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Bhavani Oil Industries v/s Paschim Gujarat Vij Company Limited

    Special Civil Application No. 2346 of 2021

    Decided On, 16 March 2021

    At, High Court of Gujarat At Ahmedabad

    By, THE HONOURABLE MR. JUSTICE VIPUL M PANCHOLI

    For the Appearing Parties: Vicky B. Mehta, Vishal B. Mehta, Premal R. Joshi, Advocates.



Judgment Text

1. This petition is filed under Articles 226 and 227 of the Constitution of India in which the petitioner has prayed that the supplementary bill dated 21.01.2021 issued by the respondent No.2 for customer No.25231006203 be quashed and set aside.

2. Heard learned advocate Mr. Vishal B. Mehta for the petitioner and learned advocate Mr. Premal Joshi for the respondents - caveators. Looking to the issue involved in the present petition, both the learned advocates jointly requested that this petition be heard finally at admission stage. Hence, Rule. Learned advocate Mr. Joshi waives service of notice of Rule for the respondents - caveators.

3. The factual matrix of the present case is as under:

3.1. It is the case of the petitioner that petitioner is a proprietary concern, which is engaged in running the business of manufacturing and selling of cottonseed oil since last four years. The respondent company has granted electricity connection in the name of the petitioner proprietary concern being consumer No.25231006203 for LTMD purpose. It is stated that petitioner is regularly making payment of the bills issued by the respondents.

3.2. It is further stated that on 27.10.2020, the concerned officer of the respondent No.2 came to the place of the petitioner and inspected the premises in question. The electric meter was removed and another meter was installed. It is stated that thereafter, vide communication dated 19.01.2021, petitioner was asked to remain present at the time of checking of electric meter in the laboratory. It is stated that in absence of the petitioner the electric meter was checked in the laboratory and it was found that there was tampering with the said meter. The respondent No.2, therefore, filed FIR on 21.01.2021 against the present petitioner under Section 135 of the Electricity Act, 2003 (hereinafter referred to as the 'Act' for short) for theft of electricity. It is also stated that on the very same day the respondent No.2 issued supplementary bill to the petitioner to the tune of Rs.50,97,336.57ps. under Section 135 of the Act and petitioner was informed to pay Rs.9,68,000/- as compounding charge within stipulated time if the petitioner wants to to compound the same, failing which, it is stated that appropriate actions will be taken against the petitioner. Petitioner has, therefore, filed the present petition.

3.3. Learned advocate Mr. Mehta appearing for the petitioner, at the outset, referred to and relied upon the decision dated 26.07.2018 rendered by the Division Bench of this Court in the case of Jayshree Talkies v. Paschim Gujarat Vij Co. Ltd. in Letters Patent Appeal No.616 of 2018 and thereafter contended that the issue involved in the present petition is covered by the said decision. It is contended that before issuance of the supplementary bill to the petitioner, an opportunity of hearing was not afforded to the petitioner and petitioner was not given opportunity to place the evidence before the respondent authority. It is contended that an opportunity of hearing is required to be given to show as to whether assessment of supplementary bill is to be made for a period of 12 months or for lesser period as contemplated under the Gujarat Electricity Regulatory Commission (Electricity Supply Code and Related Matters) (First Amendment) Regulations, 2005 (hereinafter referred to as the 'Regulations of 2005'). In the present case, no such opportunity was given. It is further submitted that the meter was checked in the laboratory in absence of the petitioner and the brother of the petitioner has made his signature without any authority or any instruction from the petitioner and therefore it is not binding to the petitioner. It is, therefore, urged that impugned supplementary bill issued by the respondent No.2 be quashed and set aside and the respondents be restrained from disconnecting the power supply of the petitioner till the assessment is made by the respondent authority after giving opportunity of hearing.

4. On the other hand, learned advocate Mr. Premal Joshi appearing for the respondents, at the outset, submitted that the decision, upon which reliance is placed by learned advocate for the petitioner, rendered by the Division Bench of this Court would not be applicable to the facts of the present case. It is further submitted that in the said case, the Division Bench of this Court was examining the issue in light of the prevailing Regulation No.7.6.5 of the Regulations of 2005. It is further submitted that now the said Regulation of 2005 are repealed and new Regulations being Gujarat Electricity Regulatory Commission (Electricity Supply Code and Related Matters) Regulations, 2015 (hereinafter referred to as the Regulations of 2015) are enacted which have come into force from 24.09.2015. It is submitted that in the case before the Division Bench of this Court the incident was of 05.07.2008 and therefore after considering Regulation 7.6.5 of the Regulations of 2005, the Division Bench has passed an order and thereby quashed and set aside the supplementary bill. It is, therefore, contended that the aforesaid decision would not be applicable to the facts of the present case.

5. Learned advocate Mr. Joshi has placed reliance upon Regulation Nos. 7.6 and 7.7 of the Regulations of 2015 and thereafter contended that in case sufficient evidence is found to establish direct theft of electricity, licensee or Supplier as per Section 135 sub-clause (1A) of the Act is empowered to disconnect the supply and seize all material evidence including wires/cables, meter, service line etc., from the premises. It is further contended that there is no provision in the Regulations of 2015 for providing an opportunity of hearing to the consumer before issuing supplementary bill in theft cases. It is, therefore, urged that this Court may not entertain the present petition.

6. Having heard the learned advocates appearing for the parties and having gone through the material placed on record, it would emerge that on 21.01.2021, the respondent No.2 has filed FIR against the petitioner under Section 135 of the Act for theft of electricity. The electric meter installed at the premises of the petitioner was taken to the laboratory for the purpose of checking and it is alleged that petitioner has tampered with the said electric meter and therefore the aforesaid FIR came to be filed. Thereafter immediately supplementary bill dated 21.01.2021 which is impugned in the present petition has been issued to the petitioner. Copy of the said supplementary bill is produced on record at page 31.

7. At this stage, this Court would like to refer the relevant provision of Regulations of 2005 as well Regulations of 2015. Regulation No.7.6.5 of the Regulations of 2005 provides as under:

"7.6.5

(a) The Assessment under this section shall be made at the rate equal to two times of the tariff rates applicable subject to pending adjudication by the competent court.

The assessment under this section shall be applicable for a period of 12 months preceding the date of detection of the theft or the exact period of the theft whichever is less. The exact period may be arrived at by following guidelines or any combination thereof or any other evidence which may be provided by the consumer.

(i) Meter reading instrument (MRI) data should be considered wherever available.

(ii) Actual period from the date of commencement of supply to the date of detection of theft.

(iii) Actual period from the date of replacement of component of metering system in which the evidence is detected to the date of detection of theft.

(iv) The actual period from the date of previous checking of installation to date of detection of theft.

(b) The assessment shall be worked out in the manner prescribed in Annexure B of the principal regulations for assessment of Theft as well."

7.1 Regulation Nos.7.6 and 7.7 of the Regulations of 2015 provide as under:

"7.6 In case sufficient evidence is found to establish direct theft of electricity, licensee or Supplier as per Section 135 sub-clause (1A) of the Act shall disconnect the supply and seize all material evidence including wires/cables, meter, service line etc., from the premises and shall lodge a complaint in writing relating to the commission of such offence in police station having jurisdiction within 24 hours from the time of such disconnection.

7.7 The Assessing Officer shall assess the energy consumption as per the assessment formula given in Annexure IV to this Code, for the entire period during which such theft of electricity has taken place. If, however, the period during which such theft of electricity has taken place cannot be ascertained, such period shall be limited to 12 months immediately preceding the date of inspection. The period of assessment may be arrived at after taking into consideration the following guidelines or any combination thereof:

(1) Actual period from the date of commencement of supply to the date of detection of theft;

(2) Actual period from the date of replacement of component of metering system in which the evidence is detected to the date of detection of theft;

(3) Actual period from the date of previous checking of installation to date of detection of theft;

(4) Meter Reading Instrument (MRI) data should be considered wherever available.

(5) Based on the valid document produced by the accused person."

8. From the aforesaid provisions contained in Regulation 7.7 of the Regulations of 2015, it can be said that the Assessing Officer is required to assess the energy consumption as per the assessment formula given in Annexure IV to the said Regulations of 2015, for the entire period during which such theft of electricity has taken place. However, it has been clarified that if the period during which such theft of electricity has taken place cannot be ascertained, such period shall be limited to 12 months immediately preceding the date of inspection. Further, it is specifically provided that the period of assessment may be arrived at after taking into consideration the guidelines or any combination of guidelines mentioned in clauses 1 to 5 of Regulation 7.7. If clause 5 of Regulation 7.7 is carefully seen, it is further clear that the period of assessment can be arrived at after considering the valid document produced by the accused person. Thus, from the aforesaid provisions of even new Regulations of 2015, this Court is of the view that, before making any assessment, opportunity is required to be given to the accused person to produce the documents. In the present case, it is not in dispute that the respondent No.2 has not given any opportunity of hearing to the petitioner and therefore the petitioner could not produce any documents before the Assessing Officer before the liability of the petitioner is determined by way of issuance of the supplementary bill.

9. At this stage, this Court would like to refer the relevant observations made by the Division Bench of this Court in the case of Jayshree Talkies (supra). In the said decision, the Division Bench was considering the provision contained in Regulation 7.6.5 of the Regulations of 2005. The Division Bench has also considered the provisions contained in Sections 126, 135, 153 and 154 of the Act. The Division Bench, in para 18, 19, 22 and 23, has observed as under:

"[18] It is clear from a reading of provision under Regulation 7.6.5 of Regulations of 2005, that in cases of theft of energy, it is not necessary in all cases to make assessment, for a period of 12 months, by applying double rate of normal tariff.

[19] The argument of learned Counsel for the respondent Company that in cases falling under Section 135 of the Electricity Act, 2003, no opportunity need be given for the purpose of assessment of civil liability, cannot be accepted. In cases, where it is established that consumer has committed theft of energy, it is always open to the authority to disconnect power supply without waiting for any period and opportunity, but at the same time before fastening civil liability by way of assessment for loss of energy on account of theft, an opportunity is to be given to show that whether assessment is to be made for a period of 12 months or for lesser period as contemplated under Regulation 7.6.5 of the Regulations of 2005. Section 135 of the Electricity Act of 2003 under Part XIV deals with offences and penalties.

[22] The short question which arise for consideration in this appeal is whether in case of theft of electricity after disconnecting power, can the respondent authority unilaterally make assessment without giving any notice to the consumer and issue supplementary bill?. In our opinion, it cannot be.

[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."

10. From the aforesaid observations made by the Division Bench of this Court, it can be said that in the Regulation 7.6.5 of the Regulations of 2005 also there was a provision that for arriving at the exact period for the purpose of assessment, the guidelines or any combination of said guidelines or any other evidence which may be provided by the consumer were required to be considered by the Assessing Officer. Thus, provisions of Regulations of 2005 as well as Regulations of 2015 are almost similar. Thus, this Court is of the view that at the stage of assessment of civil liability in theft cases, notice is required to be given to the consumer so that he can produce necessary evidence before the Assessing Officer. The Division Bench has observed that, "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". The Division Bench has further specifically held that, "the argument of learned Counsel for the respondent Company that in cases falling under Section 135 of the Electricity Act, 2003, no opportunity need be given for the purpose of assessment of civil liability, cannot be accepted. In cases

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, where it is established that consumer has committed theft of energy, it is always open to the authority to disconnect power supply without waiting for any period and opportunity, but at the same time before fastening civil liability by way of assessment for loss of energy on account of theft, an opportunity is to be given to show that whether assessment is to be made for a period of 12 months or for lesser period as contemplated under Regulation 7.6.5 of the Regulations of 2005." 11. Keeping in view the aforesaid provisions of the Regulations as well as the decision rendered by the Division Bench of this Court, if the facts as discussed hereinabove are carefully examined, it is revealed that in the present case, the respondent No.2 has not issued any show cause notice to the petitioner before determining any civil liability of the petitioner. The impugned supplementary bill has been issued without giving any opportunity of hearing. Hence, the impugned supplementary bill is required to be quashed and set aside. Hence, the supplementary bill is quashed and set aside. However, as observed by the Division Bench of this Court in para 19 of the aforesaid decision, it is always open for the respondent authorities to take appropriate steps for disconnection of power supply in accordance with law. 12. In view of the aforesaid discussion, petition is allowed. Rule is made absolute to the aforesaid extent. The respondent No.2 shall issue notice to the petitioner and to give an opportunity to produce the relevant material/evidence to the petitioner before making any assessment and before issuance of any supplementary bill. The respondent no.2 shall carry out the aforesaid exercise within a period of three weeks from the date of receipt of this order.
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