In a recent court case, the High Court of Judicature at Bombay tackled a dispute involving the Maharashtra State Electricity Distribution Company Ltd. (MSEDCL) and several companies accused of misusing electricity. Here's a breakdown of what happened.
MSEDCL, a government-owned company responsible for distributing electricity across Maharashtra, filed the case. The companies involved were Kollinz Laboratories Pvt. Ltd., Geo Chem Laboratories Pvt. Ltd., and others, all located in Mumbai.
The problem started on January 5, 2010, when MSEDCL's inspection team checked out various locations. They found that some places, which were supposed to be used for industrial purposes, were actually being used for commercial activities like laboratory and testing services. This was considered unauthorized use under the rules of the Electricity Act, 2003.
"The inspection report clearly showed commercial use. Such use falls under the rules because electricity was used for something other than what was allowed."
MSEDCL issued an initial bill on January 8, 2010, and a final bill on March 26, 2010, demanding payment for unauthorized use. The companies argued against this, claiming they didn't know about changes in electricity rates and that their activities were industrial, not commercial.
Judge Amit Borkar delivered the decision on November 28, 2025. The court found that the companies were indeed using electricity for unauthorized commercial purposes. The court stressed that not knowing about rate changes, which were announced in the Official Gazette, was not an acceptable excuse.
"Not knowing about the rate change is no excuse; the rates are binding once announced."
Unauthorized Use Confirmed: The court confirmed that using electricity for commercial purposes in areas approved for industrial use was not allowed.
Rate Orders: The court emphasized that once rate orders are announced, they are binding, whether or not the consumers are aware of them.
SSI Registration: The court noted that Small Scale Industry (SSI) registration is specific to certain locations and cannot be used to justify activities in different places without separate approval.
Double Rate Penalty: The court upheld the penalty of charging twice the normal rate for unauthorized use, as required by the Electricity Act.
The court canceled the decision from the Appellate Authority that had favored the companies and reinstated the original assessment by MSEDCL. This decision highlights the importance of following electricity usage rules and the legal consequences of unauthorized use.
