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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  5,10,930/-  as  well  the  notice  of  

disconnection dated October 5, 2010.

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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.  

4.2 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  

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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  

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  80,000/- per month and  

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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  

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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.  

4.6 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  

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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  

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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  

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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.

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(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).

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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  

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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

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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.”

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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  

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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  

1 1997 (6) SCC 740  2 1988 (1) SCC 23

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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  

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of electricity.  It is pointed out that on October 10, 2002, the High  

Court  directed  the  respondent  to  deposit  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  10,000/-  and  subsequently,  the  

respondent further deposited a sum of 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  

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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  

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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  

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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.

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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  Pal3,  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)

3 2006 (12) SCC 222

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“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.  

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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)

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