Case Note & Summary
The matter arose from an inspection by M.P. Electricity Board staff of the electrical installation of M/s. Harsh Wood Products. On 21/22 August 1991, the Board inspected two connections (Nos. 2556/1156 and 2824/1158) and found meter body seals tampered, terminal cover seals missing, and mismatched serial numbers/locations compared to a previous inspection on 16.3.91. A panchnama was prepared in presence of the consumer's representative, Mr. Dilip. The Board issued notice on 26 August 1991 alleging meter tampering to reduce recorded consumption and demanded payment of Rs.6,51,256.61. An FIR was lodged. The respondent replied on 29 August 1991 requesting restoration and undertaking to pay any balance after bills. The High Court of Madhya Pradesh, Gwalior Bench, by order dated 12 March 1993 in M.P. No.1484/91, held that the respondent had a right of hearing before the authority under Section 31(e) of the Indian Electricity Act, 1910 and that failure to provide hearing violated Articles 20(1) and 21; it quashed the demand and directed restoration of connection No.2556/1156 within 24 hours. The Board appealed by special leave. The Supreme Court considered whether the High Court was justified in interfering with the Board's demand/disconnection. The Board argued that under Section 49 read with Section 79 of the Electricity (Supply) Act, 1948, tariff conditions were determined; Clause 31(e) permitted forthwith disconnection upon detection of malpractice without prior hearing. The respondent relied on Section 24 of the Indian Electricity Act, 1910 requiring seven days notice. The Court held that Clause 31(e) clearly empowered the Board to disconnect supply forthwith and call upon the consumer to compensate for unauthorized use; since the consumer had agreed to the terms and there was prima facie evidence of tampering, no further hearing was necessary. Section 24 does not apply to pilferage; it only applies to regular supply and non-payment of bills after seven days notice. Hence the Board's action did not violate Articles 14, 20(1) or natural justice. The appeal was allowed, no costs.
Headnote
A) Electricity Law - Disconnection on Detection of Pilferage - Clause 31(e) of tariff conditions read with Sections 49 and 79 of Electricity (Supply) Act, 1948 - Board empowered to disconnect supply forthwith without prior hearing upon prima facie detection of meter tampering; consumer agreed to terms; no violation of natural justice, Articles 14 and 20(1) of Constitution - Held that High Court erred in requiring prior hearing and quashing demand (Paras 1-4)
B) Electricity Law - Scope of Section 24 of Indian Electricity Act, 1910 - Seven days' notice not required for disconnection on detection of pilferage; Section 24 applies only to regular supply and non-payment of current charges - Held that disconnection for theft of energy is outside Section 24 (Paras 1-4)
C) Constitutional Law - Natural Justice - Articles 14, 20(1), 21 Constitution of India - No violation where Board acted under tariff conditions accepted by consumer and after drawing panchnama in presence of representative - Held action not violative of principles of natural justice (Paras 1-4)
Issue of Consideration
Whether the High Court was justified in interfering with the Board's order directing payment of the assessed amount for theft of electricity; whether a consumer is entitled to a hearing before disconnection under Clause 31(e) of the tariff conditions read with Sections 49 and 79 of the Electricity (Supply) Act, 1948; whether Section 24 of the Indian Electricity Act, 1910 applies to disconnection for detection of pilferage
Final Decision
The appeal was allowed. The Supreme Court held that the Board's action was not violative of Articles 20(1), 14 of the Constitution and principles of natural justice. Section 24 of the Indian Electricity Act, 1910 did not apply to demand on detection of pilferage. No costs.
Law Points
- Section 49 read with Section 79 of Electricity (Supply) Act
- 1948 empowers Board to determine tariff and impose conditions
- Clause 31(e) permits forthwith disconnection and demand compensation upon detection of malpractice
- Section 24 of Indian Electricity Act
- 1910 only applies to regular supply and non-payment of bills
- not pilferage
- prior hearing not necessary when consumer agreed to terms and prima facie evidence of tampering exists
- action not violative of Articles 14
- 20(1)
- 21
Case Details
1996 LawText (SC) (04) 95
K. Ramaswamy, G.B. Pattanaik
1996 SCC (4) 522, JT 1996 (5) 434, 1996 SCALE (4) 485
M.P. Electricity Board, Jabalpur & Ors.
Harsh Wood Products & Anr.
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Nature of Litigation
Appeal by special leave against a High Court judgment that quashed the electricity board's demand for theft of electricity and directed restoration of supply.
Remedy Sought
The appellant-Board sought to set aside the High Court order and uphold its action of disconnection and demand for unauthorized use of electricity.
Filing Reason
The High Court held that the respondent had a right to hearing before the authority under Section 31(e) of the Indian Electricity Act, 1910 and that failure to provide hearing violated Articles 20(1) and 21, thereby quashing the demand and directing restoration.
Previous Decisions
High Court of Madhya Pradesh, Gwalior Bench in M.P. No.1484/91 dated March 12, 1993 quashed the demand and directed restoration of service connection No.2556/1156 within 24 hours.
Issues
Whether the High Court was justified in interfering with the order directing payment of the assessed amount after detection of meter tampering.
Whether a consumer is entitled to a prior hearing before disconnection under Clause 31(e) of the tariff conditions read with Sections 49 and 79 of the Electricity (Supply) Act, 1948.
Whether Section 24 of the Indian Electricity Act, 1910 applies to disconnection for detection of pilferage.
Submissions/Arguments
The appellant-Board contended that under Section 49 read with Section 79 of the Electricity (Supply) Act, 1948, tariff conditions were determined, and Clause 31(e) permitted forthwith disconnection upon detection of malpractice without prior hearing.
The respondent relied on Section 24 of the Indian Electricity Act, 1910, contending that seven days' notice was required before disconnection, and that natural justice demanded a hearing.
The Board argued that Section 24 did not apply to pilferage cases, but only to regular supply and non-payment of bills.
The respondent asserted that failure to provide hearing violated Articles 20(1) and 21 of the Constitution.
Ratio Decidendi
The Board has power under Section 49 read with Section 79 of the Electricity (Supply) Act, 1948 and Clause 31(e) of the tariff conditions to disconnect supply forthwith and demand compensation upon detection of malpractice or theft of electricity without prior hearing. Section 24 of the Indian Electricity Act, 1910 is inapplicable to disconnection for pilferage; it only applies to regular supply and non-payment of bills after seven days notice. When a consumer has agreed to the supply terms and a prima facie conclusion of tampering is reached after inspection in the consumer's presence, no further hearing is required and the action does not violate natural justice or Articles 14, 20(1) and 21.
Judgment Excerpts
Where any consumer is detected in the commission of any malpractice with reference to his use of electrical energy including authorised alternations to installations, unauthorised extension and use of devices to commit theft of electrical energy the Board may, without prejudice to its other rights, cause the consumer’s supply to be forthwith disconnected.
Section 24 does not apply to demand on detection of pilferage. It would apply to a case of regular supply made and prior demand for payment of electricity charges with a notice of seven days to be made and for failure to pay within the given time, after expiry of seven days, the appellant as a licensee would get the right to disconnect the supply of electrical energy.
The action taken by the appellant is not violative of Articles 20 [1], 14 of the Constitution and principles of natural justice.
Procedural History
On August 21/22, 1991, the appellant-Board inspected the respondent's electrical installation and found meter body seals tampered and terminal cover seals missing. A panchnama was prepared in presence of the consumer's representative. On August 26, 1991, the Board issued notice demanding Rs.6,51,256.61 for unauthorized use, and an FIR was lodged. The respondent replied on August 29, 1991. The High Court of Madhya Pradesh, Gwalior Bench, by order dated March 12, 1993 in M.P. No.1484/91, held that prior hearing was required under Section 31(e) of the Indian Electricity Act, 1910, quashed the demand and directed restoration within 24 hours. The Board appealed by special leave. Leave was granted, and the Supreme Court allowed the appeal on April 18, 1996.
Acts & Sections
- Indian Electricity Act, 1910: Section 24
- Electricity (Supply) Act, 1948: Section 49, Section 79
- Constitution of India: Article 14, Article 20(1), Article 21
