SC on Electricity Theft and Liability on Mere Suspicion
A provisional assessment for theft of electricity under the Electricity Act cannot be sustained unless the inspection report itself records a clear finding of theft and the evidence supporting that finding; suspicion or inferred irregularities are insufficient. Further, a writ petition is maintainable against a provisional assessment order where no effective statutory appellate remedy exists
SC – Mere Suspicion is No Proof of Electricity Theft & Provisional Assessment Order
Electricity Theft and Liability
Judgment dated 13.8.2026 of the Supreme Court in SLP (Civil) No.33179 of 205 of M/s. Himadri Steel Pvt Ltd Vs. Jharkhand Urja Vikas Nigam Limited and others
Inspection report on the theft of electricity and provisional assessment order for Rs.3,2,71,524/- on theft of electricity under Section 135 of the Electricity Act read with Clause 11 of the Electricity Code Regulation, 2015.
It stands established that though not explicitly mentioned, Section 127 applies as much to Section 135 as it does to Section 126. It is clear as daylight that the provision for statutory appeal under Section 127 of the Electricity Act is only with regards to a final order of assessment and not a provisional order. Since the Act does not provide for a statutory appeal against a Provisional Assessment Order, the Writ Petition against the same is maintainable.
Suspicion, no matter how strong, cannot take the place of strict proof. After a thorough perusal of record, we find that not even a single shred of evidence has been produced by the State which would allow us to come to the conclusion that the discrepancies that the State alleges can be elevated to the level of an offence. 34. It is essential that in order to hold a person or a legal entity responsible for the theft of electricity, the theft has to be first detected in the course of inspection. The inspection report must reveal that theft was detected and the details of such evidence must also be recorded therein. As noted above, in the present inspection report, no details or evidence of theft of electricity were noted. Further, there was no subjective satisfaction of the authorized officer either. Only if the inspection report records a finding on the theft of electricity and gives details of the evidence collected during the inspection which unerringly disclose theft of electricity, the provisional assessment order can be sustained. Such a finding of theft must be apparent on a bare reading of the report. If the report is of such a nature that upon bare reading of the same, one cannot construe the basis Page 30 of 32 SLP (C) No.33179 of 2025 of theft, then in such a thorough investigation would be required to ascertain whether theft took place or not and the inspection officer will not be allowed to visit penalties upon the consumer in the name of theft only on the basis of such a provisional report that has no legs to stand on. 35. In the instant matter, as the Ld. Single Judge has rightly recorded, upon a bare reading of the report, one cannot arrive at the conclusion that a theft of electricity has taken place. The inspection reported that the door cannot be opened without opening a plastic seal and that all plastic seals were found correct, intact and further reported that the meter chamber was easily accessible, however, that by itself does not prove mens rea. 36. Further, there is also a violation of Regulation 11.8 as per which all material evidence including wires, cables and meters, service lines are to be seized. Neither the inspection report nor the written report has disclosed that any material from premises of the consumer have been seized. 37. Lastly, the respondents have tried making a case that the provisional assessment order was issued and electricity connection was disconnected in order to protect the revenue of the State. This argument has to be rejected at the threshold because if protection of revenue is accepted as an argument, then that will open floodgates of cases where the inspecting authority will be get arbitrary powers to disconnect electricity of the consumers on the basis of vague reports that do not satisfy the essentials of Section 135, turning this provision into an abuse of process of law.
