# KERALA STATE ELECTRICITY BOARD & ORS v. THOMAS JOSEPH ALIAS THOMAS M. J. & ORS

- **Citation:** [2022] 9 S.C.R. 85
- **Court:** Supreme Court of India
- **Decided:** 2022-12-16
- **Case number:** Civil Appeal Nos. 9252-9253 of 2022
- **Bench:** Dinesh Maheshwari, J. B. Pardiwala
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/kerala-state-electricity-board-ors-v-thomas-joseph-alias-thomas-m-j-ors-36503
- **Pages:** 65

## Headnote

Electricity Act, 2003: ss.126 and 127 - Unauthorised use of
electricity - Consumption of electricity by consumers in excess of
the connected load/contracted load whether amount to
'unauthorised use of electricity' under explanation (b) to s.126(6)
- Held: ss.126 and 127 of the Act constitute a complete code in
themselves - The expression 'unauthorised use of electricity' means
as it appears in s.126 - The purpose of s.126 is to ensure stoppage
of misuse/unauthorised use of electricity as well as to ensure
prevention of revenue loss - Consumption of electricity in excess of
sanctioned/connected load in very same premise and for the very
same purpose without change in tariff constitutes 'unauthorised
use of electricity' under explanation (b) (iv) to s. 126 of the Act -
Kerala Electricity Supply Code, 2014 - r. 153.
Administrative law: Delegated Legislation - Rule making
power - If a rule goes beyond the rule making power conferred by
the statute, the same has to be declared invalid - If a rule supplants
any provision for which power has not been conferred, it becomes
invalid - The basic test is to determine and consider the source of
power, which is relatable to the rule - A delegated power to legislate
by making rules or regulations cannot be exercised so as to bring
into existence the substantive rights or obligations or disabilities
not contemplated by the provisions of the Electricity Act, 2003.
Kerala Electricity Supply Code, 2014: Regn.153(15) -
Whether Regn.153(15) is ultra vires of s.126 of Electricity Act, 2003
- Held: A rule making body must function within the purview of the
rule making authority conferred on it by the parent Act - The body
making rules or regulations has no inherent power of its own to
make rules, but derives such power only from the statute, it has to
[2022] 9 S.C.R. 85
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necessarily function within the purview of the statute - If
Regn.153(15) is to be given effect, then the same would frustrate
the very object of s.126 of the Act - Therefore, Regn.153(15) is
invalid on the ground that same is inconsistent with the provisions
of s.126 of the Electricity Act, 2003 - Doctrine of ultra vires.
Allowing the appeals, the Court
HELD: 1. It is not just a matter of overdrawal of electricity
in excess of 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. The
tariff applicable may remain the same; the overdrawal may be in
the same premises and for the very same purpose, there may not
be any loss of revenue but it may lead to a disastrous situation
being prejudicial to the public at large, as such overdrawal of
electricity in excess of sanctioned/connected load may disturb
the entire supply system, undermining its efficiency, efficacy and
even-increasing voltage demand. High Court 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. [Paras 56 and 58][136-B-C; 137-A-B]
2. It is settled law that the regulation making power cannot
be used to bring into existence substantive rights, which are not
contemplated under the Act 2003. If a rule goes beyond the rule
making power conferred by the statute, the same has to be
declared invalid. If a rule supplants any provision for which power
has not been conferred, it becomes invalid. The basic test is to
determine and consider the source of power, which is relatable
to the rule. Similarly, a rule must be in accord with the parent
statute, as it cannot travel beyond it. [Paras 63 and 64][139-E-H]
3. The doctrine of ultra vires envisages that a rule making
body must function within the purview of the rule making authority
conferred on it by the parent Act. As the body making rul

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KERALA STATE ELECTRICITY BOARD & ORS.
v.
THOMAS JOSEPH
ALIAS THOMAS M. J. & ORS.
(Civil Appeal Nos. 9252-9253 of 2022)
DECEMBER 16, 2022
[DINESH MAHESHWARI AND J. B. PARDIWALA, JJ.]
Electricity Act, 2003: ss.126 and 127 - Unauthorised use of
electricity - Consumption of electricity by consumers in excess of
the connected load/contracted load whether amount to
'unauthorised use of electricity' under explanation (b) to s.126(6)
- Held: ss.126 and 127 of the Act constitute a complete code in
themselves - The expression 'unauthorised use of electricity' means
as it appears in s.126 - The purpose of s.126 is to ensure stoppage
of misuse/unauthorised use of electricity as well as to ensure
prevention of revenue loss - Consumption of electricity in excess of
sanctioned/connected load in very same premise and for the very
same purpose without change in tariff constitutes 'unauthorised
use of electricity' under explanation (b) (iv) to s. 126 of the Act -
Kerala Electricity Supply Code, 2014 - r. 153.
Administrative law: Delegated Legislation - Rule making
power - If a rule goes beyond the rule making power conferred by
the statute, the same has to be declared invalid - If a rule supplants
any provision for which power has not been conferred, it becomes
invalid - The basic test is to determine and consider the source of
power, which is relatable to the rule - A delegated power to legislate
by making rules or regulations cannot be exercised so as to bring
into existence the substantive rights or obligations or disabilities
not contemplated by the provisions of the Electricity Act, 2003.
Kerala Electricity Supply Code, 2014: Regn.153(15) -
Whether Regn.153(15) is ultra vires of s.126 of Electricity Act, 2003
- Held: A rule making body must function within the purview of the
rule making authority conferred on it by the parent Act - The body
making rules or regulations has no inherent power of its own to
make rules, but derives such power only from the statute, it has to
[2022] 9 S.C.R. 85
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necessarily function within the purview of the statute - If
Regn.153(15) is to be given effect, then the same would frustrate
the very object of s.126 of the Act - Therefore, Regn.153(15) is
invalid on the ground that same is inconsistent with the provisions
of s.126 of the Electricity Act, 2003 - Doctrine of ultra vires.
Allowing the appeals, the Court
HELD: 1. It is not just a matter of overdrawal of electricity
in excess of 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. The
tariff applicable may remain the same; the overdrawal may be in
the same premises and for the very same purpose, there may not
be any loss of revenue but it may lead to a disastrous situation
being prejudicial to the public at large, as such overdrawal of
electricity in excess of sanctioned/connected load may disturb
the entire supply system, undermining its efficiency, efficacy and
even-increasing voltage demand. High Court 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. [Paras 56 and 58][136-B-C; 137-A-B]
2. It is settled law that the regulation making power cannot
be used to bring into existence substantive rights, which are not
contemplated under the Act 2003. If a rule goes beyond the rule
making power conferred by the statute, the same has to be
declared invalid. If a rule supplants any provision for which power
has not been conferred, it becomes invalid. The basic test is to
determine and consider the source of power, which is relatable
to the rule. Similarly, a rule must be in accord with the parent
statute, as it cannot travel beyond it. [Paras 63 and 64][139-E-H]
3. The doctrine of ultra vires envisages that a rule making
body must function within the purview of the rule making authority
conferred on it by the parent Act. As the body making rules or
regulations has no inherent power of its own to make rules, but
derives such power only from the statute, it has to necessarily
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function within the purview of the statute. 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. Ultra vires may
arise in several ways; there may be simple excess of power over
what is conferred by the parent Act; delegated legislation may be
inconsistent with the provisions of the parent Act or statute law
or the general law; there may be noncompliance with the
procedural requirement as laid down in the parent Act. [Para 65]
[140-B-D]
4. A delegated power to legislate by making rules or
regulations 'for carrying out the purpose of the Act', is a general
delegation without laying down any guidelines; it cannot be
exercised so as to bring into existence the substantive rights or
obligations or disabilities not contemplated by the provisions of
the Act 2003 itself. Rules or regulation cannot be made to supplant
the provisions of the enabling Act but to supplement it. What is
permitted is the delegation of ancillary or subordinating legislative
functions, or, what is fictionally called, a power to fill up details. [
Paras 78 and 80][144-H; 145-A, D]
5. 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. 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. [Para 82][148-B-C]
Sukhdev Singh and Others v. Bhagatram Sardar Singh
Raghuvanshi and Another (1975) 1 SCC 421 : [1975]
3 SCR 619 - followed.
Executive Engineer, Southern Electricity Supply
Company of Orissa Limited (Southco) and Another v.
Sri Seetaram Rice Mill (2012) 2 SCC 108 : [2011] 15
SCR 211 - relied on.
KERALA STATE ELECTRICITY BOARD & ORS. v. THOMAS
JOSEPH
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Punjab State Electricity Board v. Vishwa Caliber
Builders Private Limited (2010) 4 SCC 539; Uttar
Pradesh Power Corporation Limited and Others v. Anis
Ahmad (2013) 8 SCC 491 : [2013] 13 SCR 388;
Additional District Magistrate (Rev.) Delhi Admn. v. Siri
Ram (2000) 5 SCC 451 : [2000] 3 SCR 1019; State of
Karnataka and Another v. H. Ganesh Kamath and
Others (1983) 2 SCC 402 : [1983] 2 SCR 665; Kunj
Behari Lal Butail and Others v. State of H.P. and Others
(2000) 3 SCC 40 : [2000] 1 SCR 1054; St. Johns
Teachers Training Institute v. Regional Director,
National Council for Teacher Education and Another
(2003) 3 SCC 321 : [ 2003] 1 SCR 975; Global Energy
Limited and Another v. Central Electricity Regulatory
Commission (2009) 15 SCC 570 : [2009] 9 SCR 22;
State of T.N. and Another v. P. Krishnamurthy and Others
(2006) 4 SCC 517 : [2006] 3 SCR 396; Pratap
Chandra Mehta v. State Bar Council of Madhya
Pradesh and Others (2011) 9 SCC 573 : [2011] 11
SCR 965; Dr. Mahachandra Prasad Singh v. Chairman,
Bihar Legislative Council and Others (2004) 8 SCC
747 : [2004] 5 Suppl. SCR 692; McEldowney v. Forde
(1971) AC 632 : (1969) 3 WLR 179 - referred to.
"Delegated Legislation" in Francis Bennion's Statutory
Interpretation, 3rd Edn.) - referred to.
Case Law Reference
[2011] 15 SCR 211
relied on
Para 15
(2010) 4 SCC 539
referred to
Para 59
[2013] 13 SCR 388
referred to
Para 62
[2000] 3 SCR 1019
referred to
Para 67
[1975] 3 SCR 619
followed on
Para 68
[1983] 2 SCR 665
referred to
Para 69
[2000] 1 SCR 1054
referred to
Para 70
[2003] 1 SCR 975
referred to
Para 71
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[2009] 9 SCR 22
referred to
Para 72
[2006] 3 SCR 396
referred to
Para 74
[2011] 11 SCR 965
referred to
Para 75
[2004] 5 Suppl. SCR 692
referred to
Para 76
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos.92529253 of 2022.
From the Judgment and Order dated 12.04.2017 of the High Court
of Kerala at Ernakulam in WP (C) No.22644 of 2015 and dated
21.08.2017 in Review Petition No.598 of 2017 in WP (C) No.22644 of
2015.
With
Civil Appeal Nos. 9256-9257, 9254-9255, 9262-9263, 9264-9265,
9266-9267, 9268-9269, 9270-9271, 9258-9259 and 9260-9261 of 2022.
Basant R., Sr. Adv., Raghenth Basant, P. V. Dinesh, Vishnu
Pazhanganat, Ajay Krishna, Rahul Raj Mishra, Ashwini Kumar Singh,
Dineesh K., Advs. for the Appellants.
Nishe Rajen Shonker, Sriram P., Abraham C. Mathew, Anu K.
Joy, Alim Anvar, Mohammed Sadique T.A., Kuriakose Varghese, V.
Shyamohan, Akshat Gogna, Ms. Aishwarya Hariharan, M/s. Kmnp Law,
Dhananjaya Mishra, C. K. Sasi, Abdulla Naseeh. V. T., Ms. Meena k.
Poulose, Advs. for the Respondents.
The Judgment of the Court was delivered by
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 STATE ELECTRICITY BOARD & ORS. v. THOMAS
JOSEPH
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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
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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 explanation (b)(iv) to Section
126 of the Act 2003, in which cases, the energy charges are already
metered and paid by the consumers. The learned Single Judge of the
High Court while passing an order of reference observed that a different
yardstick may have to be applied to cases falling under the explanation
(b)(i), (iii) and (v) to Section 126 of the Act 2003 as the energy charges
are not metered.
8. The Division Bench of the Kerala High Court heard all the
consumers concerned and held as under:
"7.16. Accordingly, in Para. 87 of the judgment in Seetharam
Rice Mill's case (supra), the Three-Judge Bench of the Apex
Court concluded that, wherever the consumer commits the
breach of the terms of the agreement, Regulations and the
provisions of the Act by consuming electricity in excess of the
sanctioned and connected load, such consumer would be 'in
blame and under liability' within the ambit and scope of Section
126 of the Electricity Act, 2003. The expression 'unauthorised
use of electricity means' as appearing in Section 126 of the
Act is an expression of wider connotation and has to be
construed purposively in contrast to contextual interpretation
while keeping in mind the object and purpose of the Act. The
cases of excess load consumption than the connected load
inter alia would fall under Explanation (b)(iv) to Section 126
of the Act, besides it being in violation of Regulations 82 and
106 of the Regulations and terms of the agreement.
KERALA STATE ELECTRICITY BOARD & ORS. v. THOMAS
JOSEPH [J. B. PARDIWALA, J.]
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8. Following the law laid down by the Apex Court in
Seetharam Rice Mill's case (supra), a Division Bench of this
Court in which one among us (AKN J) was a member, held in
M/s. Classic Color Lab v. Assistant Engineer and others (2014
(3) KLT 57) that, while interpreting the provisions of Section
126 of the Electricity Act, 2003 this Court would have to apply
the principle of purposive interpretation in preference to
textual interpretation, keeping in mind the purpose to be
achieved by that Section, i.e., to put an implied restriction on
unauthorised use of electricity. Therefore, a construction
which will improve the workability of the Statute, to be more
effective and purposive, would have to be preferred to any
other interpretation which may lead to undesirable results.
8.1. In Classic Color Lab's case (supra), in the site inspection
conducted on 3.3.2005, unauthorised use of electricity was
detected by the APTS in the premises in question where the
appellant/consumer was having a Colour Photo Processing
Unit and Lab. The APTS found that the appellant/consumer
was misusing electricity for industrial purpose under LT-IV
tariff for commercial use, attracting higher tariff under LTVIIA. Accordingly, the appellant/consumer was issued with a
demand notice, demanding energy charges at a rate equal to
one and a half times LT-VIIA tariff for a period of 6 months,
less the amount already paid under LT-IV tariff.
8.2. After referring to Explanation (b) to Section 126 of the
Act, this Court held that, once it is found that the appellant/
consumer had indulged in unauthorised use of electricity, the
penal assessment contemplated under Section 126 of the Act
has to follow. As per Section 126(6), as it stood prior to the
Amendment Act 26 of 2007, such assessment shall be made at
a rate equal to one and a half times the tariff applicable for
the relevant category of services specified in sub-section (5).
8.3. In Classic Color Lab's case (supra), it was contended on
behalf of the appellant/consumer that, assessment under
Section 126 of the Act should be made at a rate equal to one
and a half times the tariff applicable for industrial connection.
Per contra, it was contended on behalf of the Board that,
such assessment should be made at a rate equal to one and a
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half times the tariff applicable for commercial connection,
for which a higher tariff is applicable.
8.4. After taking note of the law laid down by the Apex Court
in Seetharam Rice Mill's case (supra), this Court held that,
once it is found that the appellant/consumer had indulged in
unauthorised use of electricity supplied under industrial tariff,
the entire consumption in that service connection will have to
be assessed under Section 126(6) of the Act and as such, the
contention of the appellant/consumer that the consumption
through the light meter alone should have been charged under
LT-VIIA is untenable. This Court held further that, the only
interpretation that can be given to Section 126(6) of the Act
is that, in an assessment under Section 126 for unauthorised
use of electricity, assessment shall be made at a rate equal to
one and a half times (two times with effect from 15.6.2007)
the tariff applicable for the relevant category of services
attracting higher tariff for which the electricity supplied was
unauthorisedly used, and not the relevant category of service
to which the consumer belongs. Paras.15 and 16 of the
judgment read thus;
"15. On 3.3.2005, the appellant's premises was inspected
by the APTS. As evident from Ext. P1 site mahazar, the APTS
found that, the power supply through the light meter under
industrial tariff LT- IV was being used for the neon lights
and air conditioners in the studio, which are under
commercial tariff LT-VIIA. The finding in Ext. P1 site
mahazar is to the effect that, the appellant was indulging
in unauthorised use of electricity for industrial purpose
under the tariff LT-IV for commercial purpose, attracting
a higher tariff under LT-VIIA. As the appellant used the
electricity supplied for industrial use under LT-IV tariff
for commercial use under LT- VIIA tariff it amounts to
'unauthorised use of electricity' falling under Clause (b)
to the Explanation to Section 126. For such unauthorised
use the appellant is liable to be assessed under Section
126(6), as it stood prior to the Amendment Act 26 of 2007,
at a rate equal to one and half times the tariff applicable
for the relevant category of service. On 27.10.2005, the
KERALA STATE ELECTRICITY BOARD & ORS. v. THOMAS
JOSEPH [J. B. PARDIWALA, J.]
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appellant segregated the commercial load in the industrial
connection and thereafter, the connected load of service
connection under commercial tariff was enhanced from 5KW
to 28KW and the connected load of service connection
under industrial tariff was reduced from 88KW to 44KW.
This makes it abundantly clear that, the appellant was
indulging in unauthorised use electricity, thereby using a
major portion of the electricity supplied under industrial
tariff for commercial use. Once it is found that, the appellant
had indulged in unauthorised use of the electricity supplied
under industrial tariff the entire consumption in that service
connection will have to be assessed under Section 126(6).
Therefore, the contention of the appellant that the
consumption through the light meter alone should have
been charged under LT-VIIA is absolutely untenable.
16. The KSEB is supplying electricity for industrial
purpose, under LT-IV tariff, at a subsidised rate, whereas,
supply of electricity for commercial purpose, under LT-VIIA
tariff attracts a higher rate. As evident from the calculations
made in Ext.P5 demand, the commercial tariff under LTVIIA during the relevant period was Rs. 8.25 per unit. As
pointed out by the learned Standing Counsel for the KSEB,
the industrial tariff under LT-IV during the relevant period
was only Rs.4.25 per unit. Therefore, if the appellant is
assessed under Section 126(6) for the unauthorised use of
electricity, taking LT-IV industrial tariff @Rs. 4.25 per unit
as the basis for calculating the rate equal to one and half
times the tariff applicable for the relevant category of
service, then the appellant need pay only Rs. 6.37 per unit
for unauthorised use of electricity for commercial purpose,
as against the prevailing rate of Rs.8.25 per unit applicable
for the commercial tariff under LT-VIIA. If such an
interpretation is given, it would defeat the very purpose
that Section 126 has to achieve, i.e., to put an implied
restriction on unauthorised consumption of electricity. On
the other hand, if the appellant is assessed for the
unauthorised use of electricity, taking LT-VIIA industrial
tariff @Rs.8.25 per unit as the basis for calculating the
rate equal to one and half times the tariff applicable for
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the relevant category of service, the appellant has to pay
only Rs.12.37 per unit for unauthorised use of electricity
for commercial purpose, as against the prevailing rate of
Rs.8.25 per unit applicable for the commercial tariff under
LT-VIIA. Therefore, the only interpretation that can be given
to Section 126(6) of the Electricity Act, 2003, is that, in an
assessment under Section 126 for unauthorised use of
electricity, assessment shall be made at a rate equal to one
and half times (two times with effect from 15.6.2007) the
tariff applicable for the relevant category of service
attracting higher tariff for which the electricity supplied
was unauthorisedly used and not the relevant category of
service to which the consumer belongs, and we hold so."
8.5. In Classic Color Lab's case (supra), after taking note of
the arguments advanced on behalf of the appellant/consumer
relying on the judgment of this Court in J.D.T. Islam
Orphanage Committee v. Assistant Engineer, KSEB (2007 (3)
KLT 388) and that of the Calcutta High Court in Sk. Jafar
Ali v. West Bengal State Electricity Distribution Company
Limited (AIR 2010 Cal. 84) this Court observed that, J.D.T.
Islam Orphanage Committee's case (supra) is a case under
the Electricity Act, 1910, in which an orphanage under LT-VI
tariff was assessed for unauthorised extension, by levying
LT-VIII tariff applicable to temporary extension. It was not a
case in which electricity supplied under LT-VI tariff was used
by the consumer for any other purpose attracting higher tariff.
That decision was rendered on an entirely different set of facts
and it does not in any way support the case of the appellant/
consumer.
8.6. In Sk. Jafar Ali's case (supra) the electricity supplied
under domestic tariff was used for commercial purpose
attracting a higher tariff. The Court found that the meter used
for commercial purpose situated in the consumer's premises
has not been tampered with and it is the meter relating to
domestic consumption that has been tampered with. The
learned Judges of the Calcutta High Court, interpreting
Section 126(6) of the Act held that, the phrase 'applicable
for the relevant category of the services specified in sub-section
KERALA STATE ELECTRICITY BOARD & ORS. v. THOMAS
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(5)' appearing in Section 126 should be reasonably construed
as the rate 'applicable for the relevant category of the services
to which the consumer belongs'. Though, the judgment of the
Calcutta High Court does support the view as propounded
by the learned counsel for the appellant/consumer, the Division
Bench of this Court disagreed with that view of the Calcutta High
Court, stating that, if the above interpretation is accepted, a
consumer under LT-V Agriculture tariff at the rate of around
` 1/- per unit need pay only ` 1.50 per unit for unauthorised
use of electricity for commercial purpose, as against the
prevailing rate of ` 8.25 per unit applicable for LT-VIIA
commercial tariff.
9. In Maria Plana Society v. KSEB and others (judgment dated
21.5.2009 in W.P.(C). No. 12068 of 2009) a learned Judge
of this Court held that, as can be seen from Section 126 of
the Electricity Act, 2003 as amended, once the assessing officer
reaches the conclusion that unauthorised use of electricity
has taken place, the assessment shall be made for the entire
period and the assessment shall be at the rate equal to twice
the tariff applicable for the relevant category of services. A
reading of Section 45(3)(a) of the Act shows that, charges
for electricity supplied by a distribution licensee include fixed
charges in addition to the charges for the actual electricity
supplied and consumed. In the light of the above statutory
provisions, the irresistible conclusion is that, tariff includes
both fixed charges and energy charges and that, once the
assessing officer has reached the conclusion that
unauthorised used of electricity has taken place, he is bound
to make assessment at the rate equal to twice the tariff
applicable, which includes the dues payable towards energy
charges also. In the judgment dated 3.4.2014 in W.A.No.1149
of 2009 arising out of the judgment in W.P.(C).No.12068 of
2009 the Division Bench, without interfering with the judgment
of the learned Single Judge, disposed of the Writ Appeal
leaving open the question of law as to whether the penalty
under Section 126 of the Act is applicable to energy charges
also in the case of unauthorised additional load.
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10. In Seetharam Rice Mill's case (supra) the Apex Court
has stated that, Section 126 of the Act, which embodies a
complete process for assessment, determination and demand
has a purpose to achieve, i.e., to put an implied restriction on
such unauthorised consumption of electricity. The provisions
of Section 126 of the Act are self- explanatory, which are
intended to cover situations other than the situations
specifically covered under Section 135 of the Act; which would
be applicable to cases where there is no theft of electricity
but the electricity is being consumed in violation of the terms
and conditions of supply leading to malpractices, which may
squarely fall within the expression 'unauthorised use of
electricity'. Section 135 of the Act deals with an offence of
theft of electricity, which squarely falls within the dimensions
of criminal jurisprudence, and mens rea is one of the relevant
factors for finding a case of theft. On the contrary, Section
126 of the Act does not speak of any criminal intendment,
which does not have features or elements which are traceable
to the criminal concept of mens rea. Thus, the expression
'unauthorised use of electricity' under Section 126 of the Act
deals with cases of unauthorised use, even in absence of
intention. As such, intention is not the foundation for invoking
powers of the competent authority and passing of an order of
assessment under Section 126 of the Act.
11. As held by the Apex Court in Seetharam Rice Mill's case
(supra), 'unauthorised use of electricity' means the usage of
electricity by the means and for the reasons stated in
Explanation (b)(i) to (v) to Section 126 of the Act, which would
mean what is stated under that Explanation, as well as such
other unauthorised use, which is squarely in violation of the
statutory or contractual provisions in the Act, Regulations
framed thereunder and the terms and conditions of supply in
the form of contract or otherwise. Unauthorised use of
electricity brings the consumer 'under liability and in blame'
within the ambit and scope of Section 126 of the Act. The
blame is in relation to excess load while the liability is to pay
on a different tariff for the period prescribed in law and in
terms of an order of assessment passed by the assessing officer.
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12. After referring to the expression 'means' used in
Explanation (b) to Section 126 of the Act, the Apex Court
held that, the primary object of that expression is intended to
explain the term 'unauthorised use of electricity' which, even
from the plain reading of the provisions of the Act or on a
common sense view cannot be restricted to the examples given
in the Explanation. Section 126(5) and clause (iv) of
Explanation (b) to Section 126 of the Act were amended by
the Electricity (Amendment) Act, 2007 with a purpose and
object of preventing unauthorised use of electricity not
amounting to theft of electricity within the meaning of Section
135 of the Act, which has to be given its due meaning, which
will fit into the scheme of the Act and would achieve its object
and purpose.
13. Taking note of the fact that electricity supply to a consumer
is restricted and controlled by the terms and conditions of
supply, Regulations and the provisions of the Act, the Apex
Court held that, unauthorised use of electricity cannot be
restricted to the stated clauses under Explanation to Section
126 but has to be given a wider meaning so as to cover cases
of violation of terms and conditions of supply and the
Regulations and provisions of the Act governing such supply.
Therefore, the Apex Court concluded that, consumption of
electricity in excess of the sanctioned/connected load shall be an
'unauthorised use of electricity' in terms of Section 126 of the
Act, since overdrawal of electricity amounts to breach of the terms
and conditions of the contract and the statutory conditions; besides
such overdrawal being 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.
14. The provisions under Section 126 of the Act, as it stood
prior to the amendment by the Electricity (Amendment) Act,
2007 provided for assessment of unauthorised use of electricity
'one and a half times' the tariff applicable for the relevant
category of service, for a period of three months immediately
preceding the date of inspection in the case of domestic and
agricultural services and for a period of six months
immediately preceding the date of inspection for all other
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categories of services, unless the onus is rebutted by the
person, occupier or possessor of such premises or place.
15. In tune with the provisions under Section 126 of the Act,
Regulation 51(1) of the Conditions of Supply, 2005 provides
for assessment of unauthorised additional load in terms of
Regulation 50(5) and (6), i.e., at a rate equal to one and half
times the tariff applicable for the relevant category of services
specified in Regulation 50(5), for a period of three months
immediately preceding the date of inspection in case of
domestic and agricultural services and for a period of six
months immediately preceding the date of inspection for all
other categories of services, unless the onus is rebutted by
the person/occupier or possessor of such premises or place.
Though Regulation 51(1) of the Conditions of Supply, 2005
employs the term 'penalised', what is contemplated under the
said Regulation is only assessment of unauthorised use of
electricity in terms of Section 126 of the Act for the period
specified in Section 126(5) and at the rate specified in Section
126(5) of the Act. In that view of the matter, Regulation 51(1)
of the Conditions of Supply, 2005 is neither ultra vires the
provisions of Section 126 of the Act nor unenforceable, and
we hold so.
16. The provisions under Section 126 of the Act underwent a
substantial change by the Electricity (Amendment) Act, 2007.
After the amendment, if the period during which unauthorised
use of electricity has taken place cannot be ascertained by
the assessing officer, such period shall be limited to a period
of 'twelve months' immediately preceding the date of inspection
and assessment shall be made at a rate equal to 'twice' the
tariff applicable for the relevant category of services specified
in sub-section (5). The said amendment made to Section 126(5)
and (6) of the Act, with a purpose and object of preventing
unauthorised use of electricity not amounting to theft of
electricity within the meaning of Section 135 of the Act has to
be given its due meaning, which will fit into the scheme of the
Act and would achieve its object and purpose. In the absence
of any challenge against the said amendment made to Section
126(5) of the Act, the petitioners/consumers cannot now
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contend that the period of 'twelve months' prescribed therein
is unreasonable, in as much as, for theft of electricity the period
prescribed in Section 135 of the Act is only 'three months'.
17. When 'unauthorised use of electricity' under Section 126
of the Act deals with cases of unauthorised use even in absence
of intention, it cannot be contended that, in the absence of
mens rea, assessment at the maximum rate, i.e. at the rate equal
to twice the tariff applicable to the relevant category of service
is legally impermissible. In all cases of 'unauthorised use of
electricity' falling under Explanation (b) to Section 126 of
the Act, the assessing officer is empowered to assess such
unauthorised use of electricity, at the rate prescribed in
Section 126(6) and for the period specified in Section 126(5),
as amended by the Electricity (Amendment) Act, 2007. In that
view of the matter, we find no merit in the contention of the
learned counsel for the petitioners/consumers, relying on the
judgment of a Division Bench of this Court in KSEB and
others v. M/s. Alukkas Jewellery (judgment dated 9.11.2005
in W.A.No.1262 of 2004) that, in cases where no damage has
been caused to the Board's installation due to overdrawal of
electricity, assessment at the rate equal to twice the tariff
applicable to the relevant category of service is unwarranted.
18. In Seetharam Rice Mill's case (supra) the Three-Judge
Bench of the Apex Court laid down that, consumption of
electricity in excess of the sanctioned/connected load would
be squarely covered under Explanation (b)(iv) to Section 126
of the Act. Once this factor is established, then the assessing
officer has to pass the final order of assessment in terms of
Section 126(6) of the Act, which shall be at a rate equal to
twice the tariff applicable for the relevant category of services
specified in sub-section (5).
19. In PTC India Ltd. v. Central Electricity Regulatory
Commission (2010 (4) SCC 603) the Apex Court held that,
the term 'tariff', though not defined in the Electricity Act,
2003, it includes within its ambit not only the fixation of rates
but also the rules and regulations relating to it.
20. Section 45(1) of the Act provides that, subject to the
provisions of Section 45, the prices to be charged by a
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distribution licensee for the supply of electricity by him in
pursuance of Section 43 shall be in accordance with such
tariffs fixed from time to time and conditions of his licence.
Section 45(3) provides further that, the charges for electricity
supplied by a distribution licensee may include a fixed charge
in addition to the charge for the actual electricity supplied;
and a rent or other charges in respect of any electric meter or
electrical plant provided by the distribution licensee.
21. The provisions under Section 45(3) of the Act makes it
explicitly clear that, the term 'tariff' in Section 45(1), which
is the price to be charged by the distribution licensee for the
supply of electricity, includes the fixed charge in addition to
the charge for the actual electricity supplied. If that be so, it
can be safely concluded that, the term 'tariff ' in Section 126(6)
of the Act includes both fixed charges and charges for the
electricity supplied, which has to be assessed in the case of a
consumer indulged in unauthorised use of electricity, at a
rate equal to twice the tariff applicable for the relevant
category of services specified in sub-section (5). Therefore,
once the assessing officer has reached the conclusion that
the consumer has indulged in unauthorised use of electricity,
he is bound to make assessment of such consumer at the rate
equal to twice the tariff applicable, which includes both fixed
charges and energy charges.
22. Relying on the decisions in JDT Islam Orphanage
Committee v. Assistant Engineer, KSEB (2007 (3) KLT 388),
George Joseph and another v. KSEB and others (2008 (4)
KLT 610), etc. the petitioners/consumers contended that, when
the energy consumed through meter having been billed and
payment having been made, assessment of penal charges for
such consumption of energy is legally impermissible and the
only liability that can be fastened upon the consumers found
indulging in unauthorised use of electricity is penal charges
on fixed charges. The said contention can only be repelled in
view of our finding made hereinbefore, with reference to the
provisions under Sections 45 and 126 of the Act and the law
laid down by the Apex Court in Seetharam Rice Mill's case
(supra) and that laid down by this Court in Classic Color
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Lab's case (supra) that, the assessment of a consumer Section
126(6) of the Act, at the rate equal to twice the tariff
applicable, includes both fixed charges and energy charges.
23. In Board Order dated 7.2.2008, which was made
applicable with effect from 15.6.2007, it was ordered that,
the field officers shall strictly follow the provisions of Section
126(5) and (6) of the Act, as amended by the Electricity
(Amendment) Act, 2007, i.e., two times the respective tariff
for the entire period, and in case the said period cannot be
ascertained for a period of twelve months, for assessing
penalty in the case of misuse of energy including unauthorised
additional load, unauthorised extension and meter tampering
cases detected. It was also made clear that, the penalty rate
shall be applicable to both fixed and energy charges for the
unauthorised use. Penalty charges for current charges shall
be levied for proportionate energy charge and normal current
charge collected shall be deducted.
24. Though Board Order dated 7.2.2008 employs the term
'penalty', what is contemplated under the said order is only
assessment of unauthorised use of electricity in terms of
Section 126 of the Act, as amended by the Electricity
(Amendment) Act, 2007, for the period specified in Section
126(5) and at the rate specified in Section 126(6) of the Act.
In that view of the matter, Board Order dated 7.2.2008 is
neither ultra vires the provisions of Section 126 of the Act nor
unenforceable, and we hold so.
25. In Seetharam Rice Mill's case (supra) the Apex Court
was dealing with a case in which the tariff applicable to the
consumer was changed from 'medium industry' to tariff
applicable for 'large industry'.