M/S. HIMADRI STEEL PVT. LTD. VS. JHARKHAND URJA VIKAS NIGAM LIMITED

2026 INSC 851SLP (C) No.33179 of 2025 Page 1 of 32

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

SPECIAL LEAVE PETITION (CIVIL) NO(S). 33179 OF 2025

M/S. HIMADRI STEEL

PVT.LTD. … PETITIONER(S)

VERSUS

JHARKHAND URJA VIKAS NIGAM

LIMITED & ORS. … RESPONDENT(S)

J U D G M E N T

ARAVIND KUMAR, J.

CONSPECTUS

1. The Petitioner is a private limited company incorporated under

the relevant provisions of Companies Act, 1956. It was granted

electrical connection under HTSS (High Tension Special

Service) Tariff with contract demand of 3000 KVA which was

energized on 03.07.2006. On account of blast in the cubical

metering unit there was electricity breakdown in the

SLP (C) No.33179 of 2025 Page 2 of 32

petitioner’s premises which was rectified on 16.06.2017 by a

team of the Respondent Nigam’s officials and a report was

prepared. The report recorded that the metering unit chamber

was slightly damaged, K-Phase CT and all PT were found in

proper condition (written as OK), meter reading was correct

and there proper sealing, however, b-phase CT which was

totally cracked and damaged was replaced.

2. Authorities visited the petitioner’s premises on 26.09.2017 and

inspected the check meter installed by them and also inspected

the metering cubical installed. Further, they prepared an

inspection report dt. 26.09.2017.

3. On the strength of the written report of the Assistant Electrical

Engineer, Chakulia PS Case No. 30 / 2017 u/Ss. 379 / 420 / 353

IPC and u/Ss. 135 / 137 / 138 of the Electricity Act, 2003 was

lodged. The next day, the respondents disconnected the

electrical connection.

4. On 29.09.2017, the Respondents issued a Provisional

Assessment Order determining a liability of Rs. 3,23,71,524/-

towards loss caused due to theft of electricity as per Section

125 of the Act in accordance with the provisions of the

Electricity Act, 2003 and applicable regulations, based on the

inspection findings and relevant consumption data.

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5. The Petitioner ended up filing a Writ Petition (C) No. 6054 /

2017 before the High Court of Jharkhand, challenging the

Provisional Assessment Order and contending that the

Respondents had illegally disconnected the electrical

connection of the petitioner on 27.09.2017 on mere suspicion

of theft of electricity, in absolute contravention of the specific

provisions of the Electricity Act, 2003 as well as Clause 11.12

Jharkhand (Electricity Supply Code) Regulations, 2015

(hereinafter referred to as “the Regulations”) issued by the

Jharkhand State Electricity Regulatory Commission.

6. The said Writ Petition was allowed by the Ld. Single Judge

vide order dt. 05.09.2018 and the Provisional Assessment

Order was quashed. It was held that the inspection report did

not disclose conclusive evidence of theft of electricity.

7. Against the order of the Ld. Single Judge, the Respondents

filed LPA No. 648 / 2018 and in the said LPA, the Ld. Division

Bench allowed the LPA and set aside the order of the Single

Judge vide order dt. 08.08.2025, holding that the inspection

report disclosed sufficient material and that the statutory

mechanism under the Electricity Act is a complete code and

the Writ Petition was not maintainable in view of the

SLP (C) No.33179 of 2025 Page 4 of 32

alternative remedy available to the Petitioner. It is against this

order that the petitioners are before us.

SUBMISSIONS OF THE PETITIONER

8. The submissions of the Petitioner/ Electricity Consumer are as

follows:

a. That the inspection report dt. 26.09.2017 neither makes

any averment regarding the alleged “theft of electricity”,

nor does it record the satisfaction of the assessing officer

on “theft of electricity”.

b. The conclusion in the report that “further action will be

taken as per norms” is too vague and gives wide discretion

to respondents to twist the facts.

c. The inspection report does not allege “theft of electricity”

and the respondents are trying to build this claim as per

FIR.

d. During the detailed inspection by the authorities of the

petitioner’s premises, they found no irregularity or

disturbance in the check meter or the metering cubical

which may lead to evidence of theft. All the seals were

found intact and there had been no interference in any

manner with the entire metering arrangement.

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e. If at all there was any evidence of theft, they would have

mentioned that in the inspection report concluding that

there has been a theft of electricity and then they would

have mandatorily disconnected the electricity connection.

However, the inspecting team after the conclusion of

inspection restored the power supply and left the premises

saying that the metering cubicle is very old and it needs to

be replaced.

f. In the absence of direct evidence of theft of electricity, the

penalty cannot be imposed on the petitioner.

g. Subjective satisfaction of the officer based on evidence or

material collected during inspection is mandatory for

initiating proceedings for “suspected theft of electricity”,

or “unauthorized use of electricity” or “theft of

electricity”. In absence thereof, subsequent registration of

FIR or issuance of Provisional Assessment Order, which

is based on Inspection Report would be wholly without

jurisdiction.

SUBMISSIONS OF THE RESPONDENTS

9. The submissions of the Respondents / Jharkhand Urja Vikas

Nigam Ltd. are as follows:

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a. That the SLP ought to be dismissed at the threshold as the

petitioner has consciously bypassed the remedy u/Ss. 126

and 127 of the Electricity Act which provide a complete

and self - contained mechanism for assessment,

adjudication, filing of objections and appeal and in such a

case, no Writ Petition should have been entertained.

b. Under the Electricity Act, an inspection report is only

required to disclose prima facie material indicating

unauthorized use or theft of electricity, and there is no

requirement that such report must record a conclusive

finding at the stage of inspection.

c. Proceedings u/S. 126 of the Electricity Act, 2003 are civil

in nature and operate independently of criminal

prosecution under S. 135 and it is well-settled that

assessment for unauthorized use and criminal liability for

theft are distinct and can proceed simultaneously. In the

present case, clear jurisdictional facts existed in asmuch

as the inspection report dt. 26.09.2017 disclosed material

irregularities in the metering system enabling

unauthorized abstraction of electricity, thereby validly

conferring jurisdiction upon the Respondents to initiate

proceedings.

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LEGAL POSITION

10. We have heard the parties and thoroughly perused the record.

Before proceeding with the case, we would like to discuss the

Electricity Act, 2003 first.

11. As the Title of the Act states, it is 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, rationalisation 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.

12. Before this Act, the Electricity Act, 1910, the Electricity

(Supply) Act, 1948 and the Electricity Regulatory

Commissions Act, 1998 held the ground. With an intent to

encourage the private sector participation in generation,

transmission and distribution of the electricity, the Electricity

Act, 2003 was introduced.

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13. In the present case, we are dealing with terms such as

“unauthorised use of electricity” which features u/S. 126 and

127 of the Act and “theft of electricity” which features u/S. 135

of the Act.

14. Sections 126 and 127 fall in Part XII of the Act which relates

to Investigation and Enforcement and form a complete code

unto themselves. Section 135 falls under Part XIV of the Act

which deals with “Offences and Penalties”. For quick

reference, Sections 126, 127 and 135 of the Electricity Act,

2003 have been reproduced below:

“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.

(2) The order of provisional assessment shall be served

upon the person in occupation or possession or in charge of

the place or premises in such manner as may be prescribed.

(3) The person, on whom an order has been served under

sub-section (2), shall be entitled to file objections, if any,

against the provisional assessment before the assessing

officer, who shall, after affording a reasonable opportunity

of hearing to such person, pass a final order of assessment

within thirty days from the date of service of such order of

provisional assessment, of the electricity charges payable

by such person.

SLP (C) No.33179 of 2025 Page 9 of 32

(4) Any person served with the order of provisional

assessment may, accept such assessment and deposit the

assessed amount with the licensee within seven days of

service of such provisional assessment order upon him:

* * * * *

(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 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.

(6) The assessment under this section shall be made at a rate

equal to twice the tariff applicable for the relevant category

of services specified in sub-section (5).

Explanation.

—For the purposes of this section, —

(a) “assessing officer” means an officer of a State

Government or Board or licensee, as the case may be,

designated as such by the State Government;

(b) “unauthorised use of electricity” means the usage of

electricity—

(i) by any artificial means; or

(ii) by a means not authorised by the concerned

person or authority or licensee; or

(iii) through a tampered meter; or

(iv) for the purpose other than for which the usage of

electricity was authorised; or

(v) for the premises or areas other than those for

which the supply of electricity was authorised.

127. Appeal to Appellate Authority. — (1) Any person

aggrieved by the final order made under section 126 may,

within thirty days of the said order, prefer an appeal in such

form, verified in such manner and be accompanied by such

fee as may be specified by the State Commission, to an

appellate authority as may be prescribed.

SLP (C) No.33179 of 2025 Page 10 of 32

(2) No appeal against an order of assessment under sub-

section (1) shall be entertained unless an amount equal to

half of the assessed amount is deposited in cash or by way

of bank draft with the licensee and documentary evidence

of such deposit has been enclosed along with the appeal.

(3) The appellate authority referred to in sub-section (1)

shall dispose of the appeal after hearing the parties and pass

appropriate order and send a copy of the order to the

assessing officer and the petitioner.

(4) The order of the appellate authority referred to in sub-

section (1) passed under sub-section (3) shall be final.

(5) No appeal shall lie to the appellate authority referred to

in sub-section (1) against the final order made with the

consent of the parties.

(6) When a person defaults in making payment of assessed

amount, he, in addition to the assessed amount shall be

liable to pay, on the expiry of thirty days from the date of

order of assessment, an amount of interest at the rate of

sixteen per cent. per annum compounded every six months.

135. Theft of electricity. —

(1) Whoever, dishonestly, —

(a) taps, makes or causes to be made any connection with

overhead, underground or under water lines or cables, or

service wires, or service facilities of a licensee or

supplier, as the case may be; or

(b) tampers a meter, installs or uses a tampered meter,

current reversing transformer, loop connection or any

other device or method which interferes with accurate or

proper registration, calibration or metering of electric

current or otherwise results in a manner whereby

electricity is stolen or wasted; or

(c) damages or destroys an electric meter, apparatus,

equipment, or wire or causes or allows any of them to be

so damaged or destroyed as to interfere with the proper

or accurate metering of electricity; or

(d) uses electricity through a tampered meter; or

(e) uses electricity for the purpose other than for which

the usage of electricity was authorised, so as to abstract

SLP (C) No.33179 of 2025 Page 11 of 32

or consume or use electricity shall be punishable with

imprisonment for a term which

may extend to three years or with fine or with both:

Provided that in a case where the load abstracted,

consumed, or used or attempted abstraction or attempted

consumption or attempted use—

(i) does not exceed 10 kilowatt, the fine imposed on

first conviction shall not be less than three times the

financial gain on account of such theft of electricity

and in the event of second or subsequent conviction

the fine imposed shall not be less than six times the

financial gain on account of such theft of electricity;

(ii) exceeds 10 kilowatt, the fine imposed on first

conviction shall not be less than three times the

financial gain on account of such theft of electricity

and in the event of second or subsequent conviction,

the sentence shall be imprisonment for a term not less

than six months, but which may extend to five years

and with fine not less than six times the financial gain

on account of such theft of electricity:

Provided further that in the event of second and

subsequent conviction of a person where the load

abstracted, consumed, or used or attempted abstraction

or attempted consumption or attempted use exceeds 10

kilowatt, such person shall also be debarred from getting

any supply of electricity for a period which shall not be

less than three months but may extend to two years and

shall also be debarred from getting supply of electricity

for that period from any other source or generating

station:

Provided also that if it is proved that any artificial means

or means not authorised by the Board or licensee or

supplier, as the case may be, exist for the abstraction,

consumption or use of electricity by the consumer, it

shall be presumed, until the contrary is proved, that any

abstraction, consumption or use of electricity has been

dishonestly caused by such consumer.

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(1A) Without prejudice to the provisions of this Act, the

licensee or supplier, as the case may be, may, upon

detection of such theft of electricity, immediately

disconnect the supply of electricity:

Provided that only such officer of the licensee or

supplier, as authorised for the purpose by the

Appropriate Commission or any other officer of the

licensee or supplier, as the case may be, of the rank

higher than the rank so authorised shall disconnect the

supply line of electricity:

Provided further that such officer of the licensee or

supplier, as the case may be, shall lodge a complaint in

writing relating to the commission of such offence in

police station having jurisdiction within twenty-four

hours from the time of such disconnection:

Provided also that the licensee or supplier, as the case

may be, on deposit or payment of the assessed amount

or electricity charges in accordance with the provisions

of this Act, shall, without prejudice to the obligation to

lodge the complaint as referred to in the second proviso

to this clause, restore the supply line of electricity within

forty-eight hours of such deposit or payment.

(2) Any officer of the licensee or supplier as the case may

be, authorised in this behalf by the State Government

may—

(a) enter, inspect, break open and search any place or

premises in which he has reason to believe that

electricity has been or is being used unauthorisedly;

(b) search, seize and remove all such devices,

instruments, wires and any other facilitator or

article which has been, or is being used for unauthorised

use of electricity;

(c) examine or seize any books of account or documents

which in his opinion shall be useful for or relevant to,

any proceedings in respect of the offence under sub-

section (1) and allow the person from whose custody

SLP (C) No.33179 of 2025 Page 13 of 32

such books of account or documents are seized to make

copies thereof or take extracts therefrom in his presence.

(3) The occupant of the place of search or any person on his

behalf shall remain present during the search and a list of

all things seized in the course of such search shall be

prepared and delivered to such occupant or person who

shall sign the list:

Provided that no inspection, search and seizure of any

domestic places or domestic premises shall be carried out

between sunset and sunrise except in the presence of an

adult male member occupying such premises.

(4) The provisions of the Code of Criminal Procedure, 1973

(2 of 1974), relating to search and seizure shall apply, as far

as may be, to searches and seizure under this Act.”

ISSUES

15. In the instant case, it emerges that on the basis of the Inspection

Report dated 26.09.2017, a provisional assessment order was

passed by the Respondent / Jharkhand Bijli Vitran Nigam Ltd.

for payment of loss of amount of Rs. 3,23,71,524/- under

Section 135 of the Electricity Act, 2003 r/w Clause 11 of the

Electricity Supply Code Regulation, 2015.

16. In the light of this fact, the following questions emerge for

consideration:

SLP (C) No.33179 of 2025 Page 14 of 32

a. Whether the remedy of Writ Petition was

available to the Petitioner when statutory

remedies are available under the Act?

b. Whether the Petitioner is liable to be held

accountable under Section 135 of the

Electricity Act, 2003? In other words, are the

ingredients of Section 135 satisfied in the

present case?

17. We now proceed to analysis.

Whether the remedy of Writ Petition was available to the Petitioner

when statutory remedies are available under the Act?

18. The General law is that if the statutory remedies are available,

then the aggrieved party will not ordinarily move the High

Court. However, the said position of law is not free of

exceptions. Availability of a statutory remedy does not oust the

jurisdiction of the High Court to entertain a matter under A.226

of the Constitution. In the case of Southern Electricity Supply

Co. of Orissa Ltd. v. Sri Seetaram Rice Mill1, it was

expounded as follows.

“80. It is a settled canon of law that the High Court would

not normally interfere in exercise of its jurisdiction under

1 (2012) 2 SCC 108

SLP (C) No.33179 of 2025 Page 15 of 32

Article 226 of the Constitution of India where statutory

alternative remedy is available. It is equally settled that this

canon of law is not free of exceptions. The courts, including

this Court, have taken the view that the statutory remedy, if

provided under a specific law, would impliedly oust the

jurisdiction of the civil courts. The High Court in exercise

of its extraordinary jurisdiction under Article 226 of the

Constitution of India can entertain writ or appropriate

proceedings despite availability of an alternative remedy.

This jurisdiction, the High Court would exercise with some

circumspection in exceptional cases, particularly, where the

cases involve a pure question of law or vires of an Act are

challenged. This class of cases we are mentioning by way

of illustration and should not be understood to be an

exhaustive exposition of law which, in our opinion, is

neither practical nor possible to state with precision. The

availability of alternative statutory or other remedy by itself

may not operate as an absolute bar for exercise of

jurisdiction by the courts. It will normally depend upon the

facts and circumstances of a given case. The further

question that would inevitably come up for consideration

before the Court even in such cases would be as to what

extent the jurisdiction has to be exercised.

81. Should the courts determine on merits of the case or

should they preferably answer the preliminary issue or

jurisdictional issue arising in the facts of the case and remit

the matter for consideration on merits by the competent

authority? Again, it is somewhat difficult to state with

absolute clarity any principle governing such exercise of

jurisdiction. It always will depend upon the facts of a given

case. We are of the considered view that interest of

administration of justice shall be better subserved if the

cases of the present kind are heard by the courts only where

they involve primary questions of jurisdiction or the matters

which go to the very root of jurisdiction and where the

authorities have acted beyond the provisions of the Act.

However, it should only be for the specialised tribunal or

SLP (C) No.33179 of 2025 Page 16 of 32

the appellate authorities to examine the merits of

assessment or even the factual matrix of the case.

xxx

87…

3. In view of the language of Section 127 of the 2003

Act, only a final order of assessment passed under

Section 126(3) is an order appealable under Section

127 and a notice-cum-provisional assessment made

under Section 126(2) is not appealable.

4. Thus, the High Court should normally decline to

interfere in a final order of assessment passed by the

assessing officer in terms of Section 126(3) of the

2003 Act in exercise of its jurisdiction under Article

226 of the Constitution of India.”

19. The concept of “provisional order of assessment” and “final

order” find their place under Section 127 of the Act which

governs the cases falling squarely under Section 126 of the Act.

Section 135 does not have a separate procedure. Even then, the

procedure applicable under Section 127 is applicable on cases

falling under Section 126 simply for the reason that all acts of

unauthorised use of electricity are not theft, but all cases of

“theft of electricity” fall under the unauthorised use of

electricity. Hence, if we were to make a Venn Diagram, it will

look somewhat like this:

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20. Our assessment also finds precedence in the case of W.B. State

Electricity Distribution Co. Ltd. v. Orion Metal (P) Ltd.2,

wherein it came to be held as under: -

“12. A perusal of the aforesaid provisions and on giving a

conjoint reading of the same, it appears to us that after an

inspection of any place or any premises of any consumer,

when the assessing officer comes to a conclusion that the

2 (2020) 18 SCC 588

SLP (C) No.33179 of 2025 Page 18 of 32

consumer is indulging in unauthorised use of electricity, the

provisional assessment to the best of his judgment is to be

made in accordance with Section 126(1) of the Act and such

provisional assessment shall be served upon the person in

occupation of the premises. After giving an opportunity to

file objections to the provisional assessment, the assessing

officer is empowered to pass a final order of the assessment

assessing the loss of energy, on account of unauthorised use

of energy. The unauthorised use of electricity is defined

under Section 126(6)(b) of the Act. It is clear from the

aforesaid definition that unauthorised use of electricity

means, the usage of electricity by any artificial means or by

a means not authorised by the person or authority or

licensee concerned; or through a tampered meter; or for the

purpose other than for which the usage of electricity was

authorised; or for the premises or areas other than those for

which the supply of electricity was authorised.

13. It is clear from the reading of Section 126(6)(b)(iii) of

the Act that instances of use of energy through a tampered

meter is included in the definition of unauthorised use of

electricity. If that is so, there is no reason, for excluding the

power of the authorities for making assessment under

Section 126(1) of the Act to assess the loss of energy, where

electricity is used through a tampered meter. All instances

of unauthorised use of energy may not amount to theft of

electricity within the meaning of Section 135 of the Act, but

at the same time, the theft of electricity which is covered by

Section 135 of the Act, will fall within the definition of

unauthorised use of electricity. As per Section 135(1-A) of

the Act, without prejudice to the other provisions of the Act,

the licensee or supplier, as the case may be, upon detection

of theft of electricity, is empowered to disconnect the power

supply immediately. Further, as per the third proviso to

Section 135(1-A) of the Act, the licensee or supplier, as the

case may be, on deposit or payment of assessed amount or

electricity charges, without prejudice to the obligation to

lodge a complaint, can restore the power supply electricity

within forty-eight (48) hours of deposit/payment of such

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amount. Thus, it is clear that the authorities under the Act

are empowered to make a provisional and final assessment

by invoking power under Section 126(1) of the Act, even in

cases where electricity is unauthorisedly used by way of

theft. When a consumer deposits the assessed amount, the

licensee or the supplier has to restore the power supply. The

assessed amount referred to in the aforesaid proviso, relates

to assessment which is contemplated under Section 126(1)

of the Act only. There is apparent distinction between

Section 126 and Section 135 of the Act. Section 126 forms

part of the scheme which authorises electricity supplier to

ascertain loss in terms of revenue caused to it by the

consumer by his act of “unauthorised use of electricity”

whereas Section 135 deals with offence of theft if he is

found to have indulged himself in the acts mentioned in

clauses (a) to (e) of sub-section (1) of Section 135 of the

Electricity Act. Further, it is also clear from Section 154 of

the Act, which prescribes procedure and power of the

Special Court, that the Special Court is empowered to

convict the consumer and impose a sentence of

imprisonment. The Special Court, in cases, where a

criminal complaint is lodged, is also empowered to

determine civil liability under Section 154(5) of the Act. As

per Section 154(6) of the Act, in case civil liability so

determined by the Special Court is less than the amount

deposited by the consumer or the person, the excess amount

so deposited by the consumer or the person, shall be

refunded by the licensee or the person concerned, as the

case may be. Merely because the Special Court is

empowered to determine civil liability under Section 154(5)

of the Act, in cases where a complaint is lodged, it cannot

be said that there is no power conferred on authorities to

make provisional assessment/final assessment under

Section 126 of the Act.”

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21. It stands established that though not explicitly mentioned,

Section 127 applies as much to Section 135 as it does to Section

126. It is clear as daylight that the provision for statutory appeal

under Section 127 of the Electricity Act is only with regards to

a final order of assessment and not a provisional order. Since

the Act does not provide for a statutory appeal against a

Provisional Assessment Order, the Writ Petition against the

same is maintainable.

Whether the Petitioner is liable to be held accountable under

Section 135 of the Electricity Act, 2003? In other words, are the

ingredients of Section 135 satisfied in the present case?

22. The Provisional Assessment Order was issued under Section

135 of the Electricity Act, 2003, which exhaustively defines

“theft of electricity” as including acts such as interference with

the meter, tapping of electricity, making or causing to be made

any connection with overhead, underground or underwater

lines or cables, or service wires, installation or use of tampered

meter etc. This Court has illuminatingly explained the features

of Section 135 and also expounded upon the procedure

mentioned under Sections 126 and 127 in the case of Southern

SLP (C) No.33179 of 2025 Page 21 of 32

Electricity Supply Co. of Orissa Ltd. v. Sri Seetaram Rice

Mill3, thus:

“25. Section 135 of the 2003 Act falls under Part XIV

relating to “offences and penalties” and title of the section

is “theft of electricity”. The section opens with the words

“whoever, dishonestly” does any or all of the acts specified

under clauses (a) to (e) of sub-section (1) of Section 135 of

the 2003 Act so as to abstract or consume or use electricity

shall be punishable for imprisonment for a term which may

extend to three years or with fine or with both. Besides

imposition of punishment as specified under these

provisions or the proviso thereto, sub-section (1-A) of

Section 135 of the 2003 Act provides that without prejudice

to the provisions of the 2003 Act, the licensee or supplier,

as the case may be, through officer of rank authorised in this

behalf by the appropriate commission, may immediately

disconnect the supply of electricity and even take other

measures enumerated under sub-sections (2) to (4) of the

said section. The fine which may be imposed under Section

135 of the 2003 Act is directly proportional to the number

of convictions and is also dependent on the extent of load

abstracted.

26. In contradistinction to these provisions, Section 126 of

the 2003 Act would be applicable to the cases where there

is no theft of electricity but the electricity is being

consumed in violation of the terms and conditions of supply

leading to malpractices which may squarely fall within the

expression “unauthorised use of electricity”. This

assessment/proceedings would commence with the

inspection of the premises by an assessing officer and

recording of a finding that such consumer is indulging in an

“unauthorised use of electricity”. Then the assessing officer

shall provisionally assess, to the best of his judgment, the

electricity charges payable by such consumer, as well as

3 (2012) 2 SCC 108

SLP (C) No.33179 of 2025 Page 22 of 32

pass a provisional assessment order in terms of Section

126(2) of the 2003 Act.

27. The officer is also under obligation to serve a notice in

terms of Section 126(3) of the 2003 Act upon any such

consumer requiring him to file his objections, if any, against

the provisional assessment before a final order of

assessment is passed within thirty days from the date of

service of such order of provisional assessment. Thereafter,

any person served with the order of provisional assessment

may accept such assessment and deposit the amount with

the licensee within seven days of service of such provisional

assessment order upon him or prefer an appeal against the

resultant final order under Section 127 of the 2003 Act. The

order of assessment under Section 126 and the period for

which such order would be passed has to be in terms of sub-

sections (5) and (6) of Section 126 of the 2003 Act. The

Explanation to Section 126 is of some significance, which

we shall deal with shortly hereinafter. Section 126 of the

2003 Act falls under Part XII and relates to investigation

and enforcement and empowers the assessing officer to pass

an order of assessment.

28. Section 135 of the 2003 Act deals with an offence of

theft of electricity and the penalty that can be imposed for

such theft. This squarely falls within the dimensions of

criminal jurisprudence and mens rea is one of the relevant

factors for finding a case of theft. On the contrary, Section

126 of the 2003 Act does not speak of any criminal

intendment and is primarily an action and remedy available

under the civil law. It does not have features or elements

which are traceable to the criminal concept of mens rea.

29. Thus, it would be clear that the expression

“unauthorised use of electricity” under Section 126 of the

2003 Act deals with cases of unauthorised use, even in the

absence of intention. These cases would certainly be

different from cases where there is dishonest abstraction of

electricity by any of the methods enlisted under Section 135

of the 2003 Act. A clear example would be, where a

SLP (C) No.33179 of 2025 Page 23 of 32

consumer has used excessive load as against the installed

load simpliciter and there is violation of the terms and

conditions of supply, then, the case would fall under

Section 126 of the 2003 Act. On the other hand, where a

consumer, by any of the means and methods as specified

under Sections 135(a) to 135(e) of the 2003 Act, has

abstracted energy with dishonest intention and without

authorisation, like providing for a direct connection

bypassing the installed meter, the case would fall under

Section 135 of the Act.

30. Therefore, there is a clear distinction between the cases

that would fall under Section 126 of the 2003 Act on the

one hand and Section 135 of the 2003 Act on the other.

There is no commonality between them in law. They

operate in different and distinct fields. The assessing officer

has been vested with the powers to pass provisional and

final order of assessment in cases of unauthorised use of

electricity and cases of consumption of electricity beyond

contracted load will squarely fall under such power. The

legislative intention is to cover the cases of malpractices

and unauthorised use of electricity and then theft which is

governed by the provisions of Section 135 of the 2003 Act.”

23. Reference must also be made to the case of Kerala SEB v.

Thomas Joseph4, which laid down broad principles of law

pertaining to Sections 126 and 127; the same are as follows:

“60.1. The provisions of Section 126, read with Section 127

of the 2003 Act become a code in themselves. It specifically

provides the method of computation of the amount that a

consumer would be liable to pay for excessive consumption

of electricity and for the manner of conducting assessment

proceeding. Section 126 of the 2003 Act has been enacted

4 (2023) 11 SCC 700

SLP (C) No.33179 of 2025 Page 24 of 32

with a purpose to achieve i.e. to put an implied restriction

on such unauthorised consumption of electricity.

60.2. The purpose of Section 126 of the 2003 Act is to

provide safeguards to check the misuse of powers by

unscrupulous elements. The provisions of Section 126 of

the 2003 Act are self-explanatory. They are intended to

cover situations, other than, the situations specifically

covered under Section 135 of the 2003 Act. In such

circumstances, the Court should adopt an interpretation

which should help in attaining the legislative intent.

60.3. The purpose sought to be achieved with the aid of the

provisions of Section 126 of the 2003 Act is to ensure

stoppage of misuse/unauthorised use of the electricity as

well as to ensure prevention of revenue loss.

60.4. The overdrawal of electricity is prejudicial to the

public at large, as it is likely to throw out of gear the entire

supply system, undermining its efficiency, efficacy and

even — increasing voltage fluctuations.

60.5. The expression “unauthorised use of electricity”

means as it appears in Section 126 of the 2003 Act. It is an

expression of wider connotation and principle construed

purposively in contrast to contextual interpretation, while

keeping in mind the object and purpose of the 2003 Act.”

24. Section 135 is a criminal remedy as it falls under Part XIV

which pertains to Offences and Penalties under the Act. In

order to invoke this remedy, the State must firstly satisfy the

twin tests of actus reus and mens rea and further, the State must

prove the offence beyond reasonable doubt. Hence, the

threshold for proof is high. Section 135 is a distinct provision

from Section 126 which talks about “unauthorised use of

electricity”. The former is a criminal remedy and the latter is a

SLP (C) No.33179 of 2025 Page 25 of 32

civil remedy. The cases covered under Section 126 are those in

which electricity was consumed in variation of the terms and

conditions of supply leading to malpractises and mens rea is

not a vital element of the same.

25. However, on the contrary, Section 135 starts with the word

“whoever dishonestly” which indicates that there must be

presence of mens rea for invoking the said provision. The word

“dishonestly” has been defined u/S. 24 of Indian Penal Code,

1860 as well as S.2(7) of the Bhartiya Nyaya Sanhita, 2023 as

doing anything with the intention of causing wrongful gain to

one person or wrongful loss to another person. The actus reus

in this provision is tapping the connection or cables, or

tampering a meter, or damaging the electrical meter or

apparatus, or using electricity through a tampered meter or

using it for a purpose other than the one which was prescribed.

26. Section 135 (1A) of the Act confers powers on the authorized

officer to disconnect the electricity connection provided that he

is satisfied that theft of electricity has occurred, but the starting

point to take such a decision is an inspection.

27. As per Clause 11.3 of the Regulations, an authorised officer

upon reliable information shall promptly conduct inspection of

the premises. As per Clause 11.8, in case sufficient evidence is

SLP (C) No.33179 of 2025 Page 26 of 32

found to establish direct theft of electricity, licensee or Supplier

as per Section 135 sub-clause (1A) of the Act shall disconnect

the supply and seize all material evidence including

wires/cables, meter, service line etc., from the premises and

shall lodge a complaint in writing relating to the commission

of such offence in police station having jurisdiction within 24

hours from the time of such disconnection. Clause 11.10 says

that an assessment order has to be prepared by the Authorised

Officer. As per Clause 11.12, in case of suspected theft, the

Authorised Officer shall remove the old meter under a seizure

memo and seal it in the presence of the consumer or his

authorised representative. The Distribution Licensee or

supplier shall continue the supply to the consumer with a new

meter.

28. Further, Clause 11.14 provides that after the detailed

examination of the evidence and the consumption pattern of the

consumer, if the Distribution Licensee or supplier is convinced

that a prima-facie case is made out for the abstraction,

consumption or use of electricity dishonestly against the

consumer, the Distribution Licensee or supplier shall, within 7

days of inspection, serve a provisional assessment order

assessed as per clause 11.24 of these Regulations along with

SLP (C) No.33179 of 2025 Page 27 of 32

show cause notice to the consumer, giving reasons, as to why

a case of theft should not be booked against such consumer

giving full details for arriving at such decision and points on

which reply has to be submitted. As per Clause 11.17, the

person, on whom an order has been served under clauses 11.14

and 11.15 of these Regulations, shall be entitled to file

objections, if any, against the provisional assessment before the

Authorised Officer, who shall, after affording a reasonable

opportunity of hearing to such person, pass a final order of

assessment. Clause 11.28 says that the Distribution Licensee or

supplier, as the case may be, on deposit or payment of the

assessed amount or electricity charges in accordance with the

provision of these regulations, shall, without prejudice to the

obligation to lodge the complaint as referred to in the second

proviso to the clause (1A) of Section 135 of the Electricity

(Amendment) Act, 2007, restore the supply line of electricity

within forty eight hours of such deposit or payment.

29. In other words, the following procedure emerges on a

consonant reading of Section 135 of Electricity Act and

Regulations, 2015.

a. Inspection of Theft.

SLP (C) No.33179 of 2025 Page 28 of 32

b. Disconnection of Electricity in case sufficient evidence is

found to establish direct theft of electricity.

c. Removal and seizure of meter.

d. Preparation of Provisional Assessment Order.

e. Objections, if any, to be filed.

f. Final Assessment Order to be passed.

g. If the consumer deposits the assessed amount then the

electricity supply shall be restored within 48 hours.

30. At this juncture, it is pertinent to refer to the Inspection Report

dt. 26.09.2017 relied upon by the 1st Respondent Nigam which

reads as follows:

“As directed by GM cum CE surprise inspection has been

carried out by MRT officials alongwith supply officials.

During inspection cubical metering arrangement was found

raising two compartments one is meter chamber and other

is CT, PT chamber. This cubical metering arrangement

installed under metal sheet room and wall. This

arrangement makes easily approach to the CT/DT of

metering cubical. It has been absorbed that the nut in which

GPC seal is used to affix is found welded at mid point. This

welding enables the removal of the seal to start the CT

terminal point without disturbing seal. Two holes found in

meter chambers. The cover of meter chamber was opened

very easily without breaking the glass. The check metering

unit secondary box control cable came out through given

slot but more space between cable and slot. Further action

will be as per norms.

SLP (C) No.33179 of 2025 Page 29 of 32

Remarks: (i) There is no welding on the nut, (ii) earlier also

there had been blast in the cubical metering, which is very

old, and was twice repaired, (iii) door cannot be opened

without opening plastic seal, (iv) all plastic seals (paper

seal) were found correct, plastic seal may be checked, and

(v) joint inspection be made by the officer of Board and the

office bearer of Chamber.”

31. To this inspection report, the petitioners have two objections,

firstly that the Cubical Metering Unit was installed by the

respondents themselves in open space since it is a huge device.

The petitioners had simply covered the same with a Metallic

Sheet with a purpose to secure the same from direct sunlight

and rain. The premises were inspected by the authorities

periodically and not even once did they object to the sheet and

the seals on the meter were found intact at all times. Secondly,

when this inspection was conducted, nothing was seized as per

the seizure report and hence the 2015 Regulations were not

followed.

32. There is merit in what the petitioner says. The inspection report

does not have even a whiff of allegation of theft of electricity,

much less the evidence. At best, there was a suspicion and only

on the basis of the said suspicion an FIR was registered. The

Ld. Single Judge was right to record that as a matter of practice,

many people cover their metering unit to protect it from

depreciation. The minor discrepancy alleged by the inspecting

SLP (C) No.33179 of 2025 Page 30 of 32

team is not enough to prove the case of theft of electricity,

which has to adhere to the strict standards of criminal law.

33. Suspicion, no matter how strong, cannot take the place of strict

proof. After a thorough perusal of record, we find that not even

a single shred of evidence has been produced by the State

which would allow us to come to the conclusion that the

discrepancies that the State alleges can be elevated to the level

of an offence.

34. It is essential that in order to hold a person or a legal entity

responsible for the theft of electricity, the theft has to be first

detected in the course of inspection. The inspection report must

reveal that theft was detected and the details of such evidence

must also be recorded therein. As noted above, in the present

inspection report, no details or evidence of theft of electricity

were noted. Further, there was no subjective satisfaction of the

authorized officer either. Only if the inspection report records

a finding on the theft of electricity and gives details of the

evidence collected during the inspection which unerringly

disclose theft of electricity, the provisional assessment order

can be sustained. Such a finding of theft must be apparent on a

bare reading of the report. If the report is of such a nature that

upon bare reading of the same, one cannot construe the basis

SLP (C) No.33179 of 2025 Page 31 of 32

of theft, then in such a thorough investigation would be

required to ascertain whether theft took place or not and the

inspection officer will not be allowed to visit penalties upon

the consumer in the name of theft only on the basis of such a

provisional report that has no legs to stand on.

35. In the instant matter, as the Ld. Single Judge has rightly

recorded, upon a bare reading of the report, one cannot arrive

at the conclusion that a theft of electricity has taken place. The

inspection reported that the door cannot be opened without

opening a plastic seal and that all plastic seals were found

correct, intact and further reported that the meter chamber was

easily accessible, however, that by itself does not prove mens

rea.

36. Further, there is also a violation of Regulation 11.8 as per

which all material evidence including wires, cables and meters,

service lines are to be seized. Neither the inspection report nor

the written report has disclosed that any material from premises

of the consumer have been seized.

37. Lastly, the respondents have tried making a case that the

provisional assessment order was issued and electricity

connection was disconnected in order to protect the revenue of

the State. This argument has to be rejected at the threshold

SLP (C) No.33179 of 2025 Page 32 of 32

because if protection of revenue is accepted as an argument,

then that will open floodgates of cases where the inspecting

authority will be get arbitrary powers to disconnect electricity

of the consumers on the basis of vague reports that do not

satisfy the essentials of Section 135, turning this provision into

an abuse of process of law.

38. The Ld. Division Bench was in error in setting aside the well-

reasoned order of the Ld. Single Judge and same cannot be

sustained. For the aforesaid reasons, the Order of Division

Bench rendered in L.P.A. No. 648 of 2018 is set aside and the

Order of the Single Judge dated 05.09.2018 passed in W.P. (C)

No. 6054 of 2017 is restored by allowing this Appeal with no

order as to costs. Pending applications, if any, stand disposed

of.

...........................................................J.

[ARAVIND KUMAR]

............................................................J.

[VIPUL M. PANCHOLI]

NEW DELHI;

AUGUST 12th, 2026.