M/s Ruby Woolen Mills Pvt. Ltd. vs Punjab State Electricity Board and Others

Rajiv Narain Raina, J.—The petitioner is aggrieved by the memo dated 17.4.1998 (P-1) issued by respondent No. 2 of erstwhile Punjab State Electricity Board (for brevity ''the Board'') raising demand of Rs. 24,10,322/- for alleged theft of electricity. The impugned decision dated 20.2.2001 (P-6) of the Dispute Settlement Authority affirming the above demand and also order dated 26.06.2002 (P-10) passed by the Board Level Review Committee dismissing the statutory appeal of the petitioner is also questioned. A further direction has also been sought for quashing memo dated 4.10.2002 (P-12) requiring the petitioner to deposit the balance amount left unpaid out of the total disputed amount. The petitioner-company has been running a small industry dealing in processing of ''man-made fabrics''. On 28.12.1991, an electric meter bearing No. LS-51 was installed in the premises of the petitioner-company. The officials of respondent-Board had been checking the meter periodically and also by surprise. On 27.11.1997 the meter was checked by, the Senior Executive Engineer-respondent No. 3 and he affixed the official paper seal on the MCB.

Contention of the learned counsel for the petitioner that the meter installed in the industry was an old one and its condition was not shown to him at the time of its installation has no force. The periodical recording of the meter in question was conducted and the respondents found that paper seals on the meter cupboard were intact till 10.3.1998, when for the first time respondent No. 3, in the presence of a representative of the company, bad found as under:-

i) Paper seal No. 011771 dated 27.11.1997 of Sr. Xen/MMTS affixed on the MCB was found re-affixed and tampered;

ii) Meter glass appeared to be tampered;

iii) Tampering marks on the digit and number plate;

Respondent No. 3 kept the connection under observation and paper seals were affixed on the MCB and the MCB glass cover. On 17.4.1998, respondent No. 3 again visited the premises to check the intactness and genuineness of the seals and evaluate the performance of the meter during the period of observation. On suspicion, the meter was removed, packed in a cardboard box and was sent to the ME Lab, Verka in the presence of the Director of the petitioner-company. The meter inspection report was received from the ME Lab, Verka. Though all the seals on the meter body were found intact but it was discovered that the:-

i) Meter glass rubber was melted at two places;

ii) Scratches/tampering marks were found on the inner upper side of meter cover;

iii) Melted rubber and meter glass powder found inside the meter cover;

iv) Compound/adhesive material found filled between the meter cover and glass from outside;

v) Scratches/tampering marks on the plate and digits of the meter.

According to the respondents, in this way the petitioner-company had suppressed its consumption by tampering with the meter glass and through this methodology the petitioner''s unlawful hand had tinkered with the rotating meter digits with a view to deceive real consumption by reversing digits. On the basis of the aforementioned findings, it was concluded that it was a case of electricity theft. Consequently, the petitioner was served with the demand notice dated 17.04.1998 (P-1) asking him to deposit a sum of Rs. 24,10,322/-. The petitioner instead of depositing the amount requested the authorities to refer his case to the Dispute Settlement Authority which was well within its right.

The Dispute Settlement Authority while considering the dispute raised by the petitioner held that theft of energy had been committed only when it examined the consumption pattern of KWH and KVAH independently and realized the difference when compared with the corresponding consumption pattern during the same period in the previous year. The DSA also held the theft has taken place only for 2 months i.e. October, 1997 and November, 1997 and ordered levy of only 1/3rd of the total amount of compensation.

The Review Committee vide its order (P-10) had upheld the order of the DSA.

The learned counsel for the petitioner submits that it was imperative upon the authorities to offer reasonable opportunity of hearing to the petitioner before concluding the matter as a case of theft of electricity against the petitioner. In support of his contention, the learned counsel for the petitioner has placed reliance upon a judgment of the Supreme Court in Municipal Committee, Hoshiarpur Vs. Punjab State Electricity Board and Others, wherein it is observed as under:-

It is, thus, evident from the aforesaid deposition of the witness produced by the respondent-Board that no prior intimation of checking had been given to the appellant, nor was any responsible officer present at the time of checking. A copy of the checking report/chart was not given to the appellant for filing of objections nor was any show cause notice given along with the demand notice. Thus, it is a clear cut case of violation of the principles of natural justice as well as of clause 23 of the conditions of supply.

I do not find any merit in this contention. Suffice it to say that the provisions of the Indian Electricity Act, 1910 contemplate the observation of the principles of natural justice before the final assessment order is passed. The expression "reasonable opportunity of hearing" connotes the principle of audi alteram partem and the show cause notice means such an opportunity to explain one''s conduct/action pertaining to unauthorized use of electricity. The very fact that the meter was removed, checked in M.E. Lab and ''assessment order'' which contains specific reasons was passed in the presence of a representative of the petitioner, thus, no show cause notice was necessary. Besides, no prejudice has been caused to the petitioner.

Learned counsel for the respondents argued that the petitioner succeeded in manually approaching the digits of KWH but could not succeed in approaching the digits of KVAH. Power factor which is normally 0.88 had come down to 0.57 for October, 1997 and 0.64 for November, 1997. Had the petitioner succeeded in approaching the KVAH digits also, it may not have been possible for the respondents to detect the theft of energy. The respondents had come to the conclusion that the theft of energy had been committed only after comparing the consumption pattern as recorded by both the KWH and KVAH measurements.

Learned counsel for the petitioner has argued that the action of the respondents in raising a huge demand of compensation is arbitrary, illegal and unjustified. He has placed reliance on a judgment of the Supreme Court in Ram Chander Prasad Sharma Vs. State of Bihar and Another, Perusal of the judgment indicates that the facts in that case were altogether different. In that case, it was held that there was no material on the basis of which it could be said that what was done to the meter was a perfected artificial means by reason of which dishonest abstraction, consumption or use of electrical energy was possible. In these circumstances, the Supreme Court set aside the conviction & sentence of the appellants. However, in the present case the matter is altogether different. There is ample evidence of tampering of meter and the authorities were satisfied on measurable standards that the petitioner had indulged in theft of energy during the said period of two months.

Further contention of the learned counsel for the petitioner is that the Board is not competent to frame regulations or issue commercial circulars with regard to imposition of penalties. Moreover, the circular under which the penalty was imposed on the petitioner has neither been notified in the official gazette nor had approval been granted by legislative act or of conscious decision of the State Government. There is no force in such an argument. The Board being an autonomous body is fully competent to frame its own rules and regulations under the provisions of the Indian Electricity Act, 1910 (now Electricity Act, 2003).

The respondents at the time of the arguments have placed on record an affidavit dated 17.8.2012 of Er. Manohar Singh, Sr. Executive Engineer, East Commercial Division, Amritsar, in which it is stated that any drop or variation of power factor from 0.88 may not amount to theft of electricity per se but associated factors in this case lead to an irresistible conclusion that it is an established case of theft of electricity. They have also produced a similar meter under the directions of this Court to demonstrate in open Court the working of KWH and KVAH counters and ways and means of tampering with the meter. On 21.9.2012, the Engineers of the respondent-Board have explained in Court the KVAH and KWH digits and the method adopted of tampering with the meter for illegal gain. In this way, the Engineers have explained the theft of energy by physical examination of the meter. The demonstration given in Court leads me to the conclusion that it was physically possible to pry the digits with a wire inserted through the lip between the meter glass cover and the metal frame through the rubber sealing the two to reach the KWH digits. A representative of the petitioner-company was also present in Court on that day.

After hearing learned counsel for the parties, I find no merit in this petition because there is sufficient evidence on record to support the conclusion that the petitioner had been indulging in theft of electricity and had tampered with the paper seals affixed on the meter. In my considered view, the concurrent findings of fact that the electricity meter was tampered with and its seals were found broken as per the inspection report given by the M.E. Lab clearly make out a case of theft of electricity and call for no interference by this Court to warrant exercise of its writ jurisdiction. Accordingly the writ petition fails and is dismissed.

Before parting with this judgment, the matter requires to be considered in the light of the order dated 11.10.2002 passed by the Division Bench at the time of admission of the petition, which reads as under:-

Heard learned counsel and perused the record.

Admit.

In the meantime, recovery in pursuance of Annexure P-1 is stayed subject to the condition that the petitioner deposits 1/4th of the demand within a period of one month. If the petition is ultimately allowed, the amount deposited by the petitioner shall be refunded with interest at the rate of 18% per annum. If, on the other hand, the petition is dismissed, the petitioner shall have to pay the balance amount with interest at the rate of 18% per annum.

A perusal of the afore-mentioned order shows that a categorical direction was issued in the presence of the learned counsel for the petitioner that in case of dismissal of the petition, the petitioner shall have to pay the balance amount with interest at the rate of 18% per annum. I, therefore, direct the petitioner to deposit the balance amount with interest at the rate of 18% within a period of 3 months from the date of receipt of a certified copy of this order.