Consumer may be required to sign fresh agreements for each enhancement of load, but the enhancement being for the same electricity connection it would merely be amendment of the initial agreement: Supreme Court

The respondent is a small scale industry. For it had a contract the appellants­Jharkhand State Electricity Board Regulations 2005 read with Section 50 of the Electricity Act 2003 framed the Jharkhand State Electricity Regulatory Commission Regulations 2005 which came into effect from of contract demand sanctioned load no reduction of agreement which according to the appellants would be 07.07.2007 when a fresh agreement was executed for which was well within the period of three years from order dated 08.11.2007 as it was in conformity with for the respondent has submitted that the agreement even though technically fresh agreements may have been executed for enhancement of load of the the same were only extension amendment of the initial agreement dated increased contracted load. It has been contended by Regulations do not permit execution of a fresh agreement in case of enhancement of load and the agreements would merely be fresh agreement because it is the same electricity 14.04.2004 in which there have been amendments from time to time for increase of load and merely executing a fresh agreement for enhancement of load Regulations of 2005. It has thus been submitted that three years from the date of initial agreement dated 2005. In this regard reliance has been placed on For the ready reference the relevant provisions of the Regulations of 2005 are reproduced l) “Contract Demand” means demand in Kilowatt or Kilo Volt amperes or H.P Details of modification alteration and removal of electrical installation with the consumer with safety clearance certificate from competent authority as 9.2.3 The Distribution Licensee shall consider the application verify the same Load in writing within 30 days of the Provided that if the distribution licensee Demand Sanctioned Load it shall do so after affording the consumer reasonable opportunity of being heard in the matter and after communicating in writing the within 30 days of the application the consumer shall send a notice to the licensee requesting for disposal in the matter and if the decision is still not communicated within 15 days of the The reductions of Contract Demand Sanctioned Load shall be 16th day after the issue of notice to the The reduction of Contract effect from the first day of the month Contract Demand Sanctioned Load the consumer shall execute a supplementary agreement and the licensee shall recalculate the Security Deposit excess by way of adjustment in the minimum number of succeeding bills of the The communication dated 08.11.2007 of the Electrical Superintending Engineer of the Board “Sub: Regarding the reduction of load from 4000 KVA to 1325 KVA in respect of M s R.K Forging Ltd. Conn. No. HJAP­ applied for reduction of C.D from that C 9B of agreement may kindly be the expiration of three years from the date of commencement of the supply of energy of the Regulations also defines “contract demand” to be demand mutually communication meaning thereby that for variation of It is noteworthy that the Jharkhand State electricity which has laid down its own terms and electricity load varied for running its industry. The load to be varied even through a written communication then in our considered view in all fairness though fresh agreements may have been executed at the stage of enhancement of load of the as anything but an extension amendment or modification of the initial agreement granting the the Board the consumer may have been required to sign fresh agreements for each enhancement of load but the enhancement being for the same electricity connection which still continues it would merely be Reverting to the order dated 08.11.2007 application dated 20.09.2007 of the respondent for reduction of load to be that for determination of the agreement under Clause 9B of the agreement which application in fact ought to have been considered under Regulation 9.2 of the Regulations of 2005 the respondent for reduction of load was within the period of three years because as we have discussed hereinabove the agreement to be considered in the The judgments of this Court rendered in Bihar State Electricity Board Patna and Others v SCC 731 Orissa State Electricity Board v. Orissa Tiles Limited Supp. 3 SCC 481 Andhra Steel Electricity Board and Others 3 SCC 263 and facts in as much as they all relate to minimum ought to have been allowed by the Board in terms of into the question as to whether the provisions of Regulation 9.2.1 are discriminatory arbitrary and against the public policy as has been held by the Jharkhand High Court vide its judgment dated The appeal is accordingly dismissed. No The application of the respondent dated 20.09.2007 for reduction of contract load sanctioned have been allowed under the provisions of Regulation

Summary: This would also be in consonance with the provisions of the Regulations of 2005, which have to be liberally interpreted in favor of the consumer. If the Regulations provide for the contract to be varied even through written communication, then though fresh agreements may have been executed at the stage of enhancement of load of the same electricity connection, the same cannot be treated as anything but an extension/amendment modification of the initial agreement granting the electricity connection. This remarkable judgment was passed by the Supreme Court in the matter of JHARKHAND STATE ELECTRICITY BOARD &amp; ORS. V M/S RAMAKRISHNA FORGING LIMITED [CIVIL APPEAL NO. 6145 OF 2010] by Honourable Justice Vineet Saran and Honourable Justice L. Nageswara Rao. The respondent is a small-scale industry and signed a contract sanctioning load of electricity of 4000 KVA from the appellants, Jharkhand State Electricity Board The request of the respondent for reduction of such sanctioned load to 1325 KVA was refused so they filed a writ petition before the High Court of Jharkhand Aggrieved by the said judgment of the High Court, this appeal has been preferred by the Board The brief facts, relevant for the present case, are that the respondent entered into an agreement with the Board for High Tension connection of 325 KVA load Respondent thereafter applied for enhancement of load from 325 KVA to 1325 KVA The respondent again applied for enhancement of load from 1325 KVA to 3500 KVA and then 500 KVA to 4000 KVA, which were sanctioned by the Board For each enhancement of load, fresh agreements to that the effect was entered into between the respondent and the Board for supply of 4000 KVA load. Even after enhancement of load, it was facing major trippings as well as continuous load shedding which was affecting the costly machinery and therefore, the respondent decided to reduce the load. The application was rejected since an agreement would be enforced for a period of three years and treating it to be a case of determination of agreement, and quoting the Clause 98 of the agreement, it was provided that the agreement could not be permitted to be determined prior to the completion of the initial period of three years. The High Court in this challenge petition did not allow for reduction of load before the expiry of the initial period of the agreement was discriminatory, arbitrary, and against the public policy. It is clear that the said communication does not consider the provisions of the Regulations of 2005 with regard to reduction of load, but only treats the application for reduction of load to be an application for determination of agreement. Just as the consumer has the liberty of getting its load enhanced under Regulation 91, the reduction of contract demand load can also be prayed for and decided in terms of Regulation 9.2 The proviso to Regulation 9 2 1, no doubt, provides that no reduction of load shall be allowed before the expiry of the initial period of the agreement, which is three years in the present case. The question would be whether the initial agreement is to be considered for such purpose, or the subsequent agreements. SC observed, “Jharkhand State Electricity Board is an instrumentality of the State. It has to be fair and reasonable. If the Regulations provide for contract load to be varied even through written communication, then in our considered view, in all fairness, though fresh agreements may have been executed at the stage of enhancement of load of the same electricity connection, the same cannot be treated as anything but an extension of the initial agreement granting the electricity connection“ The honorable bench opined that Board has gone wrong in treating the application for reduction of load to be that for determination of agreement under clause 9b Therefore, SC stated that “we will not deliberate on the provision of Regulations 9.2.1 are discriminatory, arbitrary and against the public policy since it has already been dealt with by the HC.“