Before the
MAHARASHTRA
ELECTRICITY REGULATORY COMMISSION
13th floor, Centre No.1,
World Trade Centre, Cuffe Parade, Mumbai-400 005.
Tel.
22163964 / 22163965, Fax No. 22163976
E-mail:
mercindia@mercindia.com
Website:
www.mercindia.com
CASE NO.14 OF
2004
In the matter of
Jai Bamleshwari
Rice Mill’s Application regarding non-compliance by MSEB of Section 126 of the
Electricity Act, 2003.
Dr.
Pramod Deo, Member
Shri.
A. Velayutham, Member
ORDER
Dated:
24th November, 2004
1. The present Petition is filed on 27th
April 2004 by M/s Jai Bamleshwari Rice Mill, Gondia against the Maharashtra
State Electricity Board (MSEB) as Respondents. The prayers in the Petition are
as follows:
a)
To direct the
Respondents to reassess the provisional assessment as per the provisions of
Section 126 of the Electricity Act, 2003 and restore the power supply
immediately;
b)
Guilty officer
be punished as per the provisions of Section 142 and 146 of the Electricity
Act, 2003 for contravention of this Act or rules or regulations made there
under.
2. Shri. Prakash R. Jaiswal, Proprietor of
Jai Bamleshwari Rice Mill has stated in his Petition that on 24th
December 2003 the Flying Squad of the MSEB, Nagpur (Urban) inspected the Petitioner’s unit and prepared a spot
inspection report which showed that the Seal of the meter was intact but the
meter was slow by 63%. As the meter was found to be slow, on 25th December 2003 the
Petitioner made an application to the Electrical Inspector requesting him to
get the meter installation tested.
2. The Petition states that on 26th
December 2003 once again the Flying Squad visited the Petitioner's unit and
prepared a computerized test report and joint inspection report. On 27th
December 2003, MSEB registered a FIR under Sections 135 and 138 of the EA, 2003
and the meter box along with the meter was seized by MSEB and the electricity
supply was discontinued immediately.
3. It is further stated in the Petition
that on 31st December 2003, the Petitioner received a provisional
assessment bill for payment of Rs.41,21,995/- in which the period of assessment
was shown to be 35 months, which is against the provisions of the Electricity
Act (EA), 2003. On the same day, the Petitioner approached the Superintending
Engineer (S.E.) MSEB, Bhandara with a
request to restore the electricity supply. On 1st January 2004, the
Petitioner received a letter from the S.E., Bhandara directing the Petitioner
to pay 1/3rd of the amount of the provisional bill. Therefore, the
Petitioner filed a representation against the above letter before the concerned
Executive Engineer, MSEB requesting him to reassess as per Section 126 of the
EA, 2003.
4.
The Petition states that thereafter the Petitioner, on several
occasions, requested the S.E.,Bhandara to reconsider the provisional assessment
as per the provisions of Section 126 of the EA, 2003. After several reminders,
the S.E, asked the Petitioner to pay 20% of the provisional assessment and get
reconnection of electricity supply.
5.
The Petition contends that MSEB, though aware about the procedures
and applicability of legal provisions of law, are not complying with the
provisions of Section 126 of the EA, 2003 and are therefore liable for action
under Sections 142 and 146.
6.
In their Reply dated 10th August 2004, MSEB have
submitted that, during inspection on 24th December 2003, the
Petitioner was detected as being
involved in prejudicial use of energy. Accordingly, criminal proceedings
were initiated against the Petitioner under Section 135 of the EA, 2003, and
assessment on account of the loss of revenue to the Board has also been issued
under the relevant provisions of the Act.
7.
In their Reply, MSEB have further submitted that the Act
prescribes different treatments for consumers involved in “unauthorised use of
electricity” and “theft of electricity”.
Since the Petitioner was involved in theft of electricity, the
assessment and other action needed to be carried out in accordance with the
provisions of Section 135 of the EA, 2003 along with the provisions of MSEB’s
prevailing Supply Conditions.
8.
In his Rejoinder, the Petitioner has urged that the word “theft”
also comes within the purview of the term “unauthorised use”. In Sections
135(2)(a), 135(2)(b), 138(a) and 138(b), the word “unauthorised” is used. Thus,
the Rejoinder states that there is no separate provision under the new Act,
which provides a distinct and separate mode of
assessment in theft cases.
9.
The admissibility hearing was held on 19th October
2004, at which Shri. M. K. Gupta, representative of the Petitioner, briefly
reiterated the sequence of events and correspondence set out in the Petition.
He submitted that inspection of the Petitioner’s unit was undertaken on 24th
December, 2003 by the Flying Squad. A spot inspection report (Annexure 'A' to
the Petition) was prepared which showed that the Seal of the meter was intact
but that the meter was found to be slow by 63%. The report further showed
variance in the C.T. Ratio calculated by the investigating team, and it was
alleged in the report that the overhead LT wires were passing through the
Petitioner’s premises, thus making them easily accessible. As the meter was
found to be a slow meter, on 25th December 2003 the Petitioner made
an application to the Electrical Inspector (Annexure ‘B’) requesting him to
have the meter installation tested. Thus, the Petitioner's bonafides are
clearly established. He submitted that only after testing the meter can one
conclude whether the meter was defective, or whether it was a case of
tampering.
10. Shri. Gupta further submitted that once the Electrical
Inspector makes his report and the meter is found to be a slow meter, then an
assessment can be done for a period of six months in respect of the same.
However, in this case, neither the Electrical Inspector nor the MSEB officials
tested the meter even though there was a spot inspection report in this regard.
The Electrical Inspector stated that the meter cannot be tested where theft is
alleged. However, Shri. Gupta alleged that there was some kind of connivance
between the Electrical Inspector and officials of MSEB. He submitted that if
there was no evidence of tampering found, then MSEB cannot presume on any
grounds whatsoever that this is a case of theft. He submitted that there could
also be some technical problem in reading the meter, or there could be some
problem with the reading equipment, in which case the meter has to be tested by
MSEB.
11. Shri. Gupta submitted that once again the
Flying Squad visited the Petitioner's unit on 26th December 2003 and
prepared a computerized test report and joint inspection report (Annexure ‘C’)
which included new allegations that the name plates on the CTs appeared to be
spurious and that the name plates were dislodged. The next day, i.e. on 27th
December 2003, MSEB lodged a Police complaint (Annexure ‘D’) against the
Petitioner at 2.00 a.m.
12. It was further submitted that the
Petitioner made repeated requests to MSEB to give a provisional assessment
order so that he could make the necessary payment and then take steps to file
an appeal. On 31st December 2003, the Petitioner received a letter
from MSEB (Annexure ‘E’) along with a bill setting out the provisional
assessment for a period of 35 months. Shri. Gupta submitted that the Petitioner
raised an objection to the provisional bill because, under Section 126 of the
Electricity Act, 2003, the maximum period of assessment for non-domestic use is
only 6 months immediately preceding the date of inspection. As such, the assessment is illegal.
13. Shri. Gupta further pointed out the
significance of Part XII of the EA, 2003 regarding Investigation and
Enforcement and Part XIV regarding Offences and Penalties, and the distinction
between the two.
S.126 Assessment
(under Part XII) –
"(1) If on an inspection of any place or premises or after inspection
of the equipments, gadgets, machines, devices found connected or used, or after
inspection of records maintained by any person, the assessing officer comes to
the conclusion that such person is indulging in unauthorized use of
electricity, he shall provisionally assess to the best of his judgement the
electricity charges payable by such person or by any other person benefited by
such use.
(5)
If the assessing officer
reaches to the conclusion that unauthorized use of electricity has taken place,
it shall be presumed that such unauthorized use of electricity was continuing
for a period of three months immediately preceding the date of inspection in
case of domestic and agricultural services and for a period of six months
immediately preceding the date of inspection for all other categories of
services, unless the onus is rebutted by the person, occupier or possessor of
such premises or place."
Thus, under
Section 126, there is a presumption of six months of unauthorized use, unless
rebutted. He further submitted that Section 126 may be read with Section 145 of
the EA, 2003, which is regarding jurisdiction of the Civil Court:
"No Civil Court shall have jurisdiction to entertain
any suit or proceeding in respect of any matter which an assessing officer
referred to in Section 126 or an appellate authority referred to in Section
127…"
Shri. Gupta
submitted that, according to the above provisions, the assessment of the
assessing officer is outside the jurisdiction of the Civil Court. Section 145
clearly indicates that it is only the assessing officer who can assess the
provisional bill. He submitted that the term “assessing officer” is not
mentioned in Section 135 (Chapter XIV), which pertains to offences and
penalties for theft of electricity. Under this Section, no assessing officer
has been mentioned as in Section 126. Even though offences and penalties
regarding theft of electricity cannot be taken up before the police but only by
cognizance by the competent Court, in this case MSEB lodged a FIR with the
police against the Petitioner. Under this Section, and even as per the old
Indian Electricity Act, 1910, assessment cannot be made for a period of 35
months (amounting to Rs 41 lakhs in this case). He submitted that MSEB cannot
make any assessment according to their Circulars when they are inconsistent
with the present Act.
14. The Commission queried as to why Shri.
Gupta was referring to Section 135 while mentioning Section 126. Shri. Gupta
responded that it is MSEB’s submission that, since this is a case of theft,
Section 126 is not applicable. It is his case that the Petitioner has shown his
bonafides by asking the Electrical Inspector to test the meter. MSEB cannot
superimpose any inconsistent provisions of the new Act.
15. He submitted that primarily the
Petitioner's contention is that the EA, 2003 is very clear that if any
provisional assessment is to be made, in this case it has to be made by MSEB
only under Section 126. MSEB cannot
make an assessment of Rs.41 lakhs for the period of 35 months. They should have
made the assessment for 6 months, i.e. for only Rs.7.6 lakhs, out of which,
only 1/3rd would be payable by the Petitioner, and the Petitioner
would also then be entitled to appeal under Section 127. He submitted that in
any case MSEB cannot insist on Rs.41 lakhs when the Act itself is very clear
that the period of assessment cannot go beyond 6 months immediately preceding
the date of inspection.
16. The Commission observed that, whether
Section 126 is applicable or Section 135, the primary issue is whether the
Commission is the proper forum to hear this Petition, i.e. whether it can be
admitted.
17. Shri.
Gupta replied by referring to Section 142 of the EA, 2003.
S.142-Punishment for non-compliance of directions by
Appropriate Commission:
"In case any complaint is filed before the Appropriate
Commission by any person or if that Commission is satisfied that any person has
contravened any of the provisions of this Act or the rules or regulations made
thereunder, or any direction issued by the Commission, the Appropriate
Commission may after giving such person an opportunity of being heard in the
matter, by order in writing, direct that, without prejudice to any other penalty
to which he may be liable …."
Shri. Gupta
submitted that the Petitioner’s main contention is that this is a case where
the provisions of the Act have not been complied with inasmuch as Section 126
rather than Section 135 should have been applied, that cognizance has to be
taken by a Magistrate in case of Section 135, and that 35 months’ assessment is
not mandated in view of the ceiling of 6 months. If the Commission is satisfied
that MSEB have not complied with the said provisions, it is within its purview
to give directions to MSEB to follow those provisions. Otherwise, the
Petitioner is being made to pay Rs.41 lakhs and deprived of their right of
appeal under Section 127, whereas the Petitioner could have deposited Rs.2.35
lakhs and raised his grievance before the appellate forum. He further referred
to Section 146 of this Act, which also contains the provision for punishment
for non-compliance of orders or directions given under the Act. He submitted
that MSEB were simply harassing the Petitioner by filing FIR, and that the
Petitioner is being penalized without any evidence of theft.
18. Ms. Deepa Chawan, Counsel for MSEB
submitted that there are four different units in one compound and controlled by
the family of the Petitioners. MSEB conducted spot inspection of all these
units in December, 2003 and similar charges were raised by MSEB for the 4
different connections.
19. Counsel for MSEB submitted that all the 4
connections were cases of theft and MSEB proceeded against all the 4 units in a
uniform manner. Interestingly, in respect of 3 of the said units, the consumers
paid 20% of the amount under Clause 31(e) of
MSEB's Conditions of Supply and got the reconnection. Only the present
Petitioner has challenged similar action taken by MSEB in respect of 1 unit and
this speaks volumes for the Petitioner's bonafides.
20. Counsel for MSEB submitted that this case
is not simply about a faulty meter.
MSEB have already filed a case under the new Act before the Magistrate.
Counsel for MSEB explained that if you have a CT having a specific ratio and
particular meter design, the multiplying factor is 'X'. In this case, the CT is
replaced with a different ratio, and when the original multiplying factor is applied
to it, this would amount to theft of energy. It is done with an intention to
defraud MSEB of their legitimate dues.
Counsel for MSEB submitted that if it is found that MSEB were wrong in their
contentions, then undoubtedly the competent Court will decide in favour of the
Petitioner.
21. Counsel for MSEB further submitted that
MSEB have proceeded under Section 135 (theft) on the basis of Annexure “C” of
the Petition (Installation Testing Report), and drew attention to the ratio
observed and remarks at Sr. Nos.1 to 4. Counsel further referred to the
decision of the Hon’ble Delhi High Court dated 31st May 2004 in
respect of Sohan Lal Vs. North Delhi Power Limited & Others in which a
similar issue was raised, where Section 126 was read with Section 135. Counsel
referred to Para 48 of the decision:
"The matter in issue may also be considered from
another angle. There is bound to be
distinction between cases like that of commercial user of electricity supplied
for residential purposes, unauthorized diversion of electricity though being
recorded in the meter, electricity being consumed by persons who may have come
into possession of premises where the meter was already tampered with as
distinguished from cases where a consumer dishonestly steels electricity. Where the mens rea of dishonestly steeling
electricity is established, a more severe financial penalty is envisaged. The
mere fact that Section 135 of the said Act also provides for certain
consequences of prosecution cannot imply that a more severe civil liability
would not arise in such a case. If appreciated in this context, it would be
apparent as to why the distinction has been made between cases of mere
'unauthorized use of electricity' and 'theft of electricity'."
Therefore,
Counsel for MSEB concluded that such cases cannot be brought under the purview
of Section 126.
22. Counsel for MSEB then proceeded to the
question raised by the Commission regarding the maintainability of this
Petition, and submitted that a case filed under Section 135 is not within the
Commission's purview, and also pointed out that this case does not fall within
the ambit of Section 128 of the EA, 2003 necessitating the Commission to
appoint an Investigating Authority to investigate the affairs of MSEB.
S.128 Investigation
of certain matters:
“The Appropriate Commission may, on being satisfied that a
licensee has failed to comply with any of the conditions of license or a
generating company or a licensee has failed to comply with any of the
provisions of this Act or the rules or regulations made thereunder, at any
time, by order in writing, direct any person (hereafter in this section
referred to as “Investigating Authority”) specified in the order to investigate
the affairs of any generating company or licensee and to report to that
Commission on any investigation made by such Investigating Authority.”
23. Counsel for MSEB further submitted that
as far as the Petitioner's contention that he has no remedy left for appeal is
concerned, it may be noted that in respect of 3 of their own units, the
Petitioner's sister concerns have commenced production by paying 20%. So, that
avenue is always open to them. Further, as per the Delhi High Court decision,
MSEB can proceed under Section 135 and, therefore, Counsel submitted that this
Petition should be thrown out at the threshold itself.
24. Counsel for MSEB further submitted that
MSEB have filed appropriate proceedings and the matter is subjudice before the
Magistrate. In that proceeding, the Petitioner will have a chance to be heard,
and if the Petitioner can make out that this was not a case of theft, then he
will undoubtedly get relief from the Court. Sections 142 and 146 are also not
relevant, inasmuch as there is no Order of the Commission which has been
disobeyed.
25. Shri. Gupta submitted that the matters
relating to the other 3 units in the same compound are unconnected and do not
have any relevance with the present matter. He further submitted that the
extract from the judgement of the Delhi High Court has been cited out of
context by MSEB. In fact, some of the other units have already filed separate
Applications in respect of their matters, in which MSEB have not filed their
reply inspite of reminders from the Commission.
26. Shri. Gupta further submitted that MSEB have
also remained silent about their right to file a FIR because the cognizance is
to be taken only by the competent Magistrate.
In this regard, he compared the provisions of Section 50 of IE Act, 1910
with the provisions of Section 151 of the current EA, 2003 regarding cognizance
of offences and filing of cases.
Section 50 of IE, 1910 - Institution of prosecution-
"No prosecution shall be instituted against any person
for any offence against this Act or any rule, license or order thereunder,
except at the instance of the Government [or a State Electricity Board] or an
[Electrical Inspector], or of a person aggrieved by the same."
He submitted
that, in the present Act, Section 151 refers to “Cognizance of offences” and
not to “Institution of prosecution”. Therefore, as per the old Act, MSEB could
have instituted the prosecution by filing a FIR. Further, the words “…. or of a person aggrieved by
the same” which are present in IE Act, 1910 are missing in the new Act, and
this is a meaningful and conscious omission. When an earlier statutory
provision is replaced by another provision with an altogether different heading
and different intention of the Legislature, then the omission of certain words
and phrases from the old provision is a designed omission and not an accidental
omission. He submitted that MSEB are only trying to harass the Petitioner by
filing FIR and assessing for 35 months, when they do not have any right to
assessment for 35 months under any of these provisions. Section 135 of the new Act
is entirely different because the words “assessing officer” are missing in that
Section. The words “assessing officer”
are used in Section 126. Therefore, he submitted that MSEB will have to assess
only under Section 126 and not under Section 135, since they have no powers to
do so.
27. Shri. Gupta referred to the first spot
inspection report dated 23rd December, 2003 (Annexure “A”) and submitted that it shows
that primary and secondary load are different from the subsequent test report.
It also shows that the name plates on the CTs are taken off and preserved for
verification of record with the consent of the consumer. However, in the joint
report at Annexure “C”, it is reported that the nameplates provided on the CTs
appear to be spurious and are easily dislodged. This shows clearly the
manipulation of record done intentionally by MSEB to harass the Petitioner.
28. Shri. Gupta submitted that, in fact, this
is only a case of faulty meter, and CT has not been changed. When there is an
allegation of slow metering, and when the Petitioner has requested MSEB and the
Electrical Inspector for testing the meter installation, the meter should have
been independently tested. The Petitioner cannot be held liable for any offence
without testing the meter. With regard to MSEB's reply, he also pointed out
that they are a LT and not HT consumer, to which MSEB Counsel agreed.
29. Representative of the Petitioner further
referred to a Bombay High Court (Nagpur Bench) judgement on whether FIR under
Section 151 can be lodged wherein, since there was no authority to file a FIR
under the provisions of the present Act, the FIR was quashed. He circulated a
copy of the judgement in CA No. 1783/2004 dated 14th July, 2004,
which has been challenged in the Supreme Court but not been stayed.
30. He also referred to the judgement of the
Supreme Court (AIR 93 SC 2414) to the effect that a clarificatory Circular can
only aid in interpretation and is not binding if it is not in consonance with
the statute. In this matter, MSEB had issued several Circulars to their
subordinate officials and directed them to file FIR under Section 135 and
follow the procedure under the repealed Act even after the commencement of the
new Act, resulting in wrongful actions by the subordinate officials of the
Board which are against the provisions of the present Act.
31.
The Petitioner's representative lastly referred to another
judgement in the case of Aditya Polymers in which the Bombay High Court has
given directions regarding Section 126, of which MSEB is well aware, regarding
how to assess, and the limit of 6 months under that provision. He further
submitted that MSEB are referring only to the judgement of the Delhi High Court
but are suppressing the judgement of High Court Nagpur Bench. He submitted
finally that provisional assessment can be carried out by MSEB for a period
of upto only 6 months under Section
126, and the Petitioner may be entitled to pay 1/3rd of the amount
as per the present Act, pursuant to which the Petitioner will also be entitled
to file an appeal.
32.
The Commission has considered the written submissions and oral
presentations made by the by the parties.
The short preliminary point is whether it would be appropriate for the
Commission to interfere under the penal provisions of Sections 142 and 143 in
the circumstances of the present case. The Commission notes that these
provisions are generic in nature, and have to be read with the specific
provisions relating to unauthorized use and theft under Sections 126 and 135
respectively, and the jurisdiction of different authorities under those
provisions. The procedure, dispensation
and assessing authority have been set out in Section 126. The appellate
authority has also been indicated in Section 127. Similarly, Section 135 sets
out the provisions in cases of alleged theft, and Chapter XV refers to the
forum for trial of such cases. Thus, the Commission cannot make assessment
under Section 126, or entertain appeals against such assessment under Section
127. Similarly, it cannot try cases
under Section 135. As far as the
criminal proceedings initiated by MSEB against the Petitioner under Section 135
are concerned, whether the same are maintainable and whether MSEB have followed
due procedure and process of law, and whether there is at all a case made out
under Section 135 rather than Section 126, are all matters which will be
decided by the competent Court before which the Petitioner will have his say,
and not by the Commission. The question of the Commission ascribing to itself
that jurisdiction and invoking the provisions of Section 142 or 146 does not,
therefore, arise.
33.
In view of the above, the Commission declines to admit the
Petition, and disposes of it accordingly.
| Sd/- | Sd/- | ||
| (Shri A. Velayutham) | (Dr. Pramod Deo) |
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| Member | Member |
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| (A.M. Khan) | |||
| Secretary, MERC | |||
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