Delegated Legislation Should Not Travel Beyond Parent Act- SC Holds Regulation 153(15) Of Kerala Electricity Supply Code Invalid

A Supreme Court Bench of Justice Dinesh Maheshwari and Justice JB Pardiwala has held that "Delegated legislation should not travel beyond the purview of the parent Act. If it does, it is ultra vires and cannot be given any effect." To that effect, the Apex Court declared Regulation 153(15) of the Kerala Electricity Supply Code, 2014, to be invalid, being inconsistent with the provision of Section 126 of the Electricity Act, 2003. 

Senior Counsel R Bansal appeared for the Kerala State Electricity Board.

In this case, the Kerala High Court had relied upon Regulation 153(15) of the Kerala Electricity Supply Code, 2014, to hold that an "unauthorised additional load" in the same premises and under the same tariff shall not be reckoned as an "unauthorised use of electricity", except in those cases where the consumers were billed based on the connected load.

Aggrieved, the Appellant Board approached the Supreme Court.

The Apex Court noted that the decision of the High Court was strongly based on the decision taken by a three-Judge Bench in the case of Executive Engineer, Southern Electricity Supply Company of Orissa Limited (Southco) and Another v. Sri Seetaram Rice Mill.

The Court observed that "If a rule goes beyond the rule making power conferred by the statute, the same has to be declared invalid. If a rule supplants any provision for which power has not been conferred, it becomes invalid. The basic test is to determine and consider the source of power, which is relatable to the rule. Similarly, a rule must be in accord with the parent statute, as it cannot travel beyond it."

Further, the Court also observed that "The doctrine of ultra vires envisages that a rule making body must function within the purview of the rule making authority conferred on it by the parent Act. As the body making rules or regulations has no inherent power of its own to make rules, but derives such power only from the statute, it has to necessarily function within the purview of the statute. Delegated legislation should not travel beyond the purview of the parent Act. If it does, it is ultra vires and cannot be given any effect. Ultra vires may arise in several ways; there may be simple excess of power over what is conferred by the parent Act; delegated legislation may be inconsistent with the provisions of the parent Act or statute law or the general law; there may be noncompliance with the procedural requirement as laid down in the parent Act. It is the function of the courts to keep all authorities within the confines of the law by supplying the doctrine of ultra vires."

The Apex Court also considered the validity of subordinate legislation, and held that the Court must consider the nature, object and scheme of the enabling Act, and also consider the area over which power has been delegated under the Act. It was held that only then can the Court decide whether the subordinate legislation conforms to the parent statute. In the same vein, the Court further said that "It is important to keep in mind that where a rule or regulation is directly inconsistent with a mandatory provision of the statute, then, of course, the task of the Court is simple and easy. But where the contention is that the inconsistency or non-conformity of the rule is not with reference to any specific provision of the enabling Act, but with the object and scheme of the parent Act, the Court should proceed with caution before declaring the same to be invalid."

The Court proceeded to hold that rules or regulations cannot be made to supplant the provisions of the enabling Act but to supplement it. 

Based on the doctrine of ultra vires and the scope of the delegated legislation, the Court found that Regulation 153(15) of the Code was invalid, as it was inconsistent with Section 126 of the Electricity Act, 2003. 

Therefore, the appeals were allowed, and the order passed by the High Court was set aside. No orders were passed as to costs.

Cause Title: Kerala State Electricity Board v. Thomas Joseph Alias Thomas M J

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