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

A different fields and have no common premise in law. We have already noticed that Sections 126 and 127 of the 2003 Act read together constitute a complete code in themselves covering all relevant considerations for passing of an order of assessment in cases which do not fall under Section 135 of the 2003 Act. B Xxx xxx xxx

37. Wherever the assessing officer arrives at the conclusion that unauthorised use of electricity has taken place, the assessment shall be made for the entire period during which such unauthorised use of electricity has taken place and if such period cannot be ascertained, it shall be limited to a period of 12 months immediately preceding the date of inspection and the assessment shall be made at the rate equal to twice the tariff applicable for the relevant category of service specified under these provisions. This computation has to be taken in terms of Sections 126(5), 126(6) and 127 of the 2003 Act. The complete procedure is provided under these sections. Right from the initiation of the proceedings till preferring of an appeal against the final order of assessment and termination thereof, as such, it is a complete code in itself. E Xxx xxx xxx

44. The unauthorised use of electricity in the manner as is undisputed on record clearly brings the respondent “under liability and in blame” within the ambit and scope of Section 126 of the 2003 Act. The blame is in relation to excess load F 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 by the powers vested in him under the provisions of Section 126 of the 2003 Act. Xxx xxx xxx G

50. In other words, the purpose sought to be achieved is to ensure stoppage of misuse/unauthorised use of the electricity as well as to ensure prevention of revenue loss. It is in this background that the scope of the expression “means” has to be construed. If we hold that the expression “means” is H

KERALA STATE ELECTRICITY BOARD & ORS. v. THOMAS 131 JOSEPH [J. B. PARDIWALA, J.]

exhaustive and cases of unauthorised use of electricity are restricted to the ones stated under Explanation (b) of Section 126 alone, then it shall defeat the very purpose of the 2003 Act, inasmuch as the different cases of breach of the terms and conditions of the contract of supply, Regulations and the provisions of the 2003 Act would escape the liability sought to be imposed upon them by the legislature under the provisions of Section 126 of the 2003 Act. Thus, it will not be appropriate for the courts to adopt such an approach. Xxx xxx xxx

60. The expressions “means”, “means and includes” and C “does not include” are expressions of different connotation and significance. When the legislature has used a particular expression out of these three, it must be given its plain meaning while even keeping in mind that the use of other two expressions has not been favoured by the legislature. To put it simply, the legislature has favoured non-use of such expression as opposed to other specific expression. In the present case, the Explanation to Section 126 has used the word “means” in contradistinction to “does not include” and/ or “means and includes”. This would lead to one obvious result that even the legislature did not intend to completely restrict or limit the scope of this provision.

61. Unauthorised use of electricity cannot be restricted to the stated clauses under the Explanation 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 2003 Act governing such supply. “Unauthorised use of electricity” itself is an expression which would, on its plain reading, take within its scope all the misuse of the electricity or even malpractices adopted while using electricity. It is difficult to restrict this expression and limit its application by the categories stated in the Explanation. It is indisputable that the electricity supply to a consumer is restricted and controlled by the terms and conditions of supply, the Regulations framed and the provisions of the 2003 Act. Xxx xxx xxx H

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A 64. Minimum energy charges are to be levied with reference to “contract demand” at the rate prescribed under the terms and conditions. These clauses of the Agreement clearly show that the charges for consumption of electricity are directly relatable to the sanctioned/connected load and also the load consumed at a given point of time if it is in excess of the B sanctioned/connected load. The respondent could consume electricity up to 110 kVA but if the connected load exceeded that higher limit, the category of the respondent itself could stand changed from “medium industry” to “large industry” which will be governed by a higher tariff.

C 65. Chapter VIII of the Conditions of Supply classifies the consumers into various categories and heads. The electricity could be provided for a domestic, LT industrial, LT/HT industrial, large industry, heavy industries and power intensive industries, etc. In terms of Regulation 80, the industry would fall under LT/HT category, if it relates to supply for industrial production with a contract demand of 22 kVA and above but below 110 kVA. However, it will become a “large industry” under Regulation 80(10) if it relates to supply of power to an industry with a contract demand of 110 kVA and above but below 25,000 kVA. Once the category stands changed because of excessive consumption of electricity, the tariff and other conditions would stand automatically changed. The licensee has a right to reclassify the consumer under Regulation 82 if it is found that a consumer has been classified in a particular category erroneously or the purpose of supply as mentioned in the agreement has changed or the consumption of power has exceeded the limit of that category etc. The Conditions of Supply even place a specific prohibition on consumption of excessive electricity by a consumer.

66. Regulation 106 of the Conditions of Supply reads as under: “106. No consumer shall make use of power in excess of the approved contract demand or use power for a purpose other than the one for which agreement has been executed or shall dishonestly abstract power from the licensee’s system.”

67. On the cumulative reading of the terms and conditions of supply, the contract executed between the parties and the

KERALA STATE ELECTRICITY BOARD & ORS. v. THOMAS 133 JOSEPH [J. B. PARDIWALA, J.]

provisions of the 2003 Act, we have no hesitation in holding 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 2003 Act. This, we also say for the reason that 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. Xxx xxx xxx C

71. Consumption in excess of sanctioned load is violative of the terms and conditions of the agreement as well as of the statutory benefits. Under Explanation (b)(iv), “unauthorised use of electricity” means if the electricity was used for a purpose other than for which the usage of electricity was authorised. Explanation (b) (iv), thus, would also cover the cases where electricity is being consumed in excess of sanctioned load, particularly when it amounts to change of category and tariff. As is clear from the agreement deed, the electric connection was given to the respondent on a contractual stipulation that he would consume the electricity in excess of 22 kVA but not more than 110 kVA. The use of the negative language in the condition itself declares the intent of the parties that there was an implied prohibition in consuming electricity in excess of the maximum load as it would per se be also prejudiced. Not only this, the language of Regulations 82 and 106 also prescribe that the consumer is not expected to make use of power in excess of approved contract demand otherwise it would be change of user falling within the ambit of “unauthorised use of electricity”.

72. Again, there is no occasion for this Court to give a restricted meaning to the language of Explanation (b)(iv) of G Section 126. According to the learned counsel appearing for the respondent, it is only the actual change in purpose of use of electricity and not change of category that would attract the provisions of Section 126 of the 2003 Act. The contention is that where the electricity was provided for a domestic H

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A purpose and is used for industrial purpose or commercial purpose, then alone it will amount to change of user or purpose. The cases of excess load would not fall in this category. This argument is again without any substance and, in fact, needs to be noticed only to be rejected. B Xxx xxx xxx

87. Having dealt with and answered determinatively the questions framed in the judgment, we consider it necessary to precisely record the conclusions of our judgment which are as follows:

C 1. 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 D 2003 Act.

2. The expression “unauthorised use of electricity means” as appearing in Section 126 of the 2003 Act is an expression of wider connotation and has to be construed purposively in contrast to contextual interpretation while keeping in mind E 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 2003 Act, besides it being in violation of Regulations 82 and 106 of the Regulations and terms of the Agreement….”

54Copy pinpoint54. The principles of law discernible from the aforesaid may be summarised as under: (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 G 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. H

KERALA STATE ELECTRICITY BOARD & ORS. v. THOMAS 135 JOSEPH [J. B. PARDIWALA, J.]

The provisions of Section 126 of the Act 2003 are self-explanatory. A They are intended to cover 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.

55Copy pinpoint55. Having read and re-read the decision of this Court in the case of Seetaram Rice Mill (supra), we are clear in our mind that the High Court in its impugned judgment has carved out an exception, which does not find a place in Section 126(6) of the Act 2003. Paras 18 & 37 resply of the judgment, in the case of Seetaram Rice Mill (supra) referred to above categorically hold that Section 126 and 127 resply of the Act 2003 read together constitute a complete code in themselves. Para 50 of the said judgment holds that the purpose of Section 126 is to ensure stoppage of misuse/ unauthorised use of electricity. Para 61 of Seetaram Rice F Mill (supra) referred to above makes the picture abundantly clear.

56Copy pinpoint56. In para 67 of Seetaram Rice Mill (supra) referred to above, it was categorically held that the 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 2003. According to us, the observations G made by this Court in Seetaram Rice Mill (supra) as contained in para 67 goes to the root of the matter. Seetaram Rice Mill (supra) in para 67 has said in so many words that 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 H

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A large, as it is likely to throw out of gear the entire supply system undermining its efficiency, efficacy and even-increasing voltage fluctuations. This aspect of the matter has been completely overlooked by the High Court. 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.

57Copy pinpoint57. In para 72 of Seetaram Rice Mill (supra), a contention was raised by the consumer that it is only the actual change in purpose of use of electricity that would attract Section 126 of the Act 2003. The D contention was that where the electricity was provided for domestic purpose but was actually used for industrial or commercial purpose, then alone it will amount to change of user or purpose and accordingly a contention was raised that a case of usage of excess load would not fall in this category. This Court rejected the said contention in para 72. Para 72 states as follows: E “72. Again, there is no occasion for this Court to give a restricted meaning to the language of Explanation (b)(iv) of Section 126. According to the learned counsel appearing for the respondent, it is only the actual change in purpose of use of electricity and not change of category that would attract the provisions of Section 126 of the 2003 Act. The contention is that where the electricity was provided for a domestic purpose and is used for industrial purpose or commercial purpose, then alone it will amount to change of user or purpose. The cases of excess load would not fall in this category. This argument is again without any substance and, in fact, needs to be noticed only to be rejected.” (Emphasis supplied)

58Copy pinpoint58. 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 H

KERALA STATE ELECTRICITY BOARD & ORS. v. THOMAS 137 JOSEPH [J. B. PARDIWALA, J.]

conclusion that the consumer cannot be charged twice the energy charges A 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. B

59Copy pinpoint59. This Court in Punjab State Electricity Board v. Vishwa Caliber Builders Private Limited reported in (2010) 4 SCC 539 had the occasion to consider the Punjab State Electricity Regulatory Commission (Forum and Ombudsman) Regulations, 2005. In the said case, the challenge was to the order passed by a Division Bench of the Punjab and Haryana High Court whereby it had dismissed the writ petition C filed by the appellant therein against the order of Ombudsman, Electricity, Punjab who in turn reversed the decision of the Disputes Settlement Authority and directed refund of the amount recovered from the respondent therein towards Advance Consumption Deposit (ACD) service connection charges and load sur charge. In para 13, 14 and 15 D this Court observed as under: “13. 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 regularisation of unauthorised use of electricity by the respondent and refund of the alleged excess amount charged by the appellant.

14. The fact that the appellant could not release connection with a load of 2548 kW on account of non-availability of transformer necessary for transfer of 8 MVA load from 66 kV Sub-Station, GT 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 unauthorised use of electrical energy.

15. It is also not in dispute that after installation of a new transformer, the respondent could not avail the balance load H

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A within the stipulated time of six months and when the authority concerned 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 B 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.” (Emphasis supplied) C

60Copy pinpoint60. Thus, in the aforesaid case, the excess load to the tune of 481.637 KW was assessed as unauthorised use of electrical energy. REGULATION 153(15) OF THE CODE 2014

61Copy pinpoint61. We shall now look into the main limb of the submission D canvassed on behalf of the consumers that the Regulation 153(15) of the Code 2014 makes all the difference and the ratio and the principles as propounded in Seetaram Rice Mill (supra) should be understood in the light of the Regulation 153(15) of the Code 2014. We have quoted Regulation 153(15) of the Code 2014 in the earlier part of our judgment. E We do not find any merit in the submission canvassed on behalf of the consumers in regard to the applicability of Regulation 153(15) of the Code 2014. The Code 2014 is framed under Section 50 read with Section 181(x) of the Act 2003.

62Copy pinpoint62. This Court in Uttar Pradesh Power Corporation Limited F and Others v. Anis Ahmad reported in (2013) 8 SCC 491, held that the Supply Code cannot provide for nor does it relate to assessment of charges for ‘unauthorised use of electricity’ under Section 126 of the Act 2003. Paras 53 and 54 resply of the said judgment state as follow: “53. Section 50 of the Electricity Act, 2003 empowers the State Commission to specify an Electricity Supply Code to G provide for recovery of electricity charges, intervals for billing of electricity charges, measures for preventing damage to electrical plant or electrical line or meter, entry of distribution licensee, etc. and it reads as follows:

H

KERALA STATE ELECTRICITY BOARD & ORS. v. THOMAS 139 JOSEPH [J. B. PARDIWALA, J.]

“50. The Electricity Supply Code.—The State Commission A shall specify an Electricity Supply Code to provide for recovery of electricity charges, intervals for billing of electricity charges, disconnection of supply of electricity for non-payment thereof, restoration of supply of electricity, measures for preventing tampering, distress or damage to B electrical plant or electrical line or meter, entry of distribution licensee or any person acting on his behalf for disconnecting supply and removing the meter, entry for replacing, altering or maintaining electric lines or electrical plants or meter and such other matters.”

54. From reading Section 50, it is clear that under the C Electricity Supply Code provisions are to be made for recovery of electricity charges, billing of electricity charges, disconnection, etc. and measures for preventing tampering, distress or damage to the electrical plant or line or meter, etc. But the said Code need not provide provisions relating to it/ D do not relate to assessment of charges for “unauthorised use of electricity” under Section 126 or action to be taken against those committing “offences” under Sections 135 to 140 of the Electricity Act, 2003.” (Emphasis supplied) E

63Copy pinpoint63. Thus, reliance on Regulation 153(15) of the Code 2014 framed under Section 50 of the Act 2003 by the respondent (consumers) is thoroughly misconceived, as the same does not conform to the provisions of the Act 2003. In any event, Regulation 153(15) travels much beyond Section 126 and Section 50 resply of the Act 2003. It is settled law that F the regulation making power cannot be used to bring into existence substantive rights, which are not contemplated under the Act 2003.

64Copy pinpoint64. At this stage, it is apposite to state about the rule making powers of a delegating authority. If a rule goes beyond the rule making power conferred by the statute, the same has to be declared invalid. If G 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.

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65Copy pinpoint65. Delegated legislation has come to stay as a necessary component of the modern administrative process. Therefore, the question today is not whether there ought to be delegated legislation or not, but that it should operate under proper controls so that it may be ensured that the power given to the Administration is exercised properly; the benefits of the institution may be utilised, but its disadvantages minimised. B 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 function within the purview of the statute. C 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 non- compliance with the procedural D requirement as laid down in the parent Act. It is the function of the courts to keep all authorities within the confines of the law by supplying the doctrine of ultra vires.

66Copy pinpoint66. In this context, we may refer with profit to the decision in General Officer Commanding-in-Chief and Another v. Dr. Subhash E Chandra Yadav and Another reported in (1988) 2 SCC 351, wherein it has been held as follows:- “14. ….before a rule can have the effect of a statutory provision, two conditions must be fulfilled, namely, (1) it must conform to the provisions of the statute under which it is F framed; and (2) it must also come within the scope and purview of the rule making power of the authority framing the rule. If either of these two conditions is not fulfilled, the rule so framed would be void…..”

67Copy pinpoint67. In Additional District Magistrate (Rev.) Delhi Admn. v. G Siri Ram reported in (2000) 5 SCC 451, it has been ruled that it is a well recognised principle that the conferment of rule-making power by an Act does not enable the rule-making authority to make a rule which travels beyond the scope of the enabling Act or which is inconsistent therewith or repugnant thereto. H

KERALA STATE ELECTRICITY BOARD & ORS. v. THOMAS 141 JOSEPH [J. B. PARDIWALA, J.]

68Copy pinpoint68. In Sukhdev Singh and Others v. Bhagatram Sardar Singh A Raghuvanshi and Another reported in (1975) 1 SCC 421, the Constitution Bench has held that: “18. …. These statutory bodies cannot use the power to make rules and regulations to enlarge the powers beyond the scope intended by the Legislature. Rules and regulations made by B reason of the specific power conferred by the statute to make rules and regulations establish the pattern of conduct to be followed. …”

69Copy pinpoint69. In State of Karnataka and Another v. H. Ganesh Kamath and Others reported in (1983) 2 SCC 402, it has been stated that: C “7. It is a well-settled principle of interpretation of statutes that the conferment of rule-making power by an Act does not enable the rule-making authority to make a rule which travels beyond the scope of the enabling Act or which is inconsistent therewith or repugnant thereto.” D

70Copy pinpoint70. In Kunj Behari Lal Butail and Others v. State of H.P. and Others reported in (2000) 3 SCC 40, it has been ruled thus:- “13. It is very common for the legislature to provide for a general rule-making power to carry out the purpose of the Act. When such a power is given, it may be permissible to find out the object of the enactment and then see if the rules framed satisfy the test of having been so framed as to fall within the scope of such general power confirmed. If the rule-making power is not expressed in such a usual general form then it shall have to be seen if the rules made are protected by the limits prescribed by the parent act…….”

71Copy pinpoint71. In St. Johns Teachers Training Institute v. Regional Director, National Council for Teacher Education and Another reported in (2003) 3 SCC 321, it has been observed that: “10. A regulation is a rule or order prescribed by a superior for the management of some business and implies a rule for general course of action. Rules and regulations are all comprised in delegated legislation. The power to make subordinate legislation is derived from the enabling Act and it is fundamental that the delegate on whom such a power is H

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A conferred has to act within the limits of authority conferred by the Act. Rules cannot be made to supplant the provisions of the enabling Act but to supplement it. What is permitted is the delegation of ancillary or subordinate legislative functions, or, what is fictionally called, a power to fill up details…..” B

72Copy pinpoint72. In Global Energy Limited and Another v. Central Electricity Regulatory Commission reported in (2009) 15 SCC 570, this Court was dealing with the validity of clauses (b) and (f) of Regulation 6-A of the Central Electricity Regulatory Commission (Procedure, Terms and Conditions for Grant of Trading Licence and other Related Matters) C Regulations, 2004. In that context, this Court expressed as under:- “25. It is now a well-settled principle of law that the rule- making power “for carrying out the purpose of the Act” is a general delegation. Such a general delegation may not be held to be laying down any guidelines. Thus, by reason of such a provision alone, the regulation-making power cannot be exercised so as to bring into existence substantive rights or obligations or disabilities which are not contemplated in terms of the provisions of the said Act.

73Copy pinpoint73. In the aforementioned case, while discussing further about the discretionary power, delegated legislation and the requirement of law, the Bench observed thus: “73. The image of law which flows from this framework is its neutrality and objectivity: the ability of law to put sphere of general decision-making outside the discretionary power of those wielding governmental power. Law has to provide a basic level of “legal security” by assuring that law is knowable, dependable and shielded from excessive manipulation. In the contest of rule- making, delegated legislation should establish the structural conditions within which those processes can function effectively. The question which needs to be asked is whether delegated legislation promotes rational and accountable policy implementation. While we say so, we are not oblivious of the contours of the judicial review of the legislative Acts. But, we have made all endeavours to keep ourselves confined within the well- known parameters.” H

KERALA STATE ELECTRICITY BOARD & ORS. v. THOMAS 143 JOSEPH [J. B. PARDIWALA, J.]

74Copy pinpoint74. In this context, it would be apposite to refer to a passage from A State of T.N. and Another v. P. Krishnamurthy and Others reported in (2006) 4 SCC 517 wherein it has been held thus:- “16. The court considering the validity of a subordinate legislation, will have to consider the nature, object and scheme of the enabling Act, and also the area over which power has been delegated under the Act and then decide whether the subordinate legislation conforms to the parent statute. Where a rule is directly inconsistent with a mandatory provision of the statute, then, of course, the task of the court is simple and easy. But where the contention is that the inconsistency or non-conformity of the rule is not with reference to any specific provision of the enabling Act, but with the object and scheme of the parent Act, the court should proceed with caution before declaring invalidity.”

75Copy pinpoint75. In Pratap Chandra Mehta v. State Bar Council of Madhya Pradesh and others reported in (2011) 9 SCC 573, while discussing about the conferment of extensive meaning, it has been opined that: “58. ….The Court would be justified in giving the provision a purposive construction to perpetuate the object of the Act, while ensuring that such rules framed are within the field circumscribed by the parent Act. It is also clear that it may not always be absolutely necessary to spell out guidelines for delegated legislation, when discretion is vested in such delegatee bodies. In such cases, the language of the rule framed as well as the purpose sought to be achieved, would be the relevant factors to be considered by the Court.” F

76Copy pinpoint76. In Dr. Mahachandra Prasad Singh v. Chairman, Bihar Legislative Council and Others reported in (2004) 8 SCC 747, this Court explained the concept of delegated legislation thus: “13. …..Underlying the concept of delegated legislation is the basic principle that the legislature delegates because it G cannot directly exert its will in every detail. All it can in practice do is to lay down the outline. This means that the intention of the legislature, as indicated in the outline (that is the enabling Act), must be the prime guide to the meaning of delegated legislation and the extent of the power to make it. The true H

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A extent of the power governs the legal meaning of the delegated legislation. The delegate is not intended to travel wider than the object of the legislature. The delegate’s function is to serve and promote that object, while at all times remaining true to it. That is the rule of primary intention. Power delegated by an enactment does not enable the authority by regulations to extend the scope or general operation of the enactment but is strictly ancillary. It will authorise the provision of subsidiary means of carrying into effect what is enacted in the statute itself and will cover what is incidental to the execution of its specific provision. But such a power will not support attempts to widen the purposes of the Act, to add new and different means of carrying them out or to depart from or vary its ends. (See Section 59 in chapter “Delegated Legislation” in Francis Bennion’s Statutory Interpretation, 3rd Edn.)…….”

77Copy pinpoint77. In McEldowney v. Forde reported in (1971) AC 632 : (1969) D 3 WLR 179, Lord Diplock explained the role of the Courts in this area in the following words : “The division of functions between Parliament and the courts as respects legislation is clear. Parliament makes laws and can delegate part of its power to do so to some subordinate authority. The courts construe laws whether made by Parliament directly or by a subordinate authority acting under delegated legislative powers. The view of the courts as to whether particular statutory or subordinate legislation promotes or hinders the common weal is irrelevant. The decision of the courts as to what the words used in the statutory or subordinate legislation mean is decisive. Where the validity of subordinate legislation made pursuant to powers delegated by Act of Parliament to a subordinate authority is challenged, the court has a threefold task: first, to determine the meaning of the words used in the Act of Parliament itself to describe the subordinate legislation which that authority is authorised to make, secondly, to determine the meaning of the subordinate legislation itself and finally to decide whether the subordinate legislation complies with that description.”

78Copy pinpoint78. A delegated power to legislate by making rules or regulations H ‘for carrying out the purpose of the Act’, is a general delegation without

KERALA STATE ELECTRICITY BOARD & ORS. v. THOMAS 145 JOSEPH [J. B. PARDIWALA, J.]

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. The Court, considering the validity of a subordinate legislation, will have to consider the nature, object and scheme of the enabling Act, and also the area over which power as has been delegated under the Act and then decide whether the subordinate legislation conforms to the parent statute.

79Copy pinpoint79. It is important to keep in mind that where a rule or regulation is directly inconsistent with a mandatory provision of the statute, then, of course, the task of the Court is simple and easy. But where the contention is that the inconsistency or non-conformity of the rule is not with reference to any specific provision of the enabling Act, but with the object and scheme of the parent Act, the Court should proceed with caution before declaring the same to be invalid.

80Copy pinpoint80. 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.

81Copy pinpoint81. A Constitution Bench of this Court in the case of Sukhdev Singh (supra), while explaining the fine distinction between a rule and regulation and also the power of the delegate authority to frame such rules or regulations has made few very important observations which we must take notice of and quote as under: “11. The contentions on behalf of the employees are these. Regulations are made under the statute. The origin and source of the power to make regulations is statutory. Regulations are self- binding in character. Regulations have the force of law inasmuch as the statutory authorities have no right to make any departure from the regulations.

12. Rules, regulations, schemes, bye-laws, orders made under statutory powers are all comprised in delegated legislation. The need for delegated legislation is that statutory rules are framed with care and minuteness when the statutory authority making the rules is after the coming into force of the Act in a better position to adapt the Act to special circumstances. Delegated legislation permits utilisation of experience and H

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A consultation with interests affected by the practical operation of statutes. xx xx xx

14. Subordinate legislation is made by a person or body by virtue of the powers conferred by a statute. By-laws are made in the main by local authorities or similar bodies or by statutory or other undertakings for regulating the conduct of persons within their areas or resorting to their undertakings. Regulations may determine the class of cases in which the exercise of the statutory power by any such authority constitutes the making of statutory rules.

15. The words “rules” and “regulations” are used in an Act to limit the power of the statutory authority. The powers of statutory bodies are derived, controlled and restricted by the statutes which create them and the rules and regulations framed thereunder. Any action of such bodies in excess of their power or in violation of the restrictions placed on their powers is ultra vires. The reason is that it goes to the root of the power of such corporations and the declaration of nullity is the only relief that is granted to the aggrieved party.

E xx xx xx

18. The authority of a statutory body or public administrative body or agency ordinarily includes the power to make or adopt rules and regulations with respect to matters within the province of such body provided such rules and regulations are not inconsistent with the relevant law. In America a “public agency” has been defined as an agency endowed with governmental or public functions. It has been held that the authority to act with the sanction of Government behind it determines whether or not a governmental agency exists. The rules and regulations comprise those actions of the statutory or public bodies in which the legislative element predominates. These statutory bodies cannot use the power to make rules and regulations to enlarge the powers beyond the scope intended by the Legislature. Rules and regulations made by reason of the specific power conferred on the statute to make H

KERALA STATE ELECTRICITY BOARD & ORS. v. THOMAS 147 JOSEPH [J. B. PARDIWALA, J.]

rules and regulations establish the pattern of conduct to be followed. Rules are duly made relative to the subject-matter on which the statutory bodies act subordinate to the terms of the statute under which they are promulgated. Regulations are in aid of the enforcement of the provisions of the statute. Rules and regulations have been distinguished from orders or determination of statutory bodies in the sense that the orders or determination are actions in which there is more of the judicial function and which deal with a particular present situation. Rules and regulations on the other hand are actions in which the legislative element predominates. xx xx xx C

136. The regulations framed under the regulation-making power conferred by the three Acts in question are not the regulations as defined in the General Clauses Act. In interpreting Indian statutes it is unnecessary and might sometimes be misleading to refer to the provisions of English D law in connection with subordinate legislation. We have to refer only to the General Clauses Act and the Indian legislative practice. Though “rule” is defined as including a regulation made as a rule, it cannot be said that regulation- making power conferred on the three organisations in E question is a rule-making power. Under the legislative practice in India the rule-making power is conferred on the State and the power to make regulations is conferred on bodies or organisations created by the statute. xx xx xx F

161. I have gone through the various statutes only to point out that under the Indian legislative practice rules are what the Central Government or the State Governments make and the regulations are made by any institution or organisation established by a statute and where it is intended that the G regulation should have effect as law the statute itself says so. It is, therefore, as I stated earlier, unnecessary and may be even misleading to refer to the English practice in interpreting the word ‘regulation’.” (Emphasis supplied) H

p. 148

82Copy pinpoint82. 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 (supra), 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.

83Copy pinpoint83. The material on record indicates something very startling. D During the year 2014-15, total unauthorised use of electricity in the State of Kerala was detected in 1662 units and the total amount assessed comes to Rs.14,40,82,176/- (Rupees Fourteen Crore Forty Lakhs Eighty Two Thousand One Hundred and Seventy Six only). The corresponding figures during the years 2015-16 and 2016-17 were 1262 and 1875 units resply and the total amount assessed comes to around Rs.10,63,76,776/ E - (Rupees Ten Crore Sixty Three Lakhs Seventy Six Thousand Seven Hundred and Seventy Six only) and Rs. 34,64,80,421/- (Rupees Thirty Four Crore Sixty Four Lakh Eighty Thousand Four Hundred and Twenty One only) resply.

84Copy pinpoint84. In the revenue petitions filed by the appellant Board, it was F pointed to the High Court that the total amount assessed for all the three years referred to above, came to Rs.59,69,39,373/- (Rupees Fifty Nine Crore Sixty Nine Lakh Thirty Nine Thousand Three Hundred and Seventy Three only).

85Copy pinpoint85. In addition to the above, an amount of Rs. 41,14,858/- (Rupees G Forty One Lakh Fourteen Thousand Eight Hundred and Fifty Eight only) and Rs.1,42,09,148/- (Rupees One Crore Forty Two Lakh Nine Thousand and One Hundred Forty Eight only) were assessed during the years 2015-16 and 2016-17 resply, by Regional Audit Office (RAO) Inspection.

86Copy pinpoint86. We are really taken by surprise that despite the aforesaid, the High Court while rejecting the review applications declared that the H

KERALA STATE ELECTRICITY BOARD & ORS. v. THOMAS 149 JOSEPH [J. B. PARDIWALA, J.]

regularisation of additional connected load or enhancement of contract A demand should not necessitate upgradation of the existing distribution system.

87Copy pinpoint87. At this stage, we may also refer to Section 45(3)(a) of the Act

2003. The same reads thus: “45. Power to recover charges. % B xx xx xx (3) The charges for electricity supplied by a distribution licensee may include% (a) a fixed charge in addition to the charge for the actual electricity supplied;” C

88Copy pinpoint88. A plain reading of Section 45(3)(a) of the Act 2003 referred to above would indicate that the charges for electricity certified by a distribution licensee include the fixed charges, in addition to the charges for the actual electricity supplied and consumed. In such circumstances, it can be said that the tariff includes both, fixed charges and energy charges and once the assessing officer arrives at the conclusion that unauthorised use of electricity has taken place, he is obliged to make the assessment charge equal to twice the tariff applicable, which includes the dues payable towards the energy charges also.

89Copy pinpoint89. In overall view of the matter, we have reached to the conclusion that the finding recorded by the High Court in para 31(vi) is not sustainable in law. We have also reached to the conclusion that the Regulation 153(15) deserves to be declared invalid being inconsistent with the provisions of Section 126 of the Act 2003.

90Copy pinpoint90. The order passed by the High Court in the review applications more particularly para 10(i), 10(ii) and 10(iii) resply is also hereby set aside.

91Copy pinpoint91. In the result, all the appeals succeed and are hereby allowed to the aforesaid extent. The declaration issued by the High Court, as contained in para 31(vi) of the impugned judgment is hereby set aside.

92Copy pinpoint92. Regulation 153(15) of the Code 2014 is declared to be invalid being inconsistent with the provision of Section 126 of the Act 2003.

93Copy pinpoint93. No order as to costs.

Devika Gujral Appeals allowed. (Assisted by : Preetam Bharti, LCRA) H