Cesc Limited vs The Appellate Authority And ...
2023 Latest Caselaw 2232 Cal

                         In the High Court at Calcutta

                        Constitutional Writ Jurisdiction

                                  Appellate Side

The Hon'ble Justice Sabyasachi Bhattacharyya

                            W.P.A. No.7850 of 2016

                             CESC Limited
                                   Vs.
                    The Appellate Authority and others

     For the petitioner/
     CESC Limited                        :    Mr. Subir Sanyal,
                                              Mr. Om Narayan Rai,
                                              Mr. Debanjan Mukherjee


     For the private respondent

     Nos.2 to 5                          :    Mr. Debashis Saha,
                                              Mr. Moniruzzaman


     Hearing concluded on                :    22.03.2023

     Judgment on                         :    03.04.2023



     Sabyasachi Bhattacharyya, J:-

1. The CESC Ltd, a distribution licensee operating in West Bengal, has

preferred the instant writ petition under article 226 of the

Constitution of India, challenging an order dated February 8, 2016

passed by the Appellate Authority under Section 127 of the Electricity

Act, 2003.

2. Upon an allegation of theft having been made by the CESC, a

complaint was lodged against the private respondent Nos. 2 to 5 and a

proceeding initiated under Section 135 of the 2003 Act. A parallel

proceeding under Section 126 of the 2003 Act was also initiated

against the said private respondents. A provisional order of

assessment was made and, thereafter, upon hearing the private

respondents, a final order of assessment was passed by the Assessing

Officer of the CESC on November 11, 2015, thereby holding that the

private respondents were guilty of unauthorised use of electricity.

3. The private respondents, being thus aggrieved, preferred an appeal

against such final order under Section 127 of the 2003 Act. The

Appellate authority, by its order dated February 8, 2016, disposed of

the appeal by holding that the assessment made against the present

private respondents was unjustified and the same was quashed and

set aside. The petitioner CESC was, however, given liberty to take

appropriate action against the appropriate person committing such

unauthorised use of electricity, after proper verification of the address.

4. Being dissatisfied with the said order of the appellate authority, the

CESC has preferred the instant writ petition.

5. Learned counsel for the petitioner argues that the appellate authority

acted in a perverse manner in setting aside the final order of

assessment without any concrete reason for doing so. It is submitted

that since the assessing authority exercised discretion available to him

in law in a particular way on the basis of the materials on record, the

appellant authority acted without jurisdiction in quashing it.

6. Learned counsel contends that the scope of adjudication of civil

liability under Section 126 is on the basis of "preponderance of

probability". However, the appellate authority proceeded on the

premise that no strict proof beyond reasonable doubt was produced by

the CESC to incriminate the private respondents.

7. Learned counsel for the CESC places reliance on several photographs

of the site of alleged pilferage, along with the complaint filed before the

Officer-in-Charge of the Jorasanko Police Station and a seizure list

obtained from the alleged site of pilferage to contend that such

documents clearly show that the private respondents were guilty of

unauthorised use of electricity, including theft.

8. It is submitted that in a proceeding under Section 126 of the 2003

Act, the allegation need not be proved to the hilt. It is submitted that

the 'Best Judgment Rule' should be applicable to such a case. The

accessing officer, who was a part of the inspecting team as per the

provisions of law, gave a clear report indicating the involvement of the

private respondents in the act of unauthorised use of electricity, which

was sufficient to pass the provisional order of assessment.

Subsequently, the private respondents appeared in the hearing on the

provisional assessment but failed to rebut the evidence produced by

the CESC. Hence, the assessing officer acted well within his

jurisdiction to pass the final order of assessment on the basis of the

provisional assessment.

9. Learned counsel argues that the assessing officer clearly came to the

conclusion on the basis of materials on record that the private

respondents are residents of premises no. 116/H/1, M. G. Road,

Kolkata-700 007. Although it was recorded by the assessing officer

that the photographs indicated that the white wire which was used for

pilferage entered the said premises into one room of the third floor, the

private respondents have not produced any document whatsoever to

indicate that they were residents of a different floor.

10. It is argued that the reliance placed by the appellate authority on the

involvement of the premises No. 116/H/5, M. G. Road is a third case

beyond the pleadings of the parties. It is argued that the said premises

have no relevance to the present adjudication.

11. Learned counsel for the petitioner/CESC cites a judgment reported at

(2020) 18 SCC 588 [West Bengal State Electricity Distribution Company

Limited and others Vs. Orion Metal Private Limited and another] to

argue that a proceeding under Section 126 of the 2003 Act is to be

decided on the basis of preponderance of probability, which takes into

account the "Best Judgment Rule".

12. The CESC also places reliance on Commissioner of Sales Tax, Madhya

Pradesh Vs. H.M. Esufali, H.M. Abdulali, Siyaganj, Main Road, Indore,

reported at (1973) 2 SCC 137 to reiterate the "Best Judgment Rule".

13. Learned counsel for the CESC submits that the concept of 'inspection'

in Section 126 includes the power of the assessing officer to undertake

an enquiry in order to ascertain whether any unauthorised use was

going on and, if so, who was/were responsible for it. In the present

case, since the CESC produced clear evidence of pilferage and

unauthorised use of electricity at premises no. 116/H/1, where the

private respondents admittedly reside as well, there was no reason for

the appellate authority to reverse the findings of the assessing officer.

It is argued that credence has to be given to the opinion of the

assessing officer inasmuch as a report, as contemplated in Section

126, is concerned.

14. Learned counsel appearing for the private respondents argues that the

final order of assessment was tainted by patent perversity. No

document or other evidence was produced by the CESC to prove the

involvement of the private respondents in the alleged unauthorised

use of electricity, it is contended. It was the burden of the CESC Ltd.

to prove the involvement of the private respondents, which it

miserably failed to discharge.

15. Learned counsel next argues that in view of the private respondents

having been exonerated by the Special Court under Section 135 of the

2003 Act, against which no further steps were taken by the CESC

before any superior forum, the said order had attained finality. Hence,

the appellate authority was justified in reversing the final order of

assessment.

16. Learned counsel appearing on behalf of the private respondents cites a

judgment reported at 2020 SCC OnLine SC 886 [State of Rajasthan

and others Vs. Heem Singh] to argue that the standard of proof in a

disciplinary proceeding ought to have been adopted in the present

case.

17. In the absence of any proof that the private respondents reside on the

third floor of premises no. 164/H/1, coupled with the fact that the

private respondents have produced documents along with their

affidavit-in-opposition to show that each of them resides elsewhere

than 164/H/1, the final order of assessment incriminating the private

respondents was bad in law and in fact and rightly set aside by the

appellate authority.

18. The private respondents, in their affidavit-in-opposition, contend that

they are respectable persons in the locality, run hotels there and pay

huge amounts for consumption of electricity. Hence, it is argued that

there was no occasion for the private respondents to commit theft of

electricity. In fact, the private respondents have hinted in their

opposition that they are entitled to refund of the fifty per cent of the

claim amount which they had deposited at the time of filing the

appeal.

19. Hence, it is argued, the writ petition at the instance of the CESC

should be dismissed.

20. The first question which arises for consideration is whether the private

respondents are entitled to be relieved of their liability to pay under

Section 126 of the 2003 Act in view of their acquittal in the criminal

proceeding under Section 135.

21. A photocopy of the certified copy of Order No. 39 dated March 29,

2022 passed by the Special Judge in Special Case No. 02 of 2016

shows that the accused private respondents were discharged on the

basis of the Final Report (FRT) filed by the police in the criminal case.

A copy of the FRT has also been produced by the private respondents,

which shows that due to want of evidence, the private respondents

were discharged. Although the brief facts of the case appearing in the

said report is next to illegible, a closer scrutiny shows that the

accused persons appealed before the "electricity Tribunal" (probably

meaning the appellate authority under Section 127 of the 2003 Act)

where the CESC authority failed to produce any evidence against the

accused persons, for which the accused persons' appeal was allowed.

In this respect, it was further recorded by the police, the accused

persons had also submitted a letter annexed with the order of the

"tribunal". The above facts, according to the police themselves, were

ascertained from the advocate of the accused.

22. The police, upon such considerations, went on to suggest in the FRT

that the case against the private respondents/accused persons be

dropped.

23. Such considerations, in the absence of any appreciation of the

evidence produced (which the police, in any event, did not have the

authority to do), were a travesty of the investigation process. On the

basis of such a farce of a report, the private respondents were

discharged.

24. It is well-settled that the civil liability in a proceeding under Section

126 of the 2003 Act is assessed on the basis of 'preponderance of

probability', which is a much lesser degree of proof than 'beyond

reasonable doubt', which is the standard of proof in a criminal

proceeding under Section 135. Being discharged in a criminal

proceeding on such high standard of proof, particularly in the context

of the inadequate police report, cannot per se be a reasonable basis of

absolving the private respondents of their civil liability, which has to

be proved on a much lenient standard of proof.

25. In any event, the assessing officer gave an opportunity of hearing to

the private respondents and considered all the unrebutted evidence

produced by the CESC to come to its ultimate conclusion. Thus, the

appellate authority acted in a perverse manner in reversing the same

on flimsy grounds.

26. Much stress was laid by the appellate authority on the issue of no

proof being furnished regarding the residence of the private

respondents at premises no. 116/H/5. However, there is precious

little on record to indicate that the theft was being performed for the

benefit of the said premises, apart from the bald averment of the

private respondents themselves in their appeal. The appellate

authority arbitrarily proceeded on the premise that nothing was

proved regarding premises no. 116/H/5, whereas the CESC never

alleged any pilferage being committed there or that the private

respondents reside there. The consistent case of the CESC is that the

pilferage took place at premises no. 116, M.G. Road, where the

meters-in-question are located, and the tampered electricity went to

premises no. 116/H/1, where the private respondents reside.

27. In fact, the private respondents, in their written contentions before the

appellate authority, clearly admit that they reside, inter alia, in

respect of a "small portion" of the building at premises no. 116/H/1,

where they are "mere" tenants. However, there is nothing on record to

indicate that the private respondents produced any document to show

the exact extent or location of their tenancy in the said building.

28. The seizure list conclusively shows that about 4 metres of PVC-

insulated black copper wire with hooking arrangement used for direct

connection from the service cut-out was found, along with about 19

metres of aluminium wire (pre-insulated, black in colour) used for

distribution of electricity. Signatures of two witnesses are also found

on the seizure list.

29. Importantly, the initial complaint lodged by the CESC,

contemporaneous with the alleged discovery of unauthorized use of

electricity, clearly mentions that on enquiry in the locality it was

learnt that the private respondents, all of 116/H/1, M.G. Road, were

beneficiaries of the unauthorized abstraction of electricity and they

used the electricity to run domestic establishment at premises no.

116/H/1, which was situated "just beside" premises no. 116, where

the meters were located and from where the pilferage was taking

place.

30. It is notable that the CESC, in their complaint, mentioned that the

private respondents were committing unauthorized use of electricity,

punishable not only under Section 135 (theft) but also Section 138

(relating to interference with meters or works of licensee and

unauthorized activities) of the 2003 Act.

31. Hence, even apart from the allegation of pure theft, complaints of

unauthorized use of electricity were clearly levelled against the private

respondents. Thus, in any event, the allegations against the said

respondents were not restricted to pure theft, but also encompassed

other unauthorized use of electricity as contemplated in Section 126.

As such, an acquittal under Section 135 ipso facto does not come to

the rescue of the private respondents, inasmuch as the wider

allegation of unauthorized use, justifying clamping of Section 126 even

independently of theft, came into play.

32. Another aspect of the matter cannot be overlooked. A liability

assessment-proceeding under Section 126 of the 2003 Act is, after all,

not a full-fledged civil suit or judicial proceeding. Even as per the

language of the section, the inspection by the assessing officer has to

be given primacy unless, of course, rebutted by cogent material.

33. The officer dealt in his complaint with his inspection at the place,

particular premise and of the devices found connected as well as

undertook a painstaking enquiry which revealed the direct

involvement and primary role of the private respondents in the

unauthorized use of electricity. The assessing officer was a party to

the inspection team and passed the order of provisional assessment to

the best of his judgment, which was modified in final order of

assessment upon hearing the private respondents.

34. No fault can be found in such valid exercise of authority by the

assessing officer for the appellate authority to upset his conclusions.

The appellate authority overlooked clinching evidence of unauthorized

use by way of photographs, articles of seizure and failed to lend

sufficient weight to the presumption of correctness attached to the

assessment made on the basis of the assessing officer's personal

inspection, thereby giving a go-bye both to Section 126 of the 2003 Act

and the presumption attached to official acts under Section 114 (e) of

the Indian Evidence Act.

35. Thus, the order of the appellate authority cannot survive judicial

scrutiny.

36. The private respondents have gone so far as to claim refund of the fifty

per cent of assessed amount deposited by them for preferring the

appeal. However, the refund contemplated in Section 154 (6) of the

2003 Act can be granted only if the civil liability determined is less

than amount deposited.

37. The judgments cited by the petitioner on the score of preponderance of

probability being the standard of proof in proceedings under Section

126 of the 2003 Act, as opposed to criminal proceedings under Section

135, lay down a well-settled proposition of law and there cannot be

any quarrel with the same.

38. However, the 'best judgment' principle harped on by the CESC,

although applicable to an extent, cannot be so sacrosanct so as to

obviate the necessity of some prima facie evidence. Even on such

score, there is evidence galore in the present case to indict the private

respondent, as discussed above.

39. Insofar as the decisions relied on by the private respondents are

concerned, Heem Singh (supra) lays down that an honourable

acquittal in a criminal proceeding may lead to dismissal of charge.

However, in the present case, the acquittal was on technical grounds

and not "honourable" in any sense of the term. Hence the said

decision only strengthens the petitioner's case.

40. In Phool Singh (supra), the Supreme Court relied on Heem Singh

(supra) and reiterated the principle that the court has the jurisdiction

to interfere when the findings in the enquiry are based on no evidence

or when they suffer from perversity. A failure to consider vital evidence

is an incident of what the law regards as a perverse determination of

fact.

41. In the present case, however, the relevant evidence clearly points to

unauthorized use of electricity by the private respondents. We also

have to keep in mind that a disciplinary proceeding is visited by penal

action, whereas, for the purpose of Section 126 of the 2003 Act, the

decision is on the civil liability to pay the licensee for loss or damage

suffered by it due to unauthorized use of electricity. The two cannot be

exactly equated.

42. In fine, the above considerations unerringly indicate that the appellate

authority's decision reversing the final order of assessment and

absolving the private respondents of their liability to pay was perverse

and the decision-making process was not only unlawful but contrary

to evidence.

43. The private respondents never challenged the calculations or quantum

of assessment at any point of time as being faulty; hence, there does

not arise any scope of further scrutiny of the same.

44. The decision of the appellate authority cannot, therefore, survive

judicial scrutiny and ought to be set aside.

45. Accordingly, WPA 7850 of 2016 is allowed, thereby setting aside the

order dated February 8, 2016 passed by the appellate authority and

restoring the final order of assessment dated November 11, 2015

passed by the assessing officer, CESC Ltd. whereby the private

respondents were directed to pay an amount of Rs. 3,19,060/-.

46. There will be no order as to costs.

47. Urgent certified server copies, if applied for, be issued to the parties

upon compliance of due formalities.

( Sabyasachi Bhattacharyya, J. )