Holding

Section 26(6) applies only when a meter is incorrect (running slow/fast) and not when it is completely non‑functional; therefore, the licensee may bill on average consumption for the burnt‑meter period but cannot raise additional demand for the period of alleged inaccuracy without an Electrical Inspector’s estimate.

Summary

Bombay Electricity Supply and Transport Undertaking (the licensee) supplied electricity to Laffans (India) Pvt. Ltd. (the consumer). Several meters installed at the consumer's premises either burnt out or were found running slow, leading the licensee to replace them without referring the dispute to the Electrical Inspector under Section 26(6) of the Electricity Act, 1910. The licensee later raised a demand based on the average consumption of the previous year for the period when the meter was burnt and also sought additional demand for the period when the meter was alleged to be incorrect. The Supreme Court held that Section 26(6) applies only when a meter is incorrect (running slow or fast) and not when it is completely non‑functional, so billing on average consumption for the burnt‑meter period is permissible, but additional demand for the period of alleged inaccuracy is not without an Electrical Inspector’s estimate. Accordingly, the appeal was allowed in part, directing the licensee to retain the demand for the burnt‑meter period and to forgo any extra demand for the other period.

Issues considered

Whether Section 26(6) of the Electricity Act, 1910 is attracted when a meter is burnt (non‑functional) versus when it is running slow or fast.
Whether the licensee may raise a demand on the basis of average consumption for periods when the meter was non‑functional without referring the matter to the Electrical Inspector.
Whether the licensee can raise additional demand for periods when the meter was alleged to be incorrect without a determination by the Electrical Inspector.

Legislation cited

Electricity Act, 1910s. 26(6)
Indian Electricity Rules, 1956s. Rule 57

Subjects

electricity supplymeterSection 26(6)demand noticeaverage consumptionelectrical inspectormeter burntconsumer disputeLetters Patent Appeal

Judgment

-- BOMBAY ELECTRIC SUPPLY AND TRANSPORT
UNDERTAKING
A
v.
LAFF ANS (I) PVT. LTD. AND ANR.

APRIL 21, 2005
B
[R.C. LAHOTI, CJ., DR. AR. LAKSHMANAN AND
G.P. MATHUR, JJ.]

Electricity Act, 1910-Section 26(6)-Electric meter-Burnt on two
occasions and allegedly found slow on two occasioris-Replacement ofmeters c
by electricity supplier without referring the matter to Electrical Inspector-
Bill revised on the basis ofaverage consumption in preceding year and demand
raised-Challenged in Writ Petition-Dismissal by Single Judge of High
Court-LPA allowed by Division Bench of High Court-On appeal, held:
Section 26(6) is applicable for the period when the meter was alleged to be
D
incorrect, but is not applicable when the meter became non-functional due to
its getting burnt-Hence, demand on the basis of average consumption of
preceding year is justified for the period when the meter was burnt-But not
for ihe period when the meter was found incorrect due to non-compliance with
the provision u/s. 26(6)-Electricity Rules, 1956-Rule 57.
E
Appellant supplied electricity to the respondent-Consumer. One of
the meters installed at the premises of the respondent got burnt. Afte.r its
replacement, on routine checking, the same was found to be running slow

-- and hence was replaced. Again the replaced meter was found to be slow
and was further replaced which also got burnt. Appellant had removed
the meters without referring the matter to the Electrical Inspector u/ F
s.26(6) of Electricity Act, 1910. During the period for which the meter
was alleged to have recorded incorrect reading, bills had been regularly
sent on the basis of reading, recorded by meter and the same were duly
paid by the respondent. Appellant revised the bills on the basis of pattern
of consumption in the preceding one year and raised demand. As the G
respondent did not pay the amount, a notice of disconnection was sent.
Challenging the notices of demand and disconnection, the respondent
filed Writ Petition. The same was dismissed by Single Judge of High
Court on the ground that since the respondent-consumer had not raised
the dispute u/s. 26(6), appellant was entitled to replace the defective
'785 H
786 SUPREME COURT REPORTS (2005] 3 S.C.R.

A meter and raise demand on the basis of average consumption in the
previous year. Allowing the Letters Patent Appeal of the respondent,
Division Bench of the High Court held that since the correctness of the
meter was disputed by the appellant, it should have referred the dispute
u/s. 26(6), and that appellant having not done so, it was not open to it to
B raise the bill on the basis of average consumption of preceding year.
Hence the present appeal.

Disposing of the appeal, the Court

HELD : 1.1. The applicability of Section 26(6) of Electricity Act,
1910 is attracted only when the meter is not correct. The provision
C contemplates a meter which is either running slow or fast with the result
that it does not register the correct amount of energy supplied. 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,
D 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.
[793-E-Fl

E 1.2. Section 26(6) will have 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.
[792-E-Fl
F
2.1. In the present case, for period for which the readings could not
be recorded or retrieved because the meter was burnt there is nothing
wrong in the licensee having raised the demand based on the average
consumption for the similar period during the previous year. It is a
G reasonable basis. But for the period for which, the meter was not correct,
none of the parties has referred the. dispute to the Electrical Inspector.
The meter though it is alleged by the appellant to have remained not
correct, readings have been regularly recorded, bills raised and also paid
by the consumer-respondent. According to Section 26(6), the readings
would bind the appellant and·the Consumer-respondent both. It has never
H been the case of the appellant at any stage that the meter was not correctly
BOMBAY ELECTRJC SUPPLY AND TRANSPORT v. LAFFANS (I) PVT.LTD. 787

recording the consumption of electricity on account of being non-functional A
due to any fraud committed or device or trick adopted by the consumer-
respondent or that the body seal of the meter was found broken or ·
tampered with. The respondent was accepting and honouring the demands ,
raised by the appellant and, therefore, respondent cannot be expected to ,
have raised a dispute and sought for a reference for determination by·
Electrical Inspector. The appellant could not have, therefore, revised the. B
demand for such period based on average consumption during the
previous year. The right to raise additional bills stands lost by the appellant'
for its failure to proceed in accordance with Section 26(6) of the Electricity
Act, 1910. (795-C; 795-E-H)

2.2. According to the proviso appended to sub-section (4) of Sectio~
c
26, the licensee cannot take off or remove any such meter as to which
difference or dispute of the nature described in sub-section (6) has arisen
until the matter has been determined by the Electrical Inspector. T~e
purpose is to preserve the evidence. In the present case, the meters said
to be incorrect have been removed and replaced by the appellant. D
Admittedly, no dispute has been raised and referred to the Electrical
Inspector. The most material evidence being the meter itself has been lost
by the act of the appellant in removing the incorrect meter. The appellant
cannot be permitted to take advantage of its own act and omission - lhe
act of removing the meter and the omission to make a reference to the E
Electrical Inspector. (795-H; 796-A-CI

MP. Electricity Board v. Basantibai, (1988) l SCC 23; Belwal Spinning
Mills Ltd and Ors. v. U.P. State Electricity Board and Anr., (19971 6 SCC
740 and J.MD. Alloys Ltd. v. Bihar State Electricity Board, (2003) 5 SCC
226, relied on. F·
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3615 of 1996.

From the Judgment and Order dated 10.3.95 of the Bombay High Court
in A. No. 814 of 1993.

Dushyant Dave, K. Radhakrishnan, Arun Francis and P.H. Parekh'with
G
him for the Appellant. '

Sudhir Kumar Gupta and Anurag Pandey for the Respondents.

The Judgment of the Court was delivered by
H
788 SUPREME COURT REPORTS (2005) 3 S.C.R.

A R.C. LAHOTI, CJ. This appeal, by special leave, has been preferred
against the judgment dated 10.3.1995 ofthe Division Bench of Bombay High
Court, by which the Letters Patent Appeal filed by first respondent, Laffans
(India) Pvt. Ltd. was allowed, the judgment dated 17.3.1993 of the learned
Single Judge dismissing the writ petition was set aside and the notice of
B disconnection of electricity supply issued by the appellant was quashed.

The appellant, Bombay Electricity Supply and Transport Undertaking
is an undertaking of Municipal Corporation of Greater Bombay (second
respondent) and is a licensee under the Indian Electricity Act, 1910 (hereinafter
referred to as "the Act"). The appellant was supplying electricity to the first
C respondent, Laffans (India) Pvt. Ltd. who had a showroom· at Veer Nariman
Road, Bombay, for carrying on business of retail trade in textiles. The appellant
had installed two meters at the premises of the first respondent, for measuring
the quantity of electricity consumed : one - by lights, fans and other small
fixtures, and, the other - by the air-conditioning unit. The dispute here
relates to the meter measuring the quantity of electricity consumed by the air-
D conditioning unit. Initially, meter No. 850050 had been installed but the same
got burnt and a new meter bear.ing No. 860154 was installed on 2.5.1988.
According to the appellant, in a routine checking the said meter was found
to be running slow and accordingly the first respondent was infonned on
14.6.1989 that the meter would be replaced and revised bills would be· issued.
E Thereafter, a new meter bearing No. 890324 was installed on 30.6.1989. This
meter was also found to be running slow and accordingly the first respondent
was informed on 25.9.1989 that the meter would be replaced and revised
bills would be issued. On 18.12.1989, a new meter bearing No. 880272 was
installed. This also got burnt and was replaced by meter No. 890272 on
30.12.1989. The appellant then taking the preceding one year's Pl?riod i.e.
F from 2.2.1987 to 1.2.198~ as the base period and on the pattern of consumption
recorded therein, revised the bills and sent a demand notice dated 5.9.1990
for Rs. 2, 19,602/73 paise for the period 1.2.1988 to 30.12: 1989 on the footing
that the first respondent had been undercharged by l,13,212 units. A perusal
of the contents of the demand letter shows that for the period for which the
G meter is alleged to have recorded incorrect readings, bills were sent month
by month on the basis of readings as recorded ~by the meter. As, according
to the appellant, the first respondent had been undercharged due to the meter
not accurately recording the readings, a revised bill, based on the average
consumption of the respondent for the period 2.2.1987 to 1.2.1988 i.e. for
such period for which the meters had recorded incorre~t readings was raised.
H As the first respondent did not pay the amount, a notice of disconnection was
BOMBAY ELECTRIC SUPPLY AND TRANSPORT ''· LAFFANS (l) PVf. LTD. [LAHOTI, CJ.] 789

sent to it on 25.10.1990 calling upon it to pay the amount within a week, A
failing which the electricity supply would be disconnected. The first respondent
then challenged the notice of demand and disconnection by filing a writ
petition which was dismissed by a learned Single Judge of the High Court on
17.8.1993. The Letters Patent Appeal preferred by the first respondent was
allowed by the Division Bench and the demand notice was quashed.
B
The learned ~ingle Judge held that it was for the consumer (first
respondent) to raise ·a dispute before the Electrical Inspector under Section
26(6) of the Indian Electricity Act in case he ch~Jlenged or disputed the
assertion of the appellant that the meter was not recording correctly and was
running slow. Since the consumer did not raise any such dispute, the appellant C
was entitled to replace the meter if the same was defective and to raise a
demand on the basis of average consumption in the past period. The Division
Bench has reversed this view and has held that if the appellant disputed the
correctness of the meter, it should have referred the dispute to the Electrical
Inspector as provided in Section 26(6) of the Act and it was for the Electrical
Inspector to estimate the amount of energy supplied to the consumer. The n·
appellant having not referred any such dispute to the Electrical Inspector and
consequently no estimate of the energy supplied by it to the first respondent
(consumer) having been made, it was not open to the appellant to raise a bill
on the basis of average of past one year's consumption. The Division Bench
further held that the demand notice was for a period exceeding six months
immediately preceding the date thereof and, therefore also, the same was
.E
illegal.

The main question, which requires consideration, centres around sub- ·
section (6) of Section 26 of the Indian Electricity Act, 1910 - whether the .·
applicability of said provision is attracted to the facts and circumstances of, F
the present case and, if so, to what extent?

The relevant parts of Section 26 of the Indian Electricity Act, 1910 and'
R·Jle 57 of the Indian Electricity Rules, relevant for the purpose of this
judgment, are reproduced hereunder :-
G
The Indian Electricity Act, 1910

"26. Meters.- (I) In the absence of an agreement to the contrary, tile
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 H
790 SUPREME COURT REPORTS (2005] 3 S.C.R.

A 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
B
(3) xxx xxx xxx

(4) The licensee or any person duly authorized by the licensee shall,
at any reasonable time and on infonning the consumer of his intentio~,
have access to, and be at liberty to inspect and test, and for that
c purpose, Jf he- thinks fit, take off and· remove, any meter referred to
in sub-section (I); 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
D 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
E described in sub-section (6) has arisen until the matter has been
detennined as therein provided.

(5) xxx xxx xxx

(6) Where any difference or dispute arises as to whether any meter
referred to in sub-section (I) is or is not correct, the matter shall be
F decided, upon the application of either party, by an Electrical Inspect;
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
G not, in the opinion of such Inspect, 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 Inspect under this sub-section, he shall give to the other
H party not less than seven days' notice of his intention so to do.
BOMBAY ELECTRIC SUPPLY AND TRANSPORT v. LAFFANS (I) PVT.LTD. [LAHOTI, CJ.J 791

(7) xxx xxx xxx A
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 B
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 C
consumer's premises. - (I) 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 D
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.

Provided that for extra high voltage consumers the limit or error shall
be = I per cent.
E
(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: F
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 G
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 H
792 SUPREME COURT REPORTS [2005] 3 S.C.R.

A 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 examill'e, test and regulate the
B 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."

The abovesaid provisions have been the subject-matter of consideration
by this Court in three cases which have been brought to our notice. They are
C M.P. Electricity Board v. Basantibai, (1988) l 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
D 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
Mil/s'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
· E 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. Sec~ion 26(6) will have no applicability (i) if the
consumer is found to have committed a fraud with the licensee and thereby
F ill~gally 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
G 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).

H What is a correct meter? The language of sub-section (6) of Section 26
BOMBAY ELECTRIC SUPPLY AND TRANSPORT v. LAFFANS (I) PVT.LTD. [LAHOTI, CJ.] 793

starts with - "where any difference or dispute arises as to whether any A
meter referred to in sub-section (I) is or is not correct...". The dictionary
meaning of the word "correct" is: Adhering or conforming to an approved
or conventional standard; Conformiitg to or agreeing with fact; Accurate.

As to what would be a "correct" meter, there is sufficient indication ln
the Act and the Indian Electricity Rules, 1956 in the explanation given at th.e B
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-functiona.I
on account of any fault or having been burnt, it will not register the suppl~
of energy at all. Since a burnt meter does not record any supply of energy1
it virtually means "no meter". C
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 containe~ 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 D
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 ·E
energy supplied to the consumer by determining the extent or percentage of
error in recording the supply, 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 F
whatsoever.

In Belwal Spinning Mills 's case, this Court has held inter alia :-

( 1) Any difference or dispute arising between the licensee and the
consumer,da.s to whether anby meter ob·as.recorded
· or is recording G
correct rea mg or not, can e raised y either party and referred,
upon the application of either party, for decision by an Electrical
Inspector.

(2) If the Electrical Inspector comes to the finding that the meter
has ceased to be 'correct', he has to determine the quantum of H
794 SUPREME COURT REPORTS [2005) 3 S.C.R.

A electricity consumed for the statutory period of six months,
referred to in sub-section (6). The determination made by the
Electrical Inspector on twin questions (i) whether meter was
correct or not, and (ii) if the meter was not correct then the
estimate of supply of electricity to the consumer for the statutory t
period of six months, is binding on the licensee and the consumer
B (subject only to judicial review by a competent Court).
(3) For any other period anterior to the statutory period, the
legislature has in no uncertain terms indicated in the latter part
of sub-section (6) that reading registered in the disputed meter
will not only be presumed to be correct but such reading shall
c be conclusive proof of the quantity of electricity consumed or
the amount of electricity supplied to the consumer. For any
period other than the statutory period of six months, referred to
in sub-section (6), the legislature has intended by the amendment
of sub-section (6) of Section 26 (as made by Act 32 of 1959) ..,

D to put an end to such contest between the licensee and the
consumer and has set at rest any dispute relating to any period
anterior to the statutory period on estimation by providing that
)-
in a case of dispute as to functioning of meter, the reading in the
meter for the period beyond the period of statutory estimation,
will be final.
E
(4) Any unilateral decision of either of the parties about the correct
status of the meter is not to be accepted by the other party if the
other party raises objection as to the status of the meter.
(5) The estimate to be prepared by the Electrical Inspector, on the
dispute being referred to him, may go only· up to six months
F
prior to the date of raising the dispute and reference but such ~

estimate will only cover that period prior to raising the dispute
during which, according to the Electrical Inspector, the meter
had ceased to be correct.
(6) The estimate of supply of energy by the Electrical Inspector is
G to be made for a period not exceeding six months calculated
backwards from the date of reference to the Electrical Inspector. I-
----l-
Thus, it is the date of reference to Electrical Inspector which is
conclusive of the period of six months; the date of inspection,
the date of raising dispute and the date of adjudication are
H immaterial. (Here, we may add, that such period of six months
BOMBAY ELECTRIC SUPPLY AND TRANSPORT "· LAFFANS (I) PVT.LTD. [LAHOTI, CJ.] 795

shall apply). A
The above said deductions, drawn in the case of Belwal Spinning Mills,
are accompanied by in-depth analysis of several provisions of the Act, the
historical background and practical aspects of supply and consumption. of
electricity. As we find ourselves in entire agreement with the abovesaid
statement of law, it is not necessary for us to make a detailed independent B
discussion of our own of the reasons as the same is available in the case of
Belwal Spinning Mills.

In the present case, the demand raised by the appellant against the first
respondent can be divided into two parts: (i) for the period during which the
meter was burnt, and (ii) for the period for which the meter was not correct. C
For the period for which the readings could not be recorded or retrieved
because the meter was burnt there is nothing wrong in the licensee having
raised the demand based on the average consumption for the similar period
during the previous year. It is a reasonable basis. Nothing has been brought
on record by respondent No. I to show or even suggest that any basis other D
than the one adopted by the appellant could have been more reasonable and
more appropriate for calculating the quantity of electricity consumed during
the period of no-meter or no-meter-reading.

For the period for which, according to the appellant, the meter was not
correct, none of the parties has referred the dispute to the Electrical Inspector. E
The meter though it is alleged by the appellant to have remained not correct,
readings have been regularly recorded, bills raised and also paid by the
consumer-respondent No. I. According to Section 26(6), the readings would
bind the appellant and respondent No. I both. It has never been the case of
the appellant at any stage that the meter was not correctly recording the F
consumption of electricity on account of being non-functional due to any
fraud committed or device or trick adopted by the consumer-respondent No.
l or that the body seal of the meter was found broken or tampered with. The
respondent No. l was accepting and honouring the demands raised by the
appellant and, therefore, respondent No. I cannot be expected to have raised
a dispute and sought for a reference for determination by Electrical Inspector. G
The appellant could not have, therefore, revised the demand for such period
based on average consumption during the previous year. There is yet another
reason why the entitlement of the appellant to recover charg~s from the
respondent No. l may have to be denied. According to the proviso appended
to sub-section (4) of Section 26, the licensee cannot take off or remove any H
796 (2005] 3 S.C.R.

-
SUPREME COURT REPORTS

A such meter as to which difference or dispute of the nature described in sub-
section (6) has arisen until the matter has been determined by the Electrical
.Inspector. The purpose is t~ preserve the evidence. The dispute shall be
expeditiously disposed of by the Electrical Inspector by applying scientific
method of investigation to find out if the meter was incorrect and if so then
what was the extent of error. In the present case, the meters said to be
B incorrect have been removed and replaced by the appellant. Admittedly, no
dispute has been raised and referred to the Electrical Inspector. The most
material evidence being the meter itself has been lost by the act of the
appellant in removing the incorrect meter. The appellant caf!not be permitted
to take advantage of its own act and omissiori-.he act of removing the meter ·
C and. the omission to make a reference to the Electrical Inspector.
The material available on record before us does not enable the separation
of the impugned demand by bifurcating the same into two on the criterion
discussed hereinabove. The appellant shall have to be left free to examine its
records and then revise its demand. We may clarify that the demand raised
D by the appellant based on the average consumption during the similar period
in the last year is justified,· in the facts and Circumstances of the present case,
for the period for which the reading was lost on account of the meter having
r-
1
. j
been found burnt. Accordingly, the calculation based on the record of
consumption for the corresponding period from the previous year shall hold
E good. The appellant shall raise a demand accordingly and the first respondent
shall be bound to honour the same. So far as the period for which the meter
is said to be incorrect, the demand has not been revised by basing it on the
finding arrived at by the Electrical Inspector and hence is not available to be
revised. The meter is alleged by the appellant to be not correct and yet the
appellant has not made a reference to the Electrical Inspector under Section
F 26(6). The appeuant cannot now be allowed to raise an additional demand
over and above the demand raised through the bills which were issued for
that period and paid by the first respondent. The right to raise additional bills
stands lost by the appellant for its failure to proceed in accordance with
Section 26(6) of the Electricity Act, 1910.

G We direct accordingly and dispose of the appeal in the above terms
with no order as to the costs.

K.K.T. Appeals disposed of.