Gujarat High Court
Dhrangadhra Chemicals Works Ltd & vs Paschim Gujarat Vij Co. Ltd. & on 1 April, 2014
Author: R.M.Chhaya
Bench: R.M.Chhaya
C/SCA/15509/2004 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 15509 of 2004
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE R.M.CHHAYA Sd/-
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1 Whether Reporters of Local Papers may be allowed to see NO
the judgment ?
2 To be referred to the Reporter or not ? NO
3 Whether their Lordships wish to see the fair copy of the NO
judgment ?
4 Whether this case involves a substantial question of law as NO
to the interpretation of the Constitution of India, 1950 or any
order made thereunder ?
5 Whether it is to be circulated to the civil judge ? NO
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DHRANGADHRA CHEMICALS WORKS LTD & 1....Petitioner(s)
Versus
PASCHIM GUJARAT VIJ CO. LTD. & 1....Respondent(s)
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Appearance:
MR KUNAL NANAVATI, ADVOCATE FOR NANAVATI ASSOCIATES,
ADVOCATE for the Petitioner(s) No. 1 - 2
MS RV ACHARYA, ADVOCATE for the Respondent(s) No. 2
RULE SERVED for the Respondent(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE R.M.CHHAYA
Date : 01/04/2014
ORAL JUDGMENT
Page 1 of 19
C/SCA/15509/2004 JUDGMENT
1. By way of this petition under Article 226 of the Constitution of India, the petitioners have challenged the order dated 1.11.2004 passed by the Appellate Committee of the respondent in Appeal No. A.71/04 dated 1.11.2004 as well as supplementary bill dated 11/17-11-2004.
2. The facts which can be culled out from the record of the petition are as under.
3. That the petitioner company is a consumer of erstwhile Gujarat Electricity Board and has electric connection in the factory premises situated at Dhrangadhra, district Surendranagar. The petitioner company had electrical installation bearing CON Number and Category high tension 17513 with contract load of 150 KVA in its unit at Nimaknagar village.
4. It is the case of the petitioners that the petitioners are using the said connection for their Bromine Plant situated at Nimaknagar village. It is the case of the petitioners that as the said plant Page 2 of 19 C/SCA/15509/2004 JUDGMENT was shut down the usage of electricity gradually declined. The petitioners by application dated 29.10.2003 informed the factory inspector as regards closure of the said plant. The petitioners have also produced on record the certificate issued by the Chartered Accountant certifying that the Bromine Plant was closed and there was no production since 18.5.1999. It appears from the record that the petitioners filed an application dated 12.9.2002 to the respondent with a request to convert the HT connection to LT connection. In response to the same the respondent through its General Manager (Commerce) informed the petitioners by letter dated 21.9.2002 to approach the Superintending Engineer, Surendranagar for the said conversion. It further appears that accordingly by letter dated 16.10.2002 the Superintending Engineer, Surendranagar was informed about the same with a request for conversion of HT connection to LT connection. The Superintending Engineer, Surendranagar issued consent for permanent disconnection of the said HT connection with effect from 1.4.2003 by communication dated 15.2.2003. It Page 3 of 19 C/SCA/15509/2004 JUDGMENT further appears from the record of the petition that as per the order passed by the Superintending Engineer, Surendranagar, on 4.4.2003 the HT connection was permanently disconnected and CTPT and TV meters were removed, tagged duly sealed by the respondent in presence of the respondent as well as the petitioners and the meter was then taken to Dhrangadhra O&M Meter Lab. As per the report of the laboratory it revealed that three holes were found after scrapping the meter body and on the basis of the report the respondent issued supplementary bill of Rs.41,10,509.40 ps. It appears from the record that on receipt of the said supplementary bill with allegation of theft the petitioners did approach the Chief Engineer of the respondent, however, no actions were taken. Ultimately the petitioners filed appeal before the Appellate Committee on 1.11.2004 and the Appellate Committee by impugned order dated 12.10.2004 was pleased to partly allow the appeal and being aggrieved by the same, the present petition is filed by the petitioners.
Page 4 of 19
C/SCA/15509/2004 JUDGMENT
5. As the Gujarat Electricity Board is converted into Paschim Gujarat Vij Company Ltd., by order dated 25.1.2010 passed in Civil Application No.486 of 2010 the petitioners have been permitted to substitute the Gujarat Electricity Board as Paschim Gujarat Vij Company Ltd. - the present respondent no.1 and other respondents accordingly.
6. Heard Mr. Kunal Nanavati, learned Advocate for Nanavati Associates for the petitioners and Ms. Rohini Acharya, learned Advocate for the respondents.
7. Mr. Nanavati for the petitioners has taken this Court through the impugned order and has raised the following contentions :
(i) It was contended that it is not possible to drill any hole inside the meter without opening the cover as the meter box is protected by metal cover and it is impossible to open metal cover without opening the seals. Mr. Nanavati contended that it cannot be believed that the petitioner company opened Page 5 of 19 C/SCA/15509/2004 JUDGMENT the metal cover without opening the seals and therefore the allegation that three holes were found in the meter box is unbelievable. Mr. Nanavati further contended that even though the Bromine Plant was shut down in May,1999 supplementary bill is for the period from October, 2002 to March, 2003 and therefore the very allegation of theft against the petitioners is baseless.
(ii) Mr. Nanavati further contended that the laboratory report on the basis of which the supplementary bill is issued has been given by the respondent after a period of about six months. It was further contended that there was no element of mens rea and the benefit that may be derived out of it.
It was also contended that there should be conclusive proof of theft and benefit of such tampering. The respondent has to show that the manner in which the tampering has been done which resulted into benefit to the consumer then and then only it can be said that there was theft of energy. It was contended that the respondent has failed to prove that the Page 6 of 19 C/SCA/15509/2004 JUDGMENT petitioner tampered with the meter.
(iii) Relying upon the diagram which is produced on record of this petition with Affidavit-in- Rejoinder it was further contended that same indicates that there are as many as five seals and one MMB seal and considering the position of three holes as alleged the same cannot be done without opening the seals. It is also contended that the supplementary bill is issued for a period of two years after the plant was shut.
(iv) Mr. Nanavati also contended that even though all these contentions were clearly raised before the Appellate Authority the same are not properly dealt with in the impugned order and therefore the impugned order deserves to be quashed and set aside.
(v) Mr. Nanavati further submitted that in view of the fact that seals were found intact and in absence of any conclusive proof it cannot be believed that Page 7 of 19 C/SCA/15509/2004 JUDGMENT the petitioners abstracted the electricity by making three holes.
8. Mr. Nanavati also relied upon the judgments of Hon'ble Delhi High Court in the case of (i) Col. R.K. Nayar (Retd.) Vs. BSES Rajdhani Power Ltd. being W.P.C.2904/2005 and CMs. No.2114, 4756, 12132 and 14463/2005 decided on 18.04.2007 (iii) Bhasin Motors (I) P. Ltd. Vs. N.D.P.L. Being W.P.(C) 18328 of 2004 & CMs 13865 of 04, 9146 of 06, 4123 of 06 (iii) Ram Chandra Prasad Sharma and others Vs. State of Bihar and another, reported in AIR 1967 SC 349.
9. Per contra, Ms. Acharya, learned Advocate for the respondents raised the following contentions :
(i) That the connection was in the name of the petitioners and therefore the benefit has been taken by the petitioner company.
(ii) The Appellate Authority has taken into consideration each and every contention raised by the Page 8 of 19 C/SCA/15509/2004 JUDGMENT petitioners.
(iii) It is contended that earlier the similar issue had arisen and the present incident is the second incident of theft.
(iv) The consumption pattern clearly shows that there is dishonest abstraction of electricity and lower units have been recorded.
(v) Referring to diagram produced by the petitioners it was contended that it is not necessary to open the seals and therefore it cannot be said that respondents have failed to prove that three holes were found in the meter.
(vi) It was also contended that there are disputed questions of fact and the findings of fact arrived at by the Appellate Committee do not require any interference by this Court in its extraordinary jurisdiction under Article 226 of the Constitution of India and such disputed question can be decided only by way of filing a Civil Suit.
Page 9 of 19
C/SCA/15509/2004 JUDGMENT
10. No further or other submissions are made by the learned Advocates appearing on behalf of the parties.
11. Before considering the submissions made by the learned Advocates for the parties it would be appropriate to refer to the checking sheet dated 4.4.2003. The checking sheet (Annex.I) clearly indicates that connected load has been disconnected.
Checking sheet indicates that the meter was removed in presence of the parties. It further indicates that CTPT was also removed and sealed. It may further be noted that the checking sheet indicates that the seals were intact. It is an admitted position that the meter so removed was sent to the laboratory at Dhrangadhra on 4.4.2003 and the report of the laboratory is dated 21.10.2003. On perusal of the report, it indicates that the seals were found to be intact. However, it is further recorded in the said report that on the outer terminal at three places MMB seals were found. It was further found that by applying black colour the finishing has been shown. It is further alleged that in the interior part of it Page 10 of 19 C/SCA/15509/2004 JUDGMENT after opening seal it is found that there are three holes of different diameters. It is also alleged that there are some scratches found in the KH unit. It is further specifically mentioned in the report that the seals on the metal body were found to be intact. On the basis of this, the respondents have issued impugned supplementary bill. It appears from the record that the petitioners raised all contentions before the Appellate Committee. On perusal of the order of the Appellate Authority it appears that the Appellate Authority has believed the fact that even though the MMB seal, terminal cover seal and meter body seals were found to be intact there can be tampering with the meter and the contention raised by the petitioners before it has been negatived. It is held that it cannot be said that there was no possibility of dishonest abstraction of electric energy on the ground that MMB seal is removed every month at the time of reading. It appears from the order impugned that the Appellate Committee has recorded that there is no doubt that the laboratory inspection report shows that no tampering was found Page 11 of 19 C/SCA/15509/2004 JUDGMENT in MMB seal, terminal seal and metal body seal. However, as observed above, the said factual aspect has been discarded by the Appellate Authority. On examining the position of the three holes and comparing it with diagram at page no.70 of the paper book which is not denied by the respondents, it is found that there were holes beneath the glass as alleged in the laboratory report. The diagram clearly shows that there are four seals, out of which one seal of cable connection and one seal of MMB. That the laboratory report clearly indicates that all the seals were found intact including these four seals over and above the MMB seal. The holes were found in the inner most part of the meter. There cannot be any holes without removing the seals including MMB seal.
The checking sheet dated 22.4.2003 also does not indicate that any seals were found to be
broken/tampered when the meter was removed. In light of these facts therefore the respondent has not been able to conclusively prove that there was tampering with the meter. Though the meter was in the premises belonging to the petitioners the fact remains that it Page 12 of 19 C/SCA/15509/2004 JUDGMENT has been installed by the respondent company and before removal of the meter at the instance of the petitioners there is no allegation that the seals were found to be damaged. Hence the allegation of three holes which are found in the report of the laboratory does not prove that it is done by the petitioners for their own benefit as it cannot be done without removing or disturbing the existing seals on the meter body as well as metal cover and more particularly the MMB seal.
12. The Hon'ble Delhi High Court in the case of Col. R.K. Nayar (Retd.) Vs. BSES Rajdhani Power Ltd. being W.P.C.2904/2005 and CMs.No.2114, 4756, 12132 and 14463/2005 decided on 18.04.2007 has observed thus :
"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 Page 13 of 19 C/SCA/15509/2004 JUDGMENT 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 Page 14 of 19 C/SCA/15509/2004 JUDGMENT 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."
13. Similar view has been expressed by Delhi High Court in the case of Bhasin Motors (I) P. Ltd. Vs. Page 15 of 19 C/SCA/15509/2004 JUDGMENT N.D.P.L. Being W.P.(C) 18328 of 2004 & CMs 13865 of 04, 9146 of 06, 4123 of 06 which reads as under :
"17. In Jagdish Narayan v. NDPL (supra) and Udham Singh v. BSES Rajdhani Power Ltd. 136 (2007) DLT 500, this Court has interpreted the provisions of Section 135 of the Electricity Act, 2003 read with the DERC Regulations. The relevant passages of the last mentioned judgment in Jagdish Narayan (supra) reads as under:
"23. What is central to the definition of theft under Section 135 of the Act, which according to the respondent covers DAE as well is the element of 'dishonesty'. Therefore the means read or the intention of the consumer to dishonestly abstract electricity must be proved "conclusively" to bring home the charge of DAE. Therefore the requirement of "conclusive evidence" in terms of Regulation 25 (iii) is consistent with the statutory mandate of Section 135(1). That can be established only by showing that the consumer was responsible for tampering the meter by some visible means. The external manifestations of tampering, as has been found in the inspections conducted in the present cases, can only raise a suspicion of DAE. That suspicion will have to be made good by some tangible evidence of physical means of tampering before the presumption can be drawn that it was the consumer who tampered the meter.
24. The decision of the Hon'ble Supreme Court in Jagannath Singh v. B.S. Ramaswamy is illustrative although there the Court was concerned with a criminal conviction for the offence of theft of electricity under Sections 39 and 44 of the Indian Electricity Act, 1910. The approach to the requirement of proof of dishonest abstraction of energy is nevertheless relevant for the present case. The Hon'ble Supreme Court held that the existence of artificial means for abstracting energy can only give rise to a presumption that there had been a dishonest abstraction. The supplier would still have to show that the consumer is responsible for such tampering. In the said case, it was contended that the existence of an open stud hole on the meter was Page 1956 sufficient proof that dishonest abstraction of energy had taken place. In answer to that contention, the Hon'ble Supreme Court observed as under:Page 16 of 19
C/SCA/15509/2004 JUDGMENT A meter with an exposed stud hole, without more, is not a perfected instrument for unauthorized taking of energy, and cannot be regarded as an artificial means of 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.
25. Applying the above test, it has to be held that an automatic presumption of DAE on the basis of the external symptoms of tampering together with the analysis of the consumption pattern would not be a safe and error free method. Some other tangible evidence must be shown to exist. An accu check meter can be deployed to find out if the meter is in fact recording lesser units. The analysis of the consumption pattern in terms of the Regulation 26 (ii) is merely corroborative and not by itself substantive evidence of DAE. The decision of this Court in Udham Singh v. BSES Rajdhani Power Ltd. 136 (2007) DLT 500 is to the same effect. In fact, the formula is applied in terms of Regulation 25 (iv) read with 26 (ii) only for determining the penalty payable by the consumer once a case of either direct theft or DAE has been made out. The penalty formula cannot itself supply the proof of DAE or theft."
14. In light of the aforesaid, therefore it appears that the Appellate Committee has committed an error apparent on the face of the record and the Appellate Committee wrongly brushed aside the vital evidence to the effect that the MMB seal, terminal seal and meter body seals were intact and no tampering was found in such seals.
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C/SCA/15509/2004 JUDGMENT 15. The Appellate Committee wrongly believed that
the respondents have sufficient and reliable evidence from the checking sheet and laboratory inspection report that the arrangement was made by the appellant to abstract electric energy dishonestly.
16. In the instant case also the stud holes were found inside the meter and as held above the same cannot be done without disturbing or tampering with the seals. In the instant case also the respondents have not been able to prove that there was any mens rea to dishonestly abstract electricity. It also clearly bornes out from the record that the Bromine Plant was closed with effect from 18.5.1999 and therefore naturally the use of the power would be less which has been considered by the Appellate Committee. In the facts and circumstances arising in this petition therefore the Electricity Company has not been able to prove that there was dishonest abstraction of electricity. In the instant case, Page 18 of 19 C/SCA/15509/2004 JUDGMENT therefore, the Appellate Committee has committed an error in appreciating the evidence before it.
17. In light of the aforesaid, the petition deserves to be allowed. The impugned order dated 1.11.2004 passed by the Appellate Committee of the respondent as well as the supplementary bill dated 11/17-11-2004 are also quashed. Rule made absolute with no order as to costs.
Sd/-
(R.M.CHHAYA, J.) M.M.BHATT Page 19 of 19