Gujarat High Court

Dakshin Gujarat Vij Company Limited vs Vaibhav Metal Crusher on 25 June, 2024

Author: Sunita Agarwal

Bench: Sunita Agarwal

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      C/CA/3316/2024                                      ORDER DATED: 25/06/2024

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          IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

R/CIVIL APPLICATION (FOR CONDONATION OF DELAY) NO. 3316 of
                             2024
          In R/LETTERS PATENT APPEAL NO. 592 of 2024
                             With
            R/LETTERS PATENT APPEAL NO. 592 of 2024
                               In
         R/SPECIAL CIVIL APPLICATION NO. 1183 of 2024
                             With
          CIVIL APPLICATION (FOR STAY) NO. 1 of 2024
           In R/LETTERS PATENT APPEAL NO. 592 of 2024
                               In
         R/SPECIAL CIVIL APPLICATION NO. 1183 of 2024
===============================================================
            DAKSHIN GUJARAT VIJ COMPANY LIMITED & ANR.
                               Versus
                  VAIBHAV METAL CRUSHER & ANR.
===============================================================
Appearance:
MS LILU K BHAYA(1705) for the Applicant(s) No. 1,2
 for the Respondent(s) No. 2
DHRUVIK K PATEL(7769) for the Respondent(s) No. 1
===============================================================

  CORAM:HONOURABLE THE CHIEF JUSTICE MRS. JUSTICE SUNITA
        AGARWAL
        and
        HONOURABLE MR. JUSTICE PRANAV TRIVEDI

                                Date : 25/06/2024

                                 ORAL ORDER

(PER : HONOURABLE THE CHIEF JUSTICE MRS. JUSTICE SUNITA AGARWAL)

[1] The delay of 20 days in filing the instant appeal is explained to the satisfaction of this Court. The delay

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condonation application is hereby allowed. The delay in filing the appeal is hereby condoned. The office is directed to allot regular number to the Appeal.

[2] The instant appeal is directed against the interim order dated 12.02.2024 passed by the learned Single Judge in permitting the re-connection of electricity supply on the deposit of 50% of the amount of the Supplementary Bill dated 03.01.2024 issued by the Respondent - Authority, on the premise of the judgment and order dated 14.12.2023 rendered in Letters Patent Appeal No. 1445 of 2023 in the case of Paschim Gujarat Vij Company Ltd. Vs. Murlidhar Plastic Industries Through Dilipbhai Bachubhai.

[3] The Supplementary Bill was issued by the Respondent - Authority in the name of petitioner in a proceedings initiated by the Respondent under Section 135 of the Electricity Act, 2003, on the allegations of theft of electricity as a result of an inspection of the premises made on 01.01.2024.

[4] It is sought to by argued by Ms. Lilu K Bhaya, learned advocate appearing for the appellant that the directions contained in the judgment and order dated 14.12.2023 passed by the Division Bench of this Court in Letters Patent Appeal

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No. 1445 of 2023 are not applicable in rem', inasmuch as, it was rendered in the peculiar facts and circumstances of the said case. The learned Single Judge has erred in applying the directions therein, in toto, ignoring the facts of the instant case. It is submitted that the original petitioner has approached this Court challenging the notice dated 03.01.2024, without replying to the same, on the premise that prior to the inspection made on 01.01.2024, he made a police complaint that some third persons, his neighbours, were trying to use the electricity by making theft from the extended wire outside the premises of the petitioners.

[5] The submission is that the re-connection in a case of theft of electricity can only be made in accordance with the third proviso to Sub-section (1A) of Section 135 of the Electricity Act, 2003.

[6] Taking note of the above submissions, we propose to decide the writ petition on merits. The records of the writ petition has been summoned, the same has been heard and is being decided on merits.

[7] The writ petition was directed against the notice dated 03.01.2024, which was in essence, a provisional bill computed towards the usage of electricity by unauthorized

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means in accordance with the provisions of Section 126 of the Electricity Act, 2003 read with Clause 7.7 of the Gujarat Electricity Regulatory Commission (Electricity Supply Code and Related Matters) Regulation, 2015.

[8] In the judgment and order dated 14.12.2023, having gone through the scheme of the Electricity Act, 2003 and the Gujarat Electricity Regulatory Commission (Electricity Supply Code and Related Matters) Regulation, 2015, the Division Bench of this Court has drawn an opinion that though under the provisions of the Electricity Supply Code 2015, in the matter of theft of electricity and unauthorized use of electricity, there is no provision for providing opportunity of hearing to the assessee or the consumer or the person involved in the theft of electricity, and such a procedure has been prescribed in the case of suspected unauthorized use of electricity in the Code itself, but such distinction cannot be considered to deny opportunity to the assessee to dispute the computation made by the assessing officer in a matter of theft of electricity as per Clause 7.12 to 7.10 of the Gujarat Electricity Regulatory Commission (Electricity Supply Code and Related Matters) Regulation, 2015.

[9] It was held that in a matter of unauthorized use of electricity, the opportunity of hearing has to be provided under

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Clause 7.36 to 7.37 are in the case of suspected unauthorized use of electricity, whereas, the assessment towards energy consumption in the case of theft of energy is to be made as per Clause 7.12 in case of a proven theft of electricity. The scope of hearing under Clause 7.2, however, would be limited to the extent of the dispute pertaining to the computation made by the assessing officer, i.e. to raise a dispute that the assessment formula given in Annexure - IV of the Gujarat Electricity Regulatory Commission (Electricity Supply Code and Related Matters) Regulation, 2015 or a period of assessment is provided in Clause 7.7 of the Gujarat Electricity Regulatory Commission (Electricity Supply Code and Related Matters) Regulation, 2015, has been wrongly applied with.

[10] It was further held that the assessee would not be in a position to dispute as to whether it was a case of theft of electricity or not, inasmuch as, in the case of theft of electricity, the assessing officer is required to follow the procedure in Clause 7.2 to 7.11 for booking a case of theft of electricity, wherein it is clearly indicated that on inspection, the assessing officer shall prepare a report clearly indicating that the sufficient evidence substantiating the fact that the theft of energy was found or not, has to be prepared, by recording details of such evidence. Such report is to be signed

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by the Authorized Officer by complying with the conditions as stipulated in Clause 7.24 of the Gujarat Electricity Regulatory Commission (Electricity Supply Code and Related Matters) Regulation, 2015 and each member of inspecting team shall have to be handed over to the consumer. The complaint of theft of an electricity can be lodged only in case of theft of electricity as found to be established on sufficient evidence detailed in the report.

[11] Simultaneously, the electricity supply is also to be immediately disconnected in accordance with the provisions of Section 135 (1)(a) of the Electricity Act, 2003. The consumer or such person will have a right to contest before the Special Court, which will have to follow the procedure prescribed in Section 154 to determine whether such person is to be punished for theft of electricity and civil liability for loss or damage incurred by the court or the licensee, has to be determined or not.

[12] In another Letters Patent Appeal No. 474 of 2024, vide judgment and order dated 25.04.2024, the question as to whether the petitioners therein were entitled to an opportunity of hearing to dispute the assessment made by the assessing officer in the matter of energy consumption as per the assessment formula given in Annexure IV of the Electricity

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Supply Code, 2015 in the matter of theft of electricity had been examined. It was observed that:

"20. The further question which we find fit to examine is to whether there is any other statutory remedy before the consumer to challenge the assessment in the matter of theft of electricity. In this regard, we may take note of the decision of the Apex Court in WEST BENGAL STATE ELECTRICITY DISTRIBUTION COMPANY LTD. VS. M/S ORION METAL PVT. LTD. reported in (2020) 18 SCC 588, wherein the Apex Court was faced with the question as to whether two parallel proceedings, i.e. criminal complaint before the Special Court as also the assessment proceedings in the matter of theft of electricity can go simultaneously or not. It was the case of the consumer therein that once the complaint is filed, alleging theft of electricity under Section 135(1)(a) of the Act, no assessment is permissible under Section 126(1) of the Act. It was held by the High Court therein that when a complaint is lodged alleging theft of energy by consumer and when supply of electricity is disconnected on account of such offence alleged, only in cases where restoration of supply is sought by the consumer, agreeing to deposit the assessed amount of unmetered consumption, provisional assessment can be made under Section 126 of the Act. The High Court has drawn a distinction to exercise power under Section 126 (1) of the Act, in cases where consumers seek restoration after disconnection and in cases where

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restoration of supply had not been sought for. The High Court has held that only in cases where restoration is sought after disconnection, authorities can resort to make assessment under Section 126(1) of the Act, otherwise, the civil liability can only be determined by the Special Court by following the procedure under Sub-

Section (5) of Section 154 of the Act.

21. Considering the issue, the Apex Court had gone through the objects and reasons of the Electricity Act, 2003 as also the provisions of Sections 126, 135, 153 and 154 of the Act. It was noted therein that in the objects and reasons of the Act, a specific reference is made to incorporate provisions relating to theft of electricity, to have revenue focus. It was held that on a conjoint reading of the said provisions, it appears that after an inspection of any place or any premises of any consumer, when the assessing officer comes to a conclusion that the consumer has indulged in an unauthorized use of electricity, the provisional assessment to the best of his judgment is to be made in accordance with Section 126(1) of the Act and such provisional assessment shall be served upon the person in occupation of the premises. After giving an opportunity to file objections to the provisional assessment, the assessing officer is empowered to pass a final order of the assessment assessing the loss of energy on account of unauthorized use of electricity.

22. The 'unauthorized use of electricity' is defined under Section 126(6)(b) of the Act. It was held

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that it is clear from the reading of Section 126(6)(b)(iii) of the Act that all instances of unauthorized use of energy may not amount to theft of electricity within the meaning of Section 135 of the Act, but at the same time, the theft of electricity which is covered by Section 135 of the Act will fall within the definition of ' unauthorized use of electricity '. As per Section 135 (1 A) of the Electricity Act, without prejudice to the other provisions of the Act, the licensee or supplier, as the case may be, upon detection of theft of electricity, is empowered to disconnect the power supply immediately. Further, as per the third proviso to Section 135 (1 A) of the Electricity Act, the licensee or supplier, as the case may be, on deposit or payment of the assessed amount or electricity charges, without prejudice to the obligation to lodge a complaint, can restore the supply line of electricity within 48 hours of deposit / payment of such amount.

23. It is, thus, clear that the authorities under the Act are empowered to make a provisional and final assessment by invoking the power under Section 126 (1) of the Act, even in cases where electricity is unauthorizedly used by way of theft. When consumer deposits the assessed amount, the licensee or supplier is to restore the power supply. Noticing the distinction between Section 126 and 135 under the scheme of the Act, pertaining to 'unauthorized use of electricity' and 'theft of electricity', it was held by the Apex Court in West Bengal State Electricity Distribution Company Ltd.

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(supra) that merely because the Special Court is empowered to determine the civil liability under Section 154 (5) of the Act in cases where the complaint of theft is lodged, it cannot be said that there is no power conferred on the authorities to make provisional assessment / final assessment under Section 126 of the Act.

24. The Apex Court has also considered its previous decision in SOUTHERN ELECTRICITY SUPPLY COMPANY VS. SHRI SITARAM RICE MILLS reported in (2002) 2 SCC 108 wherein, the scope of the explanation to Section 12(6) (b) (iv) of Electricity Act, 2003, considering the distinction between Section 126 and 135 of the Act, 2003, has been worked out. It was held therein that 'unauthorized use of electricity' cannot be restricted to the stated clauses under the explanation to Section 126 (6) of the Act, but has to be given a wider meaning so as to cover cases of violation of the terms and conditions of supply and the regulations and provisions of the 2003 Act governing supply.

"Unauthorized use of electricity" itself is an expression which would, on its plain reading, takes within its scope all the misuse of the electricity or even malpractices adopted while using the electricity. It was held that it is difficult to restrict this expression and limit its application by the categories stated in the explanation.

25. Considering the above, when we look to the provisions of Clauses 7.1 to 7.14 as contained in Part '7' of the Electricity Supply Code, 2015 under the

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Electricity Act, 2003,it is evident that the procedure for assessment provided therein is of the assessment of un- metered energy consumption in a case of theft of energy which would fall within the scope of the meaning assigned to 'unauthorized use of electricity' under Section 126 (6) (b) of the Electricity Act, 2003 by the Apex Court in the aforesaid decisions. The result is that any assessment of the energy consumption in the matter of theft of electricity, though, has to be made in accordance with the procedure prescribed in Clauses 7.12 to 7.18, but it would be an assessment of unmetered energy consumption falling under Section 126 of the Electricity Act, 2003. The result is that in case a consumer is agreeable to the assessment and deposits the assessed amount as per Sub-Section (1 A) of Section 135, his electricity connection is to be restored as per the proviso contained therein. However, in case a consumer is dissatisfied with the computation of assessment made by the assessing authority, he will have a remedy to file an appeal under Section 127 of the Electricity Act, 2003. However, in case of such a dispute, without deposit, the consumer will not get an opportunity to seek restoration of the electricity supply.

26. A balancing act is to be made by the Court, inasmuch as, a person who has indulged in the act of theft of electricity cannot seek restoration of supply, without depositing the assessed un-metered energy consumption. As regards, the claim of such a consumer that he is innocent or there is no theft, it

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would be open for him to contest the matter before the Special Court.

27. We may further note the observation in Paragraph '15' in West Bengal State Electricity Distribution Company Ltd. (supra), wherein it is held that in cases where allegation is of unauthorized use of energy amounting to theft apart from assessment of energy consumption under Section 126 (1) of the Act, the complaint also has to be lodged alleging theft of energy as defined under Section 135 (1) of the Act. In such cases, the Special Court is empowered to determine civil liability under Section 154 (5) of the Act. It was, further, noted that sofar as Section 135 is concerned, the guilt of the accused is to be proved by the authorities beyond reasonable ground along with the element of mens rea, whereas such a strict rule is not necessary for assessing the liability under Section 126 (1) of the Act. The relevant Paragraph '15' of West Bengal State Electricity Distribution Company Ltd. (supra) is quoted hereinunder:

"15. We also do not find any valid reason for making a distinction as made by the High Court in 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" is of wide connotation. There may be cases of unauthorised use of

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energy, not amounting to theft, which are cases viz. exceeding the sanctioned load or using the electricity in the premises where its use is not authorised, etc. But at the same time, 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. The power conferred on authorities for making assessment under Section 126(1) of the Act and power to determine civil liability under Section 154(5) of the Act, cannot be said to be parallel to each other. In this regard, we are of the view that the High Court has committed an error in recording a finding, that both proceedings cannot operate parallelly. In a given case where there is no theft of energy, amounting to unauthorised use of energy, in such cases no complaint of theft can be lodged as contemplated under Section 135 of the Act. In such cases for loss of energy, on account of unauthorised use of energy not amounting to theft, it is always open for the authorities to assess the loss of energy by resorting to power under Section 126(1) of the Act. In cases where allegation is of unauthorised use of energy amounting to theft, in such cases, apart from assessing the proceedings under Section 126(1) of the Act, a complaint also can be lodged alleging theft of energy as defined under Section 135(1) of the Act. In such cases, the Special Court is empowered to determine civil liability under Section 154(5) of the Act. On such determination of civil liability by the Special Court, the excess amount, if any, deposited by the petitioner, is to be refunded to the consumer. It is a settled principle that to prove the guilt of the accused in a criminal proceeding, authorities have to prove the case beyond

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reasonable doubt and the element of mens rea is also to be established. On the other hand, such a strict proof is not necessary for assessing the liability under Section 126 (1) of the Act."

[13] It was further directed in Paragraphs '28' and '29' as under:

28. With the above, it is clarified that the learned Single Judge is required to take note of the aforesaid decisions of the Apex Court to see as to whether the consumer is making a complaint about the theft of electricity or is challenging the assessment of unmetered energy consumption, as per clauses 7.12 to 7.14 of the Electricity Supply Code, 2015. In any case, a finding has to be arrived into the claim of the petitioner in seeking restoration of power supply viz.a.viz the stand of the respondent - Company (appellant herein) that the petitioner is not entitled to claim restoration of electricity supply without depositing the entire assessed amount, as it was the case of the theft of energy.

29. In any case, if the petitioner chooses to challenge the assessment made by the competent authority, he has a remedy of filing appeal under Section 127 of the Act 2003. The question of opportunity of hearing at the stage of provisional assessment of unmetered energy consumption in accordance with the Clause 7.12 to 7.14, has already been settled by the Division Bench in the judgment and order dated 14.12.2023 in Paschim Gujarat Vij Company Ltd. (supra). The learned Single Judge is, therefore, required to take into account all the

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aforesaid decisions for arriving at its own conclusion. "

[14] In Paragraph '30', it was further observed that :

30. In view of the above, while staying the interim order dated 23.01.2024 passed by the learned Single Judge to the extent of the directions for restoration of electricity supply, the matter is remitted back for fresh consideration.

[15] Taking note of the observations in the above-noted decision of this Court, when we have gone through the averments made in the writ petition, we find that the original petitioner claimed to be a consumer of electricity of the sanctioned load of 99 kilo watt. A transformer has been installed at the premise of the petitioner. It is contended in the writ petition that in the past attempts were made by the villagers to connect the live-electricity line coming out of the transformer for electricity theft. A complaint dated 24.12.2023 had been lodged by the petitioner at the police station. With regard to the inspection made on 01.01.2024 at the premises of the petitioner, however, nothing much has been stated.

[16] It is further contended that a notice was issued alleging theft of electricity as a consequence of the inspection and defective meter was removed from the premises of the petitioner, packed and was seized by the checking officer for

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further investigation / checking. The tenant of the petitioner was called upon as a witness during the laboratory testing of the defective meter and it was analyzed. The laboratory report was not made available to the petitioner. A false case of theft of electricity has been alleged by the respondent in the notice in question.

[17] It is further stated that on 02.01.2024, the respondent had called upon the petitioner to regularize the excess load, which was more than the contract load and asked to execute fresh contract for change of connection from LT to HT connection. The tenant of the petitioner had requested the respondent to provide MRI data so as to ascertain as to whether there was allegations of theft of electricity occuring, which was denied. Apart from the abovenoted averments, nothing much has been stated in the writ petition.

[18] Be that as it may, the writ petition has been filed challenging the notice dated 03.01.2024, which is in the nature of the provisional assessment towards unauthorized energy consumption in the matter of theft of electricity. The petitioner was required to place his objections to the said notice dated 03.01.2024, instead of straight-away approaching this Court.

[19] All assertion made in the writ petition have not been brought to the notice of the Respondent. No reply to the

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notice dated 03.01.2024 has been filed. No coercive action for recovery of the assessed amount has yet been initiated against the petitioner except issuance of the Supplementary Bill dated 03.01.2024. However, the first information report on the allegations of theft of electricity has been lodged.

[20] In view of the above, we find it fit and proper to relegate the petitioner to agitate his grievances before the competent authority, inasmuch as, no factual inquiry can be made within the scope of Article 226 of the Constitution of India.

[21] We, therefore, dispose of the writ petition with the observation that the petitioner shall file a reply to the notice dated 03.01.2024 wherein computation towards energy consumption on the allegation of theft of electricity has been made and demand has been raised in the shape of Supplementary Bill. As the petitioner has made allegations with regard to the checking report and the laboratory tests of the meter, it is open for him to raise this issue before the competent authority.

[22] It is, thus, provided that the petitioner would be free to raise all objections to the notice dated 03.01.2024, wherein the assessment towards energy consumption has been

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made on the allegations of theft of electricity. In case, the petitioner submits a reply within the period of two weeks along with the copy of this order, before the Executive Engineer concerned, he shall be under obligation to deal with all points of objections raised by the petitioner before proceeding further. The Supplementary Bill dated 03.01.2024 raised by the respondent shall be subject to the decision to be taken by the Executive Engineer under the above directions.

[23] Insofar as the deposits made by the petitioner under the directions issued by this Court in the Judgment and Order dated 12.02.2024, we provide that the said deposits would also be subject to the decision of the Executive Engineer to be taken in compliance of the above directions, which shall be taken as early as possible preferably within the period of three weeks from the date of the receipt of reply. As regards the direction issued by the learned Single Judge in the order impugned for re-connection of electricity, the same is being kept subject to the fresh decision of the Executive Engineer.

[24] However, in case, the decision goes against the petitioner, the petitioner would have a remedy to file appeal under Section 127 of the Electricity Act, 2003, in view of the observation made by us in the judgment and order dated 25.04.2024 noted hereinbefore. In that eventuality, the deposits

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made by the petitioner under the Judgment and Order dated 25.04.2024 passed hy the learned Single Judge shall have to be adjusted towards the deposits to be made by the petitioner to maintain the appeal under Section 127 of the Electricity Act, 2003.