Suspicion Cannot Replace Proof in Power Theft Cases: Supreme Court
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Shielding electricity consumers from arbitrary disconnection and financial penalties, the Supreme Court has ruled that power distribution companies cannot invoke theft provisions under section 135 of the Electricity Act, 2003 without unequivocal, recorded evidence of dishonest abstraction in the initial inspection report. Rebuking power utilities for wielding penalty powers on mere conjecture, the top court established that strong suspicion can never substitute strict criminal proof required to allege electricity theft.
A bench comprising Justice Aravind Kumar and Justice Vipul M. Pancholi set aside a High Court Division Bench order, upholding a single judge's verdict that quashed a provisional assessment order of over ₹3.23 crore against an industrial consumer.
Key Takeaways
Inspection Reports Must Record Evidence: A provisional assessment for theft cannot stand unless the initial inspection report explicitly details clear, objective evidence of theft.
Suspicion Is Not Proof: Mere minor physical discrepancies or accessible meter cubicles cannot meet the high criminal threshold of mens rea under Section 135.
Writ Remedy Available: High Courts can entertain petitions under Article 226 of Constitution of India, 1950 against provisional assessment orders, as statutory appeals under Section 127 apply only to final assessment orders.
Mandatory Seizure Rules: Failure by inspecting teams to seize alleged tampered meters, wires, or materials under proper memo invalidates subsequent penal actions.
Court Observations and Rationale
Examining the statutory scheme, the Court emphasized that proceedings under Section 135 of the Electricity Act, 2003 fall squarely within criminal jurisprudence where dishonest intention (mens rea) and actus reus must be established beyond reasonable doubt. Distinguishing civil assessment of unauthorized use under Section 126 from criminal theft under Section 135, the Court relied on precedents like Southern Electricity Supply Co. of Orissa Ltd. v. Sri Seetaram Rice Mill, W.B. State Electricity Distribution Co. Ltd. v. Orion Metal (P) Ltd., and Kerala SEB v. Thomas Joseph.
The Court noted that the inspection report in question explicitly recorded that all plastic and paper seals were intact and doors could not be opened without breaking seals, yet alleged theft solely because the metering unit was accessible. Rejecting the state utility's defense of revenue protection, the Court held that giving arbitrary powers to disconnect electricity on vague reports turns statutory provisions into an abuse of process.
The Court, in its reasoning, observed: "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. 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."
Ratio
A provisional assessment order for electricity theft under Section 135 of the Electricity Act, 2003 is unsustainable in law unless the foundational inspection report contains a clear finding of detected theft along with detailed material evidence recorded at the time of inspection. In the absence of statutory seizure and evidence demonstrating dishonest intention, mere physical accessibility or minor equipment discrepancies cannot establish theft.
Background
The dispute arose when officers of Jharkhand Urja Vikas Nigam Limited inspected the premises of M/s. Himadri Steel Pvt. Ltd., a company registered under the Companies Act, 1956. Following the inspection, an FIR was lodged under Sections 379, 420, and 353 of the Indian Penal Code, 1860 (now covered under Bhartiya Nyaya Sanhita, 2023) read with Sections 135, 137, and 138 of the Electricity Act, 2003. The utility disconnected the power supply and issued a Provisional Assessment Order of ₹3,23,71,524/-.
The consumer challenged this before the High Court of Jharkhand under Article 226 of the Constitution of India, 1950, arguing non-compliance with Clause 11 of the Jharkhand (Electricity Supply Code) Regulations, 2015 and the Electricity Act, 2003. A Single Judge quashed the assessment order finding no conclusive evidence of theft. However, a Division Bench reversed this decision, holding that the statutory remedy under Sections 126 and 127 of the Electricity Act, 2003 barred a writ petition and that inspection reports need only show prima facie material.
Restoring the Single Judge's decision, the Supreme Court clarified that while earlier enactments like the Electricity Act, 1910, Electricity (Supply) Act, 1948, and Electricity Regulatory Commissions Act, 1998 were replaced to streamline distribution, procedural safeguards governing search and seizure akin to Section 135(4) invoking the Code of Criminal Procedure, 1973 must be strictly adhered to before penalizing consumers.
Case Details:
Case No.: Special Leave Petition (Civil) No. 33179 of 2025
Neutral Citation: 2026 INSC 851
Case Title: M/S. Himadri Steel Pvt. Ltd. v. Jharkhand Urja Vikas Nigam Limited & Ors.
Source: 2026 CaseBase(SC) 786
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