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Friday, March 28, 2014

Section 26 of the Indian Electricity Act, 1910 - Theft of Electricity - penalty imposed at Rs. 5 lakhs and odd - challenged - High court held that the petition under sec.26 not considered and held that it was violation of principles of natural justice and as such set aside the orders of Board - Apex court held that in case of a theft of Electricity, the question of application of sec.26 does not arise and as such High court committed grave error - Apex court set aside the orders of High court and allowed the appeal = Western Electricity Supply Co. of Orissa Ltd & Ors. ...Appellants vs M/s Baba Baijanath Roller and Flour Mill P. Ltd. ...Respondent = 2014 (March. Part ) judis.nic.in/supremecourt/filename=41341

   Section 26 of the  Indian  Electricity Act, 1910  - Theft of Electricity - penalty imposed at Rs. 5 lakhs and odd - challenged - High court held that the petition under sec.26 not considered and held that it was violation of principles of natural justice and as such set aside the orders of Board - Apex court held that in case of a theft of Electricity, the question of application of sec.26 does not arise and as such High court committed grave error - Apex court set aside the orders of High court and allowed the appeal =
The respondent alleged in the writ  petition  that  on  an  inspection
      conducted by the appellant on September 9, 2002 at the premises of the
      respondent, the appellant intimated that at the time of inspection  it
      was found that H.T. Meter, T.P Box’s inner  door  and  meter  terminal
      cover quick seals, plastic seals and paper  seals  were  tampered.  In
      addition, L.T.T.P Box inner door quick seals, plastic seals and  paper
      seals were found tampered. The B-Phase P.T wire was found cut as  such
      the meter was not getting B-Phase potential.- 
interference with the metering arrangement was made
      by the respondent in order to prevent the meter from recording  actual
      consumption which attracts Regulation 64  of  the  Orissa  Electricity
      Regulatory Commission Distribution (Conditions of Supply)  Code,  1998
      (hereinafter referred  to  as  “the  Code”).  Accordingly,  the  penal
      charges as per rules were intimated and raised on  the  respondent  on
      September 30, 2002. -  
The  penal
      bill was raised on the respondent/writ petitioner for a sum  of  [pic]
      5,10,930/-. On October 5, 2002 the electricity supply was disconnected
      since the respondent failed to make the payment.=
 It was urged before the High Court on behalf of the  respondent-company
      on the ground 
(i) that the penal bill had been issued in violation  of
      the principles of natural justice; 
(ii) that the  inspection was  made
      without giving a notice and in the absence of  the  representative  of
      the firm; 
(iii) that the allegation of tampering with seals cannot  be
      sustained as there was no allegation that the outer seal of  T.P.  box
      was broken or tampered with; and 
(iv) that the penal  bill  could  not
      have been raised since the meter was defective and was  not  recording
      proper consumption. 
Counter affidavit
It  is  a  clear  case  of  theft  of
      electricity by the consumer and Section 26 of the  Indian  Electricity
      Act, 1910 (hereinafter referred to  as  “the  Act  of  1910”)  has  no
      application. It is submitted that Section 26(6) of the Act of 1910  is
      attracted only when a meter is defective and is incapable of recording
      the correct consumption of electricity. It was  further  contended  on
      behalf of the appellant before the High Court that inspection  of  the
      meter was done in the presence of  the  representative  of  the  writ-
      petitioner/respondent.
the High Court  set  aside
      the  penalty  charges  imposed  by   the   appellant   on   the   writ
      petitioner/respondent. The inspection report was also quashed  on  the
      ground that such inspection was never done  in  the  presence  of  the
      authorised persons of the writ petitioner. The High Court further held
      that since the penalty is untenable, the appellant was not entitled to
      levy delayed payment surcharge on the penal charges treating it as old
      arrears or current arrears. In these  circumstances,  the  High  Court
      further directed to refund the amount so paid within three months.
Apex court conclusion
 M.P  Electricity  Board v. Basantibai [1988 (1) SCC 23] and J.M.D. Alloys Ltd. v.  Bihar
           SEB [2003 (5) SCC 226]  it  has  been  held  that  in  cases  of
           tampering or theft  or  pilferage  of  electricity,  the  demand
           raised falls outside the scope of Section 26 of the  Electricity
           Act. If that is so, neither the limitation period  mentioned  in
           Section 26 of the Electricity Act nor the procedure for  raising
           demand for electricity consumed would arise at all. In this view
           of the matter, that part of the order of the Division  Bench  of
           the High Court, directing that there should be  a  reference  to
           the Electrical  Inspector,  shall  stand  set  aside.  In  other
           respects the order of the High Court shall  remain  undisturbed.
           The appeal is allowed accordingly.”




      15.         In these circumstances, in our opinion, the High Court was
 wrong in bringing the matter within the scope of the provision  of  Section
 26(6) of the said Act, and further the High  Court  was  totally  wrong  in
 appreciation of facts even on the question of inspection and stated that no
 representative was  present  at  that  point  of  time.  On  the  contrary,
 admittedly the Manager of the respondent at the time of the inspection  was
 present.


 16.        In these  circumstances,  the  appeals  are  allowed,  the  writ
 petitions filed by the respondent/writ-petitioner  are  dismissed  and  the
 order passed by the High Court is set aside.

2014 (March. Part ) judis.nic.in/supremecourt/filename=41341
GYAN SUDHA MISRA, PINAKI CHANDRA GHOSE
                                                              Reportable

                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                       CIVIL APPEAL NO . 4023 of 2014
      (Arising out of Special Leave Petition (Civil) No. 3396 of 2011)


Western Electricity Supply Co. of Orissa Ltd & Ors.      ...Appellants

                                     vs

M/s Baba Baijanath Roller and Flour Mill P. Ltd.       ...Respondent

                                    With
                             CA No.4024 of 2014
                (arising out of SLP (Civil) No.3397 of 2011)




                               J U D G M E N T


Pinaki Chandra Ghose, J.


1.     Leave granted.

2. This appeal is directed against an order dated August 3, 2010  passed  by
   the High Court  of  Orissa  allowing  the  writ  petition  filed  by  the
   respondent, quashing the bill issued  by  the  appellant  for  a  sum  of
   [pic]5,10,930/- as well the notice  of  disconnection  dated  October  5,
   2010.
3. The respondent-writ petitioner  is  a  registered  company,  inter  alia,
   carrying on its business under the name and style of M/s.  Baba  Baijnath
   Roller and Flour Mill Pvt. Ltd., having installed a Mill in the  district
   of Jharsuguda and is the consumer of the appellant herein.

4. The facts of the case, briefly, are as follows :

4.1   The respondent alleged in the writ  petition  that  on  an  inspection
      conducted by the appellant on September 9, 2002 at the premises of the
      respondent, the appellant intimated that at the time of inspection  it
      was found that H.T. Meter, T.P Box’s inner  door  and  meter  terminal
      cover quick seals, plastic seals and paper  seals  were  tampered.  In
      addition, L.T.T.P Box inner door quick seals, plastic seals and  paper
      seals were found tampered. The B-Phase P.T wire was found cut as  such
      the meter was not getting B-Phase potential.

   2. It was further  brought  to  the  notice  of  the  respondent  by  the
      appellant that the interference with the metering arrangement was made
      by the respondent in order to prevent the meter from recording  actual
      consumption which attracts Regulation 64  of  the  Orissa  Electricity
      Regulatory Commission Distribution (Conditions of Supply)  Code,  1998
      (hereinafter referred  to  as  “the  Code”).  Accordingly,  the  penal
      charges as per rules were intimated and raised on  the  respondent  on
      September 30, 2002. The appellant further called upon  the  respondent
      to submit its representation,  if  any,  within  seven  days.  It  was
      intimated that in default of payment of such charges within seven days
      from the date of receipt of the penal bill, the power  supply  to  the
      premises will be disconnected without any further  notice.  The  penal
      bill was raised on the respondent/writ petitioner for a sum  of  [pic]
      5,10,930/-. On October 5, 2002 the electricity supply was disconnected
      since the respondent failed to make the payment.


4.3 In these circumstances, a writ petition  was  filed  by  the  respondent
      challenging the action on the part of the appellant  before  the  High
      Court. The respondent-writ petitioner made out a case  that  the  bill
      used to be received by the writ petitioner  was  around  [pic]80,000/-
      per month and according to the writ petitioner/respondent,  the  meter
      was defective and recording excessive consumption.

4.4 The writ petitioner/respondent challenged the action on the part of  the
      appellant that when the inspection was made, at that point of time the
      officers of the appellant made  a  demand  for  illegal  gratification
      since refused by the Manager of the respondent-company,  the  officers
      of the appellant raised such allegations and further the  Manager  was
      forced to sign several papers under duress and coercion.


4.5  It was urged before the High Court on behalf of the  respondent-company
      on the ground (i) that the penal bill had been issued in violation  of
      the principles of natural justice; (ii) that the  inspection was  made
      without giving a notice and in the absence of  the  representative  of
      the firm; (iii) that the allegation of tampering with seals cannot  be
      sustained as there was no allegation that the outer seal of  T.P.  box
      was broken or tampered with; and (iv) that the penal  bill  could  not
      have been raised since the meter was defective and was  not  recording
      proper consumption. By  filing  a  counter  affidavit,  the  appellant
      herein duly contested the writ petition and stated that an alternative
      remedy was available to the respondent under the Code. It was  further
      submitted that in the instant case, there is no question  of  alleging
      that the  meter  is  defective.  It  is  a  clear  case  of  theft  of
      electricity by the consumer and Section 26 of the  Indian  Electricity
      Act, 1910 (hereinafter referred to  as  “the  Act  of  1910”)  has  no
      application. It is submitted that Section 26(6) of the Act of 1910  is
      attracted only when a meter is defective and is incapable of recording
      the correct consumption of electricity. It was  further  contended  on
      behalf of the appellant before the High Court that inspection  of  the
      meter was done in the presence of  the  representative  of  the  writ-
      petitioner/respondent.


   6. The High Court  after  hearing  the  parties  held  that  in  case  of
      violation of principles of natural justice even if alternative  remedy
      is available, a writ court  can  interfere  for          redressal  of
      grievance of the petitioner. The High  Court  further  held  that  the
      representation filed by  the  writ  petitioner  was  never  considered
      before the imposition of penalty, far less giving  an  opportunity  of
      hearing to the writ petitioner. Accordingly, the High Court held  that
      this action of the appellant is in clear violation of  the  principles
      of natural justice. In these circumstances, the High Court  set  aside
      the  penalty  charges  imposed  by   the   appellant   on   the   writ
      petitioner/respondent. The inspection report was also quashed  on  the
      ground that such inspection was never done  in  the  presence  of  the
      authorised persons of the writ petitioner. The High Court further held
      that since the penalty is untenable, the appellant was not entitled to
      levy delayed payment surcharge on the penal charges treating it as old
      arrears or current arrears. In these  circumstances,  the  High  Court
      further directed to refund the amount so paid within three months.
4.7   Being aggrieved, this appeal has been filed by the appellant.
5.    Learned counsel appearing on behalf of the appellant contended  before
us that the High Court has erred in holding  that  the  matter  should  come
within the purview of Section 26(6) of the Act of 1910.  He  submitted  that
the High  Court  ignoring  the  judicial  pronouncements  on  this  question
undermined the authority of the licensee (appellant) to impose penalty as  a
consequence on a consumer even  if  the  consumer  has  committed  theft  of
electricity. By this process, the provisions  of  the  statutory  Code  have
been made nugatory. The meter could be subjected  to  tampering  in  various
ways. The  methods  as  detected  on  inspection  by  the  officers  of  the
appellant are more than sufficient to conclude that the meter  was  tampered
with and did not record the actual consumption of  energy  consumed  by  the
writ  petitioner/respondent.  He  further  contended  that  the   theft   of
electricity is governed by the Code and not under the provisions of the  Act
of 1910.


6.    The relevant provisions of the Act of 1910 as well  as  the  Code,  in
particular Clauses 54, 56, 64, 105, 110 and 115,  were  duly  placed  before
us. It will be proper for us to reproduce those hereunder:
      “Section 26 - Meters. – (1) In the absence  of  an  agreement  to  the
      contrary,  the  amount  of  energy  supplied  to  a  consumer  or  the
      electrical quantity contained in the supply shall  be  ascertained  by
      means of a correct meter, and the licensee shall, if required  by  the
      consumer, cause the consumer to be supplied with such a meter:


            Provided that the licensee may require the consumer to give  him
      security for the price of a meter and enter into an agreement for  the
      hire thereof, unless the consumer elects to purchase a meter.


      (2)   Where the consumer so enters into an agreement for the hire of a
      meter, the licensee shall keep the meter correct, and, in  default  of
      his doing  so,  the  consumer  shall,  for  so  long  as  the  default
      continues, cease to be liable to pay for the hire of the meter.


      (3)   Where the meter is the property of the consumer, he  shall  keep
      the meter correct and, in default of his doing so, the  licensee  may,
      after giving him seven days’  notice,  for  so  long  as  the  default
      continues, cease to supply energy through the meter.


      (4)   The licensee or any  person  duly  authorised  by  the  licensee
      shall, at any reasonable time and on informing  the  consumer  of  his
      intention, have access to and be at liberty to inspect and  test,  and
      for that purpose, if he thinks fit, take off  and  remove,  any  meter
      referred to in sub-section (1); and, except  where  the  meter  is  so
      hired as aforesaid, all reasonable expenses  of,  and  incidental  to,
      such inspecting, testing, taking off and removing shall, if the  meter
      is found to be otherwise than correct, be recovered from the consumer,
      and, where any difference or dispute arises as to the amount  of  such
      reasonable expenses, the matter shall be  referred  to  an  Electrical
      Inspector, and the decision of such Inspector shall be final:


            Provided that the licensee shall not be at liberty to  take  off
      or remove any such meter if any difference or dispute  of  the  nature
      described in sub-section (6) has arisen  until  the  matter  has  been
      determined as therein provided.


      (5)   A consumer shall not connect  any  meter  referred  to  in  sub-
      section (1) with any electric  supply-line  through  which  energy  is
      supplied by a licensee, or disconnect the same from any such  electric
      supply-line, but he may by giving not  less  than  forty-eight  hours’
      notice in writing to the licensee require the licensee to  connect  or
      disconnect such meter and on  receipt  of  any  such  requisition  the
      licensee shall comply with it within the period of the notice.


      (6)   Where any difference or dispute arises as to whether  any  meter
      referred to in sub-section (1) is or is not correct, the matter  shall
      be decided, upon the application of either  party,  by  an  Electrical
      Inspector; and where the meter has, in the opinion of  such  Inspector
      ceased to be correct, such Inspector shall estimate the amount of  the
      energy supplied to the consumer or the electrical  quantity  contained
      in the supply, during such time, not  exceeding  six  months,  as  the
      meter shall not, in the opinion of such Inspector, have been  correct;
      but save as aforesaid, the register of the meter shall, in the absence
      of fraud, be conclusive proof of such amount or quantity:


            Provided that before either a licensee or a consumer applies  to
      the Electrical Inspector under this sub-section, he shall give to  the
      other party not less than seven days’ notice of his  intention  so  to
      do.


      (7)   In addition to any meter which may be placed upon  the  premises
      of a consumer in pursuance of the provisions of sub-section  (1),  the
      licensee may place upon  such  premises  such  meter,  maximum  demand
      indicator or other apparatus as he may think fit for  the  purpose  of
      ascertaining or regulating either the amount of energy supplied to the
      consumer, or the number of hours during which the supply is given,  or
      the rate per unit of time at which energy is supplied to the consumer,
      or any other quantity or time connected with the supply:


            Provided that the meter, indicator or apparatus  shall  not,  in
      the absence of an agreement to the contrary be placed  otherwise  than
      between the distributing mains of the licensee and any meter  referred
      to in sub-section (1):


            Provided also that, where the charges for the supply  of  energy
      depend wholly or partly upon the reading or  indication  of  any  such
      meter, indicator or apparatus as aforesaid, the licensee shall, in the
      absence of an agreement to the contrary, keep the meter, indicator  or
      apparatus correct; and the provisions of sub-sections (4), (5) and (6)
      shall in that case apply as though the meter, indicator  or  apparatus
      were a meter referred to in sub-section (1).


      Explanation.—A meter shall be deemed to be “correct” if  it  registers
      the amount of energy supplied, or the electrical quantity contained in
      the supply, within the prescribed  limits  of  error,  and  a  maximum
      demand indicator or other apparatus referred  to  in  sub-section  (7)
      shall be deemed to be “correct” if it complies with such conditions as
      may be  prescribed  in  the  case  of  any  such  indicator  or  other
      apparatus.”




      “CHAPTER - IV


      METERS


      54. Initial power supply shall not be given without a  correct  meter.
      Meters will be installed at the point of supply or at a suitable place
      as the engineer may decide. The same shall be fixed preferably in  the
      basement or ground floor in multi-storied buildings where it  will  be
      easily accessible for reading and inspection at any time. The consumer
      shall  run  his  wiring  from  such  point  of  supply  and  shall  be
      responsible for the safety of the meter or metering equipment  on  his
      premises from theft, damage or interference.


                                    x x x


      56. The meters and associated equipment shall be  properly  sealed  by
      the engineer  and  consumer’s  acknowledgement  obtained.  The  seals,
      nameplates, distinguishing  numbers  or  marks  affixed  on  the  said
      equipment or apparatus shall not be interfered with,  broken,  removed
      or erased by the consumer. The meter, metering equipment,  etc.  shall
      on no account be handled or  removed  by  any  one  except  under  the
      authority of the engineer. The engineer can do so in the  presence  of
      the consumer or his representative. An acknowledgement shall be  taken
      from the consumer or his representative when seal is broken.


                                    x x x
      64. If a meter or metering equipment  has  been  found  to  have  been
      tampered or there is resistance by the consumer to the replacement  of
      obsolete or  defective  meters  by  the  engineer,  the  engineer  may
      disconnect the supply after giving seven clear days show cause  notice
      and opportunity to the consumer to submit his representation.


                                    x x x


      Penal Charges --


      105. (1) On detection of unauthorised use in any manner by a consumer,
      the load connected in excess of the authorised load shall  be  treated
      as unauthorised load. The quantum of unauthorised consumption shall be
      determined in the same ratio as the unauthorised load  stands  to  the
      authorised load.


      (2) The period of unauthorised use shall be determined by the engineer
      as one year prior to the date of detection or from the date of initial
      supply if the initial date of supply is less than one  year  from  the
      date of detection. If the consumer provides evidence to the  contrary,
      the period may be varied according to such evidence. The engineer  may
      levy penal charges in addition to the  normal  charges  for  aforesaid
      period  of  unauthorised  use.  Where  addition  of  the  unauthorised
      installation or sale or diversion would result in  a  reclassification
      according to this Code, the whole of the power drawn shall  be  deemed
      to have been drawn in the reclassified category.  The  consumer  shall
      also be required to execute a fresh agreement under  the  reclassified
      category.


      (3) The penal energy charges for unauthorised use of  power  shall  be
      two times  the  charges  applicable  to  the  particular  category  of
      consumer.


      (4) The penal demand charges for unauthorised use of  power  in  cases
      covered under two part tariff shall  be  calculated  on  un-authorised
      connected load expressed in KVA multiplied by two times  the  rate  of
      demand charges applicable.


                                    x x x




      CHAPTER - XII


                             CONSUMER PROTECTION


      110. (1) A consumer aggrieved by any action or lack of action  by  the
      engineer under this Code may file a representation within one year  of
      such action or lack of action  to  the  designated  authority  of  the
      licensee, above the rank of engineer who shall pass  final  orders  on
      such  a  representation  within  thirty  days  of   receipt   of   the
      representation.


      (2) A consumer aggrieved by the decision or lack of  decision  of  the
      designated authority of the licensee may file a representation  within
      forty five days to the chief executive officer  of  the  licensee  who
      shall pass final orders on such a  representation  within  forty  five
      days of receipt of the representation.


      (3) In respect of orders or lack of  orders  of  the  chief  executive
      officer of the licensee on matters provided under Section  33  of  the
      Act, the consumer may make a reference to the Commission under Section
      37(1) of the Act.


                                    x x x




      Overriding effect --




      115. (1) The provisions of this Code shall override the provisions  of
      OSEB (General Condition of Supply) Regulation, 1995.


      (2) Nothing contained in this Code shall have effect, in so far as  it
      is inconsistent with the provisions of Indian Electricity  Act,  1910,
      Electricity (Supply) Act, 1948 and Rules framed thereunder as  amended
      by the Act.”








 7.   Therefore, it would be evident from Section 26(6) which carves out  an
 exception, that where there is an allegation of “fraud”, the same provision
 is not attracted. He further contended that  invariably  a  plea  is  being
 taken by the consumer found to have committed theft of electricity that his
 meter was defective. In the instant case, in accordance with Section 26(4),
 an inspection was conducted in the presence of the  representative  of  the
 respondent. If the meter is found to be defective on such inspection and if
 the respondent was desirous of availing the benefit of Section 26(6), it is
 the duty of the consumer under the said  Section  to  move  an  application
 before the Electrical Inspector for getting the meter tested.


 8.   It was submitted that the  Orissa  Electricity  Regulatory  Commission
 (for short “OERC”) by virtue  of  Section  54  of  the  Orissa  Electricity
 Reforms Act, 1995 has framed a  Code  on  different  issues  including  the
 manner in which theft of energy is to be determined. They are statutory  in
 character. Accordingly, he submitted that  the  High  Court  has  erred  in
 dealing with the matter without taking into account the clauses of the Code
 which are framed to deal with the theft of electricity. Factually also, the
 High Court was incorrect in recording that the inspection was conducted  in
 the absence of the consumer. It is  further  submitted  that  the  decision
 relied on by the High Court  is  totally  inapplicable  in  the  facts  and
 circumstances of this case since Belwal Spinning Mills Ltd. v.  U.P.  State
 Electricity Board [1] did not deal with the Code  of  1998  framed  by  the
 Orissa Electricity Regulatory Commission and the distinguishable feature of
 the said decision is that the said decision made it clear that  when  there
 is an allegation of fraud or tampering of meter, Section 26(6) of  the  Act
 of 1910 has  no  application.  Learned  counsel  further  relied  upon  the
 decision in Madhya Pradesh Electricity Board & Ors. v. Smt. Basantibai  [2]
 and drew our attention to paragraph 9 of the said  decision  and  contended
 that Section 26(6) of the Act of 1910 has no application where there  is  a
 dispute regarding the commission of fraud in tampering with the  meter  and
 breaking the body seal is totally outside the ambit of Section 26(6) of the
 said Act. It is further contended that after the inspection  was  conducted
 in the presence of the representative  of  the  consumer,  details  of  the
 illegalities found on such  inspection  were  shared  with  the  respondent
 consumer, resulting in receipt of a vague reply from the consumer  and  was
 processed to raise a demand by way of a penal bill. Therefore, according to
 him, the requirement under the law was followed before issuance of the said
 penal bill. He  further  pointed  out  that  on  being  aggrieved  by  such
 decision, the writ petitioner/respondent could have followed the  statutory
 remedy as envisaged under Section 110 of the Code.  It  is  further  stated
 that the High Court did not even give  any  reason  for  the  direction  to
 refund the delayed payment surcharge.


 9.   In these circumstances, it is submitted that the  order  of  the  High
 Court cannot be sustained under the provisions of law. The penal  bill  was
 quashed only on the ground that the unit of the respondent was closed. Such
 fact is immaterial and irrelevant in respect of demand of a penal bill. The
 approach of the High Court is patently erroneous.


 10.  Per contra, it is submitted on  behalf  of  the  respondent  that  the
 argument of the appellant could have succeeded if the appellant could prove
 that the respondent had indulged in theft of electricity.   It  is  pointed
 out that on October 10, 2002, the High Court  directed  the  respondent  to
 deposit [pic]30,000/- without prejudice and for restoration of power supply
 since the electricity was disconnected on October 5, 2002. The power supply
 was restored on deposit of [pic]10,000/- and subsequently,  the  respondent
 further deposited a sum of [pic]20,000/- in terms of the direction.  It  is
 submitted that in spite of the interim  order  passed  by  the  High  Court
 directing stay of realisation of the penal bill,  the  appellants  went  on
 charging delayed payment surcharge on the penal charges  in  monthly  bills
 raised subsequently on the respondent. It is submitted that the  meter  had
 actually inherent defects as only the inner seal was broken but  the  outer
 seal was intact. It is true that the matter was not referred to  Electrical
 Inspector. It is further stated that in  case  of  a  dispute  between  the
 Central Act and the State Act, Central Act will prevail upon the State Act.


 11.  We have noticed the facts in this case. We have  also  considered  the
 Sections of the Act of 1910 and  it  appears  to  us  that  Section  26  is
 relevant only  when  there  is  any  difference  or  a  dispute  arises  in
 connection with correctness of a meter, in that case the  matter  shall  be
 decided, upon being applied by either party, by an Electrical Inspector and
 in the opinion of the Inspector if it is found that the meter is defective,
 the Inspector shall estimate the amount of energy supplied to the  consumer
 or the electrical quantity contained in the supply  during  such  time  not
 exceeding six months but if there is a question of fraud in tampering  with
 the meter, in that case there is no question of applicability of Section 26
 of the said Act in such a matter. In the instance case, we have  asked  the
 learned counsel appearing for  the  respondent  whether  following  Section
 26(6), the respondent ever asked or applied for checking of  the  meter  by
 the Electrical Inspector on the ground of defective meter. The  answer  was
 in the negative. Therefore, it shows that the ingredients of Section  26(6)
 were not followed by the respondent to meet the necessity of  checking  the
 meter in question in accordance with the said provision.


 12.  We have further noticed that the inspection was made in  the  presence
 of the representative of the respondent  who  is  a  Manager  of  the  said
 company and in his presence the meter was checked up and was  found  to  be
 tampered with. We have also noticed that the plea of duress or coercion  in
 signing the inspection report was raised by the respondent but  in  reality
 no allegation was made by the respondent before  an  appropriate  authority
 excepting such bald allegations  have  been  made  before  the  writ  court
 without any basis or evidence. Therefore that fact cannot have any bearings
 in deciding this matter. We cannot brush aside the said fact from the  mind
 while dealing with the matter concerning tampering of meter. It appears  to
 us that the said aspect has escaped the attention of  the  High  Court  and
 therefore, in our opinion, the High Court failed to appreciate the facts in
 their proper perspective. Therefore, on this ground, we find that the  High
 Court has misconstrued the facts and the provisions of law in dealing  with
 the matter. The provision of law which deals  with  tampering  of  metering
 equipments, i.e. clauses  56,  64  and  105  of  the  Code  have  not  been
 considered by the High Court  and in our opinion the High Court has  failed
 to construe such provisions and erred in deciding the matter  ignoring  the
 said provisions. The High Court accepted the position submitted  on  behalf
 of the respondent/writ-petitioner that it was a case of defective meter and
 there is no question of any tampering with the meter in question. The  High
 Court has failed to appreciate that the inspection was made and the fact of
 tampering of meter  would  appear  from  the  inspection  report  and  such
 inspection report was signed on behalf of  the  respondent/writ-petitioner.
 Therefore, the High Court ignoring the said fact, came  to  the  conclusion
 without giving any reason, that the inspection report is bad and has  erred
 in setting aside such inspection report. Hence, such findings of  the  High
 Court cannot be sustained.


 13.  Therefore, in our opinion, the  High  Court  was  also  wrong  in  not
 considering the rights of the appellant  to  raise  penal  charges  on  the
 respondent on the ground of unauthorised consumption by  way  of  tampering
 the meter or metering equipment and has a right  to  raise  penal  bill  in
 accordance with the provisions of Code. On this ground the High  Court  has
 erred in allowing the writ petition in favour of the  respondent,  quashing
 the penal charges and further the direction given to refund the amount. The
 said order is without any reason and cannot be sustained  in  the  eyes  of
 law. Hence, the same is set aside.


 14.        We have also noticed in Madhya Pradesh Electricity Board &  Ors.
 v. Smt. Basantibai (supra), this Court held:
      “9. It is evident from the provisions of this section that  a  dispute
      as to whether any meter referred to in sub-section (1) is  or  is  not
      correct has to be decided by the Electrical Inspector upon application
      made by either of the parties. It is for the  Inspector  to  determine
      whether the meter is correct or not and in case the  Inspector  is  of
      the opinion that the meter is not correct he shall estimate the amount
      of  energy  supplied  to  the  consumer  or  the  electrical  quantity
      contained in the supply during a period not exceeding six  months  and
      direct the consumer to pay the same. If  there  is  an  allegation  of
      fraud committed by  the  consumer  in  tampering  with  the  meter  or
      manipulating the supply line or breaking the body seal  of  the  meter
      resulting in not registering the amount  of  energy  supplied  to  the
      consumer or the electrical quantity contained in the  supply,  such  a
      dispute does not fall within the purview of sub-section (6) of Section
      26. Such a dispute regarding the commission of fraud in tampering with
      the meter and breaking the body seal is outside the ambit  of  Section
      26(6) of the said Act. An  Electrical  Inspector  has,  therefore,  no
      jurisdiction to decide such cases of fraud. It is only the dispute  as
      to whether the meter is/is not correct or it is  inherently  defective
      or faulty not recording correctly the electricity consumed,  that  can
      be decided by the Electrical Inspector under  the  provisions  of  the
      said Act.”




            In Sub-Divisional Officer  (P),  UHBVNL  v.  Dharam  Pal[3],  it
 appears to us that in case of tampering, there is no scope for reference to
 Electrical Inspector. It was held :
      “9. In State of W.B. v. Rupa Ice Factory  (P)  Ltd.   [2004  (10)  SCC
      635], it was observed as follows: (SCC p. 637, para 5)


           “5. As regards the second  claim,  namely,  the  claim  for  the
           period from December 1993 to December 1995, the finding  of  the
           High Court is that the Vigilance Squad had found that Respondent
           1 had tapped the electric energy directly from  the  transformer
           to the LT distribution board bypassing  the  meter  circuit.  If
           that is so, we do not know as to why the High Court would go  on
           to advert to Section  26  of  the  Electricity  Act  and  direct
           reference to the Electrical Inspector for decision under Section
           26(6). In two decisions of this Court in M.P  Electricity  Board
           v. Basantibai [1988 (1) SCC 23] and J.M.D. Alloys Ltd. v.  Bihar
           SEB [2003 (5) SCC 226]  it  has  been  held  that  in  cases  of
           tampering or theft  or  pilferage  of  electricity,  the  demand
           raised falls outside the scope of Section 26 of the  Electricity
           Act. If that is so, neither the limitation period  mentioned  in
           Section 26 of the Electricity Act nor the procedure for  raising
           demand for electricity consumed would arise at all. In this view
           of the matter, that part of the order of the Division  Bench  of
           the High Court, directing that there should be  a  reference  to
           the Electrical  Inspector,  shall  stand  set  aside.  In  other
           respects the order of the High Court shall  remain  undisturbed.
           The appeal is allowed accordingly.”




      15.         In these circumstances, in our opinion, the High Court was
 wrong in bringing the matter within the scope of the provision  of  Section
 26(6) of the said Act, and further the High  Court  was  totally  wrong  in
 appreciation of facts even on the question of inspection and stated that no
 representative was  present  at  that  point  of  time.  On  the  contrary,
 admittedly the Manager of the respondent at the time of the inspection  was
 present.


 16.        In these  circumstances,  the  appeals  are  allowed,  the  writ
 petitions filed by the respondent/writ-petitioner  are  dismissed  and  the
 order passed by the High Court is set aside.









 ....................................J.
                                                   (Gyan Sudha Misra)








 New                                                                  Delhi;
 .....................................J.
 March 26, 2014.                        (Pinaki Chandra Ghose)


 -----------------------
[1]    1997 (6) SCC 740
[2]    1988 (1) SCC 23
[3]    2006 (12) SCC 222

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