The Supreme Court has held that a consumer whose power supply is cut over an alleged electricity theft can challenge the supplementary bill through the assessment procedure under Section 126 of the Electricity Act, 2003. A Bench of Justice Manoj Misra and Justice K.V. Viswanathan dismissed two appeals filed by Gujarat’s power distribution companies.
Background
The appeals were Dakshin Gujarat Vij Company Limited v. Vaibhav Metal Crusher and Paschim Gujarat Vij Company Limited v. Jamanbhai Nanajibhai Bhuva. In the first, the company raised a demand of about Rs 92.99 lakh for alleged theft, plus Rs 23.45 lakh as compounding charges. The Gujarat High Court allowed reconnection on deposit of 50 percent. A Division Bench later let the consumer file objections before the Executive Engineer, with a right to appeal under Section 127. In the second case, the Division Bench sent the matter back to the Single Judge for a fresh decision.
The companies argued that theft cases fall outside Section 126, which deals with unauthorised use, and that no objection or appeal should be allowed.
The Court noted that the Act has no separate assessment mechanism for theft. It therefore read the phrase “assessed amount” in the third proviso to Section 135(1A) as the amount assessed under Section 126. Explaining why restoration cannot wait for the Special Court’s final decision, it said:
“It is an emergency provision which enables a consumer who has suffered disconnection, being accused of electricity theft, to seek restoration of the supply of electricity, a commodity essential for all aspects of life including business.”
The Court clarified that the appellate authority’s decision is final only for restoration of supply. Where a criminal complaint is filed, the Special Court still decides civil liability under Section 154(5), and any excess deposit is refunded.
It also sounded a note of caution for High Courts:
“However, in cases of theft, which necessarily involves a criminal intent (i.e. mens rea), adoption of a liberal approach may not be appropriate. Rather, each case should be addressed on its own facts and if the facts so warrant, the High Court might be justified in even declining the prayer for restoration of electricity supply till entire amount, provisionally assessed, is deposited.”
At the same time, the Court recognised that assessment takes time and said that where a provisional assessment appears prima facie arbitrary, the High Court may, for recorded reasons, order restoration on payment of “not less than 50%” of the demanded amount.
In the appeal from the Vaibhav Metal Crusher matter, the Court found the High Court acted within its jurisdiction. It clarified that the assessment would be subject to an appeal under Section 127 and, finally, to the civil liability determined by the Special Court under Section 154(5), if the consumer is prosecuted.
With this clarification, the appeal was dismissed. The appeal in the Jamanbhai Nanajibhai Bhuva matter was also dismissed, as the High Court had only sent the case back to the Single Judge.
