Every agreement after the Initial Agreement between the State Electricity board and Consumer is supplementary or an Extension: 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: On a dispute regarding the interpretation of Jharkhand State Electricity Regulatory Commission Regulations, 2005 it was decided that as per the code, every agreement between the board and consumer is not a fresh one rather only an extension or supplementary to the First agreement. This Judgment was passed by the Hon’ble Supreme Court in the case of Jharkhand State Electricity Board and others vs. M/S Ramakrishna Forging Limited [C.A. No. 6145/2010] by a Double Bench consisting of Hon’ble Shri Justice Dinesh Maheshwari and Hon’ble Shri Justice Vineet Saran.  The facts of the case are that the respondent is a small-scale industry and for its functioning, it had entered into a contract demanding or sanctioning a load of 4000 KVA from the appellants. When the respondent requested to reduce the load to 1325 KVA it was rejected. Following this, the respondent filed a writ before the Jharkhand High Court which was allowed. Aggrieved by the judgment of the High Court the appellant preferred an appeal before the Hon’ble Supreme Court. The sanction for the load was increased gradually from 325 KVA to 4000 KVA, from 2004 to 2007. It happened vide 4 contracts which were drafted from scratch every time the sanction for load increased from the respondents. The respondents alleged that they requested a decrease since they suffered major tripping and continuous shedding which affected the machinery. The appellants rejected the order stating that the agreement was valid for 3 years and under clause 9B the agreement could not be determined before the first three years. Furthermore, it also stated that the respondents will have to pay the said charges in case it terminated the contract. While the first contract between the respondents and appellant came into force in 2004, the Jharkhand state regulatory commission regulations came into force in 2005. The respondents contended that the contract may be technically fresh but was an extension to the previous contracts changing only the desired load. Placing reliance on Regulations 2(I), 9.1, and 9.2 of Regulations of 2005; the counsel contended that the 2007 agreement needs to be treated as an extension from the first agreement and thus be allowed. The Hon’ble Supreme Court held that while the consumer has the liberty to get the load enhanced under Regulation 9.1 they can also pray for a reduction under Regulation 9.2. On an analysis of the regulations and the agreements between the parties, the Supreme Court was of the opinion that as per Regulation 9.2.6 for both the increase in load and decrease in load, any agreement after the first one, shall be considered as supplementary agreements. It went on to hold that in all fairness while the regulations state that the increase or decrease in load can be done vide a written communication, the agreements are only supplementary to the first agreement.