Advocate can't be billed for electricity at commercial rate for running office at home: MP High Court

The Madhya Pradesh High Court recently held that an advocate running an office from his residence cannot be charged for electricity at commercial tariff rates [Santosh Agrawal v Madhya Pradesh Madhya Kshetra Vidyut Vitran Co. Ltd.].

Justice Milind Ramesh Phadke passed the order on a petition filed by advocate Santosh Agrawal.

Agarwal had challenged the decision of Madhya Pradesh Madhya Kshetra Vidyut Vitaran Company Limited/ MPEB to levy commercial electricity charges for the office he ran from his home.

The State-run electricity provider had, by orders dated December 31, 2020, treated such use of electricity as non-domestic and therefore subject to higher commercial tariff.

The Court disagreed with this approach.

It held that while the running of a lawyer's office cannot be termed a commercial activitiy, such operations may still be amenable to a commercial electricity tariff rate if the office is run from a commercial building.

However, in any case, a lawyer who runs his office from home cannot be asked to pay electricity bills at a commercial rate.

Setting out this legal position, the Court's May 11 states,

"Although the office of Advocate cannot be said to be a commercial activity, provided, the same is situated in residential premises but where, the office of Advocate is situated in a commercial building, then he cannot seek exemption from payment of higher electricity charges at the commercial rate. Thus, by no stretch of imagination, it can be said that Advocate is liable to pay electricity dues at commercial rates for the office run at his residence, therefore, this Court has no hesitation to hold that the respondent has committed material illegality while charging electricity charges at the commercial rate."

Agrawal had argued that the legal profession is not a commercial activity or a business activity. He added that merely operating an office from a residential space would not convert its use into a commercial one.

Accepting these arguments, the Court held that there is a clear distinction between professional and commercial activities, particularly where an advocate’s office operates from a residence.

It observed that since legal practice is based on personal skill rather than business transactions, it cannot be treated as commercial use for electricity tariff purposes.

The Court clarified that the Supreme Court’s decision in Chairman, MP Electricity Board v Shiv Narayan (2005), relied on by the MPEB, was not relevant in this case.

It observed that the apex court in that case had focused on whether the use of some premises was domestic or non-domestic, and had not examined whether the legal profession itself constitutes a commercial activity.

The Court also referred to its earlier decision in Dheeraj Singh v Himanshu Kumar Sharma, which elaborated on the meaning of “commercial” and underscored that professional services rendered through individual skill are distinct from trade or business.

It further noted a Madras High Court ruling drawing a similar distinction between law offices run from residential premises and those located in independent commercial establishments.

Concluding that the electricity company had acted illegally, the Court set aside the orders under challenge. It directed the MPEB to raise bills at residential rates for advocate Santosh Agrawal's premises.

Advocate Santosh Agrawal, being the petitioner, appeared in person.

Advocate Narottam Sharma represented the Madhya Pradesh Madhya Kshetra Vidyut Vitran Co. Ltd.

[Read Order]