2005 Supreme(SC) 698

2005(3) Supreme 451
Supreme Court of India
(From Bombay High Court)
R.C. Lahoti, CJI, Dr. AR. Lakshmanan & G.P. Mathur, JJ.
Bombay Electric Supply and Transport Undertaking —Appellant
versus
Laffans (I) Pvt. Ltd. and Anr. —Respondents
Civil Appeal No. 3615 of 1996
Decided on 21-4-2005
Counsel for the Parties :
For the Appellant : Dushyant Dave and K. Radhakrishnan, Sr. Advocates, Arun Francis and P.H. Parekh, Advocates.
For the Respondents : Sudhir Kr. Gupta, Anurag Pandey, Advocates.

Important point
Section 26(6) of the Indian Electricity Act can have no application in a case where a meter has become completely non functional on account of any reason whatsoever.

Headnote:(i) Indian Electricity Act, 1910—Section 26—Indian Electricity Rules, 1956—Rule 57—Notice of disconnection of electricity supply—Validity—What would be a ‘correct meter’—Where meter is running slow or fast—Electrical Inspector to estimate the amount of energy supplied to the consumer by determining the extent or percentage of error in recording the supply—Where the meter is burnt or is completely non functional—Section 26(6) can have no application in such a case.

       Held : The applicability of sub-section (6) of Section 26 is attracted only when the meter is not correct. Section 26(6) will have no applicability (i) if the consumer is found to have committed a fraud with the licensee and thereby illegally extracted the supply of energy preventing or avoiding its recording, or (ii) has resorted to a trick or device whereby also the electricity is consumed by the consumer without being recorded by the meter. In effect the latter class of cases would also be one of fraud. Tampering with the meter or manipulating the supply line or breaking the body seal of the meter resulting in non-registering of the amount of energy supplied to the consumer or the electrical quantity contained in the supply - are the cases which were held to be not covered by Section 26(6). (Para 6)

       What is a correct meter? The language of sub-section (6) of Section 26 starts with - “where any difference or dispute arises as to whether any meter referred to in sub-section (1) is or is not correct...”. The dictionary meaning of the word “correct” is: Adhering or conforming to an approved or conventional standard; Conforming to or agreeing with fact; Accurate. As to what would be a “correct” meter, there is sufficient indication in the Act and the Indian Electricity Rules, 1956 in the explanation given at the end of sub-section (7) of Section 26 of the Act and sub-rules (1) and (2) of Rule 57, quoted hereinabove. Where the meter is completely non-functional on account of any fault or having been burnt, it will not register the supply of energy at all. Since a burnt meter does not record any supply of energy, it virtually means “no meter”. What is contemplated by Section 26(6) is a running meter, but which on account of some technical defect registers the amount of energy supplied or the electrical quantity contained in the supply beyond the prescribed limits of error. It contemplates a meter which is either running slow or fast with the result that it does not register the correct amount of energy supplied. There is an additional reason for coming to such a conclusion. Section 26(6) confers power upon the Electrical Inspector to estimate the amount of energy supplied to the consumer or the electrical quantity contained in the supply, during such time, not exceeding six months, as the meter shall not, in the opinion of such Inspector, have been correct. Where the meter is running slow or fast, it will be possible for the Electrical Inspector to estimate the amount of energy supplied to the consumer by determining the extent or percentage of error in recording the supply, whether plus or minus. However, where the meter is burnt or is completely ­non-functional, such an exercise is not at all ­possible. Therefore, Section 26(6) can have no application in a case where a meter has become completely non-functional on ­account of any reason whatsoever. (Paras 7 to 9)

       (ii) Indian Electricity Act, 1910—Section 26(6) and (7)—Indian Electricity Rules, 1956—Rule 57—Notice of disconnection of electricity supply—Appellant was supplying electricity to first respondent who had a showroom for carrying on business of retail trade in textiles—Appellant had installed two meters at the premises of 1st respondent, for measuring the quantity of electricity consumed—Dispute relating to the meter measuring electricity consumed by air conditioning unit—Initially, meter installed had got burnt and a new meter was installed on 2-5-1988—Appellant’s case that in a routine checking the said meter was found to be running slow—A new meter was installed on 30-6-1989 which was replaced—Replaced meter also got burnt and was replaced again on 30-12-1989—Appellant taking the preceding one year’s period i.e. from 2-2-1987 to 1-2-1988 as the base period and on the pattern of consumption recorded, revised the bills and sent a demand notice alleging that first respondent had been undercharged—For the period for which meter was alleged to have recorded incorrect readings, bills were sent month by month on basis of readings as recorded by the meter—Whether notice of disconnection is justified considering the facts and circumstances of the case—(No)—Right to raise additional bills stands lost by appellant for its failure to proceed in accordance with Section 26(6) of the Act.

       Held : In the present case, the demand raised by the appellant against the first respondent can be divided into two parts: (i) for the period during which the meter was burnt, and (ii) for the period for which the meter was not correct. For the period for which the readings could not be recorded or retrieved because the meter was burnt there is nothing wrong in the licensee having raised the demand based on the average consumption for the similar period during the previous year. It is a reasonable basis. Nothing has been brought on record by respondent No.1 to show or even suggest that any basis other than the one adopted by the appellant could have been more reasonable and more appropriate for calculating the quantity of electricity consumed during the period of no-meter or no-meter-reading. For the period for which, according to the appellant, the meter was not correct, none of the parties has referred the dispute to the Electrical Inspector. The meter though it is alleged by the appellant to have remained not correct, readings have been regularly recorded, bills raised and also paid by the consumer-respondent No.1. According to Section 26(6), the readings would bind the appellant and respondent No.1 both. It has never been the case of the appellant at any stage that the meter was not correctly recording the consumption of electricity on account of being non-functional due to any fraud committed or device or trick adopted by the consumer-respondent No.1 or that the body seal of the meter was found broken or tampered with. The respondent No.1 was accepting and honouring the demands raised by the appellant and, therefore, respondent No.1 cannot be expected to have raised a dispute and sought for a reference for determination by Electrical Inspector. The appellant could not have, therefore, revised the demand for such period based on average consumption during the previous year. There is yet another reason why the entitlement of the appellant to recover charges from the respondent No.1 may have to be denied. According to the proviso appended to sub-section (4) of Section 26, the licensee cannot take off or remove any such meter as to which difference or dispute of the nature described in sub-section (6) has arisen until the matter has been determined by the Electrical Inspector. The purpose is to preserve the evidence. The dispute shall be expeditiously disposed of by the Electrical Inspector by applying scientific method of investigation to find out if the meter was incorrect and if so then what was the extent of error. In the present case, the meters said to be incorrect have been remov­ed and replaced by the appellant. Admittedly, no dispute has been raised and referred to the Electrical Inspector. The most material evidence being the meter itself has been lost by the act of the appellant in removing the incorrect meter. The appellant cannot be permitted to take advantage of its own act and omission - the act of removing the meter and the omission to make a reference to the Electrical Inspector. (Paras 12 and 13)

       The material available on record before us does not enable the separation of the impugned demand by bifurcating the same into two on the criterion discussed hereinabove. The appellant shall have to be left free to examine its records and then revise its demand. We may clarify that the demand raised by the appellant based on the average consumption during the similar period in the last year is justified, in the facts and circumstances of the present case, for the period for which the reading was lost on account of the meter having been found burnt. Accordingly, the calculation based on the record of consumption for the corresponding period from the previous year shall hold good. The appellant shall raise a demand accordingly and the first respondent shall be bound to honour the same. So far as the period for which the meter is said to be incorrect, the demand has not been revised by basing it on the finding arrived at by the Electrical Inspector and hence is not available to be revised. The meter is alleged by the appellant to be not correct and yet the appellant has not made a reference to the Electrical Inspector under Section 26(6). The appellant cannot now be allowed to raise an additional demand over and above the demand raised through the bills which were issued for that period and paid by the first respondent. The right to raise additional bills stands lost by the appellant for its failure to proceed in accordance with Section 26(6) of the Electricity Act, 1910. (Para 14)