Karnataka High Court Decision on KPTCL’s Supervision Charges
In a landmark ruling, the Karnataka High Court has declared that the Karnataka Power Transmission Corporation Limited (KPTCL) does not possess the authority to independently increase supervision charges levied on consumers who opt for self-execution of electrical works. This decision was rendered in the case of Anushka Realty Inc v. State of Karnataka, presided over by Justice Ravi V Hosmani.
Justice Hosmani emphasized that any adjustments to supervision charges must receive approval from the Karnataka Electricity Regulatory Commission (KERC). Consequently, the Court annulled a demand notice issued by KPTCL to Anushka Realty, which sought payment of ₹1.2 crore in supervision charges, exceeding the limits set by KERC regulations.
Legal Framework and Court’s Findings
The Court highlighted that KPTCL lacks the statutory authority to determine or revise supervision charges, as per Sections 39 to 41 of the Electricity Act, 2003. These sections outline the roles and responsibilities of state transmission utilities and licensees such as KPTCL. The Court remarked, “Indeed, there is no express conferment of power on KPTCL to determine or revise charges payable by consumers for supervision of self-execution works,” in its June 1 ruling.
The Court not only invalidated the demand notice but also overturned a related 2018 order imposing slab-wise supervision charges on Anushka Realty, which exceeded the limits prescribed by KERC. “In the absence of KPTCL sourcing its authority to revise supervision charges beyond the ceiling prescribed under the regulatory framework, the impugned order dated 27.06.2018 at Annexure-A prescribing slab-wise supervision charges, as also the demand notice at Annexure-B, cannot sustain,” the Court stated.
Background and Implications for Anushka Realty
Anushka Realty had embarked on a multi-story residential project in Bengaluru, opting to self-execute certain electrical works rather than relying on the state utility company. In such instances, KPTCL is authorized to levy supervision charges to oversee the self-executed works, ensuring compliance with safety and other standards. According to KERC regulations, these charges are capped at 10% of the estimated cost or ₹15 lakhs, whichever is lower.
However, KPTCL demanded ₹1.2 crore from Anushka Realty, far exceeding the prescribed cap. The developer contested this demand in the High Court, arguing the lack of authority on KPTCL’s part to independently increase supervision charges. Anushka Realty pointed out that KPTCL itself acknowledged this limitation in a 2018 correspondence to KERC, seeking approval for a charge hike to 15% of the estimated cost, as the rates had remained unchanged for 13 years.
Court’s Conclusion and Order
The Court found merit in Anushka Realty’s argument, noting, “The very act of KPTCL addressing communication at Annexure-R1 to KERC seeking its approval for the revision of supervision charges, would indicate the absence of independent statutory authority to KPTCL to revise supervision charges.” Moreover, the Court dismissed KPTCL’s claim that the hike was an administrative measure aimed at rationalizing supervision charge rates.
Justice Hosmani ruled that the levy of supervision charges affecting consumers cannot be seen as merely administrative when Section 45 of the Electricity Act outlines the procedure for such determinations. The Court ordered the annulment of the KPTCL order and demand notice, directing the refund of any excess payments collected from Anushka Realty. It further instructed that supervision charges be levied in accordance with KERC’s prescribed rates.
Anushka Realty Inc was represented by Advocate Joseph Anthony. Additional Government Advocate Milind Dange appeared for the State, and KERC was represented by Advocate BN Prakash. Senior Advocate S Sriranga and Advocate Sumana Naganand represented KPTCL and BESCOM. [Read Order]
