Jharkhand State Electricity Board ... vs The Chief Engineer-Cum-Chief ...
2026 Latest Caselaw 2360 Jhar

Jharkhand High Court

Jharkhand State Electricity Board ... vs The Chief Engineer-Cum-Chief ... on 25 March, 2026

Author: Sanjay Kumar Dwivedi

Bench: Sanjay Kumar Dwivedi

                                                                     2026:JHHC:8588




                  IN THE HIGH COURT OF JHARKHAND, RANCHI
                           W.P. (C.) No. 2594 of 2009
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Jharkhand State Electricity Board through its Law Officer, Sri Arun Kumar Srivastava, S/o Late Ramakant Lal, R/o Kusai Colony, PO and PS - Doranda, District - Ranchi, Jharkhand State Electricity Board, Opposite Nepal House, PO and PS -

             Doranda, District - Ranchi                .... Petitioner
                                     --      Versus   --

1. The Chief Engineer-cum-Chief Electrical Inspector, Electrical

Inspectorate, Department of Energy, Government of Jharkhand, Nepal House, Doranda, PO and PS - Doranda, District - Ranchi

2. M/s Sri Durga Cement Co. Ltd., having its unit at Hesla, Argada

Road, Ramgarh Cantonment, PO and PS -Ramgarh, District - Ramgarh, through one its Director Sri Ram Chandra Rungta, S/o Late Ram Kumar Rungta, R/o Main Road, Ramgarh Cantonment, PO and PS - Ramgarh, District - Ramgarh .... Respondents

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CORAM: HON'BLE MR. JUSTICE SANJAY KUMAR DWIVEDI

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For the Petitioner :- Mr. Manoj Kumar, Advocate For the State :- Ms. Varsha Ramsisaria, Advocate For Respondent No.2 :- Mr. Nitin Kr. Pasari, Advocate :- Mr. Shubham Gurung, Advocate

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08/25.03.2026 Heard learned counsel appearing for the petitioner, learned

counsel appearing for the State and learned counsel appearing for

the respondent No.2.

2. This petition has been filed for quashing of the order dated

21.10.2008 passed by Chief Engineer-cum-Chief Electrical Inspector,

Ranchi, Department of Energy, State of Jharkhand whereby the

appeal preferred by the respondent-consumer under Section 127 of

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Electricity Act, 2003 against the order of assessment dated

07.07.2008 passed by Electrical Superintending Engineer, Electric

Supply Circle, Hazaribagh (Assessing Officer) under Section 126 of

the Electricity Act, 2003 has been allowed. The prayer is also made

to hold the assessment made by the Assessing Officer to the tune of

Rs.62,17,704/- be correct.

3. Mr. Manoj Kumar, learned counsel appearing for the

petitioner submits that the respondent No.2 is a consumer of

petitioner - Jharkhand State Electricity Board now Jharkhand Bijli

Vitran Nigam Ltd. bearing consumer No. NNS-52 HTS having a

contract demands of 1067 K.V.A. He further submits that the factory

premises of respondent No.2 was inspected on 29.05.2008 and

several seals were found to be tempered/broken and it was decided

by the said team of JSEB to open the meter body for the purpose of

detail inspection of the same. He then submits that in view of the

inspection report it was found that mischief have been done and

pursuant to that the electricity connection of the petitioner has been

disconnected in light of Section 135(1-A) of the Electricity Act, 2003

and thereafter FIR was lodged on 29.05.2008 itself and seizure list

was also prepared. He next submits that provisional assessment on

account of the said detection of theft of electricity was issued to the

petitioner vide letter dated 04.06.2008 to make the payment of the

said provisionally assessed amount of Rs.2,44,98,120/- within the

statutory period as required under Section 126(4) of the Electricity

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Act, 2003 or to file objection against the same and to participate in

the hearing of the final assessment to be conducted by the

Electrical Superintending Engineer, Electric Supply Circle,

Hazaribagh. He also submits that thereafter the consumer, who is

respondent No.2, moved before this Court in W.P. (C.) No.2776 of

2008 for restoration of the electrical connection which was

disconnected by the petitioner after the inspection dated

29.05.2008. He next submits that the said writ petition was

disposed of by order dated 16.06.2008 with certain directions. He

next submits that thereafter the consumer filed an objection on

23.06.2008 and 03.07.2008 against the provisional assessment

dated 04.06.2008. He next submits that after hearing, the Assessing

Officer passed the final order of assessment dated 07.07.2008 under

Sub-section 5 of Section 126 of Indian Electricity Act, 2003 which

was challenged by the consumer before the learned appellate

authority and the learned appellate authority has found the

inspection dated 29.05.2008 as correct, however, he has changed

the formula of assessment which is not in accordance with law. He

next submits that in light of Sub-section 5 of Section 126 of Indian

Electricity Act if the electricity pilferage cannot be ascertained that

can be limited for a period of 12 months immediately preceding the

date of inspection.

4. By way of referring Sub-section 6 of Section 126 of Indian

Electricity Act, 2003, he submits that in light of assessment made

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under this section the formula should be made at a rate equal to

(twice) the tariff rates applicable for the relevant category.

According to him, the tariff was Rs.4 per unit and it should be Rs.8

per unit, however, learned appellate authority has doubled the unit

consumption and has only applied the tariff of Rs.4 per unit in place

of Rs.8 per unit accordingly. He next submits that the formula has

already been existed in the year 2005. On these backgrounds, he

submits that the appellate order may kindly be set aside.

5. On the other hand, Mr. Nitin Kr. Pasari, learned counsel

appearing for the respondent No.2 submits that the learned

appellate authority has rightly passed the order as there is no

formula on the date when the said occurrence took place and the

assessment was made. On these grounds, he submits that there is

no illegality in the order of learned appellate authority.

6. Learned counsel appearing for the State by way of referring

to the counter affidavit submits that at the time of alleged theft of

electricity there was no formula adopted by the Jharkhand State

Regulatory Commission and only based on certain interim orders of

the High Court assessments were being made and considering the

other documents relied by the concerned parties.

7. There is no doubt that learned appellate authority has found

the inspection correct and only dispute is there in the writ petition

with regard to calculation made by learned appellate authority.

8. Section 181 of the Electricity Act, 2003 stipulates the power

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of State Commission to make regulations and Sub-section 2

provides regulation.

9. Section 50 of the Electricity Act deals with Electricity Supply

Code which speaks that the State Commission shall specify an

electricity supply code to provide for recovery of electricity charges,

intervals for billing of electricity charges, disconnection of supply of

electricity for non-payment thereof, restoration of supply of

electricity; measures for preventing tampering, distress or damage

to electrical plant, or electrical line or meter, entry of distribution

licensee or any person acting on his behalf for disconnecting supply

and removing the meter; entry for replacing, altering or maintaining

electric lines or electrical plants or meter and such other matters.

10. In view of above section, it transpires that the State

Commission is required to make a formula for billing electricity

charges. The Electricity (Removal of Difficulties) Order, 2005 came

into force with effect from 08.06.2005 and order 2 stipulates

inclusion of measures to control theft in electricity supply code

which further clarify that the electricity supply code is specified by

the State Commission under Section 50 of the Act shall also include

the method, disconnection, measures etc. that has come into effect

with effect from 08.06.2005 as it was gazetted, however, the supply

code has been published in the State of Jharkhand on 01.09.2010

enumerating the formula for theft of electricity.

11. In light of statement made in the counter affidavit of

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learned counsel appearing for the State, it is an admitted position

that at the relevant time there was no formula and the said formula

has come into effect on 01.09.2010 and that formula cannot having

retrospective effect.

12. In absence of adopting the earlier enactment prior to

Electricity Act, 2003 came into force was the subject matter in the

case of Laxmi Business and Cement Company Pvt. Ltd. and Another

which was decided against the Jharkhand State Electricity Board by

High Court and the Jharkhand State Electricity Board has preferred

S.L.P. before Hon'ble Supreme Court and that judgment has been

reported being Jharkhand State Electricity Board and Others

versus Laxmi Business and Cement Company Private

Limited and Another reported in (2014) 5 SCC 236 wherein at

paragraph No.8 to 11 and 27 it has been held as under :

8. As mentioned above, after the Electricity Act, 2003 was enacted, power to frame tariff is given to the SERC. This power is statutorily conferred upon the SERC under the Act. However, it would be relevant to mention herein that before the passing of this Act, Electricity Regulatory Commission Act, 1998 was enacted and under Section 17 of the said Act, Jharkhand State Electricity Regulatory Commission was constituted by the Government of Jharkhand vide Notification No.1763 dated August 22, 2002. Its functions and duties were notified by the Government as per Section 22 of the Electricity Regulatory Commission Act.

9. On the passing of the Electricity Act, 2003, Electricity Act 1910, Electricity (Supply) Act 1948 and Electricity Regulatory Commission Act, 1998 have been repealed. At the same time, Act 2003 recognizes the SERCs constituted under the 1998 Act. The object clause of this Act reads as under:

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                                                                      2026:JHHC:8588

"An Act to consolidate the laws relating to generation, transmission, distribution, trading and use of electricity and generally for taking measures conducive to development of electricity industry, promoting competition therein, protecting interest of consumers and supply of electricity to all areas, rationalization of electricity tariff, ensuring transparent policies regarding subsidies, promotion of efficient and environmentally benign policies, constitution of Central Electricity Authority, Regulatory Commissions and establishment of Appellate Tribunal and for matters connected therewith or incidental thereto."

10. It is also not in dispute that 2004 Tariff Schedule framed by the SERC is in exercise of powers conferred upon it under Section 86 (a) of the Act. In PTC India Ltd. V. Central Electricity Regulatory Commission (2010) 4 SCC 603 this Court has categorically held that Act, 2003 is an exhaustive code on all matters concerning electricity which also provides for "unbundling" of State Electricity Boards into separate utilities for generation, transmission and distribution. Further, Regulatory regime is entrusted to the State Electricity Regulatory Commissions which are given vide ranging responsibilities. This Act has distanced the Government from all forms of regulations, including tariff regulation which is now specifically assigned to SERC.

Relevant observations, outlining the scheme of this Act, are reproduced below:

17. "The 2003 Act is enacted as an exhaustive code on all matters concerning electricity. It provides for unbundling" of SEBs into separate utilities for generation, transmission and distribution. It repeals the Electricity Act, 1910:

the Electricity (Supply) Act, 1948 and the Electricity Regulatory Commissions Act, 1998. The 2003 Act, in furtherance of the policy envisaged under the Electricity Regulatory Commissions Act, 1998 (the 1998 Act), mandated the establishment of an independent and transparent regulatory mechanism, and has entrusted wide-ranging

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responsibilities with the Regulatory Commissions. While the 1998 Act provided for independent regulation in the area of tariff determination: the 2003 Act has distanced the Government from all forms of regulation, namely, licensing, tariff regulation, specifying Grid Code, facilitating competition through open access, etc."

25. The 2003 Act contains separate provisions for the performance of dual functions by the Commission. Section 61 is the enabling provision for framing of regulations by the Central Commission: the determination of terms and conditions of tariff has been left to the domain of the Regulatory Commissions under Section 61 of the Act whereas actual tariff determination by the Regulatory Commissions is covered by Section 62 of the Act. This aspect is very important for deciding the present case. Specifying the terms and conditions for determination of tariff is an exercise which is different and distinct from actual tariff determination in accordance with the provisions of the Act for supply of electricity by a generating company to a distribution licensee or for transmission of electricity or for wheeling of electricity or for retail sale of electricity.

26. The term "tariff" is not defined in the 2003 Act. The term "tariff" includes within its ambit not only the fixation of rates but also the rules and regulations relating to it. If one reads Section 61 with Section 62 of the 2003 Act, it becomes clear that the appropriate Commission shall determine the actual tariff in accordance with the provisions of the Act, including the terms and conditions which may be specified by the appropriate Commission under Section 61 of the said Act. Under the 2003 Act, if one reads Section 62 with Section 64, it becomes clear that although tariff fixation like price fixation is legislative in character, the same under the Act is made applicable vide Section 111. These provisions, namely, Sections 61, 62 and 64 indicate the dual

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nature of functions performed by the Regulatory Commissions viz. decision-making and specifying terms and conditions for tariff determination [Emphasis supplied]

11. It is, thus, beyond the pale of doubt that the State Electricity Boards have no power whatsoever to frame tariff which is under the exclusive domain of the Commission. This legal position has been judicially recognized. [See Gujarat Urja Vikas Nigam Ltd. V. Essar Power Ltd 4 and A.P. TRANSCO v. Sai Renewable Power (P) Ltd. (2011) 11 SCC 34.

27. In view of the above, we are of the opinion that even the argument based on Section 185 of the Electricity Act, 2003 would not bring any change to the results of this case. We, thus, do not fault with the judgment of the High Court appealed against.

13. In view of the above judgment, it is settled that the charge

can be made from the consumer only on such tariff which has been

approved by the Commission.

14. In light of above provision and considering that there was

no formula at the time of the alleged pilferage of electricity learned

appellate authority has doubled the unit consumption of the entire

period and calculated with the relevant tariff of Rs.4 per unit.

15. In light of Section 181 read with Section 50 of Electricity

Act, 2003 only in a given formula approved by the State Regulatory

Commission can be made applicable. There is no formula that is an

admitted position and the learned appellate authority has doubled

the consumed unit charge and has calculated with the tariff of Rs.4

per unit which was the tariff prescribed at that time.

16. The argument of Mr. Manoj Kumar, learned counsel

appearing for the petitioner appears to be misconceived one as the

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said process or formula of 2005 has been made into force with

effect from 01.09.2010 by the State Electricity Regulatory

Commission.

17. It appears that the learned authority has rightly done so

and there is no illegality in the said modification of the assessment

order, as such no relief can be extended to the petitioner.

Accordingly, this writ petition is dismissed.

                                         (Sanjay Kumar Dwivedi, J.)
Dated 25.03.2026
Sangam/
A.F.R.




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