HC strikes down law penalising consumers for excess power use
Kolkata: The Calcutta High Court has struck down Regulation 4.4 of the West Bengal Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2011, which allowed electricity companies to penalise consumers who consumed more electricity than the limit prescribed by the companies.
The bench of Justice Sabyasachi Bhattacharya declared the Regulation 4.4 ultra vires the Constitution, the Electricity Act and the principles of natural justice due to its arbitrariness, lack of guidelines, impermissible sub-delegation and violation of Articles 14 and 19. The petitioner company, a consumer of electricity from Damodar Valley Corporation, filed a writ petition challenging the constitutional validity of the Regulation 4.4 and the charges imposed by DVC for overdrawal of electricity beyond the restricted drawal limit set by DVC for a specific period. They contested the legality and rationality of additional charges levied by DVC for exceeding restricted drawal limits. Further, they questioned whether WBERC, as a state regulator, has the authority to frame such regulations, given DVC’s inter-state operations.
The court observed Regulation 4.4 was arbitrary, as it allows licensees to impose drawal restrictions without any guidelines or justification, violating Article 14. The absence of criteria for when and how restrictions are imposed empowers licensees to act whimsically.
Further, the regulation violates natural justice by imposing penal charges without providing consumers a hearing. The Regulation 4.4 undermines the contractual obligation to supply contracted demand, as it permits arbitrary restrictions below this limit without compensating consumers, creating an imbalance favoring licensees, the court said.
The court rejected WBERC’s claim that Regulation 4.4 prevents grid instability, noting that it merely imposes a financial deterrent without prohibiting excess drawal. A consumer could destabilise the grid and escape with only additional charges, undermining the regulation’s stated purpose, the court noted.
WBERC was granted liberty to frame new regulations to curb excess drawal, subject to specific guidelines for imposing drawal restrictions, ensuring restrictions do not fall below contracted demand, and a mandatory 24-hour notice to consumers.
