Bombay HC: Unauthorized Electricity Use by Business in Mulund

Quick Summary: The Bombay High Court decided on a case about unauthorized electricity use by Supreme Metal Industries and others in Mumbai. The Maharashtra State Electricity Distribution Company Ltd (MSEDCL) disagreed with a previous decision that favored Supreme Metal Industries, who were using electricity for business purposes without the right permissions.

Background of the Case

The case was started by the Maharashtra State Electricity Distribution Company Ltd. (MSEDCL), a government-owned company that provides electricity across Maharashtra. They found that electricity meant for factory use was being used for business purposes by different companies, including Supreme Metal Industries.

Inspection and Findings

On January 5, 2010, MSEDCL's special team checked the location at Raja Industrial Estate, Mulund West, Mumbai. They discovered that the electricity, approved for factory use, was being used for business lab activities. This was considered unauthorized under a specific rule of the Electricity Act, 2003.

"The special team found business lab and testing activity, which counts as unauthorized use under Section 126(6)(b)."

Legal Proceedings

MSEDCL created a temporary assessment on January 8, 2010, and a final assessment on March 26, 2010. Supreme Metal Industries, however, challenged the decision, saying they should be considered authorized users.

Appellate Authority's Decision

The Appellate Authority agreed with Supreme Metal Industries, seeing the issue as a pricing category dispute rather than unauthorized use. They told MSEDCL to issue an extra bill without using Section 126.

Court's Judgment

Judge Amit Borkar of the Bombay High Court canceled the Appellate Authority's order from August 1, 2011. The court reinstated MSEDCL's final assessment from March 26, 2010, confirming the unauthorized use of electricity.

"The inspection report is trustworthy, the misuse is proven, and the conditions of Section 126 are fully met."

Key Points from the Judgment

• Definition of Consumer: The court explained that a consumer is someone with a legal right to use electricity, which Supreme Metal Industries did not have.
• Unauthorized Use: The court confirmed the unauthorized use of electricity for business activities instead of the approved factory use.
• Tariff Awareness: Not knowing about pricing changes is not a valid excuse. Once published officially, pricing rules must be followed.
• SSI Registration: The Small Scale Industry (SSI) registration applies to specific locations and cannot be used to justify activities in other places.

Verdict Summary

The court highlighted the importance of following the Electricity Act to prevent unauthorized use and protect public money. The ruling emphasizes the need for users to follow the legal and regulatory rules for electricity use.