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2026 Supreme(Online)(HP) 2162

IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA

( 2026:HHC:14173

CWP No.3941 of 2010

Decided on: 25.04.2026

Himachal Pradesh State Electricity Board and Anr.
....Petitioners
Versus
M/s Shree Ganesh Fats (P) Ltd and Ors.
…Respondents

Coram
Ms. Justice Jyotsna Rewal Dua
¹Whether approved for reporting? Whether reporters of Local Papers may be allowed to see the judgment? Yes

For the petitioners: Ms. Sunita Sharma, Sr. Advocate
with Mr. Dhananjay Sharma,
Advocate.
For the respondents: Mr. O.C.Sharma, Advocate, for
respondent No.1.
None for respondents No. 2 and 3.

Jyotsna Rewal Dua, Judge

Advocates:
For the Appellants/Petitioners: Sunita Sharma, Dhananjay Sharma
For the Respondents: O.C.Sharma

Section 126 of the Electricity Act regulates unauthorized use of electricity through civil assessment, requiring transparent inspections and evidence-based findings. It entails distinct legal procedures from theft under Section 135, and assessments must be based on cogent empirical data rather than suspicion or subjective inferences.

Headnote:(A) Electricity Act, 2003 - Sections 126 and 135 - Unauthorized use of electricity versus theft of electricity - Distinction between - Section 126 provides for civil consequences of unauthorized use, whereas Section 135 constitutes an offence of theft - These provisions operate in distinct fields and have no commonality in law. (Paras 4(iv))

(B) Inspection and Assessment - Requirements under Section 126 - Assessing officer must inspect premises, record a finding of unauthorized use, and follow procedural safeguards to ensure transparency - Association of independent persons or representatives of the consumer is essential to rule out arbitrariness and ensure compliance. (Paras 4(i), 4(iii))

(C) Appellate Jurisdiction - Scope - Appellate authority is empowered to examine the evidence and re-evaluate findings of the assessing officer - Where inspection process lacks transparency, association of relevant parties, or categorical evidence, the assessment order cannot be sustained. (Paras 4(i), 4(v))

Facts of the case:
A utility provider initiated proceedings against a consumer alleging unauthorized use of electricity following an inspection. A provisional assessment was issued, followed by a final assessment order. The consumer, having disputed the findings and alleging procedural lapses in the inspection process, challenged the assessment before the appellate authority. The appellate authority set aside the assessment order, finding that the electricity provider failed to prove the unauthorized use through cogent and independent evidence.

Findings of Court:
The court found that the inspection was conducted without associating the consumer's representatives and lacked clear evidence regarding the alleged unauthorized use. The final assessment order relied on surmises rather than empirical data. The court held that the burden of proof rests on the utility provider to demonstrate the method and manner of unauthorized use, which was not satisfied.

Issues: Whether the assessment order under Section 126 was legally sustainable given the procedural irregularities during inspection and the lack of evidence supporting the allegations of unauthorized use.

Ratio Decidendi: The legal framework distinguishes between unauthorized use and theft. An assessment under Section 126 requires strict adherence to procedural mandates, including the association of independent witnesses or the consumer's representatives during site inspections. In the absence of evidence proving unauthorized use beyond doubt, the appellate authority's decision to quash the assessment is legally sound.

Result: Writ petition dismissed.

The Himachal Pradesh State Electricity Board, feels aggrieved against order passed on 06.04.2010 by the Divisional Commissioner, Shimla Division, allowing an appeal preferred by respondent No.1 under Section 127 of the Indian Electricity Act, 2003 (the Act in short), against the final assessment order dated 29.07.2009, made against it under Section 126 of the Act.

2. The case

2(i) Petitioners’ case was that it had put many major industries under surveillance as huge energy losses were felt on the feeder. Respondent No.1 was also one such industry put under surveillance w.e.f. 08.01.2009. On 11.02.2009, a raid was conducted in the premises of respondent No.1. Minutes of inspection were prepared (Annexure P-3). Respondent No.1-industry was found to be involved in unauthorized use of electricity, accordingly, its electricity meter was disconnected the same day. It is the case of the petitioner that entire raid process was photographed and video-graphed. The Authorized Officer provisionally assessed the loss at Rs. 4,28,20,977/-, which was conveyed to respondent No.1 through a notice issued on 13.02.2009 under Section 126 of the Act. Since the unauthorized use of electricity by respondent No.1 also amounted to theft of electricity under Section 135 of the Act, therefore, simultaneously, FIR No. 21/2009 was got registered on 15.02.2009 at Police Station Barotiwala. Intimation about the unauthorized use of electricity by respondent No.1 was conveyed to the authorized authority on 12.02.2009.

2(ii) Respondent No.1 on 19.02.2009, requested for restoration of electricity subject to deposit of 50% of the provisionally assessed amount in installments under protest. Petitioner did not accept the request.

2(iii) Respondent No.1 moved Himachal Pradesh State Consumer Disputes Redressal Commission, Shimla on 24.02.2009 for restoration of electricity. Learned Commission vide its order dated 24.02.2009, directed restoration of electricity to respondent No.1-industry on deposit of 25% of the provisionally assessed amount with further direction to keep on depositing 12.5% of the total amount till clearance of the entire amount, in terms of the directions. Pursuant thereto, respondent No.1-industry on 25.02.2009 deposited an amount of Rs.1,07,05,250/-. Electricity supply was restored to it. Till 08.04.2009, respondent No.1-industry had deposited Rs. 2,14,10,492-00/- i.e. 50% of the amount as provisionally assessed under Section 126 of the Act. The complaint moved by respondent No.1 before learned State Commission, was permitted to be withdrawn on 10.04.2009 with liberty to take such recourse as available to it in law.

2(iv) During pendency of the complaint before the learned State Commission, on 13.03.2009 petitioner on the strength of the interim order passed by the learned State Commission, directed respondent No.1 to pay installments in terms of the order passed by the learned State Commission. Respondent No.1 assailed the directions contained in letter dated 13.03.2009 by treating it as final assessment under Section 126 of the Act and filed appeal under Section 127 of the Act. The appeal was decided on 29.06.2009 by the Divisional Commissioner, holding the same to be premature as final assessment order had not yet been issued by the respondents.

2(v) Post decision of the appeal by the Divisional Commissioner and withdrawal of complaint from the State Commission, a fresh notice was issued by the Assessing Authority to respondent No.1 on 07.07.2009, directing it to appear on 13.07.2009. The Assessing Authority before issuing the final assessment order, inspected the premises of respondent No.1 on 27.07.2009 statedly in presence of authorized representatives of respondent No.1. The inspection report was prepared on 28.07.2009. Final assessment order was issued on 29.07.2009, holding respondent No.1 liable to pay Rs. 4,28,20,977-00/-. Since respondent No.1 had already deposited 50% of this amount, it was directed to deposit

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Cases Referred (3)