IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION   

CIVIL APPEAL NO. 2538   OF 2010 (Arising out of S.L.P. (C) No.4610 of 2009)

Punjab State Electricity Board …….Appellant

Versus

M/s. Vishwa Caliber Builders Pvt. Ltd. …….Respondent

J U D G M E N T

G.S. Singhvi,  J.

1. Leave granted.

2. This is an appeal for setting aside order dated 30.7.2008 passed by the  

Division Bench of Punjab & Haryana High Court whereby it dismissed the  

writ  petition  filed  by  the  appellant  against  the  order  of  Ombudsman,  

Electricity,  Punjab  (hereinafter  described  as  “the  Ombudsman”)  who,  in  

turn, reversed the decision of the Disputes Settlement Authority (for short,

“the  DSA”)  and  directed  refund  of  the  amount  recovered  from  the  

respondent  towards  Advance  Consumption  Deposit  (ACD),  service  

connection charges and load surcharge.

3. The respondent, who owns a shopping complex at Mata Rani Chowk,  

AC  Market,  Ludhiana  submitted  application  dated  23.5.1995  to  the  

competent authority of the appellant for sanction of NRS connection with a  

load of  2548 KW and deposited ACD amounting to Rs.5,25,600/-.  The  

Engineer-in-Chief/Commercial  Sales  Director,  Punjab  State  Electricity  

Board sanctioned registration of the application of the respondent subject to  

the  condition  that  connection  would  be  released  only  after  shifting  of  8  

MVA load from 66 KV sub station, G.T. Road, Ludhiana to the proposed 66  

KV  sub  station,  Feroze  Gandhi  Market  and  Transport  Nagar,  Ludhiana.  

However,  due  to  non-availability  of  the  transformer,  steps  for  shifting  8  

MVA load  from 66 KV sub station,  G.T.  Road,  Ludhiana,  could not  be  

taken.   After some time, the respondent applied for release of connection  

with 1500 KW from the existing system.  The request of the respondent was  

accepted by the Chief Engineer concerned and accordingly a connection was  

released  in  favour  of  the  respondent  with  effect  from  25.3.1996.   On  

11.5.1999, new transformer was installed at 66 KV sub station, G.T. Road,  

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Ludhiana.  Thereafter, Memo dated 11.8.1999 was issued to the respondent  

to give consent for release of the balance load.  The latter submitted consent  

letter  dated  1.9.1999  with  a  stipulation  that  six  months’  period  may  be  

allowed for building up the balance load.  On being asked by the Senior  

Executive Engineer, the respondent submitted an affidavit dated 16.10.2000  

for release of the balance load.  

4. Since,  the  respondent  failed  to  avail  the  balance  load  within  six  

months, the competent authority of the appellant forfeited the ACD on the  

premise that the application made by the applicant had lapsed.  This was  

followed  by  notice  dated  13.12.2001  vide  which  the  respondent  was  

informed that it can submit fresh A&A form for availing the balance load.  

To  the  same  effect,  reminder  dated  23.5.2002  was  also  issued  to  the  

respondent.   However,  the  representative  of  the  respondent  declined  to  

submit fresh A&A form by contending that the same is not applicable to  

NRS connection.  

5. The electricity connection installed in the premises of the respondent  

was checked on 27.8.2004 by a team of officers of the Board which found  

that as against the sanctioned load of 1500 KW, the respondent was using  

total load of 1981.637 KW.  Upon receipt of the report of the checking team,  

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demand notice dated 25.1.2005 was issued to the respondent requiring it to  

deposit Rs.15,41,492/- which included Rs. 3,37,400/- as ACD, Rs.4,81,637/-  

as service connection charges and Rs.7,22,455/- as load surcharge.   

6. The respondent  challenged the aforesaid notice  by filing a  petition  

before  the  DSA, which  was dismissed  vide  order  dated 20.2.2006.   The  

operative portion of that order reads as under:

“Keeping  in  view  the  petition,  reply,  rejoinder,  evidence  adduced, written arguments and oral discussion DSA concluded  that charging of load surcharge for 432 KW load is correct.  As  per SR No.35.1.2, the petitioner did not apply for any extension  in time after  the expiry of six months for building up of his  load, in such cases where the consumer does not come up with  the  request  for  extension  in  time  beyond  six  months  for  building  up  of  balance  load/demand,  the  load/demand  not  availed shall  be deemed to have elapsed.  In this case above  mentioned regulation is applicable for calculating the penalty.  Thus, Rs.7,22,455/- charged, as load surcharge are recoverable.  As far  as  ACD of  Rs.3,37,400/-  is  concerned the Board has  already  received  ACD  of  full  load  in  1995.   So  only  the  difference of rate of ACD of 1052.920 KW load is recoverable.  DSA also decided that Rs.4,81,637/- charged as SCC are also  recoverable from the petitioner.

Correct  surcharge  as  per  Board’s  instructions  be  also  recovered.”

7. The respondent carried the matter before the Ombudsman, who ruled  

that the load of 1918.637 KW should be accepted as the built up load and the  

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same  should  be  deemed  as  regularized  with  effect  from 1.3.2000.   The  

relevant  portions  of  order  dated 5.9.2007 passed  by  the  Ombudsman are  

extracted below:

“There  is  merit  in  the  petitioner’s  presumption  having  complied with procedural  formalities  of  balance load and  their request for extension to build up total load within six  months of their consent letter dated 01.09.1999.  There offer  to be charged for minimum monthly charges on full load of  2548 KW clear their  antecedents.   Checking report  dated  27.08.2004 confirms that load was built up to 1981 KW if  not upto 2548 KW.  The respondents themselves confirm on  the basis of consumption data that load in excess of 1500  KW was running for some years.  Despite the petitioners  consent letter  dated 01.09.1999 to pay minimum monthly  charges on 2548 KW billing continued to be done on the  load of 1500 KW by the respondents.

Both the parties can not be absolved of the acts of omission  and commission in complying with deadlines and the rules  and  regulations  framed  by  the  Respondents.   Under  the  circumstances, I am of the opinion that the load of 1981.637  KW detected as on 27.08.2004 should be accepted as the  built  up  load  and  deemed  to  be  regularized  w.e.f.  01.03.2000 as per the commitment of the petitioner.  It will  mean that there was no unauthorized or excess load as on  the  checking date  of  27.08.2004.   The load surcharge  of  Rs.7,22,455/-  service connection charges of  Rs.4,81,637/-  and ACD of Rs.3,37,400/- levied on account of excess load  found  during  checking  are  not  recoverable  from  the  petitioner.

The minimum monthly charges on the regularized load of  1981.637  KW  are  to  be  charged  from  the  date  of  this  offered  consent  i.e.1.3.2000.   It  will  also  mean  that  the  balance load of 566.363 KW not build up till  27.08.2004  will  lapse.   The  service  connection  charges  &  ACD  

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deposited at initial stage shall be dealt with in accordance  with SR 35.5. & 35.6 of Electricity Supply Regulations.

For any further enhancement of extension of load beyond  1981.637  KW,  the  rules  and  regulations  governing  the  extension of load as per Sales Regulations will apply.  The  respondents  shall  refund  any  balance  amount  after  adjustment  of  minimum monthly charges with  interest  as  per  the  Board’s  instructions  within  two  months  of  the  receipt of this order.”

8. The writ petition filed by the appellant was dismissed by the High  

Court  by  observing  that  having  failed  to  fulfill  its  obligation  to  release  

connection with a load of 2548 KW, the appellant cannot put the respondent  

in a disadvantageous position and make it liable for the load which was not  

utilized.

9. Shri Jagjit Singh Chhabra pointed out that there is no provision in the  

Electricity Act, 2003 (for short, ‘the Act’) and the regulations framed by the  

appellant for regularization of unauthorized use of electricity and argued that  

the  Ombudsman  did  not  have  the  jurisdiction  to  ordain  deemed  

regularization of extra load with effect from 1.3.2000 and the High Court  

committed serious error by refusing to interfere with patently illegal order of  

the  Ombudsman.   Learned  counsel  further  argued  that  the  appellant’s  

inability to arrange for transfer of 8 MVA load from 66 KV sub station, G.T.  

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Road, Ludhiana to the proposed 66 KV sub station at Feroze Gandhi Market  

and  Transport  Nagar,  Ludhiana  could  not  have  been  made  basis  by  the  

Ombudsman for declaring that use of electricity by the respondent over and  

above the sanctioned load of 1500 KW did not amount to unauthorized use  

of electricity. Shri Chhabra then submitted that in terms of Clause 37.1.2 of  

the Sales Regulations framed by the appellant, the respondent could have  

availed the balance load within six months of the submission of A&A form,  

which  it  failed  to  do  and  both  the  Ombudsman  and  the  High  Court  

committed serious error  by ignoring that  without  getting sanction for the  

balance load by complying with the requirement of the relevant regulations,  

the respondent was not entitled to take supply with a load of 1981.637 KW  

and that  it  was a clear  case of  theft  of  electrical  energy to the extent  of  

481.637 KW.   

10. We have considered the arguments of the learned counsel and agree  

with him that in the absence of any provision in the Act or the regulations  

framed by the appellant, the Ombudsman committed jurisdictional error by  

directing regularization of unauthorized use of electricity by the respondent  

and refund of the alleged excess amount charged by the appellant.  The fact  

that the appellant could not release connection with a load of 2548 KW on  

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account of non-availability of transformer necessary for transfer of 8 MVA  

load from 66 KV sub station, G.T. Road, Ludhiana had no bearing on the  

issue of consumption of electricity by the respondent beyond the sanctioned  

load.  Undisputedly,  in  terms of  the  request  made  by the  respondent,  the  

Chief Engineer had sanctioned connection on the existing system with a load  

of 1500 KW, but the respondent used excess load to the tune of 481.637 KW  

and this amounted to unauthorized use of electrical energy. It is also not in  

dispute that after installation of new transformer, the respondent could not  

avail the balance load within the stipulated time of six months and when the  

concerned  authority  issued  notice  dated  13.12.2001  and  reminder  dated  

23.5.2002, its representative refused to submit fresh A&A form necessary  

for release of the balance load.  This being the position, the fault, if any, for  

non-release of the balance load lay at the doors of the respondent and the  

Ombudsman committed serious error by directing the appellant to refund the  

alleged excess amount collected from the respondent on account of use of  

electricity over and above the sanctioned load.

11. In the result, the appeal is allowed.  The impugned order of the High  

Court as also order dated 5.9.2007 passed by the Ombudsman are set aside  

and the one passed by the DSA is restored.  The respondent is allowed three  

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months  time  to  deposit  the  amount  payable  in  terms  of  demand  dated  

25.1.2005.  The appellant and, if necessary, its successor shall be entitled to  

charge interest at the prevailing banking rate on the amount which was not  

paid by the respondent or which may have been refunded by the appellant in  

terms of the directions given by the Ombudsman and/or order passed by the  

High Court.

….………………….…J. [G.S. Singhvi]

…..…..………………..J. [Asok Kumar Ganguly]

New Delhi March 19, 2010.

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