MAHARASHTRA ELECTRICITY DISTRIBUTION COMPANY LIMITED AND ANOTHERversusPANKAJ TRILOKCHAND PANDE

2026:BHC-AUG:9641
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                        IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                   BENCH AT AURANGABAD
                               30 WRIT PETITION NO. 4640 OF 2021

                MAHARASHTRA ELECTRICITY DISTRIBUTION COMPANY LIMITED
                                            AND ANOTHER
                                                VERSUS
                                    PANKAJ TRILOKCHAND PANDE
                                                   ...
               Mr. Anil S. Bajaj, Advocate for the Petitioners.
               Mr. Sonkawde h/f. Mr. N. D. Sonavane, Advocate for Respondent.
                                                   ...

                                        CORAM :           SIDDHESHWAR S. THOMBRE, J.
                                        DATE     :        4th MARCH 2026

               P.C.:-

               1.        Heard learned Advocates for the respective parties.

               2.        By the present petition, the Petitioners are aggrieved by the

               order dated 11.11.2019, passed by the Electricity Ombudsman, Nagpur

               in Representation No.80 of 2019, whereby the representation filed by

               respondent came to be allowed.


               3.        Mr. A. S. Bajaj, learned Advocate for the Petitioners submits

               that the Respondent filed a complaint raising grievance before the

               Consumer Grievance Redressal Forum, Aurangabad (for short “CGRF”)

               as regards to levy of LT-II-B tariffs in electricity bills of the month of

               December 2018, January, March and May 2019, as his consumption

               has been exceeded than the contract demand. The learned CGRF vide

               its order dated 27.08.2019 rejected the complaint of the Respondent

               and being aggrieved by the same, the Petitioner preferred a
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representation before the Electricity Ombudsman, Nagpur and the

Electricity Ombudsman vide its impugned order dated 11.11.2019

allowed the representation and directed that the Petitioner to revise the

bills and issue the same as per LT-II-A category and to withdraw the

penalty levied by it for exceeding the contract demand, DPC and

interest levied.


4.        He further submits that there is no dispute about the fact that

for Respondent was previously issued a bill as per applicable

commercial tariff i.e. LT-II-A and the load as per those tariff was

sanctioned and, therefore, the moment, the Respondent exceeded of

the use, the Petitioners are liable to issue bill as per LT-II-B tariff and

the penalty thereon. He further submits that as per the mandate of

MERC, the Petitioners have levied the charges as per the directions of

the commission on the basis of actual drawn demand and once it was

noticed that consumer exceeded three times the sanction load, the bill

along with penalty to that effect needed to be issued.


5.        He further submits that learned Electricity Ombudsman,

Nagpur has wrongly interpreted the order dated 01.01.2019 passed by

the MERC in case No.60 of 2018 in the matter between Essem Gas Pvt.

Ltd. Vs. Maharashtra Electricity Distribution Company Ltd.. In fact, that

order supports the case of the Petitioners.


6.        He further relied upon the penalty clause by submitting that
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the applicable tariff category mentioned in MERC Case No.195 of 2017

specifically provides demand-based tariff and action to recover penalty

is applicable to LT-II-A consumers in which category, Respondent No.1

falls. He further submits that in case the consumer makes default and

exceeds the contract demand then the consumer will be billed as per

the levied charges for the demand in excess of contract demand with

penalty of 150% and, therefore, he submits that the learned Electricity

Ombudsman exceeded the jurisdiction by setting aside the bill of

Respondent and directing to revise the bill accordingly.


7.        Per contra, Mr. Sonkawde holding for Mr. N. D. Sonawane,

learned Advocate for Respondent supports the order passed by the

Electricity Ombudsman by submitting that once the load was

sanctioned from LT-II-A category then even if the Petitioner exceeds the

use, whatever tariff was applicable for LT-II-A would still be applicable

and Respondent-Consumer would not be liable to pay as per the LT-II-B

tariff. Therefore, he submits that the learned Electricity Ombudsman

rightly allowed the representation.


8.        He invited my attention to the findings recorded by the

learned Electricity Ombudsman which are reproduced herein below:-


     “In view of the above, I am of the opinion that the intention of the
     Commission is to levy penalty for exceeding contract demand to
     only those consumers who avails demand based tariff. Therefore
     importing this analogy of levying penalty to consumers not
     availing demand based tariff such as LT-II-A is not tenable at all.
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      It is further noted from the bills that the Respondent has
      automatically shifted the Appellant under LT-II-B tariff category,
      billed it and further levied penalty in the months in which the
      load has increased more than 20 kW by importing the analogy,
      which is highly incorrect. It is surprising to note that the
      Respondent has gone one step further and billed the Appellant
      under LT-II-A when the demand registered is less than 20 kW. This
      flip flop in tariff applicability is not permitted in view of the tariff
      order of the Commission as nothing of this sort is mentioned in
      the tariff order.”


9.         He further submits that the use had not exceeded more than

three times and he also invited my attention to page No.22 of the

present petition and tried to interpret the clause of Penalty for

Exceeding the Contract Demand. As per his interpretation, in case a

consumer exceeds, his demand contract on more than three occasions

in a calendar year, the action to be taken would be governed by the

provisions of Supply Code Regulations. He submits that the consumer

had not exceeded the demand on more than three occasions in a

calendar year, rather had exceeded only three times. He further stated

that the use had exceeded only for the month of December 2018,

January, March, May 2019. As the Respondent had not exceeded more

than three times the demand in one calendar year, he is not liable to

pay tariff as per LT-II-B, rather he is liable to pay only under previously

santioned LT-II-A category. Therefore, Respondent was not liable to

pay the amount.


10.        He submits that the clarification on which, learned Advocate

for the Petitioners relied, was subsequent to the penalty clause and,
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therefore, such a clarification cannot be considered and therefore, he

submits that the learned Electricity Ombudsman has rightly allowed

the representation. Therefore, he submits that the order passed by the

learned Electricity Ombudsman is legal and proper.


11.        Having heard learned Advocates for the respective parties at

length. There is no dispute about the fact that Respondent was in the

category of LT-II-A and, therefore, as per clause of Penalty for

Exceeding Contract Demand read with the clarification, if the

consumer exceeds his contract demand, he will be billed at the

applicable Demand Charge rate for the Demand actually recorded and

also be charged on the additional amount @ 150% of the applicable

Demand Charge (only for the demand in access of the contract

demand).


12.        The penalty clause which is at page No.22 of the

petition/paper-book, which reads as under.


      “Penalty for exceeding Contract Demand

      In case a consumer (availing Demand-based Tariff) exceeds his
      Contract Demand, he will be billed at the applicable Demand
      Charge rate for the Demand actually recorded, and also be
      charged an additional amount at the rate of 150% of the
      applicable Dermand Charge (only for the Demand in excess of the
      Contract Demand).

      Under these circumstances, the consumer shall not be liable for
      any other action under Section 126 of the EA, 2003, since the
      penal additional Demand Charge provides for the penalty that the
      consumer is liable to pay for exceeding his Contract Demand. In
      case a consumer exceeds his Contract Demand on more than three
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      occasions in a calendar year. the action to be taken would be
      governed by the provisions of the Supply Code Regulations.”


13.         Further the tariff order dated 12.09.2018, which is at page

No.97 reads as under:-


LT II: LT – Non-Residential or Commercial

LT II (A): 0 – 20 kW
      Consumption Slab (kWh)            Fixed/Demand       Wheeling Charge     Energy
                                        Charge (Rs. per      (Rs/kWh)          Charge
                                            month)                            (Rs/kWh)
LT 11 (A) 0-20 kW
(I) 0 to 200 units per month                350.00               1.30             6.00
(ii) Above 200 units per month (only        350.00               1.30             9.20
balance consumption)

LT II (B): >20 kW and≤50 kW and (C) >50 kW
  Consumption Slab        Fixed Demand             Wheeling Charge       Energy Charge
       (kWh)                  Charge                 (Rs/kWh)              (Rs/kWh)
                         (Rs./kVA/month)
LT II (B)                                               1.30                 9.30
>20 kW and≤50 kW               350.00
LT II (C)                                               1.30                 11.60
>50 KW
                      TOD Tariffs (in addition to above base Tariffs)
2200 Hrs-0600 Hrs                                                            -1.50
0600 Hrs-0900 Hrs &                                                          0.00
1200 Hrs-1800 Hrs
0900 Hrs-1200 Hrs                                                            0.80
1800 Hrs-2200 Hra                                                            1.10



14.         The Hon’ble Apex Court in the matter of Kerala State

Electricity Board & Ors. Vs Thomas Joseph Alias Thomas M. J. & Ors.,

reported in (2023) 11 SCC 700 held that once the load was sanctioned

in a particular category and if the consumer exceeded the use as per

the load sanctioned, then tariff with a penalty is required to be
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imposed and pursuant thereto, the bill was issued as per clause which

is mentioned above.


15.         The penalty would be inflicted irrespective of the category of

consumer i.e. LT-II-A or LT-II-B.       Therefore, the learned Electricity

Ombudsman mis-interpreted the clause. The Hon’ble Apex Court in

the case of Kerala State Electricity Board (supra) has held in paragraph

Nos.57 to 66, which read as under:-


      “57.     While dealing with the challenge to the High Court's
      order, this Court in Seetaram Rice Mill³, inter alia, examined the
      scope of Sections 126, 127 and 135, respectively, of the said Act
      against the backdrop of the scheme of the 2003 Act and summed
      up its conclusions as under: (Seetaram Rice Mill case, SCC p. 143,
      para 87)

           “87.... 1. Wherever the consumer commits the breach of the
           terms of the agreement, Regulations and the provisions of
           the Act by consuming electricity in excess of the sanctioned
           and connected load, such consumer would be "in blame and
           under liability" within the ambit and scope of Section 126 of
           the 2003 Act.

           2.      The expression "unauthorised use of electricity
           means" as appearing in a Section 126 of the 2003 Act is an
           expression of wider connotation and has to be construed
           purposively in contrast to contextual interpretation while
           keeping in mind the object and purpose of the Act. The cases
           of excess load consumption than the connected load inter
           alia would fall under Explanation (b)(iv) to Section 126 of
           the 2003 Act, besides it being in violation of Regulations 82
           and 106 of the Regulations and terms of the agreement.

           3. In view of the language of Section 127 of the 2003 Act,
           only a final order of assessment passed under Section 126(3)
           is an order appealable under Section 127 and a notice-cum-
           provisional assessment made under Section 126(2) is not
           appealable.

           4. Thus, the High Court should normally decline to interfere
           in a final order of assessment passed by the assessing officer
           in terms of Section 126(3) of the 2003 Act in exercise of its
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     jurisdiction under Article 226 of the Constitution of India.

     5. The High Court did not commit any error of jurisdiction in
     entertaining the writ petition against the order raising a
     jurisdictional challenge to the notice/provisional assessment
     order dated 25-7-2009. However, the High Court
     transgressed its jurisdictional limitations while travelling
     into the exclusive domain of the assessing officer relating to
     passing of an order of assessment and determining the
     factual controversy of the case.

     6. The High Court having dealt with the jurisdictional issue,
     the appropriate course of action would have been to remand
     the matter to the assessing authority by directing the
     consumer to file his objections, if any, as contemplated under
     Section 126(3) and require the authority to pass a final
     order of assessment as contemplated under Section 126(5)
     of the 2003 Act in accordance with law."

58.      In our opinion, the first two conclusions quoted
hereinabove completely support the appellant Board. The learned
counsel appearing for the consumers and the Commission tried to
distinguish Seetaram Rice Mill from the present case on the
ground that there was a change in the classification/category
which f is not so in this case inasmuch as here the consumers
remain commercial/industrial having LT connection and,
therefore, there is no issue of unauthorised use within the
meaning of Section 126 of the 2003 Act. We see no force in the
submission that change of category would not attract Section 126
of the 2003 Act. In Seetaram Rice Mill³, it was contended that
only cases of change of user would be covered under Section 126
of the 2003 Act. While rejecting g such contention, this Court
clarified that the Explanation to Section 126 is not exhaustive and
any use of electricity which is not permissible and beyond the
contract demand amounts to unauthorised use of electricity and
the blame contemplated under Section 126 of the 2003 Act is not
dependent on whether the overdrawal transgresses into another
tariff category or not

59.     We may quote the relevant paragraphs from Seetaram
Rice Mill: (SCC pp. 120, 123, 127, 129-30, 134-37 & 143, paras
18, 22, 24, 37, 44, 50, 60-61, 67.71-72 & 87)

     "18. It is true that fiscal and penal laws are normally
     construed strictly but this rule is not free of exceptions. In
     given situations, this Court may, even in relation to penal
     statutes, decide that any narrow and pedantic, literal and
     lexical construction may not be given effect to, as the law
     would have to be interpreted having regard to the subject-
     matter of the offence and the object that the law seeks to
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achieve. The provisions of Section 126, read with Section
127 of the 2003 Act, in fact, become a code in themselves.
Right from the initiation of the proceedings by conducting
an inspection. to the right to file an appeal before the
appellate authority, all matters are squarely covered under
these provisions. It specifically provides the method of
computation of the amount that a consumer would be liable
to pay for excessive consumption of the electricity and for
the manner of conducting assessment proceedings. In other
words, Section 126 of the 2003 Act has a purpose to achieve
i.e. to put an implied restriction on such unauthorised
consumption of electricity.

22.      The relevancy of objects and reasons for enacting an
Act is a relevant consideration for the court while applying
various principles of interpretation of statutes. Normally, the
court would not go behind these objects and reasons of the
Act. The discussion of a Standing Committee to a Bill may
not be a very appropriate precept for tracing the legislative
intent but in given circumstances, it may be of some use to
notice some discussion on the legislative intent that is
reflected in the substantive provisions of the Act itself. The
Standing Committee on Energy, 2001, in its discussion said,
'the Committee feels that there is a need to provide
safeguards to check the misuse of these powers by
unscrupulous elements'. The provisions of Section 126 of the
2003 Act are self-explanatory, they are intended to cover
situations other than the situations specifically covered
under Section 135 of the 2003 Act. This would further be a
reason for this Court to adopt an interpretation which would
help in attaining the legislative intent.

24.     Upon their plain reading, the marked differences in
the contents of Sections 126 and 135 of the 2003 Act are
obvious. They are distinct and different provisions which
operate in different fields and have no common premise in
law. We have already noticed that Sections 126 and 127 of
the 2003 Act read together constitute a complete code in
themselves covering all relevant considerations for passing of
an order of assessment in cases which do not fall under
Section 135 of the 2003 Act.

37.     Wherever the assessing officer arrives at the
conclusion that unauthorised use of electricity has taken
place, the assessment shall be made for the entire period
during which such unauthorised use of electricity has taken
place and if such period cannot be ascertained, it shall be
limited to a period of 12 months immediately preceding the
date of inspection and the assessment shall be made at the
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     rate equal to twice the tariff applicable for the relevant
     category of service specified under these provisions. This
     computation has to be taken in terms of Sections 126(5),
     126(6) and 127 of the 2003 Act. The complete procedure is
     provided under these sections. b Right from the initiation of
     the proceedings till preferring of an appeal against the final
     order of assessment and termination thereof, as such, it is a
     complete code in itself.

     44.       The unauthorised use of electricity in the manner as
     is undisputed on record clearly brings the respondent "under
     liability and in blame" within the ambit and scope of Section
     126 of the 2003 Act. The blame is in relation to excess load
     while the liability is to pay on a different tariff for the period
     prescribed in law and in terms of an order of assessment
     passed by the assessing officer by the powers vested in him
     under the provisions of Section 126 of the 2003 Act.

     50.      In other words, the purpose sought to be achieved is
     to ensure stoppage of misuse/unauthorised use of the
     electricity as well as to ensure prevention of revenue loss. It
     is in this background that the scope of the expression
     "means" has to be construed. If we hold that the expression
     "means" is exhaustive and cases of unauthorised use of
     electricity are restricted to the ones stated under Explanation
     (b) of Section 126 alone, then it shall defeat the very
     purpose of the 2003 Act, inasmuch as the different cases of
     breach of the terms and conditions of the contract of supply,
     Regulations and the provisions of the 2003 Act would escape
     the liability sought to be imposed upon them by the
     legislature under the provisions of Section 126 of the 2003
     Act. Thus, it will not be appropriate for the courts to adopt
     such an approach.

60.      The expressions "means", "means and includes" and "does
not include" are expressions of different connotation and
significance. When the legislature has used a particular expression
out of these three, it must be given its plain meaning while even
keeping in mind that the use of other g two expressions has not
been favoured by the legislature. To put it simply. the legislature
has favoured non-use of such expression as opposed to other
specific expression. In the present case, the Explanation to Section
126 has used the word "means" in contradistinction to "does not
include" and/or "means and includes". This would lead to one
obvious result that even the legislature did not intend to
completely restrict or limit the scope of this provision.

61.     Unauthorised use of electricity cannot be restricted to the
stated clauses under the Explanation but has to be given a wider
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meaning so as to cover cases of violation of the terms and
conditions of supply and the Regulations and provisions of the
2003 Act governing such supply. "Unauthorised use of electricity"
itself is an expression which would, on its plain reading, take
within its scope all the misuse of the electricity or even
malpractices adopted while using electricity. It is difficult to
restrict this expression and limit its application by the categories
stated in the Explanation. It is indisputable that the electricity
supply to a consumer is restricted and controlled by the terms and
conditions of supply, the Regulations framed and the provisions of
the 2003 Act.

64.      Minimum energy charges are to be levied with reference
to "contract demand" at the rate prescribed under the terms and
conditions. These clauses of the agreement clearly show that the
charges for consumption of electricity are directly relatable to the
sanctioned/connected load and also the load consumed at a given
point of time if it is in excess of the sanctioned/connected load.
The respondent could consume electricity up to 110 kVA but if the
connected load exceeded that higher limit, the category of the
respondent itself could stand changed from "medium industry" to
"large industry" which will be governed by a higher tariff.

65.     Chapter VIII of the Conditions of Supply classifies the
consumers into various categories and heads. The electricity could
be provided for a domestic, LT industrial, LT/HT industrial, large
industry, heavy industries and power intensive industries, etc. In
terms of Regulation 80, the industry would fall under LT/HT
category, if it relates to supply for industrial production with a
contract demand of 22 kVA and above but below 110 KVA.
However, it will become a "large industry" under Regulation
80(10) if it relates to supply of power to an industry with a
contract demand of 110 kVA and above but below 25,000 kVA.
Once the category stands changed because of excessive
consumption of electricity, the tariff and other conditions would
stand automatically changed. The licensee has a right to reclassify
the consumer under Regulation 82 if it is found that a consumer
has been classified in a particular category erroneously or the
purpose of supply as mentioned in the agreement has changed or
the consumption of power has exceeded the limit of that category,
etc. The Conditions of Supply even place a specific prohibition on
consumption of excessive electricity by a consumer.

66.    Regulation 106 of the Conditions of Supply reads as
under:

     106. No consumer shall make use of power in excess of the
     approved contract demand or use power for a purpose other
     than the one for which agreement has been executed or shall
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                    dishonestly abstract power from the licensee's system.”


          16.       If the consumer exceeds the limit, contrary to the sanctioned

          load, then the consumer is liable to pay as per the penalty clause. The

          contention of learned Advocate for Respondent that the penalty would

          be inflicted only if the consumer exceeds his contract demand on more

          than three occasions in a calendar year is not a proper interpretation of

          the penalty clause.      The said clause only states that, if consumer

          exceeds the demand on more than three occasions in a calendar year,

          then the action taken would be governed by Supply Code Regulations.

          The clause nowhere states that the penalty would be inflicted only if

          consumer exceeds the demand on more than three occasions.


          17.       Considering the above, I find that the Electricity Ombudsman

          has acted contrary to the tariff issued by MERC.          Therefore, I am

          inclined to allow the writ petition by setting aside the order dated

          11.11.2019, passed by the Electricity Ombudsman, Nagpur in

          Representation No.80 of 2019.


          18.       Hence, the present petition is allowed.


          19.       The order dated 11.11.2019, passed by the Electricity

          Ombudsman, Nagpur in Representation No.80 of 2019 is hereby

          quashed and set aside.

                                              (SIDDHESHWAR S. THOMBRE, J.)
Tauseef