Case Title: Maharashtra State Electricity Distribution Co. Ltd. Vs. M/s JSW Steel Ltd. & Anr.
Case No.: CIVIL APPEAL NO. 8413 OF 2009
Order on: May 17, 2024
Quorum: J. Abhay S. Oka, J. Ujjal Bhuyan
Facts:
The case involves the Maharashtra State Electricity Distribution Co. Ltd. (MSEDCL) and JSW Steel Ltd. MSEDCL imposed an additional reliability charge on its consumers to ensure an uninterrupted power supply. However, this charge was later discontinued by the Maharashtra Electricity Regulatory Commission, which also ordered MSEDCL to refund the collected charges. MSEDCL then imposed a new reliability charge for a limited period in a specific area. JSW Steel, a large electricity consumer, challenged this charge, arguing that they were already paying higher tariffs for continuous power supply and should not be subjected to an additional charge. The Appellate Tribunal for Electricity sided with JSW Steel, and the Supreme Court upheld this decision, stating that MSEDCL had no legal basis for imposing the additional reliability charge on JSW Steel.
Issues framed by the Court:
- Whether JSW Steel should be subjected to the additional reliability charge.
- Whether MSEDCL had the legal authority to impose a reliability charge on consumers, particularly on JSW Steel, under the Electricity Act 2003.
- Whether JSW Steel, as an aggrieved party, had the right to appeal against the Commissioner’s order under Section 111 of the Electricity Act, 2003.
- Whether MSEDCL was required to refund the reliability charges collected from bulk consumers during the period when the additional supply charges were imposed.
Legal Provisions:
Section 111 of the Electricity Act, 2003: Appeal to Appellate Tribunal.
Contentions of the Appellant:
Maharashtra State Electricity Distribution Co. Ltd. (MSEDCL), herein, the appellant, argued that the reliability charge was necessary to ensure an uninterrupted power supply in certain areas. They claimed that the Maharashtra Electricity Regulatory Commission had the authority to approve such charges to improve electricity supply reliability. MSEDCL contended that JSW Steel did not participate in the public hearing about the charge, implying they had accepted it. They also pointed out that similar charges existed in other regions, and since JSW Steel benefited from uninterrupted power, they should pay the reliability charge like other industrial consumers in different areas. MSEDCL believed the Tribunal’s decision to cancel the charge was incorrect and should be overturned.
Contentions of the Respondents:
The respondent, JSW Steel Ltd., argued that they are not entitled to pay the additional reliability charge imposed by MSEDCL because they were already paying higher tariffs for a continuous and uninterrupted power supply. They contended that this higher tariff was meant to cover the cost of reliable power, making any additional charge unfair and illegal. JSW Steel also pointed out that their industry was not subjected to load-shedding, justifying the higher tariff they were already paying. They maintained that even though they did not participate directly in the public hearing, their interests were represented by the Vidarbha Industries Association, which had objected to the charges. Therefore, they believed they had the right to challenge the additional reliability charge.
Court’s Analysis and Judgement:
Based on the analysis made by the Hon’ble SC, it found that JSW Steel, as a continuous process industry, was already paying higher electricity tariffs to ensure an uninterrupted power supply. This higher tariff compensated for the reliability, making the additional charge unnecessary and unfair. Further, the Court also noted that JSW Steel, through its association, had raised objections during the public hearing process, so they had the right to challenge the charge. Hence, the Court confirmed that the Electricity Act allowed any aggrieved party to appeal, regardless of their participation in public hearings. Therefore, the SC agreed with the Appellate Tribunal’s decision that MSEDCL had no legal basis to impose the additional reliability charge on JSW Steel. However, the appeal by MSEDCL was dismissed, and the court ruled that JSW Steel should not have to pay the extra charge.
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Judgement Reviewed By- Shramana Sengupta
