Supreme Court Strikes Down Kerala Electricity Regulation on Unauthorised Load

The case of Kerala State Electricity Board & Ors. vs. Thomas Joseph Alias Thomas M.J. & Ors. dealt with a crucial question regarding the assessment of unauthorised use of electricity under Section 126 of the Electricity Act, 2003. The Supreme Court was called upon to determine whether overdrawal of electricity beyond the sanctioned load in the same premises and for the same purpose should be considered ‘unauthorised use’ under the Act.

Background of the Case

The Kerala State Electricity Board (KSEB) conducted inspections and found that various industrial and commercial consumers were drawing electricity beyond their sanctioned/contracted load. The Board assessed penalties under Section 126(6) of the Electricity Act, 2003, which prescribes charges at twice the tariff applicable for unauthorised use.

The consumers challenged these penalties in the Kerala High Court, arguing that overdrawal of electricity for the same purpose should not be classified as unauthorised use under the Act. The High Court ruled in favour of the consumers, stating that such overdrawal did not constitute unauthorised use unless it necessitated an upgrade of the distribution system or a change in tariff category.

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Arguments by the Appellant (Kerala State Electricity Board)

The KSEB, represented by Senior Advocate R. Basant, contended:

• The High Court erred in relying on Regulation 153(15) of the Kerala Electricity Supply Code, 2014, which exempted unauthorised additional load in the same premises from being treated as unauthorised use.
• Section 126 of the Electricity Act, 2003, is a complete code and does not provide for such an exemption.
• Overdrawal of electricity beyond the sanctioned load, even if in the same premises, disrupts the grid and affects the efficiency of the power supply system.
• Allowing such overdrawal without penalties would lead to widespread misuse and compromise the stability of the electricity supply network.

Arguments by the Respondents (Consumers)

The consumers, represented by Senior Advocate S. Sreekumar, argued:

• Regulation 153(15) of the Kerala Electricity Supply Code, 2014, validly provided that unauthorised additional load in the same premises should not be treated as unauthorised use.
• Consumers should not be penalised when the excess consumption was already metered and paid for.
• Section 126 should be interpreted in light of state regulations, which were designed to accommodate practical realities in power distribution.
• The High Court correctly ruled that only cases necessitating infrastructure upgrades or a change in tariff category should attract penalties under Section 126.

Key Observations by the Supreme Court

The Supreme Court, after analyzing the statutory provisions and precedents, made the following key observations:

• Section 126 of the Electricity Act, 2003, is self-contained and does not allow state regulations to dilute its provisions.
• The term ‘unauthorised use of electricity’ has a broad meaning and includes consumption beyond the sanctioned load.
• Allowing overdrawal without penalties would lead to serious grid instability, affecting public interest.
• Regulation 153(15) of the Kerala Electricity Supply Code, 2014, was inconsistent with Section 126 and therefore invalid.

Supreme Court’s Verdict

The Supreme Court ruled in favor of the Kerala State Electricity Board, holding:

“Consumption of electricity in excess of the sanctioned/connected load shall be deemed ‘unauthorised use’ under Section 126 of the Electricity Act, 2003. The High Court’s interpretation, which exempted such overdrawal, is legally unsustainable.”

The Court struck down Regulation 153(15) of the Kerala Electricity Supply Code, 2014, as being ultra vires the Electricity Act, 2003.

Conclusion

This judgment clarifies that any excess consumption beyond the sanctioned load, irrespective of the premises or purpose, qualifies as unauthorised use under the Electricity Act, 2003. The ruling strengthens the regulatory framework to prevent grid instability and ensures that all consumers adhere to their sanctioned electricity limits.

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Petitioner Name: Kerala State Electricity Board.
Respondent Name: Thomas Joseph Alias Thomas M.J. & Ors..
Judgment By: Justice Dinesh Maheshwari, Justice J.B. Pardiwala.
Place Of Incident: Kerala.
Judgment Date: 16-12-2022.

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