Theft of Electricity

By Y. Srinivasa Rao, Principal Assistant Sessions Judge, Tirupati, Andhra Pradesh

TABLE OF CONTENTS:

  1. Introduction
  2. Theft of Electricity, Misuse and Malpractices:-
  3. Distinction between Section 126 and 135  of the 2003 Act
  4. Conclusion

Introduction:-

Over a period of time, it was felt that the performance of the State Electricity Boards had deteriorated on account of various factors. Amongst others, the inability on the part of the State Electricity Boards to take decisions on tariffs in a professional and independent manner was one of the main drawbacks in their functioning.  Section 135(1) of the Electricity Act, 2003 defines theft of electricity.  For a considerable time, three legislations such as 1. the Electricity Regulatory Commissions Act, 1998; 2. The Indian Electricity Act, 1910, and 3. the Electricity (Supply) Act, 1948 remained in force, governing the electricity supply industry in India. The Boards created by the 1948 Act and the bodies created under the 1998 Act, as well as the State Governments, were provided distinct roles under these statutes. There was still overlapping of duties and some uncertainty with regard to exercise of power under these Acts. To address the issues like deterioration in performance of the Boards and the difficulties in achieving efficient discharge of functions, a better, professional and regulatory regime was introduced under the Electricity Bill, 2001, with the policy of encouraging private sector participation in generation, transmission and distribution of electricity and with the objective of distancing regulatory responsibilities from the Government by transferring the same to the Regulatory Commissions. The need for harmonizing and rationalizing the provisions of the earlier statutes was met by creating a new, self-contained and comprehensive legislation. Another object was to bring unity in legislation and eliminate the need for the respective State Governments to pass any reform Act of their own. This Bill had progressive features and strived to strike the right balance between the economic profitability and public purpose given the current realities of the power sector in India. This Bill was put to great discussion and then emerged the Electricity Act, 2003 (for short, `the 2003 Act’). The 2003 Act had notably provided for private sector participation, private transmission licences for rural and remote areas, stand alone systems for generation and distribution, the constitution of an Appellate Tribunal, more regulatory powers for the State Electricity Regulation Commission and provisions relating to theft of electricity. The additional provisions were introduced in the 2003 Act in relation to misuse of power and punishment of malpractices such as over-consumption of sanctioned electric load which are not covered by the provisions relating to theft; all of which had significant bearing upon the revenue focus – intended by the Legislature. This is the legislative history and objects and reasons for enacting the 2003 Act. To ensure better regulatory, supervisory and revenue recovery system, as expressed in the objects and reasons of the 2003 Act, there was definite concerted effort in preventing unauthorized use of electricity on the one hand and theft of electricity on the other. See. The Executive Engineer’s case, 2011 (12) SCALE 243 (Infra).

Theft of Electricity, Misuse and Malpractices:-

Section 151 of the Act explains about the cognizance of offences.  Section 151-A of the Act deals with ‘police investigation’. Offences under Sections 135 to 140 or Section 150 of the Act are cognizable offences and are non-bailable in nature as is made it clear under section 151-B of the Elecctricity Act,2003. Section 152 of the Act speaks about compounding of offences. Section 153 explains about the constituting of Special Courts for trial and Section 154 delas with its power and procedure. The offence of theft of electricity is compoundable in nature, when the offence is compounded, the jurisdiction of the Special Court is ousted and then it will be decided like a tort and that wrongdoes has also to pay the compounding charges. If the consumer fails to pay the compounding charges, criminal complaint can be lodged agaisnt such person. In certain cases, where there is no theft of electricity but it may be the case that the electricity is being consumed in violation of the terms and conditions of supply leading to malpractices. In such a case, Section 126 of the Electricity Act, 2003 applies as it comes under the purview of “unauthorised use of electricity. Further, Section 126 of the Act also deals with the cases of excessive consumption of power beyond the sanctioned load. It is significant to see that even if the offence does not attract section 135 of the Act, it is important to see the other provisions such as sections 126 and 127 of the Act which cover all other relevant considerations for passing of an order of assessment.

The offences with element of mens rea  will fall under the purview Section 135 of the Electricity Act, 2003. When there is no dishonest intention, it should be treated as ‘malpractice’ under the ambit of Section 126 of the Electricity Act.  Section 126 r/w Section 127 of the Act are relevant for process of assessment, determination and passing of a demand order. In the Executive Engineer vs M/S Sri Seetaram Ricemill, 2011 (12) SCALE 243, it was held that ”It is true that fiscal and penal laws are normally construed strictly but this rule is not free of exceptions. In given situations, this Court may, even in relation to penal statutes, decide that any narrow and pedantic, literal and lexical construction may not be given effect to, as the law would have to be interpreted having regard to the subject matter of the offence and the object that the law seeks to achieve. The provisions of Section 126, read with Section 127 of the 2003 Act, in fact, becomes a code in itself. Right from the initiation of the proceedings by conducting an inspection, to the right to file an appeal before the appellate authority, all matters are squarely covered under these provisions. It specifically provides the method of computation of the amount that a consumer would be liable to pay for excessive consumption of the electricity and for the manner of conducting assessment proceedings. In other words, Section 126 of the 2003 Act has a purpose to achieve, i.e., to put an implied restriction on such unauthorized consumption of electricity. The provisions of the 2003 Act, applicable regulations and the Agreement executed between the parties at the time of sanction of the load prohibit consumption of electricity in excess of maximum sanctioned/ installed load.

In the event of default, it also provides for the consequences that a consumer is likely to face. It embodies complete process for assessment, determination and passing of a demand order. This defined legislative purpose cannot be permitted to be frustrated by interpreting a provision in a manner not intended in law. This Court would have to apply the principle of purposive interpretation in preference to textual interpretation of the provisions of Section 126 of the 2003 Act. ” It was further held that ”By applying these principles to the provisions of this case requiring judicial interpretation, we find no difficulty in stating that the provisions of Section 126 of the 2003 Act should be read with other provisions, the regulations in force and they should be so interpreted as to achieve the aim of workability of the enactment as a whole while giving it a purposive interpretation in preference to textual interpretation.”

Distinction between Section 126 and 135  of the 2003 Act:-

In the Executive Engineer vs M/S Sri Seetaram Ricemill, 2011 (12) SCALE 243, it was held as under: ” Upon their plain reading, the mark differences in the contents of Sections 126 and 135  of the 2003 Act are obvious.

They are distinct and different provisions which operate in different fields and have no common premise in law. We have already noticed that Sections 126 and 127 of the 2003 Act  read together constitute a complete code in themselves covering all relevant considerations for passing of an order of assessment in cases which do not fall under Section 135 of the 2003 Act. Section 135 of the 2003 Act falls under Part XIV relating to `offences and penalties’ and title of the Section is `theft of electricity’. The Section opens with the words `whoever, dishonestly’ does any or all of the acts specified under clauses (a) to (e) of Sub-section (1) of  Section 135 of the 2003 Act so as to abstract or consume or use electricity shall be punishable for imprisonment for a term which may extend to three years or with fine or with both. Besides imposition of punishment as specified under these provisions or the proviso thereto, Sub-section (1A) of  Section 135  of the 2003 Act provides that without prejudice to the provisions of the 2003 – Act, the licensee or supplier, as the case may be, through officer of rank authorized in this behalf by the appropriate commission, may immediately disconnect the supply of electricity and even take other measures enumerated under Sub-sections (2) to (4) of the said Section. The fine which may be imposed under  Section 135 of the 2003 Act is directly  proportional to the number of convictions and is also dependent on the extent of load abstracted. In contradistinction to these provisions, Section 126 of the 2003 Act would be applicable to the cases where there is no theft of electricity but the electricity is being consumed in violation of the terms and conditions of supply leading to malpractices which may squarely fall within the expression `unauthorized use of electricity’. This assessment/proceedings would commence with the inspection of the premises by an assessing officer and recording of a finding that such consumer is indulging in an `authorized use of electricity’. Then the assessing officer shall provisionally assess, to the best of his judgment, the electricity charges payable by such consumer, as well as pass a provisional assessment order in terms of Section 126 (2)  of the 2003 Act. The officer is also under obligation to serve a notice in terms of Section 126 (3) of the 2003 Act upon any such consumer requiring him to file his objections, if any, against the provisional assessment before a final order of assessment is passed within thirty days from the date of service of such order of provisional assessment.

Thereafter, any person served with the order of provisional assessment may accept such assessment and deposit the amount with the licensee within seven days of service of such provisional assessment order upon him or prefer an appeal against the resultant final order under Section 127 of the 2003 Act. The order of assessment under Section 126 and the period for which such order would be passed has to be in terms of Sub-sections (5) and (6) of Section 126  of the 2003 Act. The Explanation to Section 126 is of some significance, which we shall deal with shortly hereinafter. Section 126 of the 2003 Act falls under Chapter XII and relates to investigation and enforcement and empowers the assessing officer to pass an order of assessment.”

 Section 135 of the 2003 Act deals with an offence of theft of electricity and the penalty that can be imposed for such theft. This squarely falls within the dimensions of Criminal Jurisprudence and mens rea is one of the relevant factors for finding a case of theft. On the contrary, Section 126  of the 2003 Act does not speak of any criminal  intendment and is primarily an action and remedy available under the civil law. It does not have features or elements which are traceable to the criminal concept of mens rea.

Thus, it would be clear that the expression `unauthorized use of electricity’ under Section 126  of the 2003 Act deals with cases of unauthorized use, even in absence of intention. These cases would certainly be different from cases where there is dishonest abstraction of electricity by any of the methods enlisted under Section 135 of the 2003 Act. A clear example would be, where a consumer has used excessive load as against the installed load simpliciter and there is violation of the terms and conditions of supply, then, the case would fall under  Section 126  of the 2003 Act. On the other hand, where a consumer, by any of the means and methods as specified under Section 135(a) to 135 (e) of the 2003 Act, has abstracted energy with dishonest intention and without authorization, like providing for a direct connection bypassing the installed meter. Therefore, there is a clear distinction between the cases that would fall under Section 126   of the 2003 Act on the one hand and Section 135   of the 2003 Act on  the other. There is no commonality between them in law.

They operate in different and distinct fields. The assessing officer has been vested with the powers to pass provisional and final order of assessment in cases of unauthorized use of electricity and cases of consumption of electricity beyond contracted load will squarely fall under such power. The legislative intention is to cover the cases of malpractices and unauthorized use of electricity and then theft which is governed by the provisions of Section 135  of the 2003 Act.

  Section 135 of the 2003 Act significantly uses the words `whoever, dishonestly’ does any of the listed actions so as to abstract or consume electricity would be punished in accordance with the provisions of the 2003 Act. `Dishonesty’is a state of mind which has to be shown to exist before a person can be punished under the provisions of that Section.

Conclusion:-

From the objects and reasons stated by the Supreme Court in the beginning of this judgment in the Executive Engineer’s case (supra), it is clear that `revenue focus’ was one of the principal considerations that weighed with the Legislature while enacting this law. The regulatory regime under the 2003 Act empowers the Commission to frame the tariff, which shall be the very basis for raising a demand upon a consumer, depending upon the category to which such consumer belongs and the purpose for which the power is sanctioned to such consumer. The Hon’ble Supreme Court of India did not accept the contention on behalf of the respondent that the provisions of Section126 of the 2003 Act have to be given a strict and textual construction to the extent that they have to be read exhaustively in absolute terms. This is a legislation which establishes a regulatory regime for the generation and distribution of power, as well as deals with serious fiscal repercussions of this entire regime. In the considered view of the Apex Court, the two maxims which should be applied for interpretation of such statutes are ex visceribus  actus (construction of the act as a whole) and ut res magis valeat quam pereat (it is better to validate a thing than to invalidate it). It is a settled cannon of interpretative jurisprudence that the statute should be read as a whole. In other words, its different provisions may have to be construed together to make consistent construction of the whole statute relating to the subject matter. A construction which will improve the workability of the statute, to be more effective and purposive, should be preferred to any other interpretation which may lead to undesirable results.

 

The Electricity Act,2003

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