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The Indian Electricity Act, 1910
The Electricity (Supply) Act, 1948
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Madras High Court
N.Mohammed Farook vs Union Of India on 20 February, 2012

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT

DATED: 20/02/2012

CORAM

THE HONOURABLE MR.JUSTICE K.K.SASIDHARAN

W.P.(MD)No.1715 of 2011

and

M.P.(MD)Nos.1 and 2 of 2011

N.Mohammed Farook,

Correspondent,

Naina Mohammed College of

Arts and Science,

Rajendranpuram,

Aruanthangi Taluk,

Pudukottai District. ... Petitioner

vs.

1.Union of India,

Rep. by its Secretary,

Ministry of Power,

New Delhi-100 001.

2.The Assistant Executive Engineer (Town),

Operation and Maintenance,

Tamil Nadu GED Co,

Tamil Nadu Electricity Board,

(Thanjavoure Electricity Distribution Circle),

Aranthangi,

Pudukottai District. ... Respondents

PRAYER

Writ Petition is filed under Article 226 of the Constitution of India praying for the issuance of a Writ of Declaration, declaring the Section 135(1)(e) of the Electricity Act, 2003 as illegal, conflicting and overlapping with Section 126 of the Electricity Act, 2003 and consequently, forbearing the second respondent from proceeding further pursuant to issue of Form 9 dated 21.01.2011 under Tamil Nadu Electricity Supply Code, 2004 by issue of writ in nature of Mandamus.

!For Petitioner ... Mr.B.Saravanan

^For Respondent No.1 ... Mr.K.K.Senthilvelan

Assistant Solicitor General of India

For Respondent No.2 ... Mr.S.M.S.Johnny Basha

******

:ORDER

*******

This Writ Petition, at the instance of a consumer, seeks a Writ of Declaration, to declare Section 135(1)(e) of Electricity Act, 2003 as illegal and overlapping Section 126 of the said Act.

THE FACTS:

2. The petitioner is the Correspondent of Naina Mohammed College of Arts and Science and Crescent Matriculation School, at Rajendrapuram, Aranthangi Taluk in the district of Pudukkottai. The College obtained a service connection in S.C.No.319. The College also obtained a temporary service connection in S.C.No.1 for the purpose of constructing a building within the campus of their College.

3. While the matters stood thus, the officials of the Tamil Nadu Electricity Board inspected the premises of the petitioner on 20 January, 2011 and found that electrical supply in S.C.No.319 was used for operating motor pump at Naina Mohammed College. The Electricity Board concluded that the petitioner indulged in unauthorized use of electricity and as such, he was asked to pay a sum of Rs.1,42,670/- towards consumption charges, besides a sum of Rs.8,000/- for the purpose of compounding.

4. The second respondent issued notice in form No.9 under the Tamil Nadu Electricity Supply Code, 2004, stating that during the inspection conducted on 20 January, 2011, it was found that an offence of theft of energy had been committed by unauthorized use of electricity for college building construction and accordingly, the approximate loss was quantified at Rs.1,42,670/-. The petitioner was directed to pay the amount within five days or to file objection within a period of seven days from the date of receipt of Form No.9.

5. According to the petitioner, Section 126 of the Electricity Act, 2003 provides for the assessment of loss due to unauthorized use of electricity. Explanation (b)(iv) of Section 126 defines 'the unauthorized use of electricity' as 'usage of electricity for the purpose other than for which the usage of electricity was authorized'. Section 135 of the Act deals with theft of electricity. The said provision attracts only when there is unauthorized use of electricity with a dishonest intention. Section 135(1)(e) provides that whoever, dishonestly, uses electricity for the purpose other than for which the usage of electricity was authorized, so as to abstract or consume or use electricity, shall be punishable with imprisonment for a term which may extend to three years or with fine or with both. Therefore, there is a clear overlapping and conflict between Section 135(1)(e) and explanation (b) (iv) of Section 126 of Electricity Act, 2003. According to the petitioner, the second respondent ought to have proceeded only under Section 126 of the Electricity Act, 2003 [hereinafter referred to as "the Act"] and not under Section 135 of the Act. The act complained of which is treated as unauthorized use of electricity, under Section 126 of the Act, cannot be treated as theft of electricity under Section 135 of the Act. Therefore, the petitioner wanted a declaration that Section 135 (1)(e) of the Act is null and void, besides overlapping Section 126 of the Act.

6. The second respondent filed a counter stating that the petitioner has put up construction and has obtained permanent service connection in S.C.No.319. He was paying charges at the rate of Rs.4.80 per unit. The petitioner was engaged in putting up additional construction and for the said purpose, the Institution obtained a service connection in S.C.No.1. It was a temporary connection. The petitioner was bound to pay charges at Rs.10.50 per unit. However, without using the temporary service connection, the petitioner used the permanent service connection for the purpose of construction. The inspection conducted by the officials of the Board revealed the unauthorized abstraction of electricity. Therefore, notice under Section 135 of the Act was issued. The petitioner has paid a sum of Rs.8,000/- as compounding fee on 20 January, 2011. The loss was determined in accordance with Section 135 of the Act. According to the second respondent, usage of electricity for a purpose other than for which the usage of electricity was permitted is nothing but theft of energy and as such, the Board was justified in taking action under Section 135 of the Act.

SUBMISSIONS:

7. The learned counsel for the petitioner, by placing reliance on Section 126, explanation (b)(iv) of Section 126 and Section 135(1)((e), contended that there is a clear case of overlapping and as such, Section 135(1)(e) should be declared invalid. According to the learned counsel, in case the electricity was used for a different purpose, appropriate action should only be under Section 126 of the Act. The second respondent has been initiating proceedings under Section 135, even in respect of different usage and in the absence of dishonest intention. The learned counsel further contended that dishonest intention is a pre-condition for taking action under Section 135 of the Act.

8. The learned Standing Counsel for the Electricity Board, by placing reliance on the provisions of the Act, in the light of the object sought to be achieved, contended that Sections 126 and 135 serve different purposes. According to the learned Standing Counsel, notice under Statutory form in form No.9 was issued to the petitioner and the said form was prescribed under Section 135 of the Act. Section 135(1)(e) makes the usage of electricity for a different purpose an offence. Therefore, it cannot be said that the action taken against the petitioner was in violation of the provisions of the Electricity Act, 2003.

ANALYSIS:

9. The substantial question raised by the petitioner with respect to overlapping on account of similar provisions as contained under Sections 126 and 135 is no longer res integra, in view of the recent judgment of Supreme Court in Executive Engineer vs. Sri Seetaram Rice Mills [2011(12) Scale 243].

10. The Supreme Court in Sri Seetaram Rice Mills indicated the distinction between Sections 126 and 135 of the Act. The relevant observation reads thus:

"15. Upon their plain reading, the mark differences in the contents of Sections 126 and 135 of the 2003 Act are obvious. They are distinct and different provisions which operate in different fields and have no common premise in law. We have already noticed that Sections 126 and 127 of the 2003 Act read together constitute a complete code in themselves covering all relevant consideration for passing of an order of assessment in cases which do not fall under Section 135 of the 2003 Act. Section 135 of the 2003 Act falls under Part XIV relating to 'offences and penalties' and title of the Section is 'theft of electricity'. The Section opens with the words 'whoever, dishonestly' does any or all of the acts specified under clauses (a) to (e) of Sub-section (1) of Section 135 of the 2003 Act so as to abstract or consume or use electricity shall be punishable for imprisonment for a term which may extend to three years or with fine or with both. Besides imposition of punishment as specified under these provisions or the proviso thereto, Sub-section (1A) of Section 135 of the 2003 Act provides that without prejudice to the provisions of the 2003 Act, the licensee or supplier, as the case may be, through officer of rank authorized in this behalf by the appropriate commission, may immediately disconnect the supply of electricity and even take other measures enumerated under Sub-sections (2) to (4) of the said Section. The fine which may be imposed under Section 135 of the 2003 Act is directly proportional to the number of convictions and is also dependent on the extent of load abstracted. In contradistinction to these provisions, Section 126 of the 2003 Act would be applicable to the cases where there is no theft of electricity but the electricity is being consumed in violation of the terms and conditions of supply leading to malpractices which may squarely fall within the expression 'unauthorized use of electricity'. This assessment/proceedings would commence with the inspection of the premises by an assessing officer and recording of a finding that such consumer is indulging in an 'authorized use of electricity'. Then the assessing officer shall provisionally assess, to the best of his judgment, the electricity charges payable by such consumer, as well as pass a provisional assessment order in terms of Section 126(2) of the 2003 Act. The officer is also under obligation to serve a notice in terms of Section 126(3) of the 2003 Act upon any such consumer requiring him to file his objections, if any, against the provisional assessment before a final order of assessment is passed within thirty days from the date of service of such order of provisional assessment. Thereafter, any person served with the order of provisional assessment may accept such assessment and deposit the amount with the licensee within seven days of service of such provisional assessment order upon him or prefer an appeal against the resultant final order under Section 127 of the 2003 Act. The order of assessment under Section 126 and the period for which such order would be passed has to be in terms of Sub- sections (5) and (6) of Section 126 of the 2003 Act. The Explanation to Section 126 is of some significance, which we shall deal with shortly hereinafter. Section 126 of the 2003 Act falls under Chapter XII and relates to investigation and enforcement and empowers the assessing officer to pass an order of assessment.

16. Section 135 of the 2003 Act deals with an offence of theft of electricity and the penalty that can be imposed for such theft. This squarely falls within the dimensions of Criminal Jurisprudence and mens rea is one of the relevant factors for finding a case of theft. On the contrary, Section 126 of the 2003 Act does not speak of any criminal intendment and is primarily an action and remedy available under the civil law. It does not have features or elements which are traceable to the criminal concept of mens rea.

17. Thus, it would be clear that the expression 'unauthorized use of electricity' under Section 126 of the 2003 Act deals with cases of unauthorized use, even in absence of intention. These cases would certainly be different from cases where there is dishonest abstraction of electricity by any of the methods enlisted under Section 135 of the 2003 Act. A clear example would be, where a consumer has used excessive load as against the installed load simpliciter and there is violation of the terms and conditions of supply, then, the case would fall under Section 126 of the 2003 Act. On the other hand, where a consumer, by any of the means and methods as specified under Sections 135(a) to 135(e) of the 2003 Act, has abstracted energy with dishonest intention and without authorization, like providing for a direct connection bypassing the installed meter. Therefore, there is a clear distinction between the cases that would fall under Section 126 of the 2003 Act on the one hand and Section 135 of the 2003 Act on the other. There is no commonality between them in law. They operate in different and distinct fields. The assessing officer has been vested with the powers to pass provisional and final order of assessment in cases of unauthorized use of electricity and cases of consumption of electricity beyond contracted load will squarely fall under such power. The legislative intention is to cover the cases of malpractices and unauthorized use of electricity and then theft which is governed by the provisions of Section 135 of the 2003 Act.

18. Section 135 of the 2003 Act significantly uses the words 'whoever, dishonestly' does any of the listed actions so as to abstract or consume electricity would be punished in accordance with the provisions of the 2003 Act. 'Dishonestly' is a state of mind which has to be shown to exist before a person can be punished under the provisions of that Section."

11. In view of the categorical pronouncement made by the Supreme Court, necessarily the contention raised by the petitioner with respect to overlapping has to be rejected.

12. The petitioner has raised a second question with regard to the assessment of loss. According to the learned counsel for the petitioner, for the purpose of taking action under Section 135, mens rea is necessary. However, no such requirement is necessary, in case action is taken under Section 126 of the Act. The learned counsel further contended that the department has been taking action under Section 135 in a routine manner, meaning thereby even in cases where no mens rea was alleged, action was taken under Section 135 to recover the amount.

13. The proceeding under Section 126 of the Electricity Act is essentially a civil proceeding . The said provision permits the Electricity Board to take action to recover the electricity charges in case the inspection conducted in the premises of the consumer revealed that there was unauthorized use of electricity.

14. The unauthorized use of electricity is defined thus: "(b) "unauthorized use of electricity" means the usage of electricity:

(i) by any artificial means; or

(ii) by a means not authorised by the concerned person or authority or licensee; or

(iii) through a tampered meter; or

(iv) for the purpose other than for which the usage of electricity was authorised; or

(v) for the premises or areas other than those for which the supply of electricity was authorised."

15. The usage of electricity for a purpose other than for which the usage of electricity was authorized is also a ground to pass an order of assessment under Section 126. Section 126 mandates that the assessing officer should pass an order of provisional assessment initially and after giving notice to the consumer and considering his objections, a final assessment should be made. The statute also gives illustration as to how the assessment has to be made. Section 127 gives a right to the aggrieved to file an appeal.

16. A careful reading of Section 126 shows that dishonest intention is not at all necessary to pass an order of assessment. There is no requirement to allege mens rea against the consumer for the purpose of passing an order of assessment under Section 126 of the Act.

17. Section 135 deals with theft of energy. In fact, the said provision comes under part-XIV captioned "offences and penalties". The theft of electricity under Section 135 pre-supposes that the unauthorized abstraction of energy was done dishonestly. Therefore, there should be an element of mens rea to take action under Section 135 of the Act. Section 135 is essentially criminal in nature. The authority has to arrive at a conclusion that it was an intentional act with the necessary mens rea. it is true that usage of electricity for a purpose other than for which the usage of electricity was authorized is also made an offence under Section 135(1)(e) of the Act. The very same provision is contained in Explanation (b)(iv) of Section 126. Though the order of assessment can be passed under Section 126, without considering the issue as to whether the violation was done knowingly, such an action cannot be taken straightaway under Section 135, unless there is prima facie evidence to show that the violation was with mens rea.

18. Section 135 opens with the word "whoever, dishonestly", meaning thereby dishonesty of action is a primary requirement to take follow-up action under Section 135 of the Act. A cumulative reading of Sections 126 and 135 would make the position very clear that Section 135 cannot be routinely used even in respect of unintentional acts. There should be a prima facie finding that there was theft of electricity and the theft was with necessary mens rea. The proceedings initiated under Section 135 should contain basic materials suggesting intentional act. Merely because there is a statutory format appended to Section 135, it cannot be said that even in respect of unintentional cases, action could be taken under Section 135 of the Act treating the offence as theft of electricity. There is no statutory appeal provided against the order passed under Section 135 of the Act. It is true that the parties would be given an option to compound the matter. The provision regarding compounding itself shows that the offence under Section 135 is penal in nature. The difference between Sections 126 and 135 was clearly indicated by the Supreme Court in Sri Seetaram Rice Mills.

19. The Supreme Court in paragraph No.48 of the judgment in Sri Seetaram Rice Mills very clearly stated that the expression 'malpractices' has to be construed in its proper perspective and normally may not amount to theft of electricity as contemplated under Section 135 of the Act. The following observation of the Supreme Court would make the position clear:

"48. It will also be useful to notice that certain malpractices adopted by the consumer for consuming electricity in excess of the contracted load could squarely fall within the ambit and scope of Section 126 of the 2003 Act as it is intended to provide safeguards against pilferage of energy and malpractices by the consumer. The Regulations framed in exercise of power of subordinate legislation or terms and conditions imposed in furtherance of statutory provisions have been held to be valid and enforceable. They do not offend the provisions of the 2003 Act. In fact, the power to impose penal charges or disconnect electricity has been held not violative even of Article 14 of the Constitution of India. The expression 'malpractices' does not find mention in the provisions under the 2003 Act but as a term coined by judicial pronouncements. Thus, the expression 'malpractices' has to be construed in its proper perspective and normally may not amount to theft of electricity as contemplated under Section 135 of the 2003 Act. Such acts/malpractices would fall within the mischief of unauthorized use of electricity as stipulated under Section 126 of the 2003 Act. Cases of pilferage of electricity by adopting malpractices which patently may not be a theft would be the cases that would fall within the jurisdiction of the Board in furtherance to the terms and conditions of supply...................."

20. The Supreme Court in Sri Seetaram Rice Mills indicated that the alternative cases of malpractices within the meaning of unauthorized use of electricity and which patently are not theft cases would fall under Section 126 of the Act. A careful reading of the judgment of Supreme Court clearly shows that only cases which would fall under the term "theft" committed with necessary mens rea that alone would fall under Section 135 and all other cases committed without dishonest intention should be treated as malpractices within the meaning of Section 126 of the Act.

21. The Supreme Court in Sri Seetaram Rice Mills, in the light of the objects and reasons appended to 2003 Act, observed that the Act was enacted with a definite purpose to prevent unauthorized use of electricity on the one hand and theft of electricity on the other hand.

22. Therefore, in a matter like this, the Court should give a workable and meaning interpretation to the provisions. Both Sections 126 and 135 should be harmoniously construed. In case the object of these two provisions are taken into account, it would show that Section 126 is essentially a provision to compensate the Board. On the other hand, Section 135 is primarily penal in nature and in case it was made out that there was an act of theft, action could be taken to collect the charges as well as to prosecute the offender. Therefore, in cases covered under Section 135, necessarily element of mens rea should be present and in all other ordinary cases of violation or to put it more specifically, unauthorized use of electricity, action could be taken under Section 126.

23. There is no obligation on the part of the Board to prove mens rea, in case the action falls under Section 126 of the Act. To put it otherwise, in order to take action under Section 135, the Board should have primary materials suggesting dishonest intention. No such requirement is necessary for taking action under Section 126. While taking action for assessment, involving case of unauthorized use of electricity or theft of electricity, a distinction should be drawn by the Board depending upon the presence of mens rea. In case the Board is of the view that there is no dishonest intention, action would fall only under Section 126. However, in cases there are materials indicating the theft of electricity, meaning thereby doing an act with necessary mens rea, necessarily it would fall under Section 135 of the Act. This essential distinction should be borne in mind by the authorities, while taking action either for collection of electricity charges or for taking penal action.

24. The next issue is as to whether the second respondent was justified in making a demand by issuing Form No.9.

25. The only allegation against the petitioner is that they have used electricity for a different purpose. The said violation would come under explanation (b)(iv) of Section 126. The Tamil Nadu Electricity Supply Code, 2004 indicates the methods to assess compensation both under Sections 126 and 135 of the Act. Chapter 4 deals with tampering, distress or damage to electrical plant, meters, etc. Clause 23(AA) deals with procedure for assessment of electricity charges, disconnection of supply of electricity and removing the meter, electric line, electric plant and other apparatus in case of theft of electricity as detailed under Section 135 of the Act. Though guidelines are given as to how assessment has to be made in case of violation of Clauses (a) to (e) of Section 135(1) of the Act, there is no indication in the Supply Code relating to Section 135 as to how assessment has to be made in case violation was on account of usage of electricity for a purpose other than for which the usage of electricity was authorized within the meaning of Clause (e) of Section 135(1) of the Act. It is true that the Code contains a statutory format in form No.9. Though there is a form to issue provisional assessment, there is no corresponding procedure mentioned in Clause 23(AA) of the Code to assess the electricity charges, in case the violation was for the usage of electricity for a different purpose under Section 135(1)(e) of the Act. When there is no prescribed procedure to assess the electricity charges on account of the usage of electricity for a different purpose other than for which the usage of electricity was permitted, the Electricity Board would not justify in passing an order of assessment in form No.9. On the other hand, explanation (b)(iv) to Section 126(6) of the Electricity Act, while making the usage of electricity for the purpose other than for which the usage of electricity was authorized, contains guidelines regarding assessment of tariff. Section 126(6) provides that assessment under this Section shall be made at a rate equal to twice the tariff applicable for the relevant category of services specified in Sub-Section (5) of the Act. Clause 23(AA) deals with other kinds of theft, except theft on account of unauthorized use of electricity or to put it otherwise, usage of electricity for a different purpose.

26. The Electricity Board has now issued notice in Form-9 to submit the explanation. The Notice is essentially a show cause notice. The petitioner is permitted to submit their explanation within seven days from today. The Electricity Board is directed to consider the explanation and pass appropriate orders on merits and as per law, taking into account the distinction between Sections 126 and 135 as indicated by the Supreme Court in Sri Seetaram Rice Mills.

RESULT:

27. In short, the prayer for declaration is negatived.

28. The Writ Petition is disposed of as indicated above. Consequently, the connected miscellaneous petitions are closed. No costs. SML

To

1.The Secretary,

Union of India,

Ministry of Power,

New Delhi-100 001.

2.The Assistant Executive Engineer (Town),

Operation and Maintenance,

Tamil Nadu GED Co,

Tamil Nadu Electricity Board,

(Thanjavoure Electricity Distribution Circle),

Aranthangi,