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Maharashtra State Electricity Distribution Co. Ltd. vs. M/s JSW Steel Ltd. & Anr.

Not available · 2024 INSC 442Decided 17 May 2024
Not available
Justice Abhay S. Oka · Justice Ujjal Bhuyan

Background

The Maharashtra State Electricity Distribution Company (MSEDCL) imposed a "reliability charge" on bulk industrial consumers, including JSW Steel, in the Pen Circle area to fund uninterrupted, zero-load-shedding power supply. JSW, though a large consumer that benefited from continuous supply, had not personally participated in the regulator's public hearing on the charge (though its industry association had objected). The Appellate Tribunal for Electricity set aside the charge, finding no basis for it in the Electricity Act, 2003 or the regulations, and noting JSW already paid a higher tariff for continuous, non-load-shed supply. MSEDCL appealed to the Supreme Court.

Decision Breakdown

The Supreme Court upheld the Tribunal's ruling. It found that JSW, as a continuous-process industry on an express feeder, was already paying a materially higher tariff than non-continuous consumers specifically to compensate for uninterrupted supply, so the additional reliability charge amounted to double recovery. Neither Section 62(3) of the Electricity Act nor the Commission's own rules and regulations supported imposing such a charge. The Court also rejected MSEDCL's argument that JSW's absence from the public hearing barred its right to appeal, holding that Section 111 of the Act allows any "aggrieved person" to appeal regardless of hearing participation, and noting JSW's industry association had in fact objected. The appeal was dismissed.

Lesson Learnt

A regulated utility cannot impose a new charge on consumers without clear statutory or regulatory backing, and a consumer's failure to personally object at a public hearing does not forfeit its later right to challenge that charge on appeal.

Official source (sci.gov.in)View Judgment (PDF)

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