IMPORTANT POINT
In the event of dispute between the parties as to the proper functioning of the meter and other electrical apparatus, the consumer has liability to pay the estimated amount indicated by the Electrical Inspector limiting the estimate upto the statutory period and not beyond that but for the other anterior period the consumer is required to pay according to the consumption of electricity registered in the disputed meter provided there is no fraud practised by the consumer.

Headnote:(i) Electricity Act, 1910—Section 26 as amended by Act No. 32 of 1959—Meters—Statutory duties and functions of licensee to maintain correct meter for recording quantum of electricity—Dispute about correction of meter—Electrical Inspector is the only statutory authority to decide the dispute—Estimation by Inspector limited to statutory period under sub-section (6) of Section 26—When meter ceased to be correct from the date even prior to six months from date of raising dispute—Whether licensee is competent to raise revised bills for such earlier period?—(No)—For anterior period, consumer is required to pay according to the consumption of electricity registered in disputed meter provided there is no fraud practised by consumer—Proper legislative amendment is desirable.
       Held : Although the licensee is clothed with the power to maintain a correct meter installed at the premises of the consumer and for such purpose can enter the premises of the consumer and the licensee can also repair or alter the meter and other electrical apparatus if found defective on checking or testing by the licensee, but if the dispute as to the correct status of the meter or other electrical apparatus is raised either by the licensee or by the consumer by making reference to the Electrical Inspector under sub-section (6) of Section 26, then such dispute can be determined only by the Electrical Inspector and the meter or apparatus cannot also be changed by the licensee unless the dispute is resolved by the Electrical Inspector. If there is a dispute as to the proper functioning of the meter or check meter or other electrical apparatus under sub-section (6) of Section 26, the Electrical Inspector upon entering the reference would determine the dispute as to the proper functioning of the meter and other electrical apparatus and in the event the Electrical Inspector comes to the finding that the meter ceased to be correct, he is to determine the quantum of the electricity consumed during the statutory period referred to in sub-section (6) but for any other period anterior to the statutory period, the legislature, in no uncertain term, has indicated in the latter part of sub-section (6) of Section 26 that reading registered in the disputed meter will not only be presumed to be correct but such reading shall be conclusive proof of the quantity of electricity consumed or the amount of electricity supplied to the consumer provided no fraud has been practised by the consumer. In appreciating the intention of the legislature, the provision for treating the recording of the disputed meter to be the conclusive proof of the amount of quantity supplied to the consumer in the absence of fraud where a dispute is raised by either of the party about the functioning of the meter, cannot be overlooked. Sub-section (6) has been amended and the legislature has introduced a conscious departure by deleting the requirement of assessing the quantity of electricity consumed for the entire period during which the Electrical Inspector or the competent authority was of the opinion that the meter had ceased to be correct. In our view, by limiting the period for estimation to be made by the Electrical Inspector by the amendment of sub-section (6) and further providing that for the anterior period, in the absence of fraud, the register of the meter shall be conclusive proof of the supply of the electricity it is quite evident that even if it transpires that the installed meter ceased to be correct, then for the period anterior to the statutory period for which the estimation is not to be made by the Electrical Inspector, the register of the meter about the consumption of the electricity supplied to the consumer shall be binding between the parties by treating such recording as conclusive proof of the consumption in the absence of any fraud practised by the consumer. By the amendment of sub-section (6) the Electrical Inspector has been purposely absolved from the duty to determine as to from which point of time beyond the said statutory period, the meter had ceased to function so that for such entire period, the estimation of the supply of electricity need not be made. Such amendment of sub-section (6), in our view, only means that beyond the statutory period, in the event of dispute between the parties as to the proper functioning of the meter and other electrical apparatus, the consumer has liability to pay the estimated amount indicated by the Electrical Inspector limiting the estimate upto the statutory period and not beyond that but for the other anterior period the consumer is required to pay according to the consumption of electricity registered in the disputed meter provided there is no fraud practised by the consumer because dispute of such anterior period remains unresolved by the change introduced by the amendment. (Para 19)
       Such legislative change by the amendment of sub-section (6) of Section 26, in our view, has been introduced to set at rest any dispute between the licensee and the consumer about the actual consumption of the quantity of electricity by the consumer where no fraud has been practised by the consumer for all other period anterior to statutory period for estimation. There is good reason for such legislative change because it may not be possible to precisely determine exactly from which point of time the meter ceased to be correct. (Para 20)
       Further held that although the licensee has the obligation to keep the installed meter and other electrical apparatus in proper condition by resorting to regular checking and testing, repairing etc. but the feasibility of constant checking, repairing etc. of large number of consumers in the present day set up may not be a practical proposition. In the teeth of sub-section (6) of Section 26 as amended, it is quite likely that in many cases, the licensee may suffer serious prejudice in not being able to realise from the consumers the revenue for the electricity consumed where even though no fraud was practised by the consumer, the defect in the meter escaped attention of the employees of the licensee either for genuine reasons or in a designed manner thereby bringing an unfortunate situation when the licensee can recover the estimated amount determined by the Electrical Inspector in a disputed case limited only to the statutory period but confining the revenue for the entire anterior period, which may go for years, only on the basis of reading in the defective meter. Since after amendment of Section 26(6) of the Electricity Act, the position in law is such, we feel that the proper legislative amendment is desirable so as to protect the large number of licensees including the Electricity Boards from suffering huge loss of revenue. (Para 23)
       (ii) Electricity Act, 1910—Section 26(6)—Expression ‘during such time’—Means the time during which the dispute is raised for reference and dispute is finally adjudicated—Expression ‘not exceeding six months’—Indicates that Electrical Inspector is not required in all cases to make estimate of consumption of electricity for a period upto six months—It will only cover period prior to raising dispute during which, according to Electrical Inspector, meter had ceased to be correct.
       Held, taking into consideration the time lag inherent between raising of dispute and adjudication of such dispute, the expression ‘during such time’ in sub-section (6) of Section 26 only means the time during which the dispute is raised for reference and the dispute is finally adjudicated. Hence, the estimate of supply of energy by the Inspector is to be made for a period not exceeding six months prior to the date of raising the dispute for reference to the Electrical Inspector. The expression ‘not exceeding six months’ indicates that the Electrical Inspector even when comes to the finding that the meter in question has ceased to be correct, is not required in all cases to make estimate of consumption of electricity for a period upto six months prior to the raising of the dispute for reference to the Electrical Inspector. In a given case, it may so happen that the Electrical Inspector may come to the finding that the meter ceased to be correct from a particular date which is not upto six months earlier to the date of raising the dispute for reference. In such case, the estimate to be prepared by the Electrical Inspector may go upto six months prior to the date of raising the dispute for reference but such estimate will only cover the period prior to raising the dispute during which, according to the Electrical Inspector, the meter had ceased to be correct. (Para 13)
       (iii) Electricity Act, 1910—Sections 20 and 26—Statutory duties and functions of licensee to maintain correct meter—Power of installing meter, replacing it by another meter—Independent of any dispute between consumer and licensee—No legal bar for treating check meter as an altered meter in place of meter installed earlier.
       Held : Check meter is usually installed for the purpose of checking and ascertaining the proper functioning of the installed meter but there is no legal bar for treating the check meter as an altered meter in place of the meter installed earlier when on checking the meter the licensee has found it to be defective. Such power of installing the meter, replacing it by another meter is also independent of existence of any dispute between the consumer and the licensee. The expression ‘check meter’ has no special significance or legal incidence for which there is a bar that check meter cannot be treated as an altered meter if the licensee intends to replace the defective meter by the check meter. It will be open to the Electrical Inspector to ascertain the correctness of the check meter along with the disputed meter when dispute is referred for adjudication by the Electrical Inspector and the licensee founds its case with reference to check meter. (Paras 9 & 10)

JUDGMENT

G.N. Ray, J.—The appeals arising out of Special Leave Petition Nos. 5262-64 of 1992 are directed against order dated February 19, 1992 passed by the Division Bench of the Allahabad High Court disposing of Writ Petition Nos.10379 of 1988 challenging the notice dated April 26, 1988 and the demand dated May 17, 1988 of the U.P. State Electricity Board and Writ Petition No. 16723/88 and 16325/90 challenging the validity of the bills for the month of June and July, 1988 issued by the U.P. State Electricity Board and also the demand dated June 14, 1990 made by the said Board. By the impugned judgment dated February 19, 1992, the High Court quashed various demand notices issued to the appellant on the basis of check meters installed by the respondent U.P. State Electricity Board and directing that payment for six months would be made on the basis of estimate of Electrical Inspector dated October 10, 1990 and further directing that the fresh bills for the period 7.9.87 to 10.10.90 be issued on the basis of new meter. By the order dated March 10, 1992, the Division Bench of the Allahabad High Court passed an interim order on another Writ Petition filed by the appellant on March 9, 1992 challenging the action of the U.P. State Electricity Board in respect of the bill dated January, 1992 and disconnecting the supply of electricity in the factory of the appellant. By the order dated March 10, 1992, the High Court directed the appellant to deposit Rs. 10 lacs and on such deposit, the U.P. State Electricity Board was to restore the connection within 24 hours and also directing the U.P. State Electricity Board to prepare the bills for the period subsequent to 10.10.90 within a month with a further direction to the appellant to pay such bill within a month thereafter.

2. The relevant facts leading to the controversy as to the raising demands for the bills and the consequential direction passed by the High Court on February 19, 1992 and March 10,1992 are stated hereunder.

On February 7, 1986 U.P. State Electricity Board installed a meter bearing No. 5850497 in the factory of the appellant. The Board carried out periodical inspection and tests and had raised the bills on the basis of the said installed meter and the appellant had also paid such bills. On September, 7, 1987, the U.P. State Electricity Board issued a notice raising doubt about the correctness of the said meter No. 5850497. On October 25, 1987, the appellant controverted the contents of the said notice of the Electricity Board and asserted that the meter was correct. No reference to the Electrical Inspector was made under Section 26 of the Electricity Act, 1910 by the Board. The Board installed a check meter on November 30, 1987. The appellant, however, deposited the testing fee and requested the Electricity Board to check the said test meter. The Board, however, continued to raise the bills on the basis of the said check meter for the period December, 1987 to May, 1988. On April 26, 1988, the Electricity Board wrote to the appellant that the Bills for May, 1987 to November, 1987 could be revised on the basis of check meter and sought information for the purpose of revising of the bills prior to 1987. On May 17, 11987, the Electricity Board raised a demand of Rs. 10,70,886.82 for the period May, 1987 to November, 1987 on the basis of reading in the check meter and threatened the appellant that the electricity connection would be discontinued if the payment was not made. It was at this stage that the appellant moved a Writ Petition No. 10379 of 1988 challenging the said notice dated April 26, 1988 and the demand dated May 17, 1988. During the pendency of the said Writ Petition, the Electricity Board again raised bills for the months of June and July, 1988 on the basis of check meter and also threatened the appellant that disconnection would be resorted to if the payment was not made. The appellant then moved another Writ Petition No. 165723/88 in the Allahabad High Co

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1997 Supreme(SC) 936

Cases Referred (3)