Power to Assess for 'Unauthorized Use' of Electricity U/S 126 Includes 'Theft' U/S 135, Proceedings Can Run Parallel: Madhya Pradesh High Court - 2025-09-29

MP High Court: Electricity Companies Can Assess for Theft Under S.126, Parallel to Criminal Proceedings

GWALIOR: The Madhya Pradesh High Court, in a significant ruling, has clarified that electricity distribution companies have the authority to provisionally assess civil liability for "unauthorized use of electricity" under Section 126 of the Electricity Act, 2003, even when the case involves allegations of "theft" by meter tampering, which falls under Section 135 of the Act.

The bench of Justice Amit Seth dismissed a writ petition challenging a provisional demand notice, holding that the administrative assessment proceedings under Section 126 can operate in parallel with criminal proceedings for theft before a Special Court under Section 154.

Background of the Case

The petitioner, Etendtra Kumar Ghambhir, challenged a provisional assessment order dated May 16, 2011, issued by the Madhya Pradesh Madhya Kshetra Vidhyut Vitran Co. Ltd. The order raised a demand of ₹36,348 after an inspection revealed alleged tampering of the electricity meter at the petitioner's premises.

Petitioner's Arguments: Theft Cases Only for Special Courts

The petitioner’s counsel, Shri Gaurav Mishra, argued that an allegation of meter tampering constitutes "theft of electricity" under Section 135 of the Act. He contended that in such cases, the matter must be referred exclusively to a Special Court constituted under Section 153. According to the petitioner, only this Special Court has the jurisdiction to determine civil liability under Section 154(5) of the Act.

Reliance was placed on earlier coordinate bench decisions of the High Court, including Sangita vs. State of M.P. , which distinguished between "unauthorized use" (Section 126) and "theft" (Section 135), holding that departmental assessment was not permissible in theft cases.

Respondent's Arguments: Assessment Power is Distinct

Conversely, Shri Narrottam Sharma, representing the electricity company, argued that the impugned order was a provisional assessment correctly issued under Section 126. He submitted that Section 135 does not provide a mechanism for departmental assessment. Furthermore, he noted that the petitioner had not filed any objections to the provisional assessment, causing it to attain finality, and no criminal proceedings under Section 135 had been initiated.

Legal Precedents and Court's Analysis

Justice Seth framed the central issue as whether civil liability in electricity theft cases can only be determined by a Special Court, or if the distribution company can independently assess the loss under Section 126.

The Court observed that while earlier High Court judgments in Sangita (supra) and The Hotel Adityaz Limited (supra) supported the petitioner's stance, a subsequent Supreme Court judgment in West Bengal State Electricity Distribution Company Limited vs. Orion Metal Private Limited (2020) had settled the law on the matter.

The High Court quoted the Supreme Court's reasoning, emphasizing the wide connotation of "unauthorized use of electricity" under Section 126.

"It is clear from the reading of Section 126 (6) (b)(iii) of the Act that instances of use of energy through a tampered meter is included in the definition of unauthorized use of electricity... The power conferred on authorities for making assessment under Section 126(1) of the Act and power to determine civil liability under Section 154(5) of the Act, cannot be said to be parallel to each other." - Supreme Court in West Bengal State Electricity Distribution Co. Ltd.

The Apex Court had clarified that proceedings under Section 126 (for assessment of loss) and Section 135 (for the criminal offense of theft) are distinct and can run concurrently. The standard of proof also differs: a civil assessment under Section 126 does not require proof beyond a reasonable doubt or the establishment of mens rea (criminal intent), unlike a criminal prosecution.

Final Decision and Implications

Bound by the constitutional mandate under Article 141 to follow the law laid down by the Supreme Court, Justice Seth held that the precedent set in West Bengal State Electricity Distribution Company Ltd. must be followed. The earlier High Court judgments, having been rendered before this Supreme Court decision, were deemed to yield to the superior authority of the Apex Court's ruling.

The court concluded:

"The contention advanced on behalf of the petitioner that there cannot be determination of any civil liability by exercising powers conferred under section 126 of Act of 2003 in the case of tampering of meter... being meritless in view of Apex Court judgment... deserves to be and is hereby rejected."

Dismissing the writ petition, the High Court upheld the electricity company's power to issue the provisional assessment order, reinforcing that administrative remedies for revenue loss can be pursued independently of criminal proceedings for theft.