Madras HC Says Tamil Nadu Can Recover Electricity-Theft Dues As Land Revenue, Orders Karur Consumer To Pay ₹26.3 Lakh

The respondent owned a mosquito-net manufacturing unit and had electricity service connection S.C.No.2061.

Following an inspection on 19 November 2007, the appellants alleged illegal tapping of electricity and issued a provisional assessment of ₹28,28,499; after rejecting his objections, they issued a final assessment on 4 December 2007.

The respondent challenged the assessment, and the appellants later issued a bill under Section 3(1) of the Tamil Nadu Electricity Board (Recovery of Dues) Act, 1978 (“Recovery Act”), followed by a demand notice under Section 4.

The writ petition challenging that notice was allowed by a single Judge, who held the Recovery Act repugnant to the Electricity Act, 2003 (“2003 Act”).

The appellants appealed.

The Division Bench noted that the respondent had paid ₹2,10,000 to compound the alleged theft offence, while the balance demand remained unpaid.

Article 254(1) of the Constitution gives a Parliamentary law precedence over a repugnant State law concerning a Concurrent List matter; under Article 254(2), a State law reserved for and receiving Presidential assent may prevail in that State, subject to Parliament’s power to later amend or repeal it.

Section 56 of the 2003 Act provides for disconnection of supply for non-payment and preserves a right to recover charges “by suit”; Sections 174 and 175 respectively provide for the Act’s overriding effect in cases of inconsistency and state that its provisions are “in addition to and not in derogation of” other laws.

Section 6 of the Recovery Act provides a separate statutory mechanism for recovering dues as arrears of land revenue.

Applying M. Karunanidhi v. Union of India, (1979) 3 SCC 431, the Court stated that repugnancy requires inconsistent and irreconcilable provisions; where both laws can operate without collision, repugnancy does not arise.

It also relied on Ratan Lal Adukia v. Union of India, (1989) 3 SCC 537, concerning implied repeal and legislative intent.

The Court read Section 56 as not requiring the licensee to recover dues exclusively by civil suit.

It construed the phrase “without prejudice to his rights to recover such charge or other sum by suit” as preserving the consumer’s right to sue, rather than imposing a suit-only recovery obligation on the Department.

Since, in the Court’s view, Section 56 did not prescribe a specific recovery mechanism for the Department, Section 6 of the Recovery Act supplied an additional mechanism rather than contradicting the 2003 Act; Section 175 supported that construction.

The Court therefore found no repugnancy or implied repeal and held that fresh Presidential assent was unnecessary for the Recovery Act to continue operating after the 2003 Act came into force.

It also relied on the respondent’s compounding payment in addressing the dispute, holding that his acceptance of guilt and compounding of the offence barred him from invoking the Section 56 suit remedy.

The Court held that Section 6 of the Recovery Act is not repugnant to Section 56 of the 2003 Act and that the Department may recover dues under the Recovery Act and the Tamil Nadu Electricity Supply Code, 2004 without first filing a suit.

The demand notice was revived, and the respondent was directed to pay the amount stated in it, without charges or interest under the BPC, within four weeks; failing payment, the appellants could proceed with recovery in accordance with law.