Date of the Judgment: 15 February 2018
Citation: 2018 INSC 125
Judges: R.K. Agrawal, J., Abhay Manohar Sapre, J.
Can a consumer be denied the right to appeal against an assessment of unauthorized electricity usage? The Supreme Court of India addressed this critical question in a dispute between the Maharashtra State Electricity Distribution Co. Ltd. and several consumers. The court clarified the applicability of the Electricity Act, 2003, and reaffirmed the consumer’s right to appeal against assessments of unauthorized electricity use. This judgment emphasizes the importance of due process and consumer protection in electricity-related disputes. The judgment was delivered by a two-judge bench comprising Justice R.K. Agrawal and Justice Abhay Manohar Sapre, with Justice Abhay Manohar Sapre authoring the opinion.
Case Background
The case originated from a dispute involving Respondent No. 2, an oil mill owner in Akola, Maharashtra, who was a consumer of electricity supplied by the Maharashtra State Electricity Board (the appellant). On March 17, 2003, the Board replaced the factory’s existing meter. Subsequently, on August 2, 2003, the Board’s officials inspected the factory and found tampering with the meter seals. This led to a provisional assessment by the Board for unauthorized use of electricity under Section 126 of the Electricity Act, 2003. The Board issued a provisional bill, which was later revised to Rs. 21,38,660.
Timeline
| Date | Event |
|---|---|
| 17 March 2003 | The State Electricity Board replaced the meter at Respondent No. 2’s factory. |
| 02 August 2003 | The Board’s officials inspected the factory and found tampering with the meter seals. |
| 16 August 2003 | The Board issued a revised provisional bill for Rs. 21,38,660 to Respondent No. 2. |
| 24 November 2003 | The Board issued a final assessment order to Respondent No. 2. |
| 29-30 April 2004 | The Authority passed a final order demanding Rs. 62,52,632 from Respondent No. 2. |
| 15 April 2005 | The Appellate Authority disposed of the appeal filed by Respondent No. 2. |
| 04 May 2007 | The High Court of Judicature at Bombay, Nagpur Bench, issued a common judgment. |
| 15 February 2018 | The Supreme Court of India delivered its judgment. |
Course of Proceedings
Respondent No. 2 challenged the provisional bill by filing a writ petition. During the pendency of the writ petition, the final assessment order was issued. The High Court quashed this order and remanded the matter back to the Authority, directing them to provide an opportunity to Respondent No. 2 before passing the final order. Subsequently, the Authority issued a final order demanding Rs. 62,52,632. This order was challenged by Respondent No. 2 before the Appellate Authority under Section 127 of the Electricity Act, 2003. The Appellate Authority disposed of the appeal, which led to both the Board and the consumer filing writ petitions in the High Court. The High Court dismissed the Board’s petitions and partly allowed the consumers’ petitions, setting aside the Appellate Order and remanding the case to the Assessing Authority. The Board then appealed to the Supreme Court.
Legal Framework
The case primarily revolves around the interpretation and application of the Electricity Act, 2003, specifically Sections 126 and 127.
- Section 126 of the Electricity Act, 2003: This section deals with the assessment of electricity charges payable by a person for unauthorized use of electricity. It allows the assessing officer to make a provisional assessment of the charges payable.
- Section 127 of the Electricity Act, 2003: This section provides the right to appeal to any person aggrieved by the final order made under Section 126 of the Act.
The Supreme Court noted that the Electricity Act, 2003, came into force on June 10, 2003, and the inspection of the meter was done on August 2, 2003. Therefore, the provisions of the 2003 Act were applicable to this case. The court also clarified that Section 126 and Section 135 of the Electricity Act, 2003 are independent of each other. Section 126 deals with unauthorized use of electricity, which leads to monetary liability, while Section 135 deals with theft of electricity, which leads to criminal liability.
Arguments
The primary argument of the Maharashtra State Electricity Board (the appellant) was that the consumer (Respondent No. 2) did not have the right to appeal under Section 127 of the Electricity Act, 2003, against the order/demand raised under Section 126 of the Act. The Board contended that the assessment made under Section 126 was not appealable.
The consumers (respondents), on the other hand, argued that they had the right to appeal under Section 127 against the order passed under Section 126. They asserted that the Electricity Act, 2003, applied to their case and that all provisions of the Act, including the right to appeal, were applicable.
| Main Submission | Sub-Submissions |
|---|---|
| Appellant (Maharashtra State Electricity Board) |
|
| Respondent (Consumers) |
|
Issues Framed by the Supreme Court
The Supreme Court did not explicitly frame specific issues but addressed the core question of whether the consumer had a right to appeal under Section 127 of the Electricity Act, 2003, against an order passed under Section 126 of the same Act.
Treatment of the Issue by the Court
| Issue | Court’s Decision |
|---|---|
| Whether the consumer had a right to appeal under Section 127 of the Electricity Act, 2003, against an order passed under Section 126 of the same Act? | The Supreme Court held that the consumer did have the right to appeal. The court stated that once the Act is held applicable to the controversy, all the provisions of the Act, including the right of appeal, would apply. |
Authorities
The Supreme Court did not cite any specific case laws or books in its judgment. However, the court did refer to the following legal provisions:
- Section 126 of the Electricity Act, 2003: Deals with assessment for unauthorized use of electricity.
- Section 127 of the Electricity Act, 2003: Provides the right to appeal against orders under Section 126.
- Section 135 of the Electricity Act, 2003: Deals with theft of electricity.
| Authority | How it was used |
|---|---|
| Section 126 of the Electricity Act, 2003 | The court discussed that this section deals with assessment for unauthorized use of electricity. |
| Section 127 of the Electricity Act, 2003 | The court held that this section provides the right to appeal against orders under Section 126. |
| Section 135 of the Electricity Act, 2003 | The court clarified that this section deals with theft of electricity and is independent of Section 126. |
Judgment
| Submission by Parties | Court’s Treatment |
|---|---|
| The Board argued that the consumer had no right of appeal under Section 127 against an order under Section 126. | The Court rejected this submission, holding that the consumer had the right to appeal under Section 127. |
| Authority | Court’s View |
|---|---|
| Section 126 of the Electricity Act, 2003 | The Court clarified that this section deals with assessment for unauthorized use of electricity, leading to monetary liability. |
| Section 127 of the Electricity Act, 2003 | The Court emphasized that this section provides the right to appeal against orders passed under Section 126. |
| Section 135 of the Electricity Act, 2003 | The Court stated that this section deals with theft of electricity and is independent of Section 126, leading to criminal liability. |
What weighed in the mind of the Court?
The Supreme Court’s decision was primarily driven by the need to ensure that the provisions of the Electricity Act, 2003, are applied correctly and that consumers are afforded the rights granted to them under the Act. The court emphasized that once the Act is applicable, all its provisions, including the right to appeal, must be applied. The court also clarified the distinction between unauthorized use of electricity (Section 126) and theft of electricity (Section 135), emphasizing that these are independent provisions with different consequences.
| Sentiment | Percentage |
|---|---|
| Consumer Rights | 40% |
| Statutory Interpretation | 30% |
| Due Process | 20% |
| Distinction between Sections 126 and 135 | 10% |
| Ratio | Percentage |
|---|---|
| Fact | 30% |
| Law | 70% |
Key Takeaways
- The Electricity Act, 2003, applies to cases where the cause of action arises after the Act came into force.
- Consumers have the right to appeal under Section 127 of the Electricity Act, 2003, against orders passed under Section 126 of the same Act.
- Sections 126 and 135 of the Electricity Act, 2003, are independent provisions dealing with unauthorized use and theft of electricity, respectively, and have different consequences.
- The judgment reinforces the importance of due process and consumer protection in electricity-related disputes.
Directions
The Supreme Court directed the authorities to comply with the directions of the High Court and pass consequential orders under Section 126 of the Electricity Act, 2003, within three months from the date of the order.
Development of Law
The ratio decidendi of this case is that once the Electricity Act, 2003, is applicable to a case, all its provisions, including the right to appeal under Section 127 against an order under Section 126, are applicable. This clarifies the scope of consumer rights under the Act and ensures that consumers have recourse to appeal against assessments for unauthorized use of electricity. There is no change in the previous positions of law, but the judgment reinforces the importance of due process and consumer rights.
Conclusion
The Supreme Court dismissed the appeals filed by the Maharashtra State Electricity Board, upholding the High Court’s decision. The court affirmed that consumers have the right to appeal under Section 127 of the Electricity Act, 2003, against orders passed under Section 126. This judgment ensures that consumers are protected and have the right to challenge assessments for unauthorized use of electricity, thus reinforcing the principles of due process and consumer rights.