Unauthorised use of Electricity; Jenin Mon V. Vs. State Electricity Board Ltd. [Kerala High Court, 23-08-2016]

Electricity Act, 2003 – Section 127 – Electricity Supply Code, 2014 (Kerala) – Regulation 153(15) – Estimation and regularisation of unauthorised additional load – the connected load reflected at the time of inspection was much higher than the authorised load and it will definitely take it to a different Tariff level as applicable to the ‘High Tension category’. This being the position, even though the excess energy consumed is in the same premises, the ‘second limb’ of Regulation No.153(15) with reference to the same Tariff is not satisfied. If the load is to be taken to the next Tariff level (HT category), it is quite obligatory for the consumer to get sufficient infrastructure installed including installation of Transformer at the cost of the consumer.

# Inspection


IN THE HIGH COURT OF KERALA AT ERNAKULAM

P.R. RAMACHANDRA MENON & ANIL K. NARENDRAN, JJ.

W.A.Nos.1436, 1448 & 1450 OF 2016

Dated this the 23 rd August, 2016

AGAINST THE JUDGMENT IN WP(C) 23506/2016 of HIGH COURT OF KERALA DATED 14.07.2016

APPELLANT/WRIT PETITIONER

JENIN MON V.

BY ADVS.SRI.G.SHRIKUMAR (SR.) SMT.C.SEENA SMT.P.B.WAHIDA

RESPONDENTS/RESPONDENTS

1. KERALA STATE ELECTRICITY BOARD LTD. REPRESENTED BY ITS CHAIRMAN & MANAGING DIRECTOR, VIDYUTHI BHAVAN, PATTOM, THIRUVANANTHAPURAM 695 023

2. THE ASSISTANT ENGINEER KERALA STATE ELECTRICITY BOARD LIMITED, ELECTRICAL SECTION, MUDICKAL, VAZHAKULAM, PERUMBAVOOR, ERNAKULAM-673101

3. THE ASSISTANT EXECUTIVE ENGINEER KERALA STATE ELECTRICITY BOARD LIMITED, ELECTRICAL SUB DIVISION, PERUMAVOOR, ERNAKULAM-673101

4. THE EXECUTIVE ENGINEER KERALA STATE ELECTRICITY BOARD LIMITED, ELECTRICAL DIVISION, ERNAKULAM-682031

BY SRI.JAICE JACOB,SC,KERALA STATE ELECTRICITY BOARD

J U D G M E N T

P.R. Ramachandra Menon, J.

Correctness of the verdicts passed by the learned Single Judge (separate judgments) on different dates, in the concerned writ petitions, relegating the appellants/writ petitioners to pursue statutory remedy by way of appeal under

# Section 127 of the Electricity Act, 2003

(‘Act’ for short) in respect of the assessment finalised under Section 126, is the subject matter of challenge in all these appeals.

2. The facts and circumstances are almost similar and so also is the position with regard to the consequences resulted. For convenience of reference, the parties and proceedings are referred to, as given in W.A.No.1436 of 2016, except where it is dealt with separately.

3. The petitioners availed electricity connection from the respondent Board under ‘LT IVA category’ (Industrial tariff) with a sanctioned load of less than 100 KW. On getting information as to the unauthoised use of electrical energy in the premises, a surprise inspection was conducted by the APTS (Anti Power Theft Squad) on 22.04.2016, when it was brought to light that the connected load in the premises was much higher than the sanctioned load and as such, there was high instances of ‘unauthorised use’ of electricity, which came within the purview of Section 126 of the Act. Ext.P1 Mahazar was prepared on the spot, referring to the incriminating circumstances and the instance of misuse/unauthorised use. It was accordingly, that Ext.P2 provisional assessment bill was issued to the consumer, followed by Ext.P3 demand notice. The appellant/consumer submitted Ext.P4 statement of objections. After considering the same, Ext.P5 final assessment order came to be passed by the second respondent, whereby a penalty of two times the charges for the excess quantity of the electricity consumed was mulcted upon the consumer/appellant.

4. In the course of further proceedings, the appellants sought to challenge the final assessment order by filing Ext.P7 appeal before the appellate authority/5 th respondent. But admittedly, such appeal was not preferred within the stipulated time of 30 days and there is a short delay (ranging from 7 to 10 days) in filing the same. Contending that the appeal was not being entertained by the appellate authority in view of the delay and since there was no provision in the statute to condone the delay, the appellants/writ petitioners approached this Court by filing the concerned writ petition pointing out that there was no other alternate remedy, in turn seeking for interference. The main contention was that, many relevant aspects as to the actual sanctioned load; that there was no theft of electricity but for a technical excess; absence of inspection by the ‘Assessing Officer’ himself and infringement of the mandate of

# Regulation 153(15) of the Electricity Supply Code, 2014

were specifically adverted to.

5. When the matter came up for consideration before the learned Single Judge, after hearing the learned Counsel for the writ petitioners and also the learned Standing Counsel for the Board, it was observed that since the writ petitioners/consumers had already sought to prefer appeal, it was found fit and proper to direct the appellate authority to consider whether the delay of 7 to 10 days could be condoned, if the delay could be explained. The learned judge observed that the appellate authority will have jurisdiction to condone the delay as there was no prohibition under the Act to entertain the appeal, though it was filed beyond 30 days. It was also directed that further steps to disconnect the power supply shall be kept in abeyance for a period of ‘7 days’, so as to enable the writ petitioners to take appropriate steps for filing an application to condone the delay as well as to make predeposit as per the statute. The appellants are stated as aggrieved of such direction and they have filed the present appeals insisting the merit of the case to be considered by this Court.

6. Heard Mr. G.Sreekumar, the learned Sr. Counsel appearing for the appellants and Mr. Jaice Jacob, the learned Standing Counsel for the KSEB at length.

7. Before proceeding with discussion of the facts and figures, it will be worthwhile to note the nature of the prayers sought for in the writ petition and the nature of the relief granted by the Court, which are extracted below: (prayers in W.A.No.1436 OF 2016 and the directions given therein are extracted hereunder):

“i) to issue a writ of certiorari or other appropriate writ or order quashing Exhibit P2, P3 and P5 as the same is against the provisions of law;

ii) to direct the 5 th respondent, Kerala State Electricity Appellate Authority to consider Exhibit P5 appeal and pass orders and keep in abeyance all further proceedings including disconnection till the disposal of the appeal

iii) to pass such other orders or directions as this Honourable Court deem fit to the facts and circumstances of the case.”.

Directions:

“1. That the petitioner shall submit an application to condone delay along with Ext.P7 memorandum of appeal, which shall be considered by the appellate authority, the 5 th respondent herein and appropriate orders shall be passed thereon.

2. The power connection of the petitioner shall not be disconnected for a period of seven days to enable the petitioner to take appropriate steps for filing an application to condone delay as well as to make the predeposit as per the statute.”

8. The thrust of the submissions as raised in the grounds (in Ground D) is mainly with reference to the infringement of Regulation 153(15)of the Kerala Electricity Supply Code, 2014 which reads as follows:

# 153. Estimation and regularisation of unauthorised additional load

xx xx xx

(15) Unauthorised additional load in the same premises and under same tariff shall not be reckoned as ‘unauthorised use of electricity’.

The contention is that, the said regulation mandates that unauthorised additional load in the same premises and under same Tariff shall not be reckoned as unauthorised use of electricity and as such, Ext.P5 order is not sustainable either on facts or in law. The appellants have raised some other grounds as well , as already mentioned above.

9. The factual particulars in respect of the three different consumers in the above appeals can be tabulated as given below:

Head/item W.A.1436/2016 W.A..1448/2016 W.A.1450/2016 Authorised load 63KW/ 70KVA 79KW/ 88 KVA 127.25 KW/ 142 KVA Connected load detected on inspection 181.283KW/ 202 KVA 135.046KW/ 151 KVA 253.089 KW/ 282 KVA Unauthorised connected load 118.283KW/ 132KVA 56.046 KW/ 63 KVA 125.839KW/ 140 KVA Penal Demand charge (Fixed Charge) Rs.3,96,000/- Rs.1,89,000/- Rs.4,20,000/- Penal Energy Charge (12 months((POD Computation Rs.4,77,821/- Rs.4,15,118/- Rs.6,75,811/-

10. The learned Sr.Counsel for the appellants submits that absolutely no revenue loss has been resulted to the Electricity Board and the entire energy consumed has been metered and the charges have been paid. It is pointed out that, in W.A. 1436 of 2016, the actual sanctioned load is ’99 KVA’ and not 70 KVA, which aspect has been omitted to be considered by the Assessing authority and as such the impugned order has to go on this score alone.

11. In respect of W.A.No.1450 of 2016, the learned Sr. Counsel submits that the authorised load is ‘127 KW’ and some excess was noted in the course of inspection. If the stand of the Board that, when the connected load exceeds 100 KVA, conversion had to be made to ‘High Tension’ category, (necessitating installation of separate transformer and infrastructure at the cost of the consumer), is to be accepted, the same does not reconcile with the undisputed fact as to the existing authorised load of ‘127 KW’. It is also pointed out with reference to Regulations No.153(10) and 153(12) of the Supply Code 2014 that, if there is any excess consumption steps can be taken for regularisation and till then the additional gadgets can be ordered to be detached. Since the Board has not taken appropriate action in terms of different Regulations, they cannot impose any exorbitant penalty (to an extent of two times); which is unconscionable in all respects; more so, when no inspection was conducted by the ‘Assessing officer’ himself, despite the clear stipulation under the relevant provisions of law. Reliance is also sought to be placed on the verdict passed by the Supreme Court in

# Babu Varghese vs. Bar Council of Kerala, (1999) 3 SCC 422

(paragraph 31) to contend that when the statute prescribes something to be done in a particular manner, it should be done only in that manner. Since no inspection was conducted by the ‘Assessing officer’ himself in terms of Section 126 r/w.Regulation 155(2), the proceedings are per se wrong and illegal and hence liable to be interfered by this Court.

12. The learned Standing Counsel for the Board submits that the idea and understanding of the appellants is thoroughly wrong and misconceived. It is stated that, excess use of energy beyond the authorised load, very much constitutes a forbidden act amounting to unauthorised use under Section 126 of the Act. The position has been made clear by the Apex Court in

# Executive Engineer, Southern Electricity Supply Company of Orissa Limited (SOUTHCO) and another vs. Sri Seetaram Rice Mill, (2012) 2 SCC 108

which is sought to be relied on.

13. It is pointed out that existence of ‘alternate remedy’ is admitted and the appellants have volunteered to file Ext.P7 appeal, though such appeal came to be filed belatedly. The belated filing of appeal cannot be taken as a premium to the defaulter, to have any writ petition to be entertained by this Court, which will defeat the scheme of the statute.

14. In respect of the disputed question, as to the actual connected load in respect of W.A.No.1436 of 2016, the learned Standing Counsel submits that the authorised connected load of ’70 KW’ was sought to be enhanced to ’99 KW’ and it was after considering the same, that Ext.P6 sanction of allotment of power was passed. Based on Ext.P6, necessary wiring has to be effected in the premises, followed by inspection to be done by the Board. It is also necessary for the consumer to furnish ‘additional security deposit’ and to execute an agreement to the requisite extent. Only on completing all the procedural formalities as above, can the consumer connect the gadgets to the extent of using ’99 KW’. Ext.P6 is never a sanction to connect additional gadgets before such exercise and that the authorised load still remains to be ’70 KW’.

15. In respect of W.A.No.1450 of 2016 where the existing authorised load is still reckoned as 127.25 KW, it is pointed out by the learned Standing Counsel for the Board that, prior to the Kerala Electricity Supply Code, 2005, the LT consumers were permitted to operate up to 150 KW. But the ceiling was reduced as per the Kerala Electricity Supply Code 2005 and bringing it down to 100 KW. However, observing the factual position which was prevailing earlier, some concession was sought to be given in respect of such consumers, who had got connection prior to 2005 and it was accordingly, that such persons, who were having connected load ‘upto 150 KW’ were permitted to have the energy used to such extent, without change of category as HT. Subsequently, by virtue of Kerala Electricity Supply Code, 2014, the measure of concession was restricted further, whereby it was stipulated under Regulation No.11 that, such benefit of concession will be available only till any upward revision is sought for by the consumer and never thereafter. This being the position, there is absolutely no irregularity, inconsistency or illegality in the proceedings pursued by the authorities of the Board, according to the learned counsel.

16. With regard to the inspection to be made by the ‘Assessing Officer’ in terms of Section 126 of the Electricity Act and Regulation No.155(2), the learned Standing Counsel submits that, what is envisaged to be ensured is the inspection and the emphasis is never upon the ‘person’, who conducts the inspection. This is discernible from Section 135 as well; which deals with instance of ‘thefts’ involving misuse/unauthorised use of electrical energy (which is a greater offence). Under Section 135, it is open for the ‘Sub Engineer’ to inspect the premises and collect the data, to be proceeded with further steps. Fixation of liability/penalty under Section 135 involves the process of assessment under Section 126, though the Assessing authority is different, i.e., Assistant Engineer. As it stands so, it is for the Assessing authority to ensure inspection either personally or to proceed with further steps for assessment, based on the data collected by the ‘Authorised officer’ (which term has been used under Section 135). That apart, there is no dispute for the appellants/consumers in the instant case, that there was any mistake in noting down the readings, pursuant to inspection held in the premises (or that any prejudice has been caused in this regard), and no objection in this regard has been raised in Ext.P4 statement of objections.

17. The question whether the inspection envisaged under Section 126 of the Electricity Act 2003 has to be conducted by the Assessing officer himself or whether presence of the Assessing Officer is mandatory at the time of inspection, had come up for consideration before a Single Bench of this Court in W.P.(C)No.31523 of 2013

# Syriach Kurian vs. Union of India and others, 2014 (2) KHC 325 : 2014 (3) KLT 557

After making a reference to the verdict passed in Sri Seetaram Rice Mill’s case (cited supra), the learned Judge observed that the said question was not at all considered by the Apex Court in Sri Seetaram Mill’s case. The factual position as above has been correctly noted by the Calcutta High Court as well in

# CESC Ltd vs. ABDOS Trading Co. Pvt. Ltd, AIR 2013 Cal. 76

The learned Judge further observed that the Calcutta High Court, though had made some observations as to the necessity of the Assessing Officer to be present at the time of inspection under Section 126 of the Electricity Act, it was made clear by the Calcutta High Court that since the Court was not called upon to decide the said issue, the Bench did not intend to express any further opinion in the matter. The observations made by the Bench in paragraphs 8 and 9 of the above verdict in

# Syriach Kurian vs. Union of India and others, 2014 (2) KHC 325 : 2014 (3) KLT 557

are relevant and hence they are extracted below:

“8. A scanning of S.126(1) would be beneficial, which is reproduced hereunder:

“If on an inspection of any place or premises or after inspection of the equipments, gadgets, machines, devices found connected or used, or after inspection of records maintained by any person, the assessing officer comes to the conclusion that such person is indulging in unauthorised use of electricity, he shall provisionally assess to the best of his judgment the electricity charges payable by such person or by any other person benefited by such use.”

It provides that, for making a provisional assessment to the best of his judgment with respect to the electricity charges payable, the Assessing Officer should come to a conclusion that the person against whom such provisional assessment is proposed was indulging in unauthorised use of electricity. The statute provides that such a conclusion can be arrived on the basis of inspection of any place or premise or after inspection of the equipments, gadgets, machines, devices found connected or used, or after inspection of the records maintained by such persons. Nowhere it is mentioned in S.126(1) that such inspection should be conducted by the Assessing Officer himself. Question is as to whether such conclusion can be arrived on the basis of any report of inspection conducted by any other authority. Various other provisions in the Act enables authorities other than Assessing Officers to enter upon any premises for conducting inspection for verifying position of the equipments, gadgets, machines, devices etc. Various other authorities are empowered under the statute to detect theft or misuse of energy and to take action of disconnection of supply. As observed by learned Judges of the High Court of Calcutta, the Hon’ble Apex Court had never dealt with an issue as to whether presence of the Assessing Officer is necessary at the time of inspection. The Hon’ble Supreme Court had never interpreted S.126(1) as one creating it mandatory that the Assessing Officer should only arrive at conclusion regarding indulgence in unauthorised use of electricity, by conducting inspection by himself. In other words, the Hon’ble Supreme Court had never dealt with an issue as to whether presence of the Authorised Officer is mandatory for conducting inspection, for the purpose of imposing penalty. On the other hand, the Hon’ble Apex Court only enumerated the steps to be taken under S.126, while discussing about the ambiguities in the procedure to be followed under the said provision. It observed that the Assessing Officer has to conduct inspection as a first step, towards assessment of penalty. But no where in the decision it is held that penalty cannot be imposed on the basis of inspection conducted by any other authority. In a passing observation the Hon’ble Supreme Court said that, the assessment proceedings would commence with the inspection of the premise by the Assessing Officer. There also, the court has not dealt with the issue as to whether any other authority can conduct the inspection. Hence there is no dictum laid by the Hon’ble Supreme Court that presence of the Assessing Officer is mandatory at the time of inspection. Nor even the observations contained in Sri Seetaram Rice Mill’s case can be considered as an obiter and as binding on this court. It is to be noticed that, even when the Calcutta High Court found that a plain reading of the provision would suggest presence of the Assessing Officer at the time of inspection is mandatory, the said court had specifically observed that the Hon’ble Supreme Court has not dealt with the issue in Sri.Seetaram Rice Mill’s case.

9. Insistence that presence of the Assessing Officer is mandatory at the time of inspection, will create procedural hurdle in the matter of detection of theft or unauthorised usage and assessment of penalty. If such a narrow construction is adopted with respect to S.126(1), any culprit who commits theft or unauthorised use or misuse of energy can escape from the liability of penalty, because he can remove or dismantle any device or apparatus from the premises through which theft or misuse of energy is committed, before the Assessing Officer could conduct an inspection on the basis of any information. In most of the occasions, the assessment proceedings are initiated only on the basis of inspection report submitted by a team of officers including authorities who are higher in rank than the Assessing Officer. Hence there is no illegality or irregularity in the Assessing Officer arriving at a conclusion regarding indulgence of unauthorised use of electricity, based on such reports. Of course, person against whom such assessment is made is always at liberty to challenge veracity of the findings in the report or even correctness of the conclusion arrived by the Assessing Officer. An effective statutory remedy of appeal is provided for adjudicating such challenges. Hence this Court is of the considered opinion that, provisions contained in S.126(1) cannot be construed in any manner narrowing down its scope against initiating assessment proceedings based on conclusion arrived depending on materials collected on an inspection conducted by any competent authority other than the Assessing Officer.”

We concur with the view expressed by the learned Single Judge in the aforesaid decision.

18. With regard to the submission as to the absence of ‘revenue loss’, it is pointed out by the learned Standing Counsel that involvement of ‘revenue loss’ is not a relevant aspect to be considered and that the point to be looked into is, whether there is any unauthorised use of energy. Instance of a domestic consumer is cited as an example, to show that there is no ‘fixed charge’ and if there is any excess consumption, it cannot be said that there is revenue loss as the energy consumed has been metered already. But, if excess energy is consumed or connected load is higher than the authorised load, it of course comes within the purview of Section 126 of the Act to be proceeded against. Observations made by the Supreme Court in para 50 of the decision in

# Executive Engineer, Southern Electricity Supply Company of Orissa Limited (SOUTHCO) and another vs. Sri Seetaram Rice Mill, (2012) 2 SCC 108

are sought to be relied on, to the effect that the primary object under Section 126 is to ensure ‘stoppage of misuse/unauthorised use’ of electricity as well as ‘prevention of revenue loss’. It is also added that, in the instant case, much revenue loss is there, by virtue of the course and events pursued and further that, even if there is no revenue loss, the Board is authorised to proceed against the consumers by virtue of the clear cut provision under section 126 of the Act. The learned Standing Counsel also seeks to place reliance on para 23 of the Seetaram Rice Mill’s case (cited supra), pointing out that Section 126 has to be read along with the other provisions of the statute and the workability of Section 126 has to be given paramount importance. On such an event, revenue loss cannot be a ground for consideration and that a purposive interpretation has to be given to the provisions in the statute.

19. After hearing both the sides, this Court finds that Regulation No.153(15) does not come to the rescue of the appellant/petitioner, in so far as it will be attracted only if there is excess energy consumed in the same premises AND under the same Tariff. In the instant case, the connected load reflected at the time of inspection was much higher than the authorised load and it will definitely take it to a different Tariff level as applicable to the ‘High Tension category’. This being the position, even though the excess energy consumed is in the same premises, the ‘second limb’ of Regulation No.153(15) with reference to the same Tariff is not satisfied. If the load is to be taken to the next Tariff level (HT category), it is quite obligatory for the consumer to get sufficient infrastructure installed including installation of Transformer at the cost of the consumer. As such, the said contention is devoid of any merit.

20. Regarding the other contentions on merit, in so far as there is no dispute with the factual aspects, this Court does not intend to have the same dealt with in these writ appeals; as any observation made in respect of the merit may adversely affect the rights and interests of the appellant in the statutory appeals. Since the basic contention with reference to Regulation 153(15) is answered against the appellants/petitioners, the rest is to be dealt with by the appellate authority, in terms of the relevant provisions of law. Admittedly, the appeal was not preferred within time and there is short delay. It is in the said circumstance, that the learned Single Judge has permitted the appellants – writ petitioners – to pursue the matter before the appellate authority by filing a petition to condone the delay to have the matter considered on merits; also granting some breathing time to take necessary steps, ordering to keep the coercive steps, if any, in abeyance, till such time.

21. In the above facts and circumstances, we do not find any tenable ground to interfere with the verdict passed by the learned single Judge. Accordingly, interference is declined and all the appeals are dismissed, without prejudice to the rights and liberties of the appellants to pursue the statutory remedy, as permitted by the learned Single Judge. Considering the submission made by the learned Sr. Counsel for the appellants that the time to satisfy the requirement is already over, we find it appropriate to grant a further period of ‘one week’ from the date of receipt of a copy of this judgment, so as to pursue further steps in terms of the judgment passed by the learned Single Judge. The coercive proceedings, if any, shall be kept in abeyance till such time.

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