the hospital has since been regularised by the KSEB.

This judgment serves as a significant reminder to electricity distribution licensees of their statutory duty to process consumer applications within a fixed timeframe, failing which the 'deemed sanction' clause can be invoked, protecting consumers from arbitrary penalties.