Top Court confirms APTEL's view that Maharashtra Electricity Distribution Company was not entitled to impose reliability charge on JSW Steel
Justices Abhay S. Oka & Ujjal Bhuyan [17-05-2024]

Read Order: Maharashtra State Electricity Distribution Co. Ltd v. M/s JSW Steel Ltd. &Anr [SC- CIVIL APPEAL NO. 8413 OF 2009]

Tulip Kanth

New Delhi, May 22, 2024: While observing that nothing in the Electricity Act, 2003 suggests that a consumer who does not participate in the Commission's public hearing and is aggrieved by an order of the Commission is disentitled to prefer an appeal, the Supreme Court has rejected the plea of Maharashtra State Electricity Distribution Co. Ltd  challenging the Tribunal's order whereby the appellant-Company was not held to be entitled to impose a reliability charge on JSW Steel Ltd.

The Division Bench comprising Justice Abhay S. Oka & Justice Ujjal Bhuyan was adjudicating upon the issue pertaining to the legality of the imposition of a reliability charge by the appellant, a distribution licensee. The appellant Company is principally responsible for the distribution and supply of electricity in the entire State of Maharashtra, except the areas that expressly fall within the responsibility of the utilities like the Brihanmumbai Electric Supply and Transport Undertaking, TATA Power Company, Reliance Energy Limited, etc. The 1st respondent is a steel industry, which is exporting its end products and earning significant foreign exchange for the country.

On the petition filed by the appellant, the Maharashtra Electricity Regulatory Commission (Commission) passed a tariff order in 2006, imposing additional supply charges for uninterrupted power supply to the bulk consumers like the 1st respondent. In the next tariff order passed in 2008, the Commission discontinued the additional supply to the case of the first respondent, as it is a continuous process industry and a bulk consumer, the appellant did not subject them to load-shedding. Therefore, the tariff was specifically fixed slightly higher than that for HT non- continuous process industries.

The appellant submitted a petition before the Commission under the Electricity Act, 2003 for approval of reliability charges to be recovered for implementing Zero Load Shedding (ZLS) in the area covered by Pen Circle in Maharashtra. Permission was sought to appoint the Humanist Consumer Council as an interim franchisee. As per the directions of the Commission, a public notice was published for inviting objections. The Commission allowed the petition filed by the appellant and imposed a reliability charge from June 16, 2009 to March 31, 2010 on account of ZLS, which was made payable by all the consumers in the Pen Circle area, including the 1st respondent. Being aggrieved by the said order of the Commission, an appeal was preferred by the 1st respondent before the Appellate Tribunal for Electricity. The appeal before the Top Court was filed against the impugned judgment whereby the order of the State Commission was set aside.

The Appellate Tribunal held that the 1st respondent had already been subjected to higher tariffs than consumers on non-express feeders. Thus, the appellant had already been compensated for providing continuous supply to the industries like the 1st respondent. The Tribunal also held that neither Section 62(3) of the 2013 Act nor the Rules and Regulations framed by the Commission support the levy of reliability charge. The appellant in this appeal was unable to show any basis in the Statute or Statutory rules and regulations to support the levy of a reliability charge.

Clarifying that under Section 111 of the 2003 Act, a statutory appeal is provided against an order of the Commission and the remedy is available to any aggrieved person, the Bench observed that the 1st respondent was directly affected by the levy of the reliability charge. Hence, the first respondent was the person aggrieved within the meaning of Section 111. 

“In the appeal, the appellant was entitled to challenge the legality of the impugned order of the Commission. Nothing in the 2003 Act suggests that a consumer who does not participate in the Commission's public hearing and is aggrieved by an order of the Commission is disentitled to prefer an appeal”, it added.

The Top Court noted that the respondent, a continuous process industry on express feeder, paid a higher tariff during the relevant period of July 2009 to April 2010 to enable it to get supply without load-shedding. 

Thus, dismissing the appeal the Bench said, “We find no error in the view taken by the Tribunal that the appellant was not entitled to impose a reliability charge on customers like the 1st respondent.”