Federal Court rules electricity supply can only be disconnected in the presence of a continuing offence

25 February 2022

Tenaga Nasional Bhd v Chew Thai Kay [2022] 2 CLJ 333

The appeal in Tenaga Nasional Bhd v Chew Thai Kay concerned the statutory power of Tenaga Nasional Berhad (“TNB”), the sole provider of electricity in Peninsular Malaysia, to disconnect the supply of electricity to a consumer pursuant to section 38(1) of the Electricity Supply Act 1990 (“ESA”).

On 7 June 2018, TNB discovered that there had been a tampering of the meter at the premises of a consumer. The meter was then rectified by TNB. After replacing the impugned meter and continuing to supply electricity to the premises, TNB issued a notice of disconnection, intending to disconnect electricity on 3 July 2018. The respondents in this case commenced an action in the High Court against TNB for the following reliefs: (i) a declaration that the disconnection notice to disconnect the supply of electricity at the second respondent’s premises was unlawful and (ii) an injunction where TNB be restrained from carrying out the disconnection of electricity supply at the said premises. The High Court and Court of Appeal ruled in favour of the respondents.

For the benefit of the business community, industry and large segments of the customers concerned, TNB was given leave to appeal to the Federal Court on three questions of law:

• whether the statutory power conferred on TNB under the amended section 38(1) of the ESA to disconnect the supply of electricity could be prohibited by implied limitations on the exercise of power, namely that the power must be exercised immediately upon discovery of meter tampering and/or in any event, before the tampered meter was rectified;
• whether TNB’s exercise of the statutory power to disconnect the supply of electricity under the amended section 38(1) of the ESA could be precluded or prevented without express prohibitions in the ESA on the exercise of such power; and
• whether under the amended section 38(4) of the ESA, it was a prerequisite for TNB to disconnect electricity supply before it was able to issue the statutory written statement to its consumer and rely upon the same as prima facie evidence of the payment that had to be made by the consumer under section 38(3) of the ESA.

In dismissing the appeal, the Federal Court held as follows:

• There is no substantive distinction between the pre and post amendment of section 38(1). The position of law is that once the impugned meter had been rectified and/or replaced with a new meter and TNB no longer suffered losses, TNB could not lawfully invoke the amended section 38(1) to disconnect electricity to the consumer’s premises.
• TNB has no lawful power to disconnect a consumer electricity supply pursuant to the current section 38(1) of the ESA once the impugned meter has been rectified and replaced, and the offence under section 37 is no longer subsisting and cease to exist at the material time when the notice of disconnection is issued to the customer.
• Section 38(4) sought to impose a time limit on TNB to issue a written statement to its consumers only in the event of disconnection, but no restriction is imposed on TNB if there is no disconnection. Hence, in the event of no disconnection, TNB can still issue the written statement for loss of revenue under section 38(4) and claim for such loss in civil court.