Electricity Act, 2003 – Whether a Lessee or occupant is a “consumer” Sections 126 & 127 – Important Question decided by Bombay HC
Judgment dated 28.11.2025 of the High Court of Bombay in Writ Petition No.2481 of 2021 of Maharashtra State Electricity Distribution Company Limited Vs. Supreme Metal Industries and others with connected writ petitions.
Electricity Act, 2003 – Whether a Lessee or occupant is a “consumer” – Important Question decided by Bombay HC
Lessee or Tenant or Occupant is not an electricity consumer unless recognized by Licensee – Bombay HC
Unauthorised use of electricity for commercial purpose in industrial premises attracts Section 126 of the Electricity Act including double tariff.
Tenants / occupants can appeal as “persons aggrieved” under Section 127 of the ET but cannot claim consumer rights
Lessee Not a Consumer – Bombay HC Clarifies Scope of Section 2(15) of the Electricity Act, 2003.
Bombay HC on Sections 126 & 127 of the Electricity Act – Unauthorised use of Electricity and Tenant’s Right to Appeal
Physical Possession Vs. Consumer Status – Bombay HC upholds Double Tariff for Unauthorised Electricity Use
Respondent No.1 is the registered consumer and the electricity sanctioned supply is in its name. Respondent No.2 is the lessee.
The inspection squad of MSEDCL found commercial use of electricity in the premises sanctioned only for industrial purposes. It was found that the respondent no.2 was operating a commercial laboratory and testing unit.
The premises of the respondent no.1 were used for commercial activity without disclosure and without permission. Thus, this is unauthorized use under Section 126(6)(a) of the Electricity Act, 2003.
Although the respondent no.2 had no locus standi, it had filed the appeal under section 127 challenging the assessment of unauthorized use.
Respondent no.2 Appellate Authority allowed the appeal, held that the respondent no.2 could be treated as authorized consumer, treated it as a dispute of tariff classification and directed the petitioner to issue supplementary bill without invoking section 126.
HELD that the electricity connection is in the name of respondent no.1, supply agreement is with the respondent no.1 and all electricity bills issued to respondent no.1. There is no document or communication showing that MSEDCL authorized him to use electricity from the sanctioned connection.
The second proviso to section 2(15) does not convert every occupant of a premises into a consumer. It refers only to the person who has the legal right to receive supply for that premises. That person is the one who is recognized by the licensee as the lawful user of electricity. Physical possession alone does not confer that legal right of a consumer. The respondent no.2 has not disclosed the occupation and activity. Permission as required under Regulations 10 and 11 of the Electricity Supply Code was never obtained. His use therefore cannot be treated as authorized use.
Whether a tenant using electricity is a “person aggrieved” for section 127 of the Electricity Act.
A tenant or any other occupant who has been served with the assessment order is a person aggrieved since he suffers legal injury and suffers statutory right to challenge the assessment.
Unauthorised use under Section 126
The record shows that the electricity was sanctioned to the premises strictly for industrial activity but actually used for commercial laboratory operations. The finding was recorded on the spot, it was accepted by the representative present during inspection and there was no protest or objection at that stage.
Twice-the-rate under Section 126 is important. If a person uses electricity for an unauthorized purpose, he must not only the same rate as an honest consumer. Otherwise there would be no difference authorized and unauthorized use. The higher rate is therefore not a punishment in the criminal sense. It is a statutory consequence meant to protect public revenue and discourage misuse of electricity.
The assessment for unauthorized use was challenged in appeal by the respondent no.2
