Change In Nature Of Industrial Activity Does Not Result In Unauthorised Use Of Electricity Unless Revenue Loss Is Shown: Bombay HC

The Bombay High Court has held that merely changing the purpose of electricity usage from one industrial activity to another does not amount to unauthorised use of electricity under Section 126 of the Electricity Act, 2003, unless it causes revenue loss to the distribution company.Justice Vrushali V. Joshi of the Nagpur Bench dismissed a writ petition filed by the Maharashtra State Electricity Distribution Company Limited (MSEDCL) challenging the Appellate Authority's order that had set aside a demand bill issued to consumer Azhar Ahmed Qaisar Ahmed. The Court upheld the Appellate Authority's view that the activity of water purification and packaging carried out by the consumer could not be termed as commercial usage, especially when there was no revenue loss shown to MSEDCL.A spot inspection was carried out in the premises of respondent no. 1, and it was discovered that the electricity, originally sanctioned for mattress manufacturing (an industrial activity), was being used for running a water purification plant. The Competent Authority, concluding this constituted unauthorised use, raised a provisional and then final demand for ₹2,19,000 under Section 126 of the Electricity Act. Respondent No. 1 successfully challenged this demand before the Appellate Authority. Hence, MSEDCL approached the High Court.The High Court examined Section 126 and held that the change in activity from manufacturing of mattresses to Aqua Purified Water Cans does not change the use of electricity, and cannot be termed as unauthorised use of electricity. “The guidelines which are filed on record clearly show that merely [a] change in activity from manufacturing of mattresses to manufacturing of packaged water cans would not be a ground for action under Section 126 of the Electricity Act, 2003 as long as it has not caused loss of revenue to the petitioner -MSEDCL,” the Court observed.The Court noted that even manufacturing of mattresses is not mentioned to be included in the industrial tariff in the order issued by MERC. The petitioners also failed to file any document on record to show that the activity of Water Cooling or Selling, Packaging Water in Cans is defined as commercial activity. It observed: “The action is taken under Section 126 of the Electricity Act, 2003, for unauthorised use of the electricity on the basis that, though the meter was issued for industrial purpose, it was used for commercial purpose. In this context, the petitioner has failed to prove how the activity carried out by the respondent No.1 is commercial activity and how it was used unauthorizedly.”Accordingly, the writ petition was dismissed and the rule discharged.Case Title: Maharashtra State Electricity Distribution Co. Ltd. & Anr. v. Azhar Ahmed Qaisar Ahmed & Ors. [Writ Petition No. 428 of 2019]Click Here To Read/Download Order

Change In Nature Of Industrial Activity Does Not Result In Unauthorised Use Of Electricity Unless Revenue Loss Is Shown: Bombay HC

Saksham Vaishya

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