The Karnataka High Court recently ruled that the Karnataka Power Transmission Corporation Limited (KPTCL) does not have the authority to independently increase supervision charges payable by consumers who undertake electrical works on their own. The Court held that any revision of such charges requires approval from the Karnataka Electricity Regulatory Commission (KERC), which is the statutory authority empowered to regulate such matters. The judgment came while deciding a petition filed by Anushka Realty Inc, challenging a demand raised by KPTCL for payment of enhanced supervision charges.
The dispute arose when Anushka Realty, which was developing a multi-storeyed residential project in Bengaluru, decided to execute certain electrical infrastructure works by itself instead of getting the work directly carried out by the electricity utility. Under the regulatory framework, consumers who choose self-execution of such works are required to pay supervision charges to the utility for monitoring the work, ensuring compliance with technical standards, and maintaining safety requirements.
At the relevant time, the supervision charges were governed by regulations framed by KERC. The prescribed limit was 10% of the estimated cost of the work, subject to a maximum ceiling of ₹15 lakh. However, KPTCL issued a demand notice seeking approximately ₹1.02 crore (around ₹1.2 crore according to the proceedings) from Anushka Realty by applying revised slab-based supervision charges introduced through an internal order.
The developer challenged the demand before the Karnataka High Court, arguing that KPTCL had no legal authority to revise the charges on its own. The company contended that only KERC, being the regulatory authority under the Electricity Act, 2003, could determine or modify such charges. It was argued that KPTCL’s unilateral action exceeded its statutory powers and resulted in an unlawful financial burden on consumers.
KPTCL defended its decision by stating that the revision was necessary to reflect the actual cost involved in supervising self-executed electrical works. The corporation argued that the earlier ceiling had remained unchanged for several years and did not cover the expenses incurred for technical supervision, manpower deployment, and compliance monitoring. According to KPTCL, the revised charges were an administrative measure intended to rationalise the system rather than a regulatory change requiring separate approval.
The High Court, however, rejected KPTCL’s argument. Justice Ravi V. Hosmani observed that KPTCL, despite being a State Transmission Utility and transmission licensee, did not have independent statutory power to determine or revise supervision charges payable by consumers. The Court held that such charges affect consumers financially and therefore cannot be treated as a mere administrative decision.
The Court examined the provisions of the Electricity Act, 2003 and noted that the power to frame regulations and determine such charges rests with the regulatory commission. The Bench observed that there was no express legal provision granting KPTCL the authority to fix or enhance supervision charges independently.
An important factor considered by the Court was KPTCL’s own communication to KERC seeking approval for revision of supervision charges. The Court observed that this request itself demonstrated that KPTCL understood that it did not possess independent authority to increase the charges. The Bench noted that seeking approval from KERC was inconsistent with KPTCL’s later claim that it had the power to revise the charges on its own.
The Court also rejected KPTCL’s reliance on a response from KERC suggesting that KPTCL could take a suitable decision based on applicable rules and manuals. The High Court held that such communication could not be treated as formal approval or authorisation for revising charges. A valid increase required a proper regulatory order, notification, or amendment by the competent authority.
The judgment emphasised that whenever a public authority imposes additional financial liability on citizens or businesses, such action must have clear legal backing. Administrative convenience or operational requirements cannot replace statutory authority. The Court held that financial obligations affecting consumers must be created through the procedure established by law.
The Court also considered the larger public impact of allowing unilateral increases in such charges. It observed that consumers would ultimately bear the additional financial burden and therefore regulatory safeguards were necessary. The Court noted that safety supervision of electrical works is important, but the method of recovering costs must follow the legal framework.
Accordingly, the Karnataka High Court quashed the KPTCL order introducing slab-wise supervision charges and also set aside the demand notice issued against Anushka Realty. The Court directed that the developer should be permitted to pay supervision charges according to the limits prescribed by KERC and ordered refund of any excess amount collected.
The decision is significant for consumers, developers, and infrastructure companies involved in self-execution of electricity-related works. It reinforces that public utilities, even while performing essential services, must operate within the limits of statutory authority.
The ruling also strengthens the role of electricity regulatory commissions in determining consumer-related charges. It makes clear that regulated utilities cannot bypass the regulatory process by issuing internal administrative orders that create new financial liabilities.
The judgment reflects a broader principle of administrative law — government bodies and public corporations must exercise only those powers granted to them by legislation. Where a regulatory framework exists, authorities must follow the prescribed process rather than acting independently.
In conclusion, the Karnataka High Court held that KPTCL cannot increase supervision charges on its own and that only KERC has the authority to approve such revisions. By cancelling the enhanced demand against Anushka Realty, the Court reaffirmed that consumer charges imposed by public utilities must have clear statutory approval and cannot be increased through unilateral administrative action.
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