2021 INSC 0238
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REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.6145 OF 2010
JHARKHAND STATE ELECTRICITY 
BOARD AND OTHERS …..APPELLANTS
VERSUS
M/S RAMKRISHNA FORGING 
LIMITED       .….RESPONDENT
                       J U D G M E N T
Vineet Saran, J.
The   respondent   is   a   small   scale   industry.   For
running   its   industry,   it   had   a   contract
demand/sanctioned load of electricity of 4000 KVA from
the   appellants­Jharkhand   State   Electricity   Board   (for
short   ‘the   Board’).   The   request   of   the   respondent   for
reduction   of   such   sanctioned   load   to   1325   KVA   having
been refused, the respondent filed a writ petition before

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the  High Court  of Jharkhand,  which has  been allowed.
Aggrieved   by  the   said  judgment   of  the   High  Court,   this
appeal has been preferred by the Board.
2. The   brief   facts,   relevant   for   the   present   case,
are   that   the   respondent,   which   is   a   small   scale
industry, had entered into an agreement with the Board
on 14.04.2004 for High Tension (H.T.) connection of 325
KVA   load.     The   respondent   thereafter   applied   for
enhancement of load from 325 KVA to 1325 KVA, which
was   allowed   by   the   General   Manager­cum­Chief
Engineer   of   the   Board   on   14.03.2006.     The   respondent
again   applied   for   enhancement   of   load   from   1325   KVA
to   3500   KVA,   which   was   sanctioned   by   the   Board   on
26.12.2006.     On   a   further   request   of   the   respondent,
the load was again enhanced by 500 KVA to 4000 KVA.
For each enhancement of load, fresh agreements to that
effect were entered into between the respondent and the
Board,   the   last   one   being   on   07.07.2007   for   supply   of
4000   KVA  load.       The  respondent   alleges  that   after  the

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enhancement   of   load,   it   was   facing   major   trippings   as
well   as   continuous   load   shedding   which   was   affecting
the   costly   machineries   and,   therefore,   the   respondent
decided to reduce the load from 4000 KVA to 1325 KVA.
Accordingly,   the   respondent   filed   an   application,   on
20.09.2007,   before   the   authority   of   the   appellants­
Board   for   such   reduction.     Vide   its   order   dated
08.11.2007,   the   Electrical   Superintending   Engineer
rejected   the   said   application   of   the   respondent   for
reduction of load from 4000 KVA to 1325 KVA informing
the   respondent   that   from   the   date   of   enhancement   of
supply of load, an agreement (dated 07.07.2007) would
be enforced for a period of three years and treating it to
be   a   case   of   determination   of   agreement,   and   quoting
the   Clause   9B   of   the   agreement,   it   was   provided   that
the agreement could not be permitted to be determined
prior   to   the   completion   of   initial   period   of   three   years
from   07.07.2007   and   that   the   respondent   will   have   to
pay the minimum guarantee charges and other charges,

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even   if   the   respondent   decides   to   terminate   the
agreement.  
3. Challenging the said order of the Board dated
08.11.2007,   the   respondent   filed   Writ   Petition   No.6651
of 2007, which has been allowed by the High Court vide
its judgment dated   23.07.2008, primarily on the ground
that   the   proviso   contained   in   Regulation   9.2.1   of   the
Jharkhand   State   Electricity   Regulatory   Commission
(Electricity   Supply   Code)   Regulations,   2005   (for   short,
‘the Regulations of 2005’), providing for no reduction of
load   to   be   allowed   by   the   Distribution   Licensee   before
expiry   of   the   initial   period   of   agreement   was
discriminatory,   arbitrary   and   against   the   public   policy.
Challenging   the   aforesaid   judgment,   this   appeal   has
been filed.
4. We   have   heard   Shri   Anup   Kumar,   learned
counsel   appearing   for   the   appellants   and   Shri   N.P.
Singh,   learned   Senior   Counsel   appearing   for   the

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respondent,   assisted   by   Shri   Devashish   Bharuka,
Advocate­on­Record for the respondent.
5. It   is   noteworthy   that   after   the   initial
agreement   dated   14.04.2004,   which   came   into   effect
from   16.04.2004   whereby   the   contract   demand   of   325
KVA   was   allowed   in   favour   of   the   respondent,   the
Jharkhand State Electricity Regulatory Commission (for
short,   ‘the   Commission’)   in   exercise   of   power   conferred
by   Section   181(2)(x)   read   with   Section   50   of   the
Electricity   Act,   2003,   framed   the   Jharkhand   State
Electricity   Regulatory   Commission   (Electricity   Supply
Code)   Regulations,   2005,   which   came   into   effect   from
28.07.2005.
6. The submission of the learned counsel for the
appellants­Board, is that in terms of Regulation 9.2.1 of
the Regulations of 2005, which relates to the reduction
of   contract   demand/sanctioned   load,   no   reduction   of
load could be allowed before the expiry of the period of
agreement which, according to the appellants, would be

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07.07.2007   when   a   fresh   agreement   was   executed   for
enhanced   load   of   4000   KVA.     Learned   counsel   for   the
appellants   has   thus   submitted   that   the   application   for
reduction of load filed by the respondent on 20.09.2007,
which   was   well   within   the   period   of   three   years   from
07.07.2007,   was   rightly   rejected   by   the   Board   vide   its
order   dated   08.11.2007,   as   it   was   in   conformity   with
the provisions of the Regulations of 2005.
7. Per   contra,   learned   Senior   Counsel   appearing
for   the   respondent   has   submitted   that   the   agreement
was   initially   entered   into   on   14.04.2004   and   thereafter
even   though   technically   fresh   agreements   may   have
been   executed   for   enhancement   of   load   of   the
respondent,   but   the   same   were   only
extension/amendment   of   the   initial   agreement   dated
14.04.2004, and the terms of each of these agreements
were   identical,   with   the   only   change   being   that   of   the
increased   contracted   load.     It   has   been   contended   by
the  learned Senior  Counsel for  the respondent  that the

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Regulations   do   not   permit   execution   of   a   fresh
agreement   in   case   of   enhancement   of   load,   and   the
enhancement   agreements   would   merely   be
supplementary agreements in continuation of the initial
agreement   dated   14.04.2004   and   cannot   be   treated   as
fresh   agreement   because   it   is   the   same   electricity
connection, which was granted by the agreement dated
14.04.2004,   in   which   there   have   been   amendments
from   time   to   time   for   increase   of   load,   and   merely
executing   a   fresh   agreement   for   enhancement   of   load
cannot be termed as fresh agreement for the purpose of
Regulations of 2005.   It has, thus, been submitted that
the   application   of   the   respondent   for   reduction   of   load
dated 20.09.2007 has to be treated as after a period of
three   years   from   the   date   of   initial   agreement   dated
14.04.2004 and thus, the application of the respondent
ought to have been allowed and/or should be deemed to
be   allowed   in   terms   of   the   provisions   of   Regulations   of

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2005.     In   this   regard,   reliance   has   been   placed   on
Regulations 2(l), 9.1 and 9.2 of the Regulations of 2005.
8. For   the   ready   reference,   the   relevant
provisions   of   the   Regulations   of   2005   are   reproduced
below:­
“2. Definitions. 2.1   In these regulations,
unless the context otherwise requires:
(a)…..
(b)…..
(c)…..
……...
(l)   “Contract   Demand”   means
demand   in   Kilowatt   (KW)   or   Kilo   Volt
amperes   (KVA)   or   H.P   (Horse   Power)
mutually   agreed   between   the   Distribution
Licensee   and   the   consumer   as   entered
into   agreement   or   agreed   through   other
written communication . 
(m)…..
(n)…..
9.   Enhancement   and   Reduction   of
Contract Demand/Sanctioned Load. – 
9.1   Enhancement of Contract Demand
/Sanctioned Load
9.1.1   The   application   for   enhancement   of
Contract   Demand/Sanctioned   Load   shall
be made in the prescribed form and in the

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manner   as   specified   in   new   service
connection   in   Clause   5   of   these
Regulations. 
9.1.2   The   application   for   enhancement   of
load   shall   be   disposed   of   in   the   manner
and   within   the   time   frame   as   prescribed
for   new   service   connection   in   Clause
6.2.11 of these Regulations.
Provided   that   the   application   for
enhancement   of   Contract
Demand/Sanctioned   Load   may   be
outright   rejected   by   the   distribution
licensee   if   the   consumer   is   in   arrears   of
licensee’s   dues   and   the   same   have   not
been   stayed   by   a   court   of   law   or   the
Commission.
9.2   Reduction   of   Contract
Demand/Sanctioned Load. ­ 
9.2.1   The   application   for   reduction   of
Contract   Demand/Sanctioned   Load   shall
made   in   the   prescribed   form   specified   for
the new service connection.
Provided   that   no   reduction   of   load   shall
be   allowed   by   the   Distribution   Licensee
before   expiry   of   the   initial   period   of
agreement. 
9.2.2  The application for reduction of load
shall be accompanied by­
(i)   Details   of   modification,   alteration   and
removal   of   electrical   installation   with
completion certificate and test report of the
Licensed Electrical contractor. 
(ii) Any other reason for reduction of load

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(iii) Details of generator if any installed by
the   consumer   with   safety   clearance
certificate   from   competent   authority   as
applicable. 
9.2.3   The   Distribution   Licensee   shall
consider   the   application   verify   the   same
and communicate in writing its decision on
reduction of Contract Demand/Sanctioned
Load   in   writing   within   30   days   of   the
application.
Provided   that   if   the   distribution   licensee
rejects or refuses the reduction of Contract
Demand/Sanctioned   Load   it   shall   do   so
after   affording   the   consumer   reasonable
opportunity   of   being   heard   in   the   matter
and   after   communicating   in   writing   the
reasons for such refusal. 
9.2.4    If the decision of the application for
reduction of Contract Demand/Sanctioned
Load is not communicated by the licensee
within   30   days   of   the   application,   the
consumer   shall   send   a   notice   to   the
licensee   requesting   for   disposal   in   the
matter   and   if   the   decision   is   still   not
communicated   within   15   days   of   the
notice.     The   reductions   of   Contract
Demand/   Sanctioned   Load   shall   be
deemed to have been sanctioned, from the
16th   day   after   the   issue   of   notice   to   the
licensee by the consumer.
9.2.5   The   reduction   of   Contract
Demand/Sanctioned Load shall come into
effect   from   the   first   day   of   the   month
following the month in which the reduction
of load has been sanctioned or have been
deemed to be sanctioned. 

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9.2.6   After the sanction of the reduction of
Contract   Demand/Sanctioned   Load   the
consumer   shall   execute   a   supplementary
agreement   and   the   licensee   shall
recalculate   the   Security   Deposit   excess
Security   Deposit   if   any   shall   be   refunded
by   way   of   adjustment   in   the   minimum
number   of   succeeding   bills   of   the
consumer.”
(emphasis supplied)
9. The   communication   dated   08.11.2007   of   the
Electrical   Superintending   Engineer   of   the   Board,
refusing   the   prayer   of   the   respondent   for   reduction   of
load, is reproduced below:­
“Sub:     Regarding   the   reduction   of
load   from   4000   KVA   to   1325
KVA   in   respect   of     M/s   R.K.
Forging   Ltd.   Conn.   No.   HJAP­
185
Ref:    Your letter No. R.K.F.L/III and IV
182/07­08 dated 05.10.2007.
With respect to the above, you have
applied   for   reduction   of   C.D   from
4000KVA to 1325KVA.  It is to inform you
that   C/9B   of   agreement   may   kindly   be
seen.
‘C/9B­ The consumer shall not be at
liberty to determine this agreement before
the   expiration   of   three   years   from   the

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date   of   commencement   of   the   supply   of
energy   (4000KVA   w.e.f.   12.07.2007).
The   consumer   may   determine   this
agreement with effect from any date after
the said period on giving to the Board not
less   than   twelve   calendar   months’
previous notice (this has charged not less
than   6   Month   Notice   vide   Secretary,
Jharkhand   State   Electricity   Board
Notification No.5058 dated 20.08.2002) in
writing   in   that   behalf   and   upon   the
expiration   of   the   period   of   such   notice.
This   agreement   shall   cease   and
determine   without   prejudice   to   any   right
which   then   have   accrued   to   the   Board
herewith   provided   always   that   the
consumers   may   at   any   time   with   the
previous   consent   of   the   Board   transfer
and   assign   this   agreement   to   any   other
person   and   upon   subscription   of   such
transfer,   this   agreement   shall   be   binding
on   the   transferee   and   Board   and   take
effect   in   all   respects   as   if   transferee   had
originally   been   party   in   place   of   the
consumer   who   shall   henceforth   be
discharged   from   all   liabilities   under   or   in
respect thereof.’ 
Hence   your   request   for   reduction
cannot be done as per agreement.”
10. Heard   learned   Counsel   for   the   parties   and
have carefully gone through the record.

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11. From   perusal   of   the   communication   dated
08.11.2007,   it   is   clear   that   the   application   of   the
respondent   for   reduction   of   load   has   been   rejected   in
terms of Clause 9(B) of the agreement, treating the date
of commencement of the agreement to be 7/12.07.2007
and   only   by   considering   the   provision   of   determination
of   the   agreement,   which   could   not   have   been   without
giving   notice   of   less   than   12   calendar   months.     It   is
clear   that   the   said   communication/order   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 the agreement.
12. Chapter   9   of   the   Regulations   of   2005   deals
with   the   enhancement   and   reduction   of   contract
demand/sanctioned   load.     Regulation   9.1   deals   with
enhancement   of   contract   demand/sanctioned   load,
whereas   Regulation   9.2   deals   with   the   reduction   of
contract demand/sanctioned load.  

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13. Just   as   the   consumer   has   the   liberty   of
getting   its   load   enhanced   under   Regulation   9.1,   the
reduction of contract demand/sanctioned 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 expiry of the
initial   period   of   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. 
14. Regulation   9.2.6   of   the   Regulations   of   2005
provides for execution of a supplementary agreement for
reduction   of   contract   demand/sanctioned   load   of   the
consumer. Similarly, for enhancement of load also, even
if   a   fresh   agreement   may   have   been   executed   between
the parties, the same could be treated as nothing but a
supplementary   agreement   of   the   initial   agreement   by
which   the   electricity   connection   was   granted   for   a
particular   load.   Clause   2(l)   of   the   Regulations   also

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defines   “contract   demand”   to   be   demand   mutually
agreed in the agreement  or agreed through other written
communication ,   meaning   thereby   that   for   variation   of
the   contract   demand   execution   of   a   fresh   agreement   is
not   essential  and   the  same   can  be   done  otherwise   also
by mere written communication. 
15.  It   is   noteworthy   that   the   Jharkhand   State
Electricity Board (‘the Board’) is a monopoly supplier of
electricity   which   has   laid   down   its   own   terms   and
conditions, regarding which the consumer has no say or
choice but to sign on the dotted lines, if it wants of get
electricity   load   varied   for   running   its   industry.   The
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   a   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

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as   anything   but   an   extension/amendment   or
modification   of   the   initial   agreement   granting   the
electricity   connection,   which   in   the   present   case   would
be   the   agreement   dated   14.04.2004.   On   the   dictates   of
the   Board,   the   consumer   may   have   been   required   to
sign   fresh   agreements   for   each   enhancement   of   load,
but   the   enhancement   being   for   the   same   electricity
connection   which   still   continues,   it   would   merely   be
amendment of the initial agreement. This would also be
in consonance with the provisions of the Regulations of
2005, which have to be liberally interpreted in favour of
the consumer. 
16.   Reverting   to   the   order   dated   08.11.2007,
which  was impugned  in the  writ petition,  we are  of the
opinion   that   the   Board   has   gone   wrong   in   treating   the
application   dated   20.09.2007   of   the   respondent   for
reduction   of   load   to   be   that   for   determination   of   the
agreement   under   Clause   9B   of   the   agreement,   which
application,   in   fact,   ought   to   have   been   considered

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under   Regulation   9.2   of   the   Regulations   of   2005.
Further, we are unable to accept the submission of the
learned Counsel for the appellant that the application of
the   respondent   for   reduction   of   load   was   within   the
period   of   three   years,   because   as   we   have   discussed
hereinabove,   the   agreement   to   be   considered   in   the
present   case   is   the   initial   agreement   dated   14.04.2004
and not the subsequent agreement dated 07.07.2007.  
17. The   judgments   of   this   Court   rendered   in
Bihar   State   Electricity   Board,   Patna   and   Others   v.
M/s.   Green   Rubber   Industries   and   Others ,   (1990)   1
SCC   731,   Orissa   State   Electricity   Board   v.   Orissa
Tiles   Limited ,  (1993)   Supp.  3   SCC  481,   Andhra   Steel
Corporation Ltd. and Others  v.  Andhra Pradesh State
Electricity   Board   and   Others,   (1991)   3   SCC   263   and
Jharkhand State Electricity Board & Others  v  Laxmi
Business and Cement Company Private Limited and
Another , (2014) 5 SCC 236 as have been relied upon by

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learned   counsel   for   the   parties,   are   distinguishable   on
facts,   in   as   much   as   they   all   relate   to   minimum
guarantee charge, and that too under the old Electricity
Act of 1910, as is so in the first three cases. 
18. In view of the aforesaid, we are of the opinion
that the application of the respondent dated 08.11.2007
ought   to   have   been   allowed   by   the   Board   in   terms   of
Regulation   9.2   of   the   Regulations   of   2005,   treating   the
application to be beyond the period of three years from
the date of the execution of the initial agreement dated
14.04.2004,   by   which   the   electricity   connection   of   the
respondent had been initially granted.
19. While dismissing the appeal, we are not going
into   the   question   as   to   whether   the   provisions   of
Regulation   9.2.1   are   discriminatory,   arbitrary   and
against   the   public   policy,   as   has   been   held   by   the
Jharkhand   High   Court   vide   its   judgment   dated
23.07.2008.

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20. The   appeal   is,   accordingly,   dismissed.     No
order as to costs.
21. The   application   of   the   respondent   dated
20.09.2007   for   reduction   of   contract   load/sanctioned
load   from   4000   KVA   to   1325   KVA   would   be   deemed   to
have   been   allowed   under   the   provisions   of   Regulation
9.2 of the Regulations of 2005, and the respondent shall
be entitled to all consequential benefits.
………..………………………………..J
                     (L. NAGESWARA RAO)
                          ………..……………………………....J
(VINEET SARAN)
New Delhi
       April 30, 2021.