Case Note & Summary
The petitioner, Maharashtra State Electricity Distribution Company Ltd. (MSEDCL), filed a writ petition challenging the order of the appellate authority which set aside the assessment of unauthorized use of electricity against respondent No.1, Ramchandra Naik. Respondent No.1 was a consumer of MSEDCL who had taken an electricity supply for his printing press under an industrial tariff. He closed the printing press and gave the premises on leave and license to respondent No.2, Abhishek Gaike, who ran a coaching class (commercial use) from the premises without changing the tariff. On 27.12.2017, MSEDCL personnel inspected the premises and found that respondent No.2 was using the electricity for commercial purposes, which was unauthorized under Explanation (b)(iv) to Section 126 of the Electricity Act, 2003. A provisional bill was raised, and respondent No.2 filed a reply contending that he had a registered leave and license agreement with respondent No.1, who authorized him to use the electricity, and that he had no privity of contract with MSEDCL. The appellate authority set aside the assessment against respondent No.1, holding that the liability should be on respondent No.2 who actually used the electricity. The High Court dismissed the petition, affirming that the original consumer (respondent No.1) cannot be held liable for unauthorized use by the sub-licensee (respondent No.2) as there was no privity of contract between respondent No.2 and MSEDCL regarding the tariff, and respondent No.2 had applied for a higher load knowing his business nature.
Headnote
A) Electricity Law - Unauthorized Use of Electricity - Section 126 Electricity Act, 2003 - Liability of Consumer - The issue was whether the original consumer (respondent No.1) could be held liable for unauthorized use of electricity when he had given the premises on leave and license to respondent No.2, who used the electricity for commercial purposes without changing the tariff. The court held that the licensee (respondent No.2) who actually used the electricity for a different purpose is liable, not the original consumer who had no privity with the sub-licensee's use. (Paras 2-5) B) Electricity Law - Privity of Contract - Section 126 Electricity Act, 2003 - Tariff Change - The court held that the original consumer cannot be held responsible for the unauthorized use by the sub-licensee because there was no privity of contract between the sub-licensee and the electricity company regarding the tariff. The sub-licensee had applied for a higher load and knew the nature of his business. (Paras 3-5) C) Electricity Law - Assessment of Unauthorized Use - Section 126 Electricity Act, 2003 - Liability of Licensee - The court held that the assessment under Section 126 should be made against the person who actually used the electricity in an unauthorized manner, i.e., the sub-licensee, and not the original consumer who had closed his business. (Paras 4-5)
Issue of Consideration
Whether the original consumer (respondent No.1) can be held liable for unauthorized use of electricity under Section 126 of the Electricity Act, 2003, when the premises were given on leave and license to respondent No.2 who used the electricity for a commercial purpose without changing the tariff.
Final Decision
The High Court dismissed the writ petition, upholding the order of the appellate authority that set aside the assessment against respondent No.1. The court held that the liability for unauthorized use of electricity under Section 126 of the Electricity Act, 2003, lies with the person who actually uses the electricity in an unauthorized manner, i.e., respondent No.2, and not the original consumer who had no privity with the sub-licensee's use.
Law Points
- Unauthorized use of electricity
- Section 126 Electricity Act 2003
- liability of consumer for sub-licensee's actions
- privity of contract
- tariff change
- leave and license agreement
