Pearl Corporation vs Calcutta Electric Supply Company ...
2022 Latest Caselaw 1247 Cal/2

                     In the High Court at Calcutta
                    Constitutional Writ Jurisdiction
                             Original Side

The Hon'ble Justice Sabyasachi Bhattacharyya

                          W.P.O. No. 94 of 2021

                          Pearl Corporation
                                 Vs.
          Calcutta Electric Supply Company Ltd. and others


     For the petitioner            :      Mr. Tapas Dutta,
                                          Mr. Mritunjay Halder

     For the CESC                  :      Mr. Suman Ghosh,
                                          Mr. Debanjan Mukherji

     Hearing concluded on          :      21.03.2022

     Judgment on                   :      04.04.2022



     Sabyasachi Bhattacharyya, J:-


1.

The petitioner has challenged the provisional and final orders of

assessment, culminating in a bill dated October 15, 2020, issued

under Section 126 of the Electricity Act, 2003 (herein after referred to

as "the 2003 Act") and quashing of an FIR registered at the behest of

the Distribution Licensee under Section 135 of the 2003 Act, as well

as recovery of the amount of Rs. 1,50,000/- (Rupees One Lakh Fifty

Thousand only) paid by the petitioner in that regard.

2. Learned counsel for the petitioner argues that in view of the

Distribution Licensee patently lacking jurisdiction to issue the

provisional and final assessment bills, the writ petition under

Article 226 of the Constitution of India is maintainable, despite the

final assessment being appellable.

3. It is argued that, since a specific allegation of theft has been brought

against the petitioner and a proceeding initiated under Section 135 of

the 2003 Act, the purported provisional and final assessments under

Section 126 of the said Act were beyond jurisdiction.

4. Learned counsel places reliance on the judgment of WBSEDCL Vs.

Orion Metal Private Limited, reported at (2020) 18 SCC 588, for

advancing the proposition that the operation of Sections 126 and 135

of the 2003 Act are distinct in their scope of operation. It was held by

the Supreme Court in the said judgment, inter alia, that the assessed

amount, relating to assessment contemplated under Section 126(1) of

the Act, is distinct from the scope of Section 135 of the Act. While

observing about the distinction between the two provisions, the

Supreme Court held that Section 126 forms part of the Scheme which

authorizes an electricity supplier to ascertain loss in terms of the

revenue caused to it by the consumer by his act of "unauthorised use

of electricity", whereas Section 135 deals with the offence of theft if he

has been found to have indulged himself in the acts mentioned in

Clauses (a) to (e) of Sub-Section (1) of Section 135 of the 2003 Act. It

was observed further that it is also clear from Section 154 of the Act,

which prescribes procedure and power of the Special Court, that the

Special Court is empowered to convict the consumer and impose a

sentence of imprisonment and also to determine civil liability under

Section 154(5) of the Act.

5. Learned counsel submits, however, that the observation of the

Supreme Court in Paragraph No.15 of Orion Metal (supra) was

contrary to a Three-Judge Bench decision of the Supreme Court

rendered in Executive Engineer, Southern Electricity Supply Company

of Orissa Limited (Sourthco) and another Vs. Sri Seetaram Rice Mill,

reported at (2012) 2 SCC 108.

6. In Paragraph No.15 of Orion Metal (supra), a Two-Judge Bench of the

Supreme Court considered Sri Seetaram Rice Mill (supra) and

observed, inter alia, that the said Bench did not find any valid reason

for making a distinction as made by the High Court applying Section

126 of the Act. From the Scheme of the Act, it appears that after

inspection team notices unauthorised use of energy by tampering the

meter, the authorities can disconnect the power supply immediately

and make immediate assessment for loss of energy, by invoking

power under Section 126(1) of the Act. The term "unauthorised use of

energy" was held to be of wide connotation. The Supreme Court

further found that there may be cases of unauthorised use of energy,

not amounting to theft, which are cases namely exceeding the

sanctioned load or using the electricity in the premises where its use

is not authorised, etc. But, at the same time, it was observed, when

there is an allegation of unauthorised use of energy by tampering the

meter, such cases of unauthorised use of energy include "theft" as

defined under Section 135 of the Act.

7. By placing reliance on the Three-Judge Bench decision of the

Supreme Court rendered in Sri Seetaram Rice Mill (supra), learned

counsel submits that the Supreme Court, in the said judgment,

categorically observed that Section 135 of the 2003 Act falls under

Part-XIV relating to "offences and penalties" and the title of the

Section is "Theft of Electricity". In contradistinction to the said

provision, Section 126 of the 2003 Act would be applicable to the

cases where there is no theft of electricity but the electricity is being

consumed in violation of the terms and conditions of supply leading

to malpractices which may squarely fall within the expression

"unauthorised use of electricity". Section 135 of the 2003 Act, it was

held, deals with an offence of theft of electricity and the penalty that

can be imposed for such theft. This squarely falls within the

dimensions of criminal jurisprudence and mens rea is one of the

relevant factors for finding a case of theft. On the contrary, Section

126 of the 2003 Act does not speak of any criminal intendment and is

primarily an action and remedy available under the Civil Law. It does

not have features or elements which are traceable to the criminal

concept of mens rea. Therefore, the Supreme Court held, there is a

clear distinction between the cases that would fall under Section 126

on the one hand and Section 135 on the other and there is no

commonality between them in law. They operate in different and

distinct fields. The word "dishonest" was considered by the Supreme

Court to qualify an offence under Section 135, whereas, in

contradistinction to this, the intention is not the foundation for

invoking powers under Section 126 of the 2003 Act.

8. It is, thus, submitted that the said clear distinction between

Sections 126 and 135 of the 2003 Act, as iterated in Sri Seetaram Rice

Mill (supra) by a Three-Judge Bench of the Supreme Court, was

virtually overruled by the subsequent Two-Judge Bench in Orion

Metal (supra). In such view of the matter, it is argued by learned

counsel for the petitioner that the prior Three-Judge Bench judgment,

being rendered by a Bench of higher strength, ought to be followed as

a precedent in preference to Orion Metal (supra), so far as this court is

concerned.

9. Learned counsel for the petitioner submits that the petitioner was

merely heard in connection with Section 135 of the 2003 Act.

However, no prior hearing and/or notice were given to the petitioner

regarding the assessment under Section 126 of the Act.

10. The petitioner, it is submitted, had to put in an amount of

Rs. 1,50,000/- (Rupees One Lakh Fifty Thousand only) in order to get

bail in the criminal proceeding initiated against the petitioner on the

ground of theft of electricity. However, in view of no prior notice

and/or hearing having been given to the petitioner in connection with

the proceeding for assessment under Section 126, the said proceeding

and the resultant assessments were de hors the law and patently

without jurisdiction. Sections 126 and 135 do not and cannot

operate simultaneously, it is contended by learned counsel for the

petitioner.

11. Learned counsel appearing for the CESC Limited contends that the

petitioner appeared, through an agent and thereafter through an

advocate, before the authorities in connection with the hearing under

Section 126 of the 2003 Act.

12. Contrary to the submissions of the petitioner, it is argued that the

proceeding under Section 135 was initiated independently from the

proceeding under Section 126, there being no conflict between the

two.

13. Learned counsel appearing for the CESC Limited, in support of his

submissions, cites a Division Bench judgment of this Court rendered

in Talat Sahmid Vs. The W.B.S.E. Distribution Co. Ltd. & Anr., reported

at (2015) 5 CHN (Cal) 165, for the proposition that every case of

unauthorised use of electricity may not lead to the conclusion that

there is theft of energy, however, vice-versa is true as every case of

theft of energy amounts to unauthorised use of electricity also.

14. That apart, learned counsel for the CESC Limited argues that the

proposition laid down in Sri Seetaram Rice Mill (supra) is not

applicable to the facts of the present case. In the said case, it is

contended, no allegation of theft was dealt with, as opposed to the

present case. It has not been laid down in Sri Seetaram Rice Mill

(supra) that proceedings under Section 126 and Section 135 of the

2003 Act cannot go on parallelly.

15. Upon hearing learned counsel for the parties, it is evident that, after

disconnection on October 8, 2020, a notice was given by the CESC

Limited to the petitioner, as annexed at page 24 (Annexure R-2) of the

affidavit-in-opposition used by the CESC Limited. It was clearly

indicated therein that the electricity supply of the petitioner was

disconnected due to detection of "unauthorised use of electricity".

Again, the order of provisional assessment dated October 8, 2020

clearly enumerates that hooking was found from service cut-out of

the CESC Limited located at the petitioner's premises.

16. In the said order, it has also been mentioned that the charges for

unauthorised use of electricity had been assessed provisionally.

17. The said order is annexed at page 25 of the affidavit-in-opposition of

the CESC Limited.

18. The petitioner has taken a consistent stand that although the

petitioner was represented by his agent and advocate, they appeared

in connection with the proceeding under Section 135 of the 2003 Act.

However, as evident from Annexure R-4 of the affidavit-in-opposition

of CESC Limited (at page 28 thereof), the petitioner's agent confirmed

full and final acceptance of the order of provisional assessment under

Section 126 of the 2003 Act. Hence, the final order of assessment

only remained a mere formality.

19. A vakalatnama was also filed on behalf of the petitioner by an

advocate in connection with the matter, which has been annexed at

page 34 (Annexure R-5) of the affidavit-in-opposition.

20. There is evidence galore from the materials-on-record, annexed by

both the parties, that the CESC Limited undertook proceedings under

Section 135 as well as under Section 126 of the 2003 Act

simultaneously.

21. Undoubtedly, as per the observations made in the cited judgments of

the Supreme Court, it was clarified that Sections 126 and 135 operate

on different footings; however, the petitioner's argument that the Two-

Judge Bench decision of the Supreme Court rendered in Orion Metal

(supra) cannot be a binding precedent in view of the said judgment

having 'overruled' the Three-Judge Bench decision in Sri Seetaram

Rice Mill (supra), in unacceptable.

22. The Two-Judge Bench, in Orion Metal (supra), categorically

considered Sri Seetaram Rice Mill (supra) in paragraph no.14 of the

said judgment and upon an interpretation of the same proceeded to

observe that there was no valid reason for making a distinction in

applying Section 126 of the 2003 Act. In view of the Two-Judge

Bench, in the subsequent judgment of the Supreme Court, having

considered and interpreted the Three-Judge Bench decision, there

cannot remain any option before this Court to overlook and ignore the

proposition laid down in the latter, that is, Orion Metal (supra) as not

binding. The rule of precedence clearly stipulates that, in the event a

previous judgment of the Supreme Court is considered and

interpreted in a particular manner by a subsequent judgment, the

later judgment prevails as a precedent.

23. The situation might have been different if the Two-Judge Bench

decision did not take note of the prior Three-Judge Bench decision;

however, such an academic exploration is futile in the present case as

the Two-Judge Bench decision categorically considered and

interpreted the prior Three-Judge Bench decision of Sri Seetaram Rice

Mill (supra).

24. It is evident from the materials-on-record that the petitioner was

represented through an agent and an advocate at various stages of

the matter, including the proceeding under Section 126 of the 2003

Act. The agent of the petitioner acting on behalf of the petitioner had

categorically conceded to the provisional assessment quantum as

raised by the CESC Limited. Hence, the petitioner cannot now resile

from such position and controvert the provisional and consequent

final orders of assessment.

25. In the present case, the post-disconnection notice clearly mentioned

hooking as well as the unauthorised use of electricity as charges

levelled against the petitioner, thereby prompting the CESC Limited to

initiate proceedings under Section 135 as well as Section 126 of the

2003 Act parallelly and independently.

26. Although the two provisions are independent and distinct from each

other, there are several areas of intersection between the two.

27. The Explanation (b) to Section 126 defines "unauthorised use of

electricity". Clause (iii) thereof envisages usage of electricity through a

tampered meter to fall within the purview of unauthorised use.

28. Section 135(1)(d), on the other hand, also contemplates usage of

electricity through a tampered meter, although qualified by the

expression 'dishonestly', to come within the ambit of Section 135 of

the 2003 Act. Thus, there are common areas between the two

provisions. There may be a distinction with regard to the

consequences of the two Sections, one being a civil liability and the

other having penal consequences, the expression "unauthorised use

of electricity" is a genus, of which 'theft' is a species. Hence, although

all instances of unauthorised usage of electricity are not thefts, all

thefts come within the ambit of "unauthorised use of electricity".

29. Since ingredients of both have been indicated in the allegations made

against the petitioner by the CESC Limited in its several

communications to the petitioner, there is nothing to vitiate the

parallel conduct of the provisional and final assessment under

Section 126 of the 2003 Act on the one hand and criminal

proceedings for theft under Section 135 of the 2003 Act on the other.

30. Hence, the plinth of the submission of the petitioner, that the CESC

Limited acted patently de hors the law and without jurisdiction in

claiming a bill on the basis of provisional and final assessment

orders, is not tenable in the eye of law and, as such, is turned down.

31. In the event the petitioner had a grievance against the final order of

assessment, after the provisional assessment merged into the same,

the remedy before the petitioner, in ordinary course, would lie in an

appeal under Section 127 of the 2003 Act.

32. However, since the petitioner in the present case, through his agent,

squarely admitted and conceded to the provisionally assessed

amount, the final assessment reached on the basis of such

provisional assessment by the CESC Limited cannot now be

challenged by the petitioner before any forum whatsoever.

33. In such view of the matter, the present writ petition fails.

34. Accordingly, W.P.O. No.94 of 2021 is dismissed on contest without

any order as to costs.

35. Urgent certified copies of this order shall be supplied to the parties

applying for the same, upon due compliance of all requisite

formalities.

( Sabyasachi Bhattacharyya, J. )