Delegated legislation should not travel beyond the purview of the parent act. If it does, it is ultra vires and cannot be given any effect. Rules or regulations cannot be made to supplant the provisions of the enabling act but to supplement it.

                                                                                                      Dr Prem Lata

The SC ruled that Regulation 153(15) of the Code 2014 is invalid because it violates Section 126 of the Electricity Act 2003. The SC noted that there is a thin line between a rule and a regulation, and that if the delegate authority’s power to create such rules or regulations is upheld, ultra vires may result and delegated legislation may be in conflict with the Parent Act’s provisions.

Kerala State Electricity Board vs. Thomas Joseph Alias Thomas (SC) 16 Dec 2022

A long pending issue before the Hon’ble Supreme court was finally settled with a landmark judgement in the matter of U.P. Power Corporation Ltd & others vs Anis Ahmad & others in 2013 along with eight more cases of similar nature.

The issues before the court were-

• Whether consumer complaints made against electricity boards can be brought before the consumer courts established under the Consumer Protection Act.
• Whether the consumer forums have the jurisdiction to entertain a complaint filed by a consumer or a person against assessment made for unauthorized use of electricity under section 126 of the Electricity Act 2003 or action taken by billing with penal rates under sec. 135 to 140 of the Electricity Act 2003.

Supreme Court in its final verdict held as hereunder stated

• In case of any inconsistency between the Electricity Act 2003 and the Consumer Protection Act 1986, the provisions of Consumer Protection Act will prevail with regard to the matters of services defined under Section 2(1) (o) or complaint under Section 2(1) (c) of the Consumer Protection Act 1986.
• A complaint against the assessment made for unauthorized use of electricity under Section 126 of the Electricity Act or action taken by billing with penal rates under Section 135 to 140 cannot be challenged before the consumer courts established under Consumer Protection Act.
• The Electricity Act 2003 and Consumer Protection Act runs parallel for giving redressal to consumers who fall within the definition of consumer and complainant under the Consumer Protection Act under sections 2(1 )(c)&(d) of the act .

According to the aforementioned ruling, complaints against assessments made under Section 126 of the Electricity Act or actions taken under Sections 135 to 140 are categorically prohibited in all situations, but if a service provider has charged a price that is higher than the price set by any law, it is open to challenge before the consumer court. This means that a consumer can file a complaint before the forum for excessive billing even if he has not been charged with using electricity without authorization or the like.

But there is twist and turn in the latest Judgment by SC on the issue of unauthorised consumption of electricity in case of Kerala State Electricity Board V/S Thomas Joseph Alias Thomas 2022 (SC) decided on 16 December 2022. The Supreme Court held that the consumption of electricity in excess of the connected load/contracted load would amount to ‘unauthorised use of electricity’ under explanation (b) to Section 126(6) of the Electricity Act, 2003 and also declared Regulation 153(15) of the Kerala Electricity Supply Code, 2014 as invalid for being inconsistent with the provision of Section 126 of Electricity Act 2003.

Facts Leading to Dispute

An appeal was filed by Kerala State Electricity Board against the Kerala HC judgment which had held that ‘unauthorised additional load’ in the same premises and under the same tariff shall not be reckoned as ‘unauthorised use of electricity’.

In its appeal, the KSEB cited a decision by a three-judge panel in the case of Executive Engineer, Southern Electricity Supply Company of Orissa Limited and Another vs. Sri Seetaram Rice Mill (2012) 2 SCC 108, which determined that cases of excess load consumption other than the connected load would fall under Explanation (b) (iv) to Section 126. The bench summed up the guidelines established in the aforementioned ruling with reference to this instance.

(1) The provisions of Section 126, read with Section 127 of the Act 2003 become a Code in themselves. It specifically provides the method of computation of the amount that a consumer would be liable to pay for excessive consumption of electricity and for the manner of conducting assessment proceeding. Section 126 of the Act 2003 has been enacted with a purpose to achieve i.e., to put an implied restriction on such unauthorised consumption of electricity.
(2) The purpose of Section 126 of the Act 2003 is to provide safeguards to check the misuse of powers by unscrupulous elements. The provisions of Section 126 of the Act 2003 are self-explanatory. They are intended to cover 46 situations, other than, the situations specifically covered under Section 135 of the Act 2003. In such circumstances, the Court should adopt an interpretation which should help in attaining the legislative intent.
(3) The purpose sought to be achieved with the aid of the provisions of Section 126 of the Act 2003 is to ensure stoppage of misuse/unauthorised use of the electricity as well as to ensure prevention of revenue loss.
(4) The overdrawal of electricity is prejudicial to the public at large, as it is likely to throw out of gear the entire supply system, undermining its efficiency, efficacy and even-increasing voltage fluctuations.
(5) The expression ‘unauthorised use of electricity’ means as it appears in Section 126 of the Act 2003. It is an expression of wider connotation and principle construed purposively in contrast to contextual interpretation, while keeping in mind the object and purpose of the Act 2003.

The bench, therefore, observed:

“In view of para 72 of Seetaram Rice Mill (supra) referred to above, the High Court could be said to have erred in coming to the conclusion that the consumer cannot be charged twice the energy charges if the consumer uses in excess of the sanctioned/connected load in the very same premises and for the very same purpose, which do not involve any change in the tariff. Para 87(2) in Seetaram Rice Mill (supra) categorically holds that consumption in cases of the connected load would fall in Explanation (b) (iv) to Section 126 of the Act 2003.”

Statutory Provision in the Act

As per explanation (b) to Section 126(6), the “unauthorised use of electricity” means the usage of electricity─ (i) by any artificial means; or (ii) by a means not authorised by the concerned person or authority or licensee; or (iii) through a tampered meter; or (iv) for the purpose other than for which the usage of electricity was authorised; or (v) for the premises or areas other than those for which the supply of electricity was authorised.

However Regulation 153(15) of Supply Code 2014 provides that an unauthorised additional load in the same premises and under the same tariff shall not be reckoned as ‘unauthorised use of electricity’ except in cases of consumers billed on the basis of connected load. On Regulation 153(15), the bench observed that a delegated legislation should not travel beyond the purview of the parent Act and if it does it is ultra vires and cannot be given any effect. It observed:

“If we have to set right the impugned judgment and order of the High Court and bring in tune with the principles embodied in the decision of this Court in the case of Seetaram Rice Mill then we have no other option but to declare that Regulation 153(15) of the Code 2014 framed by the Commission is inconsistent with Section 126 of the Act 2003. If the Regulation 153(15) is to be given effect, then the same would frustrate the very object of Section 126 of the Act 2003. The High Court in its impugned judgment says that Regulation 153(15) does not lead to any loss of revenue. The stance of the Commission also is that there is no loss of revenue if the Regulation 153(15) is permitted to be operated. However, we are of the view that it is not just the question of loss of revenue. At the cost of repetition, we emphasis on the fact that 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.”

In light of the foregoing considerations and the most recent Supreme Court ruling, the following principle is established:

• Cases of excess load consumption other than the connected load would amount to ‘Unauthorised use of Electricity’.
• Delegated legislation should not travel beyond the purview of the parent act. If it does, it is ultra vires and cannot be given any effect. Rules or regulation cannot be made to supplant the provisions of the enabling act but to supplement it.
• Regulation 153(15) of the Code 2014 to be invalid, being inconsistent with the provisions of Section 126 of the Electricity Act 2003.