Kerala High Court
C.K.Abdul Rahman vs The Kerala State Electricity Board on 26 August, 2025
2025:KER:65227
W.P.(C).Nos.17906 & 40877 of 2016
1
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE S.MANU
TUESDAY, THE 26TH DAY OF AUGUST 2025 / 4TH BHADRA, 1947
WP(C) NO. 17906 OF 2016
PETITIONER:
THE ASSISTANT ENGINEER
KERALA STATE ELECTRICITY BOARD LTD.,
ELECTRICAL SECTION NO.1, KODUNGALLUR-680664.
BY ADVS.
SHRI.JAICE JACOB,SC,KERALA STATE ELECTRICITY BOARD
SRI.AJIT JOY
SRI.ANEESH JAMES
RESPONDENTS:
1 C.R.ABDUL RAHMAN
S/O. KOCHAHAMMED, ADMINISTRATIVE OFFICER & DIRECTOR,
MEDICARE HOSPITAL, TKS PURAM, KODUNGALLUR-680664.
2 KERALA STATE ELECTRICITY APPELLATE AUTHORITY
CC 51/52, NEAR 110 KV SUBSTATION, VYTTILA,
KOCHI-682019.
BY ADV SHRI.R.S.KALKURA
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON
26.08.2025, ALONG WITH WP(C).40877/2016, THE COURT ON THE SAME
DAY DELIVERED THE FOLLOWING:
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W.P.(C).Nos.17906 & 40877 of 2016
2
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE S.MANU
TUESDAY, THE 26TH DAY OF AUGUST 2025 / 4TH BHADRA, 1947
WP(C) NO. 40877 OF 2016
PETITIONER:
C.K.ABDUL RAHMAN
AGED 78 YEARS
S/O.KOCHAHAMAD, AGED 78 YEARS,
ADMINISTRATIVE OFFICER & DIRECTOR, MEDICARE HOSPITAL,
T.K.S.PURAM, KODUNGALLUR.
BY ADVS.
SRI.R.S.KALKURA
SRI.HARISH GOPINATH
SRI.M.S.KALESH
RESPONDENTS:
1 THE KERALA STATE ELECTRICITY BOARD
REPRESENTED BY ITS SECRETARY, VYDYUTHI BHAVAN,
PATTOM, THIRUVANANTHAPURAM.
2 THE ASSTT. ENGINEER
ELECTRICAL SECTION NO.1 KERALA STATE ELECTRICITY
BOARD, KODUNGALLUR - 680 664.
3 THE SENIOR SUPERINTENDENT ELECTRICAL SECTION NO.1
KERALA STATE ELECTRICITY BOARD,
KODUNGALLUR - 680 664.
4 KERALA STATE ELECTRICITY APPELLATE AUTHORITY
CC 51/52, NEAR 110 KV SUBSTATION VYTILLA,
KOCHI - 682 019.
BY ADVS.
SRI.AJIT JOY
SRI.ANEESH JAMES
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON
26.08.2025, ALONG WITH WP(C).17906/2016, THE COURT ON THE SAME
DAY DELIVERED THE FOLLOWING:
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W.P.(C).Nos.17906 & 40877 of 2016
3
S.MANU, J.
------------------------------------------------
W.P.(C).Nos.17906 & 40877 of 2016
------------------------------------------------
Dated this the 26th day of August, 2025
JUDGMENT
First respondent is running a hospital. Electricity supply
under LT-VIB Tariff in three phases with sanctioned load 74kW
was availed by the 1st respondent. In an inspection conducted
by Vigilance Special Squad led by Anti Power Theft Squad,
Palakkad unit in the premises of the 1 st respondent on
27.3.2003, additional load of 46kW over and above registered
load of 74kW was detected. Penalty was imposed and the same
was remitted by the 1st respondent. Though it was directed to
regularise the unauthorised additional load, same was not done
by the 1st respondent for a long time. The supply was not
disconnected, however, charges for additional load continued to
be demanded and paid by the 1st respondent.
2. According to the KSEB penal portion of fixed charges
from June 2008 to March 2011 and energy charges from June
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W.P.(C).Nos.17906 & 40877 of 2016
2007 to April 2011 were not included in the monthly demands
by mistake. It was noticed in the audit of accounts. Thereafter,
a demand was issued for the escaped charges on 30.10.2011.
The bill was for an amount of Rs.18,58,537/-. First respondent
challenged the demand in W.P.(C)No.30946/2011. The writ
petition was disposed of by judgment dated 8.11.2013.
Impugned demand was set aside and Board was given liberty to
impose penalty in compliance with Section 126 of the Electricity
Act.
3. First respondent submitted a representation on
17.7.2014 to the Assistant Engineer requesting to drop the
demand. Thereafter, Ext.P6 order was issued by the Assistant
Engineer directing to remit the amount as per the final bill. A
detailed split up was also furnished along with the order. First
respondent challenged the order by approaching the appellate
authority under Section 127 of the Electricity Act. The appellate
authority after considering the matter, by order dated
23.12.2015 allowed the appeal. Final assessment order was set
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W.P.(C).Nos.17906 & 40877 of 2016
aside and Board was directed to refund the amount already
deposited by the 1st respondent with interest. W.P.
(C)No.17906/2016 was filed by the Board challenging the order
of the appellate authority. First respondent filed W.P.
(C)No.40877/2016 seeking direction to refund an amount of
Rs.9,29,300/- deposited with interest at the rate of 21% per
annum from 1.9.2014. Since the writ petitions are inter-related
they were heard together and are being disposed by this
common judgment. Parties are being referred as they are
arrayed in W.P.(C)No.17906/2016. Reference to the documents
is also as marked in the said writ petition.
4. Learned Standing Counsel for the KSEB Sri.Ajit Joy
contended that the order of the appellate authority is illegal. He
submitted that the consumer had indulged in unauthorised use
of energy. 46 kW was the unauthorised load. Though the
penalty was paid, 1st respondent failed to regularise the
additional load. Steps were taken by the 1st respondent much
later for regularisation of unauthorised load. First respondent is
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liable to pay penalty for the unauthorised additional load until
the additional load is removed or regularised as per the Rules.
Due to inadvertence at the time of computerization fixed
charges from 6/2008 to 3/2011 and energy charges from
6/2007 to 4/2011 were omitted when monthly demands were
raised. Bill for an amount of Rs.18,58,537/- was issued on
31.10.2011 when the omission was noticed. The demand so
raised was in accordance with the relevant Regulations and
Rules. Therefore, the demand was in fact an assessment made
for escaped charges for a period during which the energy
charges and fixed charges were omitted to be demanded. The
learned Standing Counsel referred to Regulation 51(2) of the
Kerala State Electricity Board Terms and Conditions of Supply,
2005 which provides that the penalty for unauthorised
additional load shall be levied till the unauthroised additional
load is removed or regularised. The learned Standing Counsel
submitted that the impugned order of the appellate authority is
illegal and perverse as the appellate authority arrived at an
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W.P.(C).Nos.17906 & 40877 of 2016
erroneous conclusion that the procedure under Section 126 of
the Electricity Act was not followed. He referred to Section 126
of the Act and contended that assessing officer can come to a
conclusion regarding unauthorised use of electricity after
inspection of records also and it is not necessary that inspection
of place or premises or of the equipment, gadgets, machines or
devices shall be made. He hence submitted that the final bill in
the case at hand was issued and the final assessment was made
on the basis of inspection of records and hence there was due
compliance of the provisions of the Section 126 of the Act. He
also submitted that the inspection was held by Vigilance Squad
in the year 2003 in which unauthorised load was detected and
penalty was paid by the 1 st respondent. Hence, the 1st
respondent cannot be permitted to contend that there was no
unauthorised use of electricity. So also it cannot be disputed
that unauthorised load was removed or regularised during the
period with respect to which the assessment was made for
escaped charges. Hence, he contended that the appellate
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authority ought to have upheld the final assessment and by
interfering with the same, the said authority has committed a
grave error in exercising the powers under Section 127 of the
Act.
5. The learned Standing Counsel further submitted that
the demands are not hit by limitation under Section 56(2) of the
Act. He relied on judgment of the Hon'ble Supreme Court in
Assistant Engineer(D1), Ajmer Vidyut Vitran Nigam
Limited and Another v. Rahamatullah Khan Alias
Rahamjulla [(2020)4 SCC 650]. About the contention of the
respondent that for issuing the disputed demand notices fresh
compliance of the requirements of Section 126 was essential, he
pointed out judgment of a Division Bench of this Court in
W.A.No.975/2014. He contended that for issuing further
demands on the basis of an inspection and assessment under
Section 126 of the Electricity Act, no fresh compliance with the
procedure under Section 126 is essential in view of the
judgment of the Division Bench.
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6. Learned counsel for the 1st respondent submitted that
Ext.P2 bill was issued on 31.10.2011 without giving any
opportunity to the respondent to explain. No opportunity was
provided to contest the calculation of the alleged dues. The
Board has violated provisions of Section 126 while issuing the
disputed bill. In W.P.(C)No.30946/2011 this Court quashed the
bills and held that KSEB could impose penalty only after
complying with all the procedural formalities under Section 126
of the Act. Thereafter, fresh provisional assessment bill was
issued on 14.7.2014 reiterating the claim raised earlier. Since
this Court directed the KSEB in Ext.P4 judgment to comply with
the procedure under Section 126 of the Electricity Act, the
Board ought to have followed the same. The judgment had
become final and being an inter-party judgment the Board as
well as the consumer are bound by the said judgment. By
issuing the final assessment bill without complying with the
procedure under Section 126 of the Act, the Board had flouted
the directions in Ext.P4 judgment. The appellate authority
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therefore rightly interfered and set aside the final assessment
and bill. He also submitted that the demand was hit by
limitation. According to the learned counsel, the maximum
previous period with respect to which the claim can be raised
under Section 126 of the Act is 12 months and hence the
demand is clearly untenable. The Board ought to have complied
with the direction of the appellate authority to refund the
amount deposited by the 1 st respondent. The learned counsel
also submitted that the judgment of Division bench of this Court
in W.A.No.975/2014 is distinguishable on facts. He therefore
prayed that the challenge by the Board may be repelled and it
may be directed to refund the amount deposited by the
respondent at the earliest.
7. The main issue to be addressed in view of the
contentions of both sides is as to whether the procedure
adopted by the Board in issuing final assessment order was
proper or not. In W.P.(C)No.30946/2011 filed by the consumer
this Court set aside Ext.P2 bill and held as follows:-
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".............Even though Regulation 51 (2) of the
KSEB Terms and Conditions Supply, 2005 provides
that penalty for unauthorized additional load shall
be levied till the said unauthorized additional load
is removed or regularized, the said regulation does
not authorizes any person to make an assessment
of such penalty without following the
comprehensive procedure contemplated under
Section 126, which are mandatory in nature.
Merely because once the unauthorized use of
electricity was detected and penalty was imposed,
the authorities of the Board are not entitled to
continue the penalization automatically for any
further period, without following procedure
prescribed under Section 126. On an equitable
basis, the authorities of the Board are not
supposed to permit the consumer to continue the
unauthorized usage indefinitely, without insisting
upon to dismantle the unauthorized additional load
or without insisting upon regularization of such
additional load. Even if no such action was taken
from the side of the Board, and even if the
consumer had failed to remove or regularize the
additional load, penalty alleging continuance of
such unauthorized usage can be made only by
completing separate assessment, after complying
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W.P.(C).Nos.17906 & 40877 of 2016
with all the procedural formalities requisite under
Section 126. The impugned bills issued merely
demanding payment of penalty without issuing any
provisional order and without affording any
opportunity to the consumer to raise objections and
without affording any opportunity for personal
hearing, as required under Section 126 (2) and (3),
cannot be sustained legally.
5. Under the above mentioned circumstances,
the writ petition is allowed and Exhibit P1 and P4
bills are hereby quashed. It is made clear that the
respondents will be at liberty to impose penalty on
the petitioner, if sustainable under law, after
complying with all the procedural formalities
enumerated under Section 126. However, if any
such steps are initiated, the petitioner will be at
liberty to challenge/object such proposal on all
available grounds, including the question of
limitation if any provided under the relevant
provisions."
8. This Court thus held that the Board will be at liberty
to impose penalty on the consumer, if sustainable under law,
after complying with all the procedural formalities enumerated
under Section 126. Learned counsel for the petitioner
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vehemently contended that no fresh inspection was conducted
by the Board and ignoring the specific direction to comply with
the procedure under Section 126 of the Act, the Board
proceeded in violation of the directions issued by this Court. The
learned Standing Counsel addressed the said contention by
arguing that it is not necessary to conduct a fresh inspection for
assessment under Section 126(1) of the Act. He pointed out
that inspection of records maintained is also sufficient for
effecting assessment under Section 126 of the Act. For ready
reference Section 126(1) is extracted hereunder:-
"Section 126. Assessment. (1) If on an inspection
of any place or premises or after inspection of the
equipments, gadgets, machines, devices found
connected or used, or after inspection of records
maintained by any person, the assessing officer comes
to the conclusion that such person is indulging in
unauthorised use of electricity, he shall provisionally
assess to the best of his judgment the electricity
charges payable by such person or by any other person
benefited by such use."
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9. A careful reading of the provision shows that
assessing officer can come to the conclusion that there is
unauthorised use of electricity either, 1) on an inspection of any
place or premises, 2) or after inspection of the equipments,
gadgets, machines, devices found connected or use, 3) or after
inspection of records maintained by any person. Language of
the provision makes it clear that the assessing officer can arrive
at a conclusion if he finds that there is unauthorised use of
electricity on inspection in any of the three modes provided
under Section 126(1). Each mode of inspection is independent
and separate. Therefore, it cannot be said that inspection of the
place or premises is mandatory or that the assessment cannot
be done without such an inspection.
10. The learned Standing Counsel submitted that in the
instant case unauthorised use of electricity was detected in the
inspection conducted in the premises in 2003. Penalty imposed
was paid by the 1st respondent. Penal charges were also being
paid. It is also not disputed that the unauthorised load was not
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removed and regularised before or during the period with
respect to which Ext.P2 bill was issued. He hence submitted that
inspection of records was sufficient in the case at hand for
assessment pursuant to which Ext.P2 was issued. It is to be
noted that Ext.P2 as well as Ext.P6 were issued for the fixed
charges and energy charges which were omitted to be
demanded along with penal charges. In the nature of the
charges which were omitted and later demanded it cannot be
said that any fresh inspection of the premises was required.
Consumption will be recorded periodically for the purpose of
issuing bills. Therefore, records available with the Board were
sufficient to find out the escaped fixed charges and electricity
charges. Direction issued by this court in WP(C).No.30946 of
2011 was to comply with the requirements of S.126 as
discernible from paragraph 5 of the judgment. Inspection of the
records was hence sufficient for issuing Exts.P2 and P6.
Therefore it cannot be said that the Board did not comply with
the requirements under Section 126 of the Electricity Act when
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it issued Ext.P6. Hence, the contention of the consumer that the
Board violated the directions issued by this Court as well as the
provisions of Section 126 is without merit.
11. The next aspect to be considered is as to whether
the Board was justified in raising demands in 2014 for the
period from 6/2007 to 4/2011 and 6/2008 to 3/2011. The
learned counsel for the consumer contended that under Section
126(5) of the Act, the assessment shall be limited to a period of
12 months immediately preceding the date of inspection. He
also pointed out that the limitation under Section 56(2) also
may apply. The learned Standing Counsel on the other hand
submitted that the said limitation would apply only when the
period during which unauthorised use of electricity had taken
place could not be ascertained. Section 126(5) is extracted
hereunder: -
"Section 126. Assessment.........
(5) If the assessing officer reaches to the
conclusion that unauthorised use of electricity has
taken place, the assessment shall be made for the
entire period during which such unauthorised use of
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electricity has taken place and if, however, the
period during which such unauthorised use of
electricity has taken place cannot be ascertained,
such period shall be limited to a period of twelve
months immediately preceding the date of
inspection."
12. It is clear from the reading of the provision that the
period of assessment shall be limited to 12 months immediately
preceding the date of inspection only if the period during which
unauthorised use of electricity has taken place cannot be
ascertained. In the present case period during which the Board
omitted to demand electricity charges and fixed charges is
clearly ascertainable and hence the provisions of Section 126(5)
of the Act have no application. As rightly contended by the
learned Standing Counsel, even the limitation under Section
56(2) will not apply in the case in view of the categorical
declaration by the Hon'ble Supreme Court in Assistant
Engineer(D1), Ajmer Vidyut Vitran Nigam Limited and Another
v. Rahamatullah Khan Alias Rahamjulla [(2020)4 SCC 650].The
Hon'ble Supreme Court held as under:-
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"9. Applying the aforesaid ratio to the facts of the
present case, the licensee company raised an additional
demand on 18-3-2014 for the period July 2009 to
September 2011. The licensee company discovered the
mistake of billing under the wrong Tariff Code on
18-3-2014. The limitation period of two years under
Section 56(2) had by then already expired.
9.1. Section 56(2) did not preclude the licensee
company from raising an additional or supplementary
demand after the expiry of the limitation period under
Section 56(2) in the case of a mistake or bona fide
error. It did not, however, empower the licensee
company to take recourse to the coercive measure of
disconnection of electricity supply, for recovery of the
additional demand.
9.2. As per Section 17(1)(c) of the Limitation Act,
1963, in case of a mistake, the limitation period begins
to run from the date when the mistake is discovered for
the first time. In Mahabir Kishore v. State of M.P.
[Mahabir Kishore v. State of M.P., (1989) 4 SCC 1] ,
this Court held that : (SCC p. 11, para 22)
"22. Section 17(1)(c) of the Limitation Act,
1963, provides that in the case of a suit for relief
on the ground of mistake, the period of limitation
does not begin to run until the plaintiff had
discovered the mistake or could with reasonable
diligence, have discovered it. In a case where
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payment has been made under a mistake of law as
contrasted with a mistake of fact, generally the
mistake becomes known to the party only when a
court makes a declaration as to the invalidity of
the law. Though a party could, with reasonable
diligence, discover a mistake of fact even before a
court makes a pronouncement, it is seldom that a
person can, even with reasonable diligence,
discover a mistake of law before a judgment
adjudging the validity of the law.
(emphasis supplied)"
9.3. In the present case, the period of limitation
would commence from the date of discovery of the
mistake i.e. 18-3-2014. The licensee company may
take recourse to any remedy available in law for
recovery of the additional demand, but is barred from
taking recourse to disconnection of supply of electricity
under sub-section (2) of Section 56 of the Act."
(Emphasis supplied)
13. The appellate authority allowed the appeal by Ext.P8
order holding that for assessment invoking Section 126 of the
Act, all the procedure under the said Section shall be complied
with, which would commence with the site inspection and
preparation of detailed site mahazar. As found already, for
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assessment under Section 126 of the Act, inspection of the
premises is only one of the methods provided under Section
126(1). Observation of the appellate authority that every
assessment under Section 126 shall commence with inspection
and preparation of mahazar is therefore erroneous. The
appellate authority relied on the judgment of this Court in
Luqman Ali Muhammed v. Kerala State Electricity Board
[2013 SCC OnLine Ker 24478:2014 (2) KLT 833]. This Court
held that penalty for continued unauthorised extension can be
imposed only if the assessing officer is convinced that such
extension had actually continued during any period after the
date of inspection that too after complying with the procedure
under Section 126 of the Act. In the facts of the instant case the
unauthorised use of electricity was conceded by the consumer
by paying the penalty and by continuing to pay penal charges
for a long period. The Board has contended that it repeatedly
directed the consumer to dismantle the unauthorised load or to
regularise the same. The consumer has no case that it
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disconnected the unauthorised load or regularised it before or
during the period with respect to which Ext.P6 was issued. In
such a situation, in my view, there was no requirement to
conduct any fresh inspection before issuing Ext.P6. Hence, the
reasoning of the appellate authority obtained from Ext.P8
cannot be sustained. It is liable to be set aside.
In the result, WP(C).No.17906/2016 is allowed. Ext.P8
order in appeal No.67/2015 is set aside. WP(C).No.40877/2016
is dismissed.
Sd/-
S.MANU
JUDGE
skj
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APPENDIX OF WP(C) 17906/2016
PETITIONER'S EXHIBITS
EXHIBIT P1 A TRUE COPY OF THE SITE MAHASSAR DATED
27-03-2003.
EXHIBIT P2 A TRUE COPY OF THE SAID BILL DATED 30-
10-2011 ALONG WITH THE CALCULATION
STATEMENT.
EXHIBIT P3 A TRUE COPY OF THE REPRESENTATION FILED
BEFORE THE ASSISTANT EXECUTIVE ENGINEER
ON 10-05-2013.
EXHIBIT P4 A TRUE COPY OF THE JUDGMENT IN WPC
30946/2011 DATED 08-11-2013.
EXHIBIT P5 A TRUE COPY OF THE OBJECTION FILED BY
THE 1ST RESPONDENT ON 17-07-2014.
EXHIBIT P6 A TRUE COPY OF THE FINAL ORDER PASSED
ON 08-08-2014.
EXHIBIT P7 A TRUE COPY OF THE APPEAL PREFERRED
BEFORE THE APPELLATE AUTHORITY.
EXHIBIT P8 A TRUE COPY OF THE ORDER PASSED BY THE
APPELLATE AUTHORITY UNDER S. 127 OF THE
ACT IN OP NO. 67 OF 2015 DATED 23-12-
2015.
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W.P.(C).Nos.17906 & 40877 of 2016
APPENDIX OF WP(C) 40877/2016
PETITIONER'S EXHIBITS
EXT.P1: TRUE COPY OF THE BILL DATED 18/07/2011
ISSUED BY THE 3RD RESPONDENT TO THE
PETITIONER.
EXT.P2: TRUE COPY OF THE NOTICE DATED
04/08/2011 ISSUED BY THE PETITIONER'S
COUNSEL TO THE RESPONDENTS 1 AND 2.
EXT.P3: TRUE COPY OF THE POSTAL ACKNOWLEDGEMENT
EVIDENCING THE RECEIPT OF THE NOTICE
ISSUED BY THE PETITIONER'S COUNSEL.
EXT.P4: TRUE COPY OF THE FINAL BILL DATED
31/10/2011 ISSUED BY THE 3RD RESPONDENT
TO THE PETITIONER.
EXT.P5: TRUE COPY OF THE STATEMENT OF ACCOUNTS
ISSUED BY THE RESPONDENTS TO THE
PETITIONER.
EXT.P6: TRUE COPY OF THE JUDGMENT IN WRIT
PETITON (CIVIL) NO.30946/2011 DATED
08/11/2013.
EXT.P7: TRUE COPY OF THE BILL ALONG WITH THE
CALCULATION SHEET ISSUED BY THE 2ND
RESPONDENT TO THE PETITIONER.
EXT.P8: TRUE COPY OF THE ORDER DATED 08/08/2014
ISSUED BY THE 2ND RESPONDENT.
EXT.P9: TRUE COPY OF THE MEMORANDUM OF APPEAL
IN ITS FORMAT AND THE CONTENTS OF THE
APPEAL.
EXT.P10: TRUE COPY OF THE DEMAND DRAFT NO.903050
DATED 01/09/2014 ISSUED IN FAVOUR OF
THE RESPONDENT FOR RS.9,29,300/-
EXT.P11: TRUE COPY OF THE ORDER DATED 23/12/2015
OF THE KERALA STATE ELECTRICITY
APPELLATE AUTHORITY IN APPEAL NO.67 OF
2015.
