Court Emphasizes Mandatory Compliance with Electricity Act, 2003 and Himachal Pradesh Electricity Supply Code, 2009; Rejects Electricity Board's Assessment Based Solely on Audit Report Without Premises Inspection
The Himachal Pradesh High Court, presided over by Justice Sandeep Sharma, has dismissed the writ petition filed by the Superintending Engineer of the Himachal Pradesh State Electricity Board Limited (HPSEBL), upholding the decision of the Divisional Commissioner, Shimla, who, acting as the Appellate Authority under Section 127 of the Electricity Act, 2003, set aside a Final Assessment Order issued against M/s Sunoxx International for alleged unauthorized use of electricity.
The case arose from an assessment initiated by HPSEBL against M/s Sunoxx International for allegedly overdrawing electricity beyond their contracted demand from March 2011 to November 2015. The Board based its provisional and final assessment orders, demanding Rs. 1.65 crore, primarily on an audit report prepared by the Regional Audit Officer (RAO) without conducting a physical inspection of the consumer's premises, as mandated under Section 126 of the Electricity Act, 2003.
The respondent objected to the assessment, highlighting procedural lapses including the absence of a premises inspection and the issuance of the assessment order more than fifteen months after permanent disconnection and settlement of the final electricity bill, violating Clause 7.1.6 of the Himachal Pradesh Electricity Supply Code, 2009.
While the Assessing Officer rejected the respondent's objections and upheld the assessment, the Divisional Commissioner's appellate order quashed the assessment on grounds that the mandatory procedural requirements under the Electricity Act and the State Supply Code, including prompt inspection and issuance of provisional assessment orders within stipulated timelines, were not followed. The appellate authority observed that the assessment was based solely on audit records without the Assessing Officer inspecting the premises or preparing an inspection report, rendering the assessment illegal and unsustainable.
The HP High Court extensively analyzed the statutory provisions, particularly Sections 50, 126, 127, and 181 of the Electricity Act, 2003, and the relevant Clauses of the Himachal Pradesh Electricity Supply Code, 2009. The Court underscored that Section 126 proceedings must commence with an inspection of the premises or equipment by the designated Assessing Officer, who must then prepare an inspection report detailing the connected load, meter condition, and evidence of unauthorized use. This report must be signed and served to the consumer or their representative, and a provisional assessment order must be issued within 48 hours of the inspection.
The Court rejected the Board's contention that inspection was not mandatory and that the assessment could be based solely on audit records. The judgment cited the Supreme Court's decisions in Executive Engineer, Southern Electricity Supply Company of Orissa Limited (SOUTHCO) v. Sri Seetaram Rice Mill (2012) and Kerala SEB v. Thomas Joseph (2023), which affirm that inspection by an Assessing Officer is indispensable before invoking Section 126.
Furthermore, the Court noted that the Board issued the assessment notice well after the final bill had been settled post permanent disconnection, violating the Supply Code's stipulation that final bills must be prepared within five days of disconnection request, after which no further charges can be recovered.
While acknowledging that unauthorized use of electricity includes overdrawal beyond sanctioned loads and that such misuse is prejudicial to the public and supply system, the Court held that the Board's failure to adhere to the prescribed statutory and regulatory procedures vitiated the assessment. The Court observed that the Appellate Authority did not take a hyper-technical approach but rightly enforced the procedural safeguards envisioned in the law.
Accordingly, the High Court dismissed the petition, upholding the appellate order and confirming that no unauthorized use assessment under Section 126 can be sustained without compliance with the mandatory inspection and procedural requirements laid down in the Electricity Act and the Supply Code.
This judgment underscores the importance of strict adherence to procedural safeguards in assessing unauthorized electricity use and protects consumers from arbitrary or retrospective assessments based solely on audit reports without proper inspection and notice.
Bottom Line:
Electricity Act, 2003 - Assessment for unauthorized use of electricity under Section 126 cannot be sustained where no inspection is conducted by the Assessing Officer and the assessment is made merely on the basis of audit report/records - Supply Code requirements regarding inspection report and issuance of provisional assessment order must be followed - After permanent disconnection and settlement of final bill/no dues, Board cannot subsequently raise assessment under Section 126 in violation of the Act and Supply Code.
Statutory provision(s):
Electricity Act, 2003 Sections 50, 126, 127, 181; Himachal Pradesh Electricity Supply Code, 2009 Clauses 6.1.1 to 6.1.7, 7.1.6
