Electricity Load Reduction Dispute: Jharkhand High Court Verdict Upheld image for SC Judgment dated 30-04-2021 in the case of Jharkhand State Electricity Bo vs M/S Ramkrishna Forging Limited
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Electricity Load Reduction Dispute: Jharkhand High Court Verdict Upheld

The case of Jharkhand State Electricity Board & Others vs. M/S Ramkrishna Forging Limited revolved around a contractual dispute concerning the reduction of sanctioned electricity load. The respondent, a small-scale industry, had an agreement with the Jharkhand State Electricity Board for a sanctioned load of 4000 KVA. However, due to operational difficulties, the respondent sought a reduction in the sanctioned load to 1325 KVA. The Board refused, citing regulatory provisions. The case ultimately reached the Supreme Court, which upheld the Jharkhand High Court’s ruling favoring the respondent.

Background of the Case

The respondent initially entered into an electricity supply agreement with the Board on April 14, 2004, with a sanctioned load of 325 KVA. Over the years, the load was enhanced multiple times upon request, reaching 4000 KVA. However, the respondent faced operational issues such as power tripping and frequent load shedding, adversely affecting its machinery. Consequently, it applied for a reduction in load.

Petitioners’ Arguments

The Jharkhand State Electricity Board opposed the reduction request based on Clause 9B of the agreement, which stipulated:

“The consumer shall not be at liberty to determine this agreement before the expiration of three years from the date of commencement of supply of energy.”

They further argued that Regulation 9.2.1 of the Jharkhand State Electricity Regulatory Commission’s Electricity Supply Code Regulations, 2005 prohibits any reduction in load before the initial contract period expires.

Read also: https://judgmentlibrary.com/supreme-court-issues-landmark-guidelines-for-speedy-execution-of-civil-decrees/

Respondent’s Arguments

The respondent countered that the multiple load enhancements were mere modifications of the original 2004 agreement and did not constitute new agreements. They argued that under Regulation 9.2, reduction of load should be allowed if the initial agreement had already exceeded three years. The respondent also contended that the Board, being a monopoly, must operate fairly and reasonably.

Supreme Court’s Findings

The Supreme Court observed three crucial points:

  • Each enhancement was an amendment to the original agreement and not a fresh agreement.
  • The Board’s decision was based solely on contract provisions, ignoring the Electricity Regulations of 2005.
  • The Board failed to justify why a consumer cannot reduce their load after the expiration of the initial contract period.

The court stated:

“The Board is an instrumentality of the State. It has to be fair and reasonable. If the Regulations provide for contract load to be varied through written communication, then merely executing a fresh agreement for enhancement of load cannot be treated as a fresh agreement.”

Judgment and Conclusion

The Supreme Court upheld the Jharkhand High Court’s decision, ruling that:

“The application of the respondent dated 20.09.2007 for reduction of contract load/sanctioned load from 4000 KVA to 1325 KVA would be deemed to have been allowed under the provisions of Regulation 9.2 of the Regulations of 2005, and the respondent shall be entitled to all consequential benefits.”

With this ruling, the Supreme Court reinforced the principle that regulatory provisions take precedence over contractual clauses, ensuring fairness for electricity consumers.


Petitioner Name: Jharkhand State Electricity Board & Others.
Respondent Name: M/S Ramkrishna Forging Limited.
Judgment By: Justice L. Nageswara Rao, Justice Vineet Saran.
Place Of Incident: Jharkhand.
Judgment Date: 30-04-2021.

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