The Calcutta High Court has struck down an electricity regulation, stating it grants licensees unchecked power to restrict withdrawals and impose excessive charges, violating consumer rights and fair practices.
Kolkata: The Calcutta High Court invalidated Regulation 4.4 of the West Bengal Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2011, citing that it grants the licensee unrestricted authority to limit electricity withdrawal to a self-determined level and impose excessive charges based on this pretext.
A company, the primary petitioner and an electricity consumer from the Damodar Valley Corporation (DVC) in West Bengal, brought the case to the High Court, challenging the legality of Regulation 4.4 of the West Bengal Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2011, established by the West Bengal Electricity Regulatory Commission (WBERC).
The challenge also contested the charges levied by the DVC for electricity overdrawal exceeding the restricted limit set by the DVC for specific periods.
Justice Sabyasachi Bhattacharyya, sitting as a Single Bench, stated,
“Thus, Regulation 4.4 does not prohibit excess drawal of electricity at all. What it does is confer unbridled power on the licensee to restrict drawal to a limit of its own choice and overcharge on such pretext. Nothing in Regulation 4.4 prevents the consumer from overdrawing to jeopardise the grid stability but it merely imposes a penal charge for doing so.”
Advocate Surajit Nath Mitra represented the Petitioner, while Senior Advocate Pratik Dhar represented the Respondents.
Reasoning for the decision, The Bench clarified that Regulation 4.4 addresses the regulation of electricity tariffs within West Bengal.
The additional charge is applied to overdrawal of electricity at the consumer’s end, not to the interstate transmission of electricity. It was also noted that while the DVC operates across states in electricity generation and transmission, the Regulation in question pertains to electricity consumption within the state.
Therefore, it falls within the WBERC’s powers, as the State Commission in West Bengal, to impose such tariffs under Section 61, in conjunction with Section 181 of the Electricity Act.
The Bench observed that Regulation 4.4 allows the licensee to arbitrarily restrict drawal without providing any guidelines regarding the reasons or duration for such restrictions. The Regulation and other WBERC Regulations do not specify the grounds and situations in which such a restriction can be imposed.
It also grants the licensee unrestricted power to violate the contract demand clause and arbitrarily restrict drawal even below the contract demand limit, as Regulation 4.4 does not limit the imposition of restricted drawal limits up to or above the contract load.
It was further explained that the second flaw in Regulation 4.4 is that it gives the licensee unrestricted power to choose when and how long to impose restricted drawal, without specifying any specific ground or guideline for such imposition.
Nothing in Regulation 4.4 prevents the consumer from overdrawing to jeopardise the grid stability but it merely imposes a penal charge for doing so.
It added,
“Hence, Regulation 4.4, in the absence of guidelines, is implicitly arbitrary and violative of Article 14 of the Constitution of India as well as all principles of natural justice”,
The High Court held that the absence of sub-delegation powers within Sections 61 and 181 of the Electricity Act is overreached by Regulation 4.4, which sub-delegates to the licensee the power to determine its tariff and double it merely by regulating the drawal limits at any given point in time.
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It held,
“This Court is of the clear opinion, based on the very nature of the impugned Regulation, that Regulation 4.4 of the WBERC (Terms and Conditions of Tariff) Regulations, 2011 is ultra vires the Constitution and contravenes core principles of natural justice and is violative of Articles 14 and 19 of the Constitution of India, being patently arbitrary and devoid of any guidelines for exercise of power under the said provision by the licensee”,
Partly allowing the appeal, the Bench struck down Regulation 4.4 of the 2011 Tariff Regulations framed by the WBERC as ultra vires.
It concluded,
“However, the WBERC will be at liberty to frame appropriate fresh Regulation(s) for curbing excess drawals which might jeopardise the grid stability”,
The Petitioner was represented by Advocates Surajit Nath Mitra, Tanoy Chakraborty, and Siddharth Shroff.
The Respondents were represented by Senior Advocate Pratik Dhar, along with Advocates Ritwik Pattanayak, Abhrotosh Majumdar, Prasun Mukherjee, and Deepak Agarwal.
Case Title: Metsil Exports Private Limited and Another v. West Bengal Electricity Regulatory Commission and Others (Case No.: W.P.A. No.4669 of 2023)