Electricity-theft assessment cannot be based on suspicion alone; inspection report must record clear evidence, Supreme Court rules

The petitioner, an HTSS electricity consumer with a contract demand of 3000 KVA, experienced a breakdown after a blast in its cubical metering unit. During repairs on 16.06.2017, the respondents found the metering arrangement substantially functional, with the b-phase CT replaced due to damage

On 26.09.2017, the respondents conducted a further inspection and alleged irregularities in the metering cubicle, including welded nuts, accessibility of the meter chamber, and space around a cable slot. However, the report also recorded that the seals were intact and stated only that “further action will be as per norms”

An FIR was registered under Sections 379, 420 and 353 IPC and Sections 135, 137 and 138 of the Electricity Act, 2003, following which the petitioner’s electricity supply was disconnected

A provisional assessment of Rs. 3,23,71,524/- was thereafter issued under Section 135 of the Electricity Act, 2003

The petitioner challenged the assessment and disconnection before the Jharkhand High Court. The Single Judge quashed the provisional assessment, holding that the inspection report did not disclose conclusive evidence of theft

The Division Bench reversed that decision on the grounds that the statutory mechanism under the Electricity Act was an adequate alternative remedy and that the inspection report disclosed sufficient material

Whether a writ petition under Article 226 of the Constitution was maintainable against a provisional assessment order when statutory remedies under Sections 126 and 127 of the Electricity Act, 2003 were available?

Whether the inspection report disclosed the ingredients of theft of electricity under Section 135 of the Electricity Act, 2003, including the requisite dishonest intention, so as to sustain the provisional assessment and disconnection?

The Court applied Sections 126 and 127 of the Electricity Act, 2003, which create a complete mechanism for provisional assessment, objections, final assessment and appeal, while holding that the statutory appeal under Section 127 lies only against a final assessment order and not a provisional assessment order

It relied on Southern Electricity Supply Co. of Orissa Ltd. v. Sri Seetaram Rice Mill, (2012) 2 SCC 108, for the principle that availability of an alternative remedy does not absolutely bar the High Court’s writ jurisdiction, particularly where jurisdictional issues arise

It also relied on W.B. State Electricity Distribution Co. Ltd. v. Orion Metal (P) Ltd., (2020) 18 SCC 588, for the proposition that Section 126 assessment may apply even where unauthorised use occurs through alleged meter tampering, although Section 126 civil proceedings remain distinct from Section 135 criminal proceedings

Section 126 concerns unauthorised use of electricity and does not require mens rea, whereas Section 135 criminalises dishonest abstraction, consumption or use of electricity and requires proof of both actus reus and mens rea to the criminal standard

Clauses 11.3, 11.8, 11.12, 11.14, 11.17 and 11.28 of the Jharkhand Electricity Supply Code Regulations, 2015 require inspection, seizure of relevant material where direct theft is detected, a reasoned provisional assessment, opportunity to object, final assessment and restoration upon payment

The Court held that the writ petition was maintainable because the impugned order was only a provisional assessment order, against which Section 127 provides no statutory appeal

On the merits, the Court distinguished unauthorised use under Section 126 from theft under Section 135. Since the respondents proceeded on the basis of theft, they were required to show material recorded during inspection that prima facie established dishonest abstraction or interference with the metering system

The inspection report merely referred to alleged structural or accessibility irregularities in the cubicle. It did not expressly allege that theft had been detected, did not record the authorised officer’s subjective satisfaction, and acknowledged that the plastic seals were intact

No meter, cable, wire or other material was seized, contrary to Regulation 11.8

The Court therefore concluded that the alleged discrepancies raised, at most, suspicion and could not establish the actus reus or mens rea required under Section 135. Suspicion, however strong, could not substitute strict proof

It answered the second issue by holding that the inspection report did not disclose sufficient evidence or the requisite subjective satisfaction to invoke Section 135 of the Electricity Act, 2003.

The Division Bench’s order in LPA No. 648 of 2018 was set aside, the Single Judge’s order dated 05.09.2018 quashing the provisional assessment was restored, and the appeal was allowed without costs