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CASE NO.: Appeal (civil)  4979 of 2006

PETITIONER: Sub Divisional Officer (P), UHBVNL

RESPONDENT: Dharam Pal

DATE OF JUDGMENT: 15/11/2006

BENCH: ARIJIT PASAYAT & LOKESHWAR SINGH PANTA

JUDGMENT:

JUDGMENT (Arising Out of S.L.P.(C) No. 20653  of 2004)

ARIJIT PASAYAT, J.

Leave granted.

Challenge in this appeal is to the order passed by the  National Consumer Disputes Redressal Commission, New  Delhi (in short the ’Commission’). By the impugned order, the  Commission dismissed the revision petition filed in terms of  Section 2l of the Consumer Protection Act, 1986 (in short the  ’Act’).

Background facts in a nutshell are as follows: The respondent is a consumer of electricity and a meter  was installed by the appellant at his factory premises. An  inspection was done on 04.07.2000. The Inspecting staff  found that there was tampering with the meter and, therefore,  a demand of Rs.1,07,326/- was made purporting to be  charges payable for actual consumption of energy.  Questioning the demand, a complaint was filed before the  District Consumer Disputes Redressal Forum, Yamuna Nagar,  Jagadhiri, Haryana (in short ’District Forum’).

The basic stand of the respondent as complainant was  that prior to the inspection, on 02.07.2000 there was a  sparking in the C.T. Box installed at his factory premises and  the complainant immediately informed the appellant and  requested for rectification of the defect. The complainant had  also given a letter dated 2.7.2000 to the department in this  behalf and since the meter was defective the appellant should  have rectified the meter. Instead of doing that, the demand  was raised for alleged tampering with the meter. With  reference to the inspection report it was averred that the seals  were found intact and, therefore, there was no question of any  tampering. It was, therefore, prayed that reference should be  made to the Electrical Inspector for action in terms of Section  26(6) of the Indian Electricity Act, 1910 (in short ’the Act’).  It  was further submitted that notice was to be given before  raising of demand. This was stated to be in line with principles  of natural justice and statutory prescriptions. The said prayer  was rejected by the present appellant taking the stand that in  case of tampering there was no question of any reference to  the Electrical Inspector. The District Forum found substance  in the complaint filed by the respondent and held that the  demand was illegal and instead reference ought to have been

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made in terms of Section 26(6) of the Act.

An apneal was filed by the appellant herein before the  State Consumer Disputes Redressal Commission, Chandigarh  (in short the ’State Commission’). The appeal under Section 15  of the Act was dismissed by the State Commission holding  that the direction given by the District Forum was in order  and action in terms of Section 26(6) of the Act was required to  be taken. A revision was filed before the Commission which,  as noted above, has been dismissed holding that proper  direction has been given by the District Forum which was  upheld by the State Commission.  

In support of the appeal, learned counsel for the  appellant submitted that in case of tampering there was no  scope for reference to the Electrical Inspector in terms of  Section 26(6). Notice is to be given only when there is a default  in payment of the demand raised and in cases of this nature,  no notice is required.

Learned counsel for the respondent on the other hand  submitted that this is not a case of tampering. The respondent  had, two days prior to the inspection, requested the  authorities to verify the meter as the same was defective.  Instead of rectifying the meter, and a reference under Section  26(6) to the Electrical Inspector, arbitrarily the demand has  been raised. Before raising the demand, no notice was issued  to the respondent which is in clear violation of the principles  of natural justice. As the respondent was denied opportunity  of placing his stand before the demand was raised, the same  cannot be maintained being in violation of the principles of  natural justice.  

Question as to when action in terms of Section 26(6) of  the Act is to be taken has been considered by this Court in  many cases. (See Bombay Electricity Supply and Transport  Undertaking v. Laffans (India) (P) Ltd. & Anr. (2005 (4) 5CC  327). Section 26(6) of the Act and Rule 57 of Indian Electricity  Rules, 1956 (in short ’Electricity Rules’) read as follows:  "5. The relevant parts of Section 26 of the  Indian Electricity Act, 1910 and Rule 57 of  the Indian Electricity Rules, relevant for the  purpose of this judgment, are reproduced  hereunder:- The Indian Electricity Act, 1910 "26. Meters.- (1) In the absence of an  agreement to the contrary, the amount of  energy supplied to a consumer or the  electrical quantity contained in the supply  shall be ascertained by means of a correct  meter, and the licensee shall, if required by  the consumer, cause the consumer to be  supplied with such a meter: Provided that the licensee may require  the consumer to give him security for the  price of a meter and enter into an agreement  for the hire thereof, unless the consumer  elects to purchase a meter. (2) xxx xxx xxx (3) xxx xxx xxx  (4) The licensee or any person duly authorized  by the licensee shall, at any reasonable time  and on informing the consumer of his  intention, have access to, and be at liberty to  inspect and test, and for that purpose, if he

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thinks fit, take off and remove, any meter  referred to in sub-section (1); and, except  where the meter is so hired as aforesaid, all  reasonable expenses of, and incidental to,  such inspecting, testing, taking off and  removing shall, if the meter is found to be  otherwise than correct, be recovered from the  consumer; and, where any difference or  dispute arises as to the amount of such  reasonable expenses, the matter shall be  referred to an Electrical Inspector, and the  decision of such Inspector shall be final: Provided that the licensee shall not be at  liberty to take off or remove any such meter if  any difference or dispute of the nature  described in sub- section (6) has arisen until  the matter has been determined as therein  provided. (5) xxx xxx xxx (6) Where any difference or dispute arises as  to whether any meter referred to in sub- section (1) is or is not correct, the matter shall  be decided, upon the application of either  party, by an Electrical Inspector; and where  the meter has, in the opinion of such  Inspector ceased to be correct, such Inspector  shall estimate the amount of the energy  supplied to the consumer or the electrical  quantity contained in the supply, during such  time, not exceeding six months, as the meter  shall not, in the opinion of such Inspector,  have been correct; but save as aforesaid, the  register of the meter shall, in the absence of  fraud, be conclusive proof of such amount or  quantity: Provided that before either a licensee or a  consumer applies to the Electrical Inspector  under this sub-section, he shall give to the  other party not less than seven days’ notice of  his intention so to do. (7) xxx xxx xxx Explanation  - A meter shall be deemed to be  "correct" if it registers the amount of energy  supplied, or the electrical quantity contained  in the supply, within the prescribed limits of  error, and a maximum demand indicator or  other apparatus referred to in sub-section (7)  shall be deemed to be "correct" if it complies  with such conditions as may be prescribed in  the case of any such indicator or other  apparatus." Indian Electricity Rules, 1956 "57. Meters, maximum demand indicators  and other apparatus on consumer’s premises.  - (1) Any meter or maximum demand  indicator or other apparatus, placed upon a  consumer’s premises in accordance with  Section 26 shall be of appropriate capacity  and shall be deemed to be correct if its limits  of error are within the limits specified in the  relevant Indian Standard Specifications and  where no such specification exits, the limits of  error do not exceed 3 per cent, above or below  absolute accuracy at all loads in excess of  one-tenth of full loads and up to full load:

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Provided that for extra high voltage  consumers the limit or error shall be 1 1 per  cent. (2) No meter shall register at no load. (3) Every supplier shall provide and maintain  in proper condition such suitable apparatus  as may be prescribed or approved by the  Inspector for the examination, testing and  regulation of meters used or intended to be  used in connection with the supply of energy: Provided that the supplier may with the  approval of the Inspector and shall, if  required by the Inspector, enter into a joint  arrangement with any other supplier for the  purpose aforesaid.  (4) Every supplier shall examine, test and  regulate all meters, maximum demand  indicators and other apparatus for  ascertaining the amount of energy supplied  before their first installation at the  consumer’s premises and at such other  intervals as may be directed by the State  Government in this behalf. (5) Every supplier shall maintain a register of  meters showing the date of the last test, the  error recorded at the time of the test, the limit  of accuracy after adjustment and final test,  the date of installation, withdrawal, re- installation, etc. for the examination of the  Inspector or his authorized representative. (6) Where the supplier has failed to examine,  test and regulate the meters and keep records  thereof as aforesaid, the Inspector may cause  such meters to be tested and sealed at the  cost of the owner of the meters in case these  are found defective." 6. The above-said provisions have been the  subject-matter of consideration by this Court  in three cases which have been brought to  our notice. They are M.P. Electricity Board v.  Basantibai (1988 (1) SCC 23), Belwal  Spinning Mills Ltd. and Ors. v. U.P. State  Electricity Board and Anr. (1997 (6) SCC 740)  and J.M.D. Alloys Ltd. v. Bihar State  Electricity Board (2003 (5) SCC 226). The first  and the last of the cases are decisions by  three learned Judges and the second one is a  decision by two learned Judges. We have  carefully perused the three decisions and we  find ourselves in entire agreement with the  view of the law taken in these cases. In  particular, in Belwal Spinning Mills’s case,  this Court has examined the provisions of  Section 26, specially sub-section (6) thereof,  in very many details, also taking into  consideration the legislative intention and the  object sought to be achieved by substituting  sub-section (6) by Act 32 of 1959 in its  present form over the predecessor provision.  We would be referring to the relevant findings  of law recorded in these cases. However, at  the outset and here itself, we would like to  mention that the applicability of sub-section  (6) of Section 26 is attracted only when the  meter is not correct. Section 26(6) will have

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no applicability (i) if the consumer is found to  have committed a fraud with the licensee and  thereby illegally extracted the supply of  energy preventing or avoiding its recording, or  (ii) has resorted to a trick or device whereby  also the electricity is consumed by the  consumer without being recorded by the  meter. In effect the latter class of cases would  also be one of fraud. Tampering with the  meter or manipulating the supply line or  breaking the body seal of the meter resulting  in non-registering of the amount of energy  supplied to the consumer or the electrical  quantity contained in the supply - are the  cases which were held to be not covered by  Section 26(6) in the case of Basantibai  (supra), while the provision was held  applicable to any case of meter being faulty  due to some defect and not registering the  actual consumption of electrical energy.  Similar is the view taken in the case of J.M.D.  Alloys Ltd. (supra). 7. What is a correct meter? The language of  sub-section (6) of Section 26 starts with -  "where any difference or dispute arises as to  whether any meter referred to in sub-section  (1) is or is not correct...". The dictionary  meaning of the word "correct" is: Adhering or  conforming to an approved or conventional  standard; Conforming to or agreeing with fact;  Accurate. 8. As to what would be a "correct" meter,  there is sufficient indication in the Act and  the Indian Electricity Rules, 1956 in the  explanation given at the end of sub-section (7)  of Section 26 of the Act and sub-rules (1) and  (2) of Rule 57, quoted hereinabove. Where the  meter is completely non-functional on  account of any fault or having been burnt, it  will not register the supply of energy at all.  Since a burnt meter does not record any  supply of energy, it virtually means "no  meter". 9. What is contemplated by Section 26(6) is a  running meter, but which on account of some  technical defect registers the amount of  energy supplied or the electrical quantity  contained in the supply beyond the  prescribed limits of error. It contemplates a  meter which is either running slow or fast  with the result that it does not register the  correct amount of energy supplied. There is  an additional reason for coming to such a  conclusion. Section 26(6) confers power upon  the Electrical Inspector to estimate the  amount of energy supplied to the consumer or  the electrical quantity contained in the  supply, during such time, not exceeding six  months, as the meter shall not, in the opinion  of such Inspector, have been correct. Where  the meter is running slow or fast, it will be  possible for the Electrical Inspector to  estimate the amount of energy supplied to the  consumer by determining the extent or  percentage of error in recording the supply,

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whether plus or minus. However, where the  meter is burnt or is completely non- functional, such an exercise is not at all  possible. Therefore, Section 26(6) can have no  application in a case where a meter has  become completely non-functional on account  of any reason whatsoever."

In State of W.B. and Ors. v. Rupa Ice Factory (P) Ltd. and  Ors. (2004 (10) 5CC 635) it was observed as follows:

"5. As regards the second claim, namely, the  claim for the period from December 1993 to  December 1995, the finding of the High Court  is that the a Vigilance Squad had found that  Respondent 1 had tapped the electric energy  directly from the transformer to the LT  distribution board bypassing the meter  circuit. If that is so, we do not know as to why  the High Court would go on to advert to  Section 26 of the Electricity Act and direct  reference to the Electrical Inspector for  decision under Section 26(6). In two decisions  of this Court in M.P Electricity Board v.  Basaniibai and J.M.D. Alloys Ltd. v. Bihar   SEB it has been held that in cases of  tampering or theft or pilferage of electricity,  the demand raised falls outside the scope of  Section 26 of the Electricity Act. If that is so,  neither the limitation period mentioned in  Section 26 of the Electricity Act nor the  procedure for raising demand for electricity  consumed would arise at all, In this view of  the matter, that part of the order of the  Division Bench of the High Court, directing  that there should be a reference to the  Electrical Inspector, shall stand set aside. In  other respects the order of the High Court  shall remain undisturbed. The appeal is  allowed accordingly."

Though strong reliance was placed by learned counsel for  the respondent on a decision in M.P.E.B. & Ors. v. Smt.  Basantibai (AIR 1988 SC 71) more particularly, paragraph 13  thereof, a bare reading of the decision shows that the same  did not relate to a case of tampering and, therefore, has no  application to the present case.  

Above being the position, the District Forum, State  Commission and the Commission were not justified in holding  that a reference in terms of Section 26(6) of the Act was called  for. The orders passed by these authorities are quashed.

The appeal is allowed but without any order as to costs.