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Consumer may be required to sign fresh agreements for each enhancement of load, but the enhancement being for the same electricity connection it would merely be amendment of the initial agreement: Supreme Court

This would also be in consonance with the provisions of the Regulations of 2005, which have to be liberally interpreted in favor of the consumer. If the Regulations provide for the contract to be varied even through written communication, then though fresh agreements may have been executed at the stage of enhancement of load of the same electricity connection, the same cannot be treated as anything but an extension/amendment modification of the initial agreement granting the electricity connection.

This remarkable judgment was passed by the Supreme Court in the matter of JHARKHAND STATE ELECTRICITY BOARD & ORS. V M/S RAMAKRISHNA FORGING LIMITED [CIVIL APPEAL NO. 6145 OF 2010] by Honourable Justice Vineet Saran and Honourable Justice L. Nageswara Rao.

The respondent is a small-scale industry and signed a contract sanctioning load of electricity of 4000 KVA from the appellants, Jharkhand State Electricity Board The request of the respondent for reduction of such sanctioned load to 1325 KVA was refused so they filed a writ petition before the High Court of Jharkhand Aggrieved by the said judgment of the High Court, this appeal has been preferred by the Board

The brief facts, relevant for the present case, are that the respondent entered into an agreement with the Board for High Tension connection of 325 KVA load Respondent thereafter applied for enhancement of load from 325 KVA to 1325 KVA The respondent again applied for enhancement of load from 1325 KVA to 3500 KVA and then 500 KVA to 4000 KVA, which were sanctioned by the Board For each enhancement of load, fresh agreements to that the effect was entered into between the respondent and the Board for supply of 4000 KVA load. Even after enhancement of load, it was facing major trippings as well as continuous load shedding which was affecting the costly machinery and therefore, the respondent decided to reduce the load. The application was rejected since an agreement would be enforced for a period of three years and treating it to be a case of determination of agreement, and quoting the Clause 98 of the agreement, it was provided that the agreement could not be permitted to be determined prior to the completion of the initial period of three years. The High Court in this challenge petition did not allow for reduction of load before the expiry of the initial period of the agreement was discriminatory, arbitrary, and against the public policy.

It is clear that the said communication does not consider the provisions of the Regulations of 2005 with regard to reduction of load, but only treats the application for reduction of load to be an application for determination of agreement.

Just as the consumer has the liberty of getting its load enhanced under Regulation 91, the reduction of contract demand load can also be prayed for and decided in terms of Regulation 9.2 The proviso to Regulation 9 2 1, no doubt, provides that no reduction of load shall be allowed before the expiry of the initial period of the agreement, which is three years in the present case. The question would be whether the initial agreement is to be considered for such purpose, or the subsequent agreements.

SC observed, “Jharkhand State Electricity Board is an instrumentality of the State. It has to be fair and reasonable. If the Regulations provide for contract load to be varied even through written communication, then in our considered view, in all fairness, though fresh agreements may have been executed at the stage of enhancement of load of the same electricity connection, the same cannot be treated as anything but an extension of the initial agreement granting the electricity connection

The honorable bench opined that Board has gone wrong in treating the application for reduction of load to be that for determination of agreement under clause 9b Therefore, SC stated that “we will not deliberate on the provision of Regulations 9.2.1 are discriminatory, arbitrary and against the public policy since it has already been dealt with by the HC.

Therefore, SC dismissed the petition since reduction of contract load should be allowed under the provisions of Regulations 9.2 of regulations 2005.

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