Electricity use in PG accommodation by multiple paying occupants constitutes non-domestic use, regardless of tenancy nomenclature.

The Appellant was the registered consumer of two electricity connections at C-86, Sudarshan Park, Moti Nagar, New Delhi.

The Respondent conducted an inspection on 11 January 2023 to determine whether the premises were being used for commercial purposes.

A provisional assessment order under Section 126(1) of the Electricity Act, 2003 was issued on 31 January 2023, to which the Appellant replied on 21 February 2023.

Final assessment orders dated 21 and 27 March 2023 classified the premises as being used for a paying guest (“PG”) accommodation for female students and working professionals, and assessed the connections accordingly.

The Appellant’s civil suit challenging the assessment was dismissed as barred by the Electricity Act, with liberty to pursue the statutory appeal.

After a demand was raised and the connections were disconnected, the Appellant deposited ₹4,02,000, following which supply was restored.

The Electricity Appellate Authority dismissed the Appellant’s appeals on 11 September 2024.

The learned Single Judge thereafter dismissed the writ petition on 2 April 2025, holding that the premises were being used for non-domestic purposes.

The Appellant challenged that decision in the present intra-court appeal.

Whether the inspection and consequent assessment proceedings were vitiated by alleged procedural irregularities, including unauthorised inspection, absence of independent witnesses, non-affixation of the inspection report, and alleged fabrication of videography.

Whether the use of the premises as short-term accommodation for multiple paying female students constituted non-domestic or commercial use for electricity tariff and assessment purposes, notwithstanding the Appellant’s description of the arrangement as a residential tenancy.

Whether the disconnection of the electricity connections violated Section 56 of the Electricity Act, 2003, and whether the assessment proceedings violated principles of natural justice.

Whether the learned Single Judge’s judgment disclosed perversity or any other ground warranting interference in an intra-court appeal.

Section 126(1) of the Electricity Act, 2003, permits provisional assessment where electricity is allegedly used unauthorisedly or for a purpose different from the authorised purpose, subject to an opportunity to submit objections.

The Court considered Section 56 of the Act in relation to disconnection for non-payment.

The applicable Tariff Order for Financial Year 2021–2022 provided that domestic tariff classification applied to connections with sanctioned load up to 5 KW, while use outside that category could attract non-domestic classification.

Alleged procedural irregularities do not invalidate proceedings absent demonstrated prejudice.

Allegations of fabrication or mala fides against public officials must be established by clear and cogent evidence.

The Court applied the doctrine of actual or substantive user rather than the nomenclature of the tenancy for determining electricity tariff classification.

The Court found that the Appellant had received the provisional assessment order, submitted a written reply, and participated in proceedings before the Assessing Officer, the Appellate Authority, and the Single Judge.

Accordingly, even assuming some irregularity in the inspection, the Appellant failed to demonstrate prejudice sufficient to invalidate the assessment.

The allegation that the inspection report or videography was fabricated was rejected because such a serious allegation required clear and cogent proof, while the finding of PG use was independently supported by the record and had been affirmed at three successive stages.

On classification, the Court held that letting the premises to multiple unrelated occupants for consideration, even if described as residential tenancy, amounted to PG accommodation and therefore non-domestic use.

The sanctioned loads exceeded 5 KW, and the connected loads exceeded the sanctioned loads, which further reinforced the non-domestic classification.

The Appellant’s admission that the premises were let for short periods to female students also supported that conclusion.

The natural justice challenge failed because the Appellant had been given an opportunity to respond and had subsequently obtained full consideration of the matter before the statutory Appellate Authority and the writ court, with no prejudice demonstrated.

It further held that the premises were being used as PG accommodation for multiple paying occupants and therefore constituted non-domestic use under the applicable tariff framework.

The Court found no violation of natural justice or any perversity in the learned Single Judge’s judgment and dismissed the appeal.

The pending application was also disposed of, with no order as to costs.