Holding

The electricity board may disconnect supply and demand payment for electricity theft without prior hearing, and Section 24 notice does not apply to pilferage cases.

Summary

The Madhya Pradesh Electricity Board inspected the meters of Harsh Wood Products and found tampered seals indicating theft of electricity. The Board issued a notice demanding payment of Rs 6,51,256.61 and threatened disconnection of supply. The High Court set aside the demand, holding that the consumer was entitled to a hearing before any disconnection or demand under Section 31(e) of the Indian Electricity Act, 1910, and that the order violated Articles 14 and 20(1) of the Constitution. On appeal, the Supreme Court held that Section 24 of the 1910 Act, which requires a seven‑day notice, does not apply to cases of pilferage detection, and that the Board may disconnect supply and recover dues without a prior hearing. The Court affirmed the Board’s statutory power under Sections 49 and 79 of the Electricity (Supply) Act, 1948, and restored the demand. Consequently, the appeal was allowed and the High Court’s order was set aside.

Issues considered

Whether a consumer must be afforded a hearing before the electricity board disconnects supply or demands payment for electricity theft detected under Section 31(e) of the Indian Electricity Act, 1910.
Whether the seven‑day notice provision of Section 24 of the Indian Electricity Act, 1910 applies to cases of pilferage.
Whether the High Court’s quashing of the board’s demand violated Articles 14 and 20(1) of the Constitution.
Whether the board’s action is within the powers conferred by Sections 49 and 79 of the Electricity (Supply) Act, 1948.

Legislation cited

Electricity Act, 1910s. 24, s. 31(e)
Electricity (Supply) Act, 1948s. 49, s. 79

Subjects

electricity theftmeter tamperingnatural justiceright to hearingdisconnection of supplyIndian Electricity ActSection 31(e)Section 24constitutional lawArticles 14Article 20(1)Electricity (Supply) Act

Judgment

A M.P. ELECTRICITY BOARD, JABALPUR AND ORS.
v.
HARSH WOOD PRODUCTS AND ANR.

APRIL 18, 1996

B [K. RAMASW.\MY AND G.B. PATTANAIK, JJ.J

E/ectlicity Laws :

Indian Elecllicity Act, 1910/Elecllicity (Supply) Act, 1948 : Ss.24,
C 31 (e )/49, 7'}-Elecllicit;-Pilferage-Detected by vigilance inspectio11-FIR
lodged-Order passed directing to pay the differc11ce of the amount-High
Court holding that since no opportunity 1vas given, the order was
void-De111a11d quaslzed-Held, action take11 by the Elec(licity Board not
violative of the P1i11ciples of 11at11ral justice nor violative of A1tic/es 20( I) and
14 of the Co11stitution-Notice for disconnection-Not i;ecesswy.in case of
D demand after detectio11 of pilferage-Pri11ciples of Natural Justice-Ad-
ministrative Law-A1ticles 14 and 20(1j-Constitutio11 of I11dia.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 7798 of
1996.
E From the Judgment and Order dated 12.3.93 of the Madhya Pradesh
High Court in M.P. Ne 1484 of 1991.

G.L. Sanghi, Vivek Gambhir and S.K. Gambhir for the Appellants.

Niraj Shrama for the Respondents.
F
The following Order of the Court was delivered :

Leave granted.

We have heard learned counsel on both sides. This appeal by special
G leave arises from the Judgment and order dated March 12, 1993 passed by
the Division Bench of the High Court of Madhya Pradesh, Gwalior Bench
in M.P. No 1484/91. The admitted position is that on August 21, 1991, the
appellants' staff inspected the electrical installation of the respondents
connected by the appellant-Board. In the proceedings recorded after the
H said inspection, the facts noted are as und_er :
574
M.P. ELECT BD. v. HARSH WOOD PRDTS. 575

"During the course of inspection, Shri Dilip was present as the A
representative of M/s. Harsh Wood Products, Hanmore and found
the following irregularities. Connection No. 1156 (2556) -

1. No Seal found on Meter terminal cover.

2. Body seals of the meter, hearing No. 490812 (Right side) and B
01443 (Left Side) found tematampered.

3. The seals on Meter Box, bearing No. 38556/SE Morena, C-
10/MPEB Gwalior, found OK.

Connection No. 1158 (2824) c
(1) No seal found with Meter terminal cover.

(2) Meter Body seals. bearing No. 49817 (Right Side) & 013361
(Left Side) found broken and Tampered.
D
(3) Seal on meter box bearing No. 33434/SE Morena C- 10/MPEB
Gwalior found OK.

In both the above connection, the difference was noticed, in
serial No. and the location of the seals provided on Meter Body.
The serial No. and the location of the meter body seals, as found E
in the inspection carried out on dated 16.3.91, are found different
in the checking carried out on dated 22.8.91. The difference
noticed in serial No. & location in checking is as hereunder :

16.3.91 Connection No. 2556 Connection No. 2824
Seal fixed Right Side 490817 013343
F
Left Side 490812 013361
28.8.91 Right Side 490812 49817
Report as Left Side 013343 013361
Meler No. 0530489 545768 G
This panchnama has been prepared in view of Meter Body seals
found Tampered and Meter terminal seals found missing so as to
interfere and control the energy consumption as per his own desire.

Maintaining "Status Quo" of the tampered and broken body H
576 SUPREME COURT REPORTS (1996] SUPP. 1 S.C.R.

A seals of Meter of Both the above connection, New Seels are fixed
on the meter box bearing No. M1919 MPEB/MT on Connection
No. 2556 and No. M1920 MPEB/MT on connection No. 2824. The
old seals provided on the meter box are in custody with the
Executive Engineer (0 & M) Morena.

B Sid- 22.8.91 Sid- 22.8.91 Sd/- 22.8.91
EE (0 & M) S.E. (Testing) A.E. (DIW)
Morena Gwalior Morena
Sd/- 22.8.91 Sd/- 22.8.91 Sd/- 22.8.91
A.E. 132 KV A.E. (Testing) Dilip
c Sis Hanmore Morena (Representtative of
Consumer)".
In the said proceedings, one Mr. Dilip had represented the respon-
dent-industry and he was also the signatory to the proceedings. Thereafter,
notice was issued to the respondents on August 26, 1991 informing that the
D meter body seals were tampered and damage with seal wire. The seals of
the meter terminal block were found missing which would indicate that the
function of the meter was disturbed to reduce the consumption of electrical
oncrgy. Therefore, the respondent-Industry was directed to pay the dif-
ference of the assessed amount said to be in a sum of Rs. 6,51,256.61 at
the earliest. It was also pointed out that bill for the further past years was
E being examined and the decision would be taken and intimated in due
course. In furtherance thereof, the respondent-Industry submitted the ex-
planation to the show cause on August 29, 1991 wherein he requested that
on humanitarian grounds, viz., "the supply of the installation will please be
restored immediately and we give the undertaking that if any balance
F amvunt become due for payment on account of vigilance checking, the
same will be denosited immediately on providing the bills for such amount".
The reply was also given by Mr. Dilip who had participated during inspec-
ti on.

Upon these facts, the question emerges : whether the High Court
G '''ould be justified in interfering with the order directing ther.1 to pay the
difference of the amount. The High Court in the impugned judgment has
held that the respondent has a right of hearing before the authority subject
it to payment of the amount which is alleged to be due towards the theft
of electricity as required under Section 31( e) of the Indian Electricity Act,
H 1910. Since that opportunity was not given, it violated Articles 20(1) and
M.P. ELECT BD. v. HARSH WOOD PRDTS. 577

21 of the Constitution and, therefore, the order wa' void. Accordingly, it A
directed the appellant-Board to restore within 24 hours the service con-
nection No. 2556/1156 of the Industry. It is also stated with respect to the
claim of the Board against electricity stolen that it would be open to the
appellant to raise legal and appropriate demand in a legal and lawful
manner. Accordingly, the demand was quashed.
B
- The question, therefme, is : whether the view of the High Court is
sustainable in law. It would be seen that Section 49 read with Section 79
of the Electricity (Supply) Act, 1948 gives power to the appellant-Board to
determine and also to revise tariff from time to time. Admittedly, in
exercise of the power the tariff has been determined and the principles C
governing the supply of electricity have been enumerated. Clause 3l(e) is
relevant in this behalf. It provides as under :

"(e) Where any consumer is detected in the commission of any
malpractice with reference to his use of electrical energy including D
authorised alternations to installationsi unauthorised extension and
use of devices to commit theft of electrical energy the Board may,
without prejudice to its other rights, cause the comumer's supply
to be forthwith disconnected. The supply may be restored in the
discretion of the Division Engineer of the Board if the consumer
forthwith compensates the Board and pays all dues as per bill and E
takes such other actions as he may be directed by the Divisional
Engineer of the Board to take in this connection".

A reading thereof clearly indicates that the appellant-Board, when it
detects that any consumer had committed any malpractice with reference F
to his use of electrical energy including authorised alternations to installa-
tions, unauthorised e:x1:ension and us·e of de\,ices to commit theft of electri-
cal energy, may, without prejudice to its o~·hcr rights; disconnect the supply
of electricity forthwith and may call upon the consumer to make payment
for compensation of the unauthorised use of electricity which is now stated
to be a theft of electricity. It is not in dispute that an FIR had already been G
lodged for theft of electrical energy. It is seen that the proceedings have
been drawn in the presence of the representative of the respondent-
Industry and the meters were found to have been tampered with. In
furtherance thereof, a prima facie conclusion of pilferage has been reached
that the meters were tampered with and respondents \Vere.called upon to H
578 SUPREME COURT REPORTS (1996] SUPF. 1 S.C.R.

A pay the difference of the rate for electricity said to have been consumed
during the stated period of the detection. It would appear thal the said
asse~s1nent was based upon the previous consumption. It is seen 1hat since
the proceedings are pending, it would not be desirable to re:ord any
finding in this behalf.

B The learned counsel for the respondenf placed strong re iance on
Section 24 of the Indian Electricity Act, 1910 which contempla es seven
days' notice before disconnection. Section 24 does not apply lo demand on
detection of pilferage. It would apply to a case of regular supply nade and
prior demand for payment of electricity charges with a notice of ;c ven days
c to be made and for failure to pay within the given time, after 'xpiry of
seven days, the appellant as a licensee would get the right to d:sconnect
the supply of electrical energy. It would thus be seen that disccnnection
will be in the course of regular supply of electricity for non-paym< nt of the
usual bills but not to any case demand after detection of pilferag=.

D The only question is : whether the consumer if entitled le hearing
before disconnection ? In view of the conditions to which the res; londents
had agreed at the time of installation and also the prima facie cc nclusion
reached by the authorities, it was not necessary to give further hearing to
the respondents. The action taken by the appellant is not viclative of
Articles 20(1), 14 of the Constitution and principles of natural ju ;tice.
E
The appeal is accordingly allowed. No costs.

G.'.'I. Appeal allowed.