Laws laid down by supreme court



In the matter of Brihan Mumbai Electricity Supply & transport under taking Versus Maharashtra Electricity Commission (MERC) & others Civil Appeal No. 4223 of 2012 in the Supreme Court of India,decided on  8 May, 2014 BEST (Brihan Mumbai Electricity Supply & transport known as BEST) is a licensee for electricity supply to the public at large.  Tata power also has the license to supply electricity in the same area. The unit rate of electricity of BEST was 100% more than the unit rate of Tata-power. One Mr. Guru Prasad Shetty who is a restaurant owner was the customer of BEST. He wanted to switch over to Tata power to save on electricity bills. Tata power asked the consumer to get NOC from BEST for allowing  Tata Power to give  electricity connection. BEST refused to give NOC on the ground that they are a “local authority under the Electricity Act and hence in their area nobody can supply electricity to retail customers

Mr Guru Prasad approached Maharashtra Electricity Regulatory Commission who after getting convinced with the consumer, directed Tata Power Company to create its own infrastructure for giving electricity to the consumer.since BEST refused to give NOC to get  the power from his set up/infrastructure. BEST went in appeal to Electricity Appellate tribunal and challenged the directions of the Maharashtra Electricity Regulatory Commission. Appellate Tribunal for Electricity also confirmed the order of the MERC and decided in favour of the consumer. BEST again filed an appeal before the Hon’ble Supreme Court of India.with the following points –

a)The Regulatory Commission did not have the jurisdiction to entertain a dispute between the consumer and a distribution licensee;

  (b) TPC was not a deemed distribution licensee for the area in question and therefore was not entitled to give connection to consumer in the area

c) TPC could not extend its network in BEST area of supply, without BEST’s consent and agreement.

Advocate for the consumer Mr. Guru Prasad Shetty argued that Tata-power has to adhere to its universal supply obligation. It cannot run away from the responsibility of establishing their own infrastructure in the license area and supply electricity to the customers. Advocate for complainant further argued that if the monopoly of BEST is allowed it defeats the objective of the Act to create competition among the electricity suppliers.

 One more question was also raised on the point of jurisdiction qua Maharashtra Electricity Regularity Authority to deal with the subject when there is a provision of consumer forums Consumer Grievances Redressal Forum (CGRF) established under Section 42 (5) of the Act.established by each distributing agency Here in this case ,Guru Prasad had  approached the Regulatory Commission to enforce a distribution licensee obligation under the Act. As on that date, he was not the consumer of TPC but wanted to become its consumer. In so far as CGRF is concerned, which each distribution licensee is required to set up under Section 42 (5) of the Act, it deals with the grievances of the consumer.

Hon’ble Supreme Court Bench comprising Hon’ble Justice Mr. Surinder Singh Nijjar and Mr. A. K. Sikri by a detailed Judgment dated 08.05.2014 accepted the contentions of Mr. S. Ravi Shankar and dismissed the appeals Civil Appeal No.4223 of 2012 filed by M/S. Brihan Mumbai Electricity Supply & transport under taking (BEST) and upheld the rights of the retail electricity consumers to choose the electricity supplier on the basis of the service quality and price.

Law point is –

Section 42 (3) of the Act 

When an application is made by a consumer to a distribution licensee for supply of electricity, such a distribution licensee for supply of electricity, can request other distribution licensee in the area to provide it network to make available for wheeling electricity to such consumers and this open access is to be given as per the provisions of section 42 (3) of the Act.

Sec 43 0f the act –

 If in a particular area local authority has its network and it does not permit wheeling of electricity by making available its network, the other distribution licensee will have to provide the electricity from its own network. For this purpose, if it is not having its network, it will have to lay down its network if it requires in order to supply electricity to a consumer seeking supply.

This is the provision to provide open access in transmission from the outset. The provision of open access to consumers ensures right of the consumer to get supply from a person other than the distribution licensee of his area and can take supply under section 43 of the Act.

But consumers/suppliers  who have been allowed open access under Section 42 (by getting NOC from the local supplier) ,may enter into an agreement with any person for supply of electricity on such terms and conditions, including tariff, as may be agreed upon by them under Section 49 of the Act

National Electricity Policy (Paragraph 5.4.7) stipulates that the second licensee in the same area shall have the obligation to supply to all consumers in accordance with Section 43.

Reported earlier cases

Chandu Khamaru v. Nayan Malik reported in (2011) 12 SCC 314:

“These provisions in the Electricity Act, 2003 make it amply clear that a distribution licensee has a statutory duty to supply electricity to an owner or occupier of any premises located in the area of supply of the distribution licensee, if such owner or occupier of the premises applies for it, and correspondingly every owner or occupier of any premises has a statutory right to apply for and obtain such electric supply from the distribution licensee.”

In Tata Power Co.Ltd. v. Reliance Energy Ltd. & Ors.(2008) 10 SCC 321, this Court gave due recognition to objective behind the Act viz. to promote competition and give the consumer open to choose the distribution licensee from which it seeks electricity as is clear from the following paragraphs:

“in our view, the provisions of both the 1903 and 1910 Electricity Acts encourage competition in the electricity trade and the same is also incorporated in the licences issued in favour of the distribution licensees, which also include licensees generating power for supply. The element of competition has been included in the Preamble to the 2003 Act and permeates the same in its various provisions.”

By Dr Prem Lata 

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