The Supreme Court set aside a Division Bench order that had upheld a provisional assessment of Rs. 3,23,71,524 under Section 135 of the Electricity Act, 2003, restoring a High Court judgment that quashed the assessment. The Court clarified that mere suspicion cannot substitute for the strict proof of theft required under the criminal provision and that a writ petition under Article 226 is not automatically barred by the existence of statutory remedies.
Background & Facts
The Dispute
The petitioner, M/s. Himadri Steel Pvt. Ltd., a private limited company incorporated under the Companies Act, 1956, was granted a high-tension special service (HTSS) connection with a contract demand of 3,000 KVA, which was energized on 03 July 2006. A blast in the cubical metering unit caused an electricity breakdown, which was rectified on 16 June 2017 by officials of the respondent, Jharkhand Urja Vikas Nigam Ltd. (JUVNL). The rectification report noted that the K-Phase CT and all PTs were in proper condition, the meter reading was correct, but the B-Phase CT was cracked and replaced.
Key Facts
- 26 September 2017: Authorities inspected the check meter and the metering cubical at the petitioner’s premises and prepared an inspection report dated the same day.
- 27 September 2017: Respondents disconnected the petitioner’s electricity supply on the basis of the inspection report.
- 29 September 2017: Respondents issued a Provisional Assessment Order determining a liability of Rs 3,23,71,524 towards loss caused due to alleged theft of electricity, invoking Section 125 of the Electricity Act, 2003.
- 5 September 2018: The Jharkhand High Court (Single Judge) allowed the petitioner’s writ petition (W.P. (C) No. 6054/2017), quashing the Provisional Assessment Order on the ground that the inspection report did not disclose conclusive evidence of theft.
- 8 August 2025: The Jharkhand High Court Division Bench allowed the respondent’s Letter Patent Appeal (LPA No. 648/2018), set aside the Single Judge’s order and held that the inspection report disclosed sufficient material and that the statutory mechanism under the Electricity Act was a complete code.
- 12 August 2026: The Supreme Court delivered the present judgment, hearing the petitioner’s Special Leave Petition (Civil) No. 33179 of 2025.
Procedural History
- 03 July 2006: HTSS connection energized.
- 16 June 2017: Metrology unit rectified after blast.
- 26 September 2017: Inspection report prepared.
- 27 September 2017: Electricity disconnected.
- 29 September 2017: Provisional Assessment Order issued (Rs 3,23,71,524).
- 5 September 2018: High Court Single Judge quashes assessment order.
- 8 August 2025: High Court Division Bench sets aside Single Judge order.
- 12 August 2026: Supreme Court delivers judgment.
Relief Sought
The petitioner sought quashing of the Provisional Assessment Order, restoration of electricity supply, and a declaration that the writ petition was maintainable despite the existence of statutory remedies under Sections 126 and 127 of the Electricity Act.
The Legal Issue
The central questions were: (a) Whether a writ petition under Article 226 of the Constitution is maintainable when the Electricity Act, 2003 provides a complete statutory remedy; and (b) Whether the petitioner can be held liable under Section 135 of the Electricity Act, 2003, i.e., whether the ingredients of theft of electricity were satisfied in the present facts.
Arguments Presented
For the Petitioner
- The inspection report dated 26 September 2017 makes no specific averment of theft nor records the assessing officer’s satisfaction that theft had occurred.
- The report’s conclusion that “further action will be taken as per norms” is vague and gives unfettered discretion to the respondents.
- In the absence of direct evidence of theft, a penalty under Section 135 cannot be imposed; the statutory mechanism under Sections 126/127 provides the appropriate civil remedy.
- The existence of a statutory remedy does not per se oust the High Court’s jurisdiction under Article 226; exceptional cases involving pure questions of law or vires of the Act may still be entertained.
For the Respondent
- The petitioner bypassed the remedial provisions of Sections 126 and 127, which constitute a complete, self-contained mechanism for assessment, objection, and appeal.
- An inspection report need only disclose prima facie material indicating unauthorized use or theft; it is not required to record a conclusive finding at the inspection stage.
- Proceedings under Section 126 are civil in nature and can coexist with criminal proceedings under Section 135; the inspection report disclosed material irregularities that justified the provisional assessment.
The Court's Analysis
The Court began by reaffirming the settled principle that the availability of a statutory remedy does not automatically bar the High Court’s jurisdiction under Article 226, but it emphasized that such jurisdiction is exercised with circumspection and primarily where the matter raises a pure question of law or challenges the vires of the statute.
"The inspection report does not have even a whiff of allegation of theft of electricity, much less the evidence."
The Court examined the language of Section 135, noting that it commences with the word “whoever, dishonestly”, thereby imposing a mens-rea requirement. It contrasted this with Section 126, which deals with “unauthorised use of electricity” and is a civil provision that does not require proof of dishonest intent.
Key points of analysis:
- Statutory Interpretation: The Court read Sections 126 and 135 as distinct regimes - Section 126 addresses civil liability for unauthorised use, while Section 135 penalises criminal theft requiring proof of dishonest intent.
- Evidence Requirement: For a provisional assessment under Section 135 to be valid, the inspection report must contain a clear finding of theft and the material evidence must be recorded. The report in this case merely noted minor physical observations and did not allege theft.
- Procedural Compliance: The Court highlighted that the Regulations under the Jharkhand Electricity Supply Code require seizure of material evidence (Clause 11.8). No seizure was documented, further weakening the prosecution’s case.
- Distinction of Remedies: The Court held that a provisional assessment order issued under Section 135 without a final order of assessment is not appealable under Section 127; consequently, the writ petition challenging the provisional order was maintainable.
- Precedent Application: The Court relied on Southern Electricity Supply Co. of Orissa Ltd. v. Sri Seetaram Rice Mill and Kerala SEB v. Thomas Joseph to underscore that statutory remedies do not oust constitutional jurisdiction and that the purpose of Section 126 is to curb unauthorised consumption, not to substitute for criminal prosecution under Section 135.
In sum, the Court concluded that the inspection report failed to satisfy the stringent evidentiary standards required for invoking Section 135, and that the High Court’s original quashing of the Provisional Assessment Order was legally sound.
The Verdict
The Supreme Court set aside the Division Bench order dated 08 August 2025, restored the Single Judge order dated 05 September 2018, and held that the Provisional Assessment Order of Rs 3,23,71,524 dated 29 September 2017 under Section 135 was unsustainable. The appeal was dismissed with no order as to costs, and all pending applications, if any, stand disposed of.
What This Means For Similar Cases
Writ Petition Not Barred by Statutory Remedy
- Practitioners can still approach the High Court under Article 226 even when the Electricity Act provides a specific remedial route, provided the case raises a pure question of law or challenges the statutory scheme.
- The court will scrutinise whether the statutory mechanism is complete and whether the grievance falls within its ambit before declining jurisdiction.
Proof of Theft Required for Section 135 Assessment
- An inspection report must expressly record a finding of theft and detail the material evidence; vague observations are insufficient.
- The prosecution must satisfy both actus reus and mens rea as defined in Section 135; absence of dishonest intent defeats the assessment.
- Failure to comply with procedural safeguards (e.g., seizure of material under Clause 11.8) will render a provisional assessment vulnerable to judicial review.
Distinction Between Sections 126 and 135
- Section 126 deals with civil liability for unauthorised use and does not require proof of dishonest intent; it is the appropriate avenue for revenue recovery.
- Section 135 is a criminal provision; it can be invoked only when theft is proved beyond reasonable doubt.
- Practitioners must carefully assess which provision applies to the facts to avoid unnecessary criminal prosecution and to preserve the consumer’s right to contest civil assessments.
