KARACHI: SC suspends SHC order on extra power charges
By Our Reporter
KARACHI, Nov 17: The Supreme Court has suspended the operation of an impugned judgment of the Sindh High Court which had declared the demand for load regularization and systems development charges by the KESC illegal, till the final disposal of the KESC’s appeals which had been admitted for regular hearing.
The apex court bench at Karachi Registry comprised Justice Nazim Husain Siddiqui and Justice Rana Bhagwandas.
The KESC filed the appeal against 70 respondents who were the beneficiary of the SHC judgment, authored by its Chief Justice, Saiyed Saeed Ashhad.
Justice Nazim Husain Siddiqui, who authored the order, suggested that hearing of the KESC appeals be fixed in the third week of January, subject to orders of the Chief Justice of Pakistan.
The petitioner, KESC, was represented by A. R. Akhtar. He submitted that the utility was engaged in the business of generation and distribution of electricity under licence granted by the government of Sindh. It supplies electricity to consumers in approved areas of supply in terms of the licences and the Electricity Act of l91O, rules and regulations made thereunder and on tariff as fixed by the government of Sindh, under the Karachi Electricity Rates Control Act (Act No. LVII of 1952) from time to time.
The supply of energy to various consumers, ie, domestic, commercial and industrial, is made as applied for and approved by the Electric Inspector Karachi appointed by the government of Sindh under section 36 of the Act of l910.
It was the contention of the petitioner’s counsel that his client discovered that as against total contract load, the connected load of energy used at consumers premises was much more and its Surveillance and Theft Deduction Cell on physical inspection of respondents premises, found that they were consuming more electrical energy than sanctioned and agreed to be supplied by the petitioner.
It was his contention that the respondents were found consuming 766.8 KWH (Connection Load) as against the contract/sanctioned load of 236 KWH, ie, approximate 530.8 KWH more than the contract demand at its six meters installed on its premises.
The situation creates severe pressure on its entire generation and distribution supply system (ie, equipment, feeders, transformers, transmission system) resulting in frequent breakdowns, short circuits, tripping and damage to equipment causing heavy losses.
The petitioner submitted that it had drawn up a policy of load regularization on October 13, 2000. It provided a method to regularize the loads and made demands on the respondents, under section 22 of the Act of 1910. The petitioner offered the respondents to get their unauthorized load regularized by paying the System Development Charges of Rs3,500 per KW for excess load and where applicable security deposit at the rate of Rs500 per KW and/or Rs3,000 per KW for excess load.
The respondents challenged the aforesaid policy by filing constitutional petitions with the Sindh High Court, saying that the demand was illegal and unauthorized. They also averred that under the Regulation of Generation, Transmission and Distribution of Electric Power Act, (Act XL of 1997), the demand made by the petitioner required prior approval of the National Electric Power Regulatory Authority (Nepra).
The Sindh High Court, by impugned judgment, had allowed the petitions declaring the demand made by the petitioner without jurisdiction/ authority in the absence of prior approval of tariff by Nepra, under the Act of 1997.
Justice Nazim Husain Siddiqui granted leave to appeal to consider:-
i) Whether the Act of 1997 repealed any provisions of the Act of 1910 relating to obligations of consumers on use of energy within the agreed Maximum Demand.
ii) Whether the respondents in terms of section 22 of the Act of 1910 and Clause VI of Schedule to that Act are bound to pay such reasonable sum towards the capital expenditure as claimed by the petitioner for System Development Charges for meeting its demand over and above the contract demand of energy.
iii) Whether the provisions of the Act of 1997 relating to fixation of tariff by Nepra are ultra vires to the Constitution, in so far as it encroaches upon the powers of the province of Sindh to determine and levy tariff in accordance with the existing law.
iv) Whether the Karachi Electric Control Act of 1952 in any way was repealed or amended by any of the provisions of the Act of 1997?
v) Whether after the promulgation of the Act of 1997 the petitioner had ceased to have the power to levy, determine, modify or revise the rates, charges and terms and conditions for generation of electric power, transmission, interconnection, distribution services, and power sales to consumers.
vi) What is the impact on these matters of SRO No 342 (1)/2001 dated 28-5-2001 issued by the ministry of water and power published in the Gazette of Pakistan, Extraordinary, Islamabad on Thursday, May, 31, 2001.
He also suspended the operation of the impugned judgment till the final disposal of these appeals.
Barrister Kamal Azfar, Munawar Ghani, Qazi Khalid, Ms Wajahat Niaz, Abdul Samad Khan, N. M. Shaikh and K. A. Wahab, advocates, represented the respondents.
The question before the division bench of the Sindh High Court was whether the KESC had the power to determine the rates, charges and terms and conditions for generation of electric power transmission, interconnection, distribution services and power sales to consumers in exercise of the powers conferred on it by clause VI, provisions three and four of the Schedule to the Act of 1910, or it had been stripped of such powers after promulgation of the Act of 1997.
Barrister Kamal Azfar, representing Standard Chartered, had contended that after the promulgation of the Act of 1997 these powers were conferred on Nepra and by virtue of sections 7 (3) (a) and 31 of the Act of 1997.
