Navghanbhai Govindbhai Zala vs Pashim Gujarat Vij Company Ltd.

Biren Vaishnav, J

In this petition, under Article 226 of the Constitution of India, the petitioner has prayed for the following reliefs:

“(A) Be pleased to allow this petition.

(B) Be pleased to issue appropriate writ, order or direction upon the respondent authority and be pleased to quash and set aside the action on the part of the respondent authoritative in issuing supplementary bill dated 2.6.2022 u/s.135 of the Electricity Act, 2003 by which the petitioner has been directed to pay a sum of Rs.12,57,478-68 Paisa to the respondent authorities towards the supplementary bill and Rs.32,000/- towards compounding charges.

(C) Be pleased to issue appropriate writ, order or direction upon the respondent authorities and be pleased to quash and set aside the supplementary bill as well as the Assessment Sheet dated 2.6.2022 and further be pleased to direct the respondent to re-assess the supplementary bill in accordance with law.”

The facts in brief would indicate that it is the case of the petitioner that the petitioner is in the business of excerpting ground nut oil. The petitioner had preferred an application on 3.3.2020 to the respondent – Paschim Gujarat Vij Company Limited (for short, hereinafter referred to as `Electricity Company’) for procuring electricity connection for the business of excerpting ground nut oil on a seasonal basis for a period of four months. On a new season coming into play, on 2.4.2022, the petitioner again preferred an application on 2.4.2022 for grant of electricity connection. The company on 2.6.2022 issued a communication alongwith a supplementary bill u/S. 135 of the Electricity Act to the petitioner for a sum of Rs.12,57,478.68 Paisa and Rs.32,000/- towards compounding charge. They also issued an assessment sheet based on which the supplementary bill was issued. It was the case of the respondent – Electricity Company based on a checking report, that the petitioner had carried out theft of energy inasmuch as, there was tampering with the LT transformer.

Of the several grounds of challenge made in this petition, Mr. Kinkhabwala, learned advocate for the petitioner submitted that the supplementary bill is required to be quashed and set aside since the same is passed without opportunity of hearing to the petitioner. In support of his submissions, Mr. Kinkhabwala relied on a Division Bench decision dated 26.7.2018 of LPA No.616 of 2018 of this Court in the case of Jayshree Talkies v. Paschim Gujarat Vij Company Limited.

He also placed reliance on the judgment of the Hon’ble Supreme Court in the case of West Bengal State Electricity Distribution Company Limited v. M/s. Orion Metal Private Limited reported in 2019(11) SCC, 1077. He would submit that if the Regulations 7.6 and 7.7 of the 2015 Regulations are read, it provides for assessment of a civil liability for which the petitioner is entitled to be heard.

Mr. Mitesh Rangras, learned counsel for the respondent - Electricity Company would submit that a petition under Article 226 of the Constitution of India is not maintainable inasmuch disputed questions of fact are involved. He would further submit that the petitioner has an alternate remedy of invoking the provisions of Sections 153 and 154 of the Electricity Act, 2003 wherein the Special Court will assess the civil liability of the petitioner and therefore that is correct forum where the legality and correctness of the supplementary bill can be challenged. In support of his submission, Mr. Rangras would rely on a decision in the case of Sanjay Ispat Private Limited v. Chairman reported in 2009 JX(Guj), 535. He also relied on a decision in Special Civil Application 2000 of 2018 in the case of Bahuchar Stone Industries Prop Concern of Dolatbhai Prabhubhai Patel v. State of Gujarat reported in 2021 Law Suit (Guj), 5371.

Having considered the decisions of the Court, this court (Coram Mr. Justice A.S. Supehia) has considered the issue on an identical basis in a judgment rendered in SCA No.16735 of 2021 dated 30.6.2022. Considering the decisions in the case of Jayshree Talkies (Supra) and M/s. Orion Metal Private Limited (Supra), the Court has held as under:

“6. The facts, as narrated hereinabove, are not in dispute that the petitioner has been issued a supplementary bill under the provisions of Section 135 of the Act, for the reason that he has committed theft. The Division Bench of this Court in the judgment dated 26.07.2018 passed in Letters Patent Appeal No.616 of 2018, while examining the analogous issue and the provisions of Sections 126 and 135 of the Act, has held thus:-

“[23] As much as Section 126 of the Electricity Act of 2003 deals with malpractice other than the cases falling in the category under Section 135, procedure is prescribed under Section 126 of the Electricity Act of 2003. Section 135 of the Electricity Act deals with offences and penalties, as such, it has not indicated the manner and method of assessment of civil liability in cases of theft of energy. Electricity Supply Code is notified by the statutory functionary under Section 50 of the Electricity Act of 2003. It is expected that the respondent authorities to follow such Code before making the assessment. It is true that there is no express provision for granting opportunity, but from a reading of Regulation 7.6.5 issued by the Gujarat Electricity Regulatory Commission, it is clear that at the stage of assessment of civil liability, notice is required to be given for the consumer to give opportunity to produce evidence by the consumer to show cause why liability is not fastened for a period of 12 months preceding date of detection of theft. As much as, said Regulation empowers the assessment to be made for a period of 12 months preceding the date of detection of theft or exact period of theft whichever is less. In the Regulation 7.6.5(a), it is specifically prescribed that exact period can be arrived at by following guidelines or any other evidence which may be provided by the consumer. When the consumer is given opportunity to produce evidence to show that theft period cannot be extended to 12 months, he can produce such evidence which is with him to plead for lesser period. Such production of evidence will arise only if the consumer is given opportunity but not otherwise.

(24) From a reading of Regulation 7.6.5 of the Regulations of 2005, it is clear that it is inbuilt, in the regulation itself to provide opportunity to the consumer before supplementary bill is raised. In case of theft of energy, respondent authorities cannot unilaterally assess loss of energy for a maximum period of 12 months in all cases without giving any opportunity. Further it is clear that civil liability determined is subject to orders of the Special Court under Section 154(5) of the Electricity Act. If any amount is deposited by the consumer which is excess of civil liability to be determined by the Special Court, such amount is required to be refunded to the consumer under Section 154(6) of the Electricity Act of 2003.

(25] In view of aforesaid provision of Regulation 7.6.5 of the Regulation of 2005 which is issued in exercise of section 50 of the Electricity Act of 2003 read with Section 154(5) and 154(6) of the Electricity Act of 2003, it makes clear that in cases of theft of energy, initial assessment power is conferred on the authorities subject to provision under Section 154(5) and 154(6) of the Electricity Act of 2003. Initial assessment is to be made by the authorities by following Regulation 7.6.5 of the Regulations of 2005 notified by the Gujarat Electricity Regulatory Commission. In that view of the matter, we are of the view that aforesaid two judgments relied by the learned Counsel for the respondent would not render any assistance in support of their plea that in the cases of theft of energy, for assessing civil liability, no opportunity need be given to the consumer. Said contention of learned Counsel for the respondent is required to be rejected and accordingly, it is rejected.

[26] As much as, we are of the view that before issuing supplementary bill, no procedure is followed in this case as referred above, the appeal is required to be allowed by setting aside the supplementary bill for an amount of Rs.17,18,384.43 ps.. Accordingly, supplementary bill for an amount of Rs.17,18,384.43 ps. (Annexure — D in Special Civil Application No.10600 of 2008) is hereby quashed and set aside and the matter is remanded to competent authority to take fresh decision by giving opportunity to the appellant as contemplated under Regulation 7.6.5 of the Regulations of 2005.

The Division, has set aside the supplementary bill on the ground of hearing and the matter was remanded to the competent authority to take a fresh decision by giving an opportunity to the concerned appellants, as contemplated under regulations 7.6.5 of the Regulations of 2005.

In the case of Orien Metal Pvt. Ltd. (supra), the Supreme Court also, while examining the analogous issue, has observed thus:-

“16. 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 Assessing Officer comes to a conclusion that the consumer is indulging in unauthorized 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 unauthorized use of energy. The unauthorized use of electricity is defined under Section 126(6)(b) of the Act. It is clear from the aforesaid definition that unauthorized use of electricity means, the usage of electricity by any artificial means or by a means not authorized by the concerned person or authority or licensee; or through a tampered meter; or for the purpose other than for which the usage of electricity was authorized; or for the premises or areas other than those for which the supply of electricity was authorized.

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 unauthorized 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 unauthorized 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 unauthorized use of electricity. As per Section 135(1A) 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(1A) 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 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 unauthorizedly 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 authorizes electricity supplier to ascertain loss in terms of revenue caused to it by the consumer by his act of “unauthorized 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 Electricity Act. Further, it is also clear from Section 154 of the Act, which prescribes procedure and power of 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 concerned person, 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.

The Apex Court has held that ultimately, merely because the Special Court is empowered to determined 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 the authorities to make provisional assessment / final assessment under Section 126 of the Act. The Supreme Court has also observed that for the unauthorized used of electricity as defined in Section 126(6)(b) of the Act, and also reading the proviso of Section 135(1) of the Act, the Electricity Company has to initially arrived at a provisional assessment to the best of his judgment and thereafter giving an opportunity of filing objection such a provisional assessment, the Assessing officer is empowered to pass final order of the assessment assessing the loss of energy on account of unauthorized used of energy. The Supreme Court has encompassed the theft of electricity as envisaged under the provisions of Section 135 of the Act, within the meaning of unauthorized used of electricity.”

In light of the aforesaid observations of the Division Bench of this Court as well as the judgment of the Hon’ble Supreme Court, the supplementary bill dated 2.6.2022 is hereby quashed and set aside. The matter is remanded to the competent authority to reassess and finalize the supplementary bill, after affording an opportunity of hearing to the petitioner. The entire exercise shall be undertaken and a final supplementary bill shall be issued within a period of one month from the date of writ of this order. The petitioner shall fully cooperate with the competent authority.

The writ petition is disposed of accordingly. Direct Service is permitted. No order as to costs.