Delhi High Court
Col. R.K. Nayar (Retd.) vs Bses Rajdhani Power Ltd. on 18 April, 2007
Author: S. Muralidhar
Bench: S. Muralidhar
JUDGMENT S. Muralidhar, J.
1. The petitioner resides in the second floor of B-42, Kailash Colony. He filed this writ petition to challenge a speaking order dated 14.12.2004 passed by the respondent BSES Rajdhani Power Ltd. The petitioner also challenges bills raised for fraudulent abstraction of energy ('FAE') in the sum of Rs. 6,97,030/- for a connection K. No. 009-0803434 and for an amount of Rs. 1,65,910/- for a connection K. No. 013-1333658.
2. The background to the filing of the petition is that in May 1992 the petitioner's wife opened a beauty clinic in the basement of the premises. A voluntary declaration of commercial use on one of the meters was made by the petitioner. An inspection was conducted of the premises on 1.8.1998 by one Shri G.K.Kaushal, Inspector, Meter Testing Department ('MTD'). It was found that there were three connections: K. No. 009- 0803434, K. No. 009-1333658 and 013-1333666. As regards the connection K. No. 009-0803434 which was for meter No. 4G 9022557, the seals of CT Box and meter box (common) were found tampered. As regards K. No. 013-1333658 concerning meter No. 4G 9022570 a common CT and meter box seals were found missing. The meter half-seal found fixed did not tally with the sample monogram and was hence stated to be fictitious. Both rivets were found tampered. Tampering was also observed in the meter by damaging the meter body between meter cover and meter base. As regards the third connection K. No. 013-1333666 both half seals were found in tact. The meter was found stopped on 100W test lamp and also stopped on consumer load.
3. According to the respondent, another inspection was conducted on 7.10.1998 by Shri J.P.Kaushik, Inspector (Zone-1802), Nehru Place. As regards the connection No. K.009-0803434, the inspection report disclosed that this connection was found being used at ground floor and basement with a connected load of 67.305 KW. The other connection K. No. 013-1333658 was being used at first and second floor with a connected load of 48.695 KW. The connection No. 0131333666 was being used for water pump and lighting, had a connected load of 2.8. KW. It is stated that on the basis of these 2 inspections, bills for the FAE as mentioned hereinbefore were raised.
4. The petitioner challenged the bills by filing of Writ Petition (C) No. 6722 of 1998. By an order dated 26.7.1999 this Court referred the matter to the Permanent Lok Adalat to explore the possibility of a settlement. In the record of proceedings dated 10.3.2000 the Lok Adalat noted that on 18.6.1997 the petitioner had written a letter to the Officer in charge, Delhi Vidyut Board ('DVB'), Greater Kailash Part I stating that the outermost seal of the steel cover/box in respect of meter bearing No. 1333658 was broken. The petitioner requested the DVB to have the seal of the meter installed/refitted. The Lok Adalat also noticed the statement of the petitioner that despite this request, no action was taken by the respondents and that is why he approached the High Court. The Lok Adalat also noted the submissions of the petitioner that the inspection report of 1.10.1998 was not based on facts. The recorded consumption pattern three years prior to 1.8.1998 and 13 months after 1.8.1998 had been more or less uniform whereas the case of the respondent was that the consumption based on the connected load was much higher than the recorded consumption. The Lok Adalat noticed that there was no possibility of an amicable settlement and the record was returned to the High Court.
5. By an Order dated 16.9.2004 this Court noted the submission of the respondent that the second inspection dated 7.10.1998 was carried out at the request of the petitioner and that the connected load against the two connections was to the extent of 67.305KW (Basement and ground floor) and 48.695 KW (first and second floor) as against the sanctioned load which is 16 KW for domestic purpose. The Court also noted the statement of learned Counsel for the respondent that pursuant to the Order of the I.G. (Enforcement), Delhi dated 24.12.1998 directing the respondent to reconsider the matter, the respondent was indeed inclined to do so and that the petitioner was also agreeable to that proposal. This Court accordingly directed the respondent to reconsider the matter. The Court gave the petitioner an opportunity of hearing by issuing a specific direction to the respondent that the petitioner would appear for the hearing and four weeks time was given to the Superintending Engineer (Enforcement) to pass an order within four weeks from the date of the hearing. Till then the demand was directed to remain stayed. The Court then fixed the date of hearing as 5.10.2004 at 11 a.m. and disposed of the writ petition.
6. After the impugned speaking order was passed on 14.12.2004, the petitioner filed an application in the disposed of writ petition making a grievance about the speaking order. This Court directed the petitioner to file a substantive petition for such relief and accordingly the present writ petition was filed.
7. This Court, while initially admitting the present petition on 18.2.2005 formulated several questions concerning supply of electricity even where misuse had been declared and misuse charges paid. The other question was whether, in the event of such misuser, the electricity companies were justified in supplying electricity and thereby legitimising the misuser. Several other questions were also formulated on the issue of the answerability and liability of the respondent to supply electricity even for such unauthorised/illegal constructions.
8. However, with a number of ineffective hearings having taken place, the petitioner submitted that he did not seek to address the Court on the larger issues. This Court on 1.3.2007 passed the following order:
Mr. N.K. Kaul, Sr. Advocate who is appointed as amices curiae for the petitioner is stated to be in some personal difficulty.
The petitioner who appears in person refers to CM No. 2906/2007 which he says is really a synopsis of his arguments in the writ petition. He categorically states that he has nothing further to add and that these submissions may be considered and appropriate orders may be passed by the Court. Mr. Vinaik, learned Counsels for BSES states that he would like to file a reply to the synopsis in CM No. 2906/2007 within 2 weeks and in any event not later than 16.3.2007.
The scope of the present hearing is therefore confined to the issue of the validity of the speaking order dated 14.12.2004 and the bills raised against the petitioner, which payment was not stayed by this Court. Pursuant to the above order, respondent has on 28.3.2007 filed written submissions enclosing copies of the inspection reports and the Speaking Order.
9. The contentions of the petitioner as contained in the petition and in CM No. 2906 of 2007 are as under:
(i) There is no denial whatsoever by the respondent that the petitioner wrote a letter on 18.6.1997 complaining of a defective meter and the fact that they took no action on that letter.
(ii) Despite the I.G.(Enforcement) directing way back on 24.12.1998 to have a relook at the complete case, the respondents did not take action for over six years. The speaking order does not deal with this aspect at all.
(iii) Although the two connections are shown to have a connected load in excess of the domestic load of 16 KW, the petitioner was paying misuse charges against K. No. 0803434 since May, 1992. The third meter having a 9 KW connection had a connected load of only 2.8 KW. This obviously did not stand to logic.
(iv) Since the petitioner himself had informed the respondent on 18.6.1997 of the broken meter seals, to allege that in the inspection report that the petitioner had tampered the meter seals absolutely no sense since he had himself given the complaint on 16.6.1997. The petitioner placed reliance upon the judgments of the Hon'ble Supreme Court in AIR 1966 SC 849 and AIR 1967 SC 349.
(v) The petitioner points out that the seals affixed by the DVB on 1.8.1990 were opened by the DVB themselves in 1992, but this was not recorded anywhere. This has also not been denied by the respondent.
10. The petitioner questions the reliance placed by the respondent on the consumption pattern ascertained by the DVB for a period of one year from 6.8.1997 to 3.8.1998 i.e. before the paper seals were affixed. In this context he points out that since a letter was written by him to the DVB regarding broken seals on 18.6.1997 i.e. 2 months before 6.8.1997 it does not stand to logic that he would be indulging in FAE 2 months after writing such a letter. Further, according to the petitioner the respondent appears to have included the period between 2.7.1999 and 3.8.1999 for working out the average consumption whereas for this very period forms part of the period from 2.7.1999 to 26.6.2002 in respect of which the respondent had acknowledged the meter to be defective, replaced the meter in June 2002 and refunded him a sum of Rs. 1.92 lakhs.
11. The stand taken by the respondent on the other hand is that the consumption pattern for a period of one year prior to the inspection and one year after the inspection when studied reveals that the average recorded consumption had increased by 43.63 % in relation to K. No. 0090803434 and by 80% in relation to K. No. 0131333658. The conclusion in the Speaking Order that the petitioner's was a case of fraudulent abstraction of energy is reiterated.
12. This Court finds considerable merit in the contentions advanced by the petitioner in the instant case. In the first place many of the specific contentions raised by the petitioner do not appear to have been either denied or dealt with in the Speaking Order. For instance, it does not deny that the basement was being used for running a school for cosmetology since May 1992, which information was provided to the DVB and for which the petitioner volunteered to make payment on commercial rates. It does not deny that the petitioner complained about the defective meter way back on 18.6.1997 and that no action was taken on that complaint. It does not indicate if the matter was re-examined pursuant to the directions given on 24.12.1998 by the I.G. (Enforcement). Although it records the petitioner's contentions that no inspection was conducted on 7.10.1998 and that in any event he was not present when such inspection took place, that although a team is stated to have inspected the premises the report was signed only by one person, and that he was given a copy of the so-called inspection report only much later, the Speaking Order offers no answer to these contentions.
13. The explanation offered by the respondent for inferring a case of FAE against the petitioner is that the consumption pattern increased after the date of inspection and that the consumption pattern for a one year period prior to the inspection was less than the permissible limit given the connected load. The explanation in this behalf in the Speaking Order dated 14.12.2004 is as under:
The average recorded energy for connection No. 009-0803434 for the period 6.8.1997 to 3.8.1998 has been found 16.40% of the assessed energy for the corresponding period, considering the connected load of 54.425 KW based on the revised ratings of the equipments.
The average recorded energy for connection No. 013-1333658 for the period 5.8.1997 to 9.8.1998 has been 57.59% of the assessed energy for the corresponding period considering the connected load of 45.301KW.
DERC Regulations further provides that even if one seal of the meter is found missing or tampered and the consumption pattern for the last one year is less than 75% of the assessed consumption, the case of Dishonest Abstraction of Energy can be booked.
14. This Court is of the view that an inference of fraudulent abstraction of energy must be based on some conclusive evidence that the user has tampered with the meter in a manner that has enabled such user to either slow down the meter or make it record lesser units of consumption. There must be a link established between the physical evidence of tampering noticed on inspection and the consumer. An inference of FAE should not be permitted to be drawn on the mere fact that a meter had been found with broken seals. An electricity meter is admittedly not kept enclosed in a tamper proof environment under the lock and key, with one key retained by the consumer and the other by the supplier of the electricity. If a meter is kept in a location that permits any person intending to do mischief to have easy access to the meter, then to fasten the charge of FAE on the consumer in the event of the meter being found tampered, is not being reasonable or even realistic. Something more would have to be demonstrated to infer an intention by the consumer to "fraudulently" abstract electricity. In this context it is necessary to emphasise that the analysis of consumption pattern cannot constitute substantive proof of DAE in the absence of tangible physical evidence of DAE in the manner explained above. In other words, the analysis of consumption pattern can only corroborate what is found on physical inspection which can indicate whether the consumer has herself or himself employed a device or a method to dishonestly abstract electricity. It will not be open to the respondent, in the absence of any tangible evidence of DAE, to proceed on the basis of the consumption pattern to infer DAE. The decision of this Court in Udham Singh v. BRPL 136 (2007) DLT 500 is to the same effect.
15. To explain this further, where the respondent finds on inspection some evidence of 'tampering' like a missing or broken glass, a broken seal, a missing or tampered rivet, it usually notes that it is a case of 'suspected DAE'. It has to then proceed to investigate further to confirm this suspicion. The term 'dishonest abstraction' is not defined in the Electricity Act, 2003. It is defined only under Regulation 2 of the DERC Regulations. The relevant clauses read as under:
2(i) 'Direct theft' shall mean abstraction of electrical energy either through by passing the meter by some arrangement external to it or through unauthorized tapping of the supply from licensee's distribution network.
2(m) 'Dishonest Abstraction of Energy (DAE)' shall mean abstraction of electrical energy where accessibility to the internal mechanism of the metering equipment and some collateral evidence is found to support the conclusion that the meter has been caused to record less energy than actually passing through it. It shall also include any other means adopted by consumer to cause the meter to stop or run slow (such as reversing the polarity of one phase of poly phase meters, changes in CT or PT, etc.).
The wording of this definition does not help drawing up presumption of DAE merely on the discovery of a tampered meter. Moreover, the shifting of the burden of proof to the consumer has to have a statutory basis. That necessarily takes us to Section 135(1) of the Electricity Act, 2003 which reads as under:
135. Theft of electricity - (1) Whoever, dishonestly, - (a) taps, makes or causes to be made any connection with overhead, underground or under water lines or cables, or service wires, or service facilities of a licensee; or
(b) tampers a meter, installs or uses a tampered meter, current reversing transformer, loop connection or any other device or method which interferes with accurate or proper registration, calibration or metering of electric current or otherwise results in a manner whereby electricity is stolen or wasted; or
(c) damages or destroys an electric meter, apparatus, equipment, or wire or causes or allows any of them to be so damaged or destroyed as to interfere with the proper or accurate metering of electricity, so as to abstract or consume or use electricity shall be punishable with imprisonment for a term which may extend to three years or with fine or with both;
Provided that in a case where the load abstracted, consumed or used or attempted abstraction or attempted consumption or attempted use -
(i) does not exceed 10 kilowatt, the fine imposed on first conviction shall not be less than three times the financial gain on account of such theft of electricity and in the event of second or subsequent conviction the fine imposed shall not be less than six times the financial gain on account of such theft of electricity.
(ii) exceeds 10 kilowatt, the fine imposed on first conviction shall not be less than three times the financial gain on account of such theft of electricity and in the event of second or subsequent conviction, the sentence shall be imprisonment for a term not less than six months but which may extend to five years and with fine not less than six times the financial gain on account of such theft of electricity:
Provided further that if it is proved that any artificial means or means not authorized by the Board or licensee exist for the abstraction, consumption or use of electricity by the consumer, it shall be presumed, until the contrary is proved that any abstraction, consumption or use of electricity has been dishonestly caused by such consumer.
The second proviso to Section 135(1) of the Act enables the shifting of the burden of proof only on the initial burden being discharged by the respondent. That initial burden is on the respondent to prove that "any artificial means or means not authorised by the Board or licensee exist". Unless it is so proved, the presumption of dishonest abstraction does not get attracted.
16. The applicability of Regulation 26 for determining the penalty arises only after there is a determination by conclusive proof that it is a case of DAE or theft as the case may be. In other words the calculation of the penalty is in the second stage. The Regulation 26 (ii) and (iv) read as under:
(ii) Before the personal hearing, the officer of the licensee, before whom personal hearing has to be given, shall analyze the case after carefully considering all the documents, submissions by the consumer, facts on record and the consumption pattern, wherever available. The licensee shall also assess the energy consumption for past six months as per the Tariff Order. In case of suspected DAE, if consumption pattern for last one year is reasonably uniform and is not less than 75% of the assessed consumption where meter is less than 10 years old and not less than 65% of the assessed consumption where meter is more than 10 years old, no further proceedings shall be taken and the decision shall be communicated to the consumer under proper receipt within 3 working days and connection shall be restored through original meter.
(iv) Where it is established that there is a case of DAE, the licensee [may] lodge a report with the local police along with the material evidence including wires/cables, meter, service line, etc. seized from the site, which shall be handed over to police. The licensee shall also assess the energy consumption for past six months as per the Tariff Order and prepare final assessment bill on 5 times the rates as per applicable tariff. The consumer shall be required to make the payment within 2 working days of its proper receipt. The licensee may, taking into consideration the financial position and other conditions of the consumer, extend the last date of payment or approve the payment to be made in Installments. The amount, the extended last date and/or time schedule of payment/installments should be clearly stated in the speaking order. A copy of the speaking order shall be handed over to the consumer under proper receipt on the same day.
The determination of "computed units" or "assessed units" by using a formula in relation to the "connected load" or "billing load" as the case may be takes place after the determination of DAE. If after such computation the recorded consumption is found to be less than the 75% of the assessed or computed consumption, then a certain calculation of penalty ensues. The whole purpose of Regulation 26 is to calculate such a penalty consequent upon the determination of DAE. It is possible in a given case that the case of DAE is established and yet no penalty is attracted when applying the formula under Regulation 26. In these circumstances it can be seen that Regulation 26 is not intended to supply the proof of DAE. In other words the respondent cannot use Regulation 26 as the starting point by first determining the assessed consumption, then applying the formula for determining if a penalty is attracted and then infer, on that basis that it is a case of DAE. The formula for determining penalty cannot itself be the proof of DAE. However, that is what appears to have been done in the present case as is evident from the reading of the Speaking Order.
17. The precursor to Section 135 of the Act was Section 39 of the Indian Electricity Act, 1910 which was similarly worded and which has been interpreted by the Courts. In Jagannath Singh v. Ramaswamy , the Hon'ble Supreme Court held that:
(8) An exposure of a stud hole on the meter cover is an artificial means for preventing the meter from duly registering. For the purposes of Section 44, the existence of this artificial means gives rise to the presumption that the meter was prevented from duly registering but this presumption cannot be imported into Section 39. A meter with an exposed stud hole, without more is not a perfected instrument for unauthorised taking of energy, and cannot be regarded as an artificial means for its abstraction. To make it such an artificial means, the tampering must go further, and the meter must be converted into an instrument for recording less than the units actually passing through it. A check meter affords an easy method of proving that the consumer's meter is recording less than the units consumed and is being used as an artificial means for abstraction of the unrecorded energy. To bring home the charge under Section 39, the prosecution must also prove that the consumer is responsible for the tampering. The evidence adduced by the prosecution must establish beyond doubt that the consumer is guilty of dishonest abstraction of energy.
18. This was reiterated in the subsequent decision in Ram Chandra v. State of Bihar . In that case a wire had actually been inserted which had the effect of preventing the rotation of a disc despite that it was held that in addition to the above evidence, it was important to demonstrate that "the appellant would have knowingly done something to the meter which would have escaped detection of a meter reader and facilitated the abstraction of electricity." The Court set aside the conviction in that case.
19. Although the above decisions were rendered in the context of a conviction in a criminal case, the proof necessary for inferring FAE or DAE can be no less considering that the element of 'dishonesty' brings in the concept of means read which is common to both FAE/DAE and the offence of theft of electricity. Moreover the consequence of a DAE for the consumer is that he has to pay the penalty which is five times the normal tariff.
20. Applying these tests in the instant case it is seen that the petitioner himself was hardly shown to be responsible for the tampering of the meter. Since it was he who complained having found the meter tampered, it was unreasonable for the respondent company to turn around and accuse the petitioner himself of tampering the meter. The documents dated 7.10.1998 hardly reads like an inspection report. There are no signatures of the team of officers who visited the premises. There is no signature of the petitioner or even an endorsement that he refused to sign. In fact, it is not even in the standard format. In the circumstances, the petitioner is justified in doubting if such inspection took place at all. Moreover, the presumption that is sought to be drawn in the present case is completely belied by the fact that, after the two inspections on 1.8.1998 and 7.10.1998 (a fact that remains disputed) the I.G. (Enforcement) of the DVB had on 24.12.1998 asked for a re-examination of the case, a fact that is not denied by the respondent. Nowhere in the pleadings or even in the written submissions filed by the respondent is it actually explained whether in fact that re-examination took place. By merely reiterating what was found at the time of inspection in the Speaking Order, the respondent does not add to the understanding whether the petitioner can be held to be guilty of FAE.
21. A strange argument is advanced that an amnesty scheme was commenced in 1999 for a specific period and that "simply informing breakage of seal of CT and meter box when the amnesty scheme was not operative does not absolve the petitioner from the case of fraudulent abstraction of energy." This argument does not stand to logic. It certainly does not answer the point made by the petitioner that the respondent failed to take action on his complaint made on 18.6.1997. The only other ground on which the inference of FAE is sought to be made is the pattern of consumption and comparing the computed consumption with the recorded consumption. As already held, the consumption pattern by itself again cannot lead to an inference of FAE it would have to corroborate what is detected on a physical examination. An accu check meter could have been used to detect if the meter was recording lesser energy than it should. That, however, was not done in the instant case. Since it is not shown that there was some device or even any technique used to slow down the meter to make it record lesser energy, the consumption pattern cannot by itself constitute the substantial evidence of FAE. On the contrary in the instant case since admittedly the petitioner has informed the respondent since May 1992 that the use of a portion of the premises was no longer domestic but commercial, that factor was required to be accounted for determining if there was anything unusual in the consumption pattern. The fact that the meter was replaced in June 2002 and the petitioner was refunded a sum of Rs. 1.92 lakhs for the period from 2.7.1999 to 26.6.2002 also is relevant in this regard. However, the Speaking Order is silent on these aspects.
22. In view of the above discussion, the impugned speaking order dated 14.12.2004 is set aside and the two impugned bills are hereby quashed.
23. The petitioner has in his written submissions given a calculation of the amounts due to him and claims that a sum of Rs. 10,48,364/-against K. No. 0803434 and a sum of Rs. 2,76,841/- against K. No. 1333658 is owing to him by the respondent. This amount includes the interest he claims to have paid on the loans borrowed to make the payment. He has also enclosed a working sheet to his application which gives the details. It appears reasonable that the petitioner should be refunded the amounts paid by him in respect of the two impugned theft bills after adjusting the normal changes for actual recorded consumption, together with interest at 12 % p.a. from the date of payment by the petitioner to the date of refund by the respondent. A direction is accordingly issued to the respondent to refund the aforementioned sum to the petitioner within a period of 8 weeks from today and in any event not later than 20.6.2007. Any delay beyond this period will attract a higher interest at 18% p.a. The respondent will also pay to the petitioner costs in the sum of Rs. 10,000 within a period of four weeks from today and in any event not later than 20.5.2007.
24. With the above directions, the writ petition is allowed and the applications are disposed of.