Case Note & Summary
The Municipal Corporation of Greater Mumbai (MCGM), through its Brihanmumbai Electric Supply & Transport Undertaking (BES&T), filed a writ petition under Article 226 of the Constitution of India challenging Regulation 4.10 read with Regulations 4.1 and 4.7 of the Maharashtra Electricity Regulatory Commission (Standards of Performance of Distribution Licensees, Period for Giving Supply and Determination of Compensation) Regulations, 2014. The MCGM is a distribution licensee under the Electricity Act, 2003. The impugned regulation requires a distribution licensee to pay compensation to an applicant if it fails to provide a new electricity connection within the period specified in Regulations 4.1 and 4.7. The MCGM argued that the regulation was ultra vires the Electricity Act, 2003, particularly Section 43 which provides for a right to supply but does not prescribe compensation for delay, and that the MERC lacked the power under Section 181 to make such a regulation. The respondents, including the MERC and Tata Power Company Limited, defended the regulation as a valid exercise of delegated legislation to ensure standards of performance and consumer protection. The court, after hearing arguments, held that the regulation is within the powers of MERC under Section 181 read with Section 86(1)(a) and (e) of the Electricity Act, 2003. The court reasoned that the regulation is a permissible measure to enforce the duty under Section 43 and to maintain standards of performance under Section 57. The compensation is not a penalty but a remedy for breach of statutory duty. The court dismissed the petition, upholding the validity of Regulation 4.10.
Headnote
A) Electricity Law - Validity of Regulations - Ultra Vires Challenge - Regulation 4.10 of MERC (Standards of Performance) Regulations, 2014 - Sections 43, 56, 57, 58, 59, 86, 181 of Electricity Act, 2003 - The MCGM challenged Regulation 4.10 as being beyond the rule-making power of MERC under Section 181 and contrary to Section 43 which provides for a right to supply but does not prescribe compensation for delay. The Court held that the regulation is within the powers of MERC under Section 181 read with Section 86(1)(a) and (e) and is not ultra vires. The regulation is a valid exercise of delegated legislation to ensure standards of performance and consumer protection. (Paras 1-24) B) Electricity Law - Compensation for Delayed Connection - Standards of Performance - Regulation 4.10 - The regulation requires a distribution licensee to pay compensation to an applicant if it fails to provide a new connection within the period specified in Regulations 4.1 and 4.7. The Court held that this is a permissible measure to enforce the duty under Section 43 and to maintain standards of performance under Section 57. The compensation is not a penalty but a remedy for breach of statutory duty. (Paras 25-40) C) Electricity Law - Delegated Legislation - Power of MERC - Section 181 of Electricity Act, 2003 - The Court held that the MERC has the power to make regulations for the discharge of its functions under the Act, including specifying standards of performance and compensation for failure to meet them. Regulation 4.10 is not inconsistent with the Act and is a reasonable regulation to protect consumer interests. (Paras 41-50)
Issue of Consideration
Whether Regulation 4.10 read with Regulations 4.1 and 4.7 of the MERC (Standards of Performance of Distribution Licensees, Period for Giving Supply and Determination of Compensation) Regulations, 2014 is ultra vires the Electricity Act, 2003 and the Constitution of India, and whether the MERC has the power to impose compensation for failure to provide new electricity connections within the stipulated time.
Final Decision
The Bombay High Court dismissed the writ petition, upholding the validity of Regulation 4.10 read with Regulations 4.1 and 4.7 of the MERC (Standards of Performance) Regulations, 2014. The court held that the regulation is within the powers of MERC under Section 181 of the Electricity Act, 2003 and is not ultra vires.
Law Points
- Interpretation of Section 43
- 56
- 57
- 58
- 59
- 86
- 181 of Electricity Act
- 2003
- Validity of MERC Regulations
- Compensation for delayed supply
- Standards of Performance
- Distribution Licensee obligations
- Ultra vires challenge
- Article 226 jurisdiction
