[Cites 22, Cited by 0]
Jharkhand High Court
Jharkhand Bijli Vitran Nigam Ltd. ... vs The Chief Engineer-Cum-Chief ... on 25 March, 2026
Author: Sanjay Kumar Dwivedi
Bench: Sanjay Kumar Dwivedi
2026:JHHC:8517
IN THE HIGH COURT OF JHARKHAND, RANCHI
W.P. (C.) No. 2261 of 2009
----
Jharkhand Bijli Vitran Nigam Ltd. through its Law Officer, having
its office at Engineering Bhawan, H.E.C. Township. PO and PS -
Dhurwa, District - Ranchi, Jharkhand
.... 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 Prity Cement Co. Pvt. Ltd., having its unit at Bharech
Nagar, PO - Marar, PS - Ramgarh, District - Ramgarh, through
its Director Sri Ratan Lal Agarwal, S/o Late Hira Lal Agarwal,
having its corporate office at PO and PS - Bistupur, District -
Jamshedpur
3. The State of Jharkhand .... Respondents
----
CORAM: HON'BLE MR. JUSTICE SANJAY KUMAR DWIVEDI
---
For the Petitioner :- Mr. Mrinal Kanti Roy, Advocate
For the State :- Mr. Shivam Singh, Advocate
For Respondent No.2 :- Mr. A.K. Sahani, Advocate
----
27/25.03.2026 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
05.12.2008 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
Electricity Act, 2003 against the order of assessment dated
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06.09.2008 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.42,66,840/- be correct.
3. Mr. Roy, 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. KJ-7698 having a contract demands of
150 K.V.A. He further submits that the factory premises of
respondent No.2 was inspected on 18th July, 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 of the petitioner has been
disconnected in light of Section 135(1-A) of the Electricity Act, 2003
and thereafter FIR was lodged on 18th July, 2008 itself and seizure
list was also prepared. He next submits that provisional assessment
dated 25.07.2008 on account of the said detection of theft of
electricity was issued to the consumer to make the payment of the
said provisionally assessed amount of Rs.42,66,840/- within the
statutory period as required under Section 126(4) of the Electricity
Act, 2003 or to file objection against the same and to participate in
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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.3701 of
2008 for restoration of the electrical connection which was
disconnected by the petitioner after the inspection dated
18.07.2008. He next submits that the said writ petition was
disposed of by order dated 27.08.2008 directing the consumer to
deposit 50% of the assessed amount and further direction was
issued to restore the electricity supply. He next submits that
thereafter the consumer filed an objection on 23.08.2008 against
the provisional assessment dated 28.07.2008. He next submits that
after hearing, the Assessing Officer passed the final order of
assessment dated 06.09.2008 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 05.10.2007 and
18.07.2008 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 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. On these backgrounds, he submits that
the appellate order may kindly be set aside.
5. On the other hand, Mr. A.K. Sahani, learned counsel
appearing for the respondent No.2 submits that Sri Ratan Lal
Agarwal was not a Director of M/s Prity Cement Co. Pvt. Ltd. at the
time of alleged theft of electricity. He submits that he has already
resigned prior to that and that has been accepted by the Registrar
of Company and Form-32 has been issued. He further 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
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the inspection correct and only dispute is there in the writ petition is
with regard to calculation made by learned appellate authority.
8. Section 181 of the Electricity Act, 2003 stipulates the power
of State Commission to make regulations and Sub-section 2
provides for regulation.
9. Section 50 of the Electricity Act deals with Electricity Supply
Code and 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
from 08.06.2005 as it was gazetted, however, the supply code has
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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
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
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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:
"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,
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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
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
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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
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
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per unit which was the tariff prescribed at that time. 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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