J.M.D. ALLOYS LTD.versusBIHAR STATE ELECTRICITY BOARD AND ORS.

A                               J.M.D. ALLOYS LTD.
                                            v.
               BIHAR STATE ELECTRICITY BOARD AND ORS.

                                     MARCH 6, 2003

B

                                                                                       --
             [S. RAJENDRA BABU, D.M. DHARMADHIKARI AND
                           G.P. MATHUR, JJ.]

                                                                                       I
                                                                                           ~,,

          Electricity laws:

C         Electricity Act, 19 I 0:

          Section 26(6)-Dispute with regard to tampering ofseal ofCT/PT uni/-
    Scope and ambit of-Held: Such dispute is outside the ambit of section 26(6)
    and Electrical Inspector has no jurisdiction to try such cases-Electrical
D   Inspector can only decide whether the meter is correct and is recording the
    reading accurately.

          Sections 39 and 44-Case of theft of ene;·gy-Trial-Object and purpose
    of-Held: Is to punish and sentence the person who is alleged to have
    committed the offence-Trial of accused in criminal case has no bearing on
E   assessment made in accordance with the tariff of the value of electricity
    dishonestly abstracted or consumed.

          Bihar State Electricity Tariff:

          Clause 16.9-Detection of unauthorized load-Counting the period of
F   dishonest abstraction of energy as I 80 days when there is no evidence to
    establish the period-Justification of-Held: Assessment justified

           Clause 16.9 and 16. 10.3-Dishonest abstraction-Assessment of fael
    charge at thrice the rate per unit-Justification of-Held: Clause 16. 10.3 is
    a separate clause which deals with fuel surcharge and it nowhere lays down
G   that this additional surcharge will be levied at thrice the rate per unit of the
    Tariff, thus levy offuel surcharge at thrice the rate per unit not justified.

          Constitution of India, 1950:

          Article 226-Scope of-Order of Chief Engineer-Writ petition against
H                                           690
                     J.M.D. ALLOYS LTD. v. BIHAR STATE ELECTRICITY BOARD           69 J
      the order--He/d: High Court not hearing an appeal against the decision of A
      Chief Engineer-Hence scope of inquiry is limited-Judicial review.

             Petitioner-factory has a high tension industrial connection of electricity
      for running induction furnaces. Electricity Board inspected the petitioner's
      factory premises and found the seal fixed on CT/PT box tampered. FIR was
      lodged. Thereafter, Electricity Board issued a bill. Petitioner challenged the       B

---   bill. As directed by High Court, Electricity Board issued a notice. After giving
      an opportunity to the petitioners, Chief Engineer passed an order holding that
      Clause 16.9 (b) and (c) of Tariff is attracted and the petitioner is liable to pay
      compensatory bill in terms of the Tariff and also issued a fresh bill. Petitioner
      challenged the bill. Single Judge dismissed the writ petition. Petitioner filed a    C
      letters patent appeal. Division Bench partly allowed the same holding that
      the petitioner is liable to pay electricity charges in accordance with clause
      16.9 oi the Tariff. However, with regard to fuel surcharge it held that the
      same cannot be levied at thrice the rate in accordance with Clause 16.9 of
      the Tariff. Hence the present appeals.
                                                                                           D
            Petitioner-factory contended that t~ey had not tampered with 1the seal
      of CT/PT unit since on inspection no irregularity had been found; that there
      was no material or evidence to show that the petitioner interfered with the
      meter which may have the effect of showing lesser consumption of energy or
      there was presence of artificial means which would have rendered abstraction         E
      of electrical energy possible, thus the provisions of Clause 16.9 of the Tariff
      could not be made applicable and the electricity bill issued to the petitioner
      is incorrect; that the faulty recording of the meter has to be judged from the
      standpoint of Section 26(6) of the Electricity Act, 1910 and the matter should
      have been referred to Electrical Inspector; that after registration of a criminal
      case, case was investigated and a final report was submitted, which was              F
      accepted by the Magistrate and as a result of this order, the petitioner stands
      exonerated from the charge of theft of electricity; that there is no justification
      for counting the period of dishonest abstraction of energy as 180 days (six
      months); and that the findings recorded by the Chief Engineer are wholly
      incorrect as instead of basing his order on the actual production of steel, he       G
      has gone by the capacity of the furnaces.

            Respondent-Electricity Board contended that Section 26(6) of the Act
      has no application to a case where the seal fixed on CT/PT terminal box had
      been tampered with and the recording of consumption by the meter had been
      effected by recourse to artificial means; that the surcharge being part of the       H
    692                     SUPREME COURT REPORTS                    [2003] 2 S.C.R.

A electricity bill, the Division Bench of the High Court had erred in holding
    that the same was chargeable per unit basis and not at thrice the value thereof;
    and in view of Clause 16.9 of the Tariff, the fuel surcharge has also to be
    levied at three times the units assessed; and that the Chief Engineer after
    considering all the relevant material and circumstances has recorded a
B   categorical finding that the seal of the CT/PT terminal box had been tampered
    with and the petitioner had exceeded the contracted load and had also
    dishonestly abstracted electrical energy to a very large extent which are not
    open to ch:;llenge in proceedings under Article 226 of the Constitution.

          Dismissing the appeal, the Court

c         HELD: 1.1. In the instant case, it has been found that the seal on the
    CT/PT terminal box had been tampered with and the natural working of the
    meter had been affected by taking recourse to external devices. A dispu~e of
    this kind cannot be referred to an Electrical Inspector, thus the submission
    that the dispute regarding tampering of the seal of CT/PT terminal unit should
D   have been referred to the Electrical Inspector is rejected. (697-C; 700-G]

          Madhya Pradesh Electricity Board and Ors. v. Bansantibai, (1988] 1 SC
    23, referred to.

          1.2. The mere acceptance of final report by the Magistrate cannot
E   amount to a finding by the criminal court that theft of electricity was not
    committed. The accused was not even summoned, no charge was framed nor
    any evidence was recorded. In such a situation, it cannot be held that the
    criminal court has recorded any finding to the effect that the petitioner has
    not committed theft of electricity. That apart, the purpose of a trial under
    Section 39/44 of the Electricity Act is entirely different and the object is to
F   punish and sentence the person who is alleged to have committed the offence.
    The trial of an accused in a criminal case can have no bearing in the matter
    of assessment made in accordance with the tariff of the value of electricity
    dishonestly abstracted or consumed. Therefore, the submission raised on the
    basis of alleged acceptance of the final report in the criminal case is rejected.
G                                                                     (703-E, F, GI

          1.3. In cases of theft of electricity or dishonest abstraction of electrical
    energy the assessment for compensation has to be done on the basis of a
    formula wherein 'D' stands for number of days for which the pilferage took
    place and where there is no possible evidence to establish the period, this factor
H   can be taken to be equivalent to 180 days. Similarly, in a case where connected
             J.M.D. ALLOYS LTD. v. BIHAR STATE ELECTRICITY BOARD        693
load is more than the sanctioned load, the assessment charge has to be A
done on the basis of a formula where 'C' stands for six months or the
number of months or part thereof elapsed from the date of connection/
installation, whichever is less. Therefore, under the Tariff in both the
cases the period can be taken as 180 days or six months. It is on the basis
of this formula that the assessment for consumption of units has been B
done for 180 days. It has been held that the terms of conditions for
supply of electricity to consumers notified by the Board m exercise of
power under the Act and made applicable to all consumers availing supply
of electricity, are statutory in character. Thus, Electricity Board rightly
applied Clause 16.9 of the Tariff and there is no infirmity in the assessment
 made and the bill prepared in pursuance thereof. [702-F, G, H; 703-A)        C
     Hyderabad Vanaspathi Ltd. v. A.P. State Electricity Board and Ors.,
(1998) 4 sec 470, referred to.

      1.4. The formula for caiculating the fuel surcharge is a long and
complicated one and is given in Clause 16.10.3 of the Tariff. A host of         D
factors have to be taken into ~onsideration and they depend upon many
yariables. Clauses 16.9 and 16.I0.3 are separate and distinct clauses in
the Tariff. Clause 16.9 lays down the formula for calculating the value of
the electrical energy abstracted or consumed by a e;onsumer by exceeding
the contracted load or by creating obstruction in running of meter which
is charged at thrice the rate per unit of the Tariff applicable to the          E
consumer excluding the consumption recorded by the meter and the
latter shall be charged at the appropriate Tariff rates. Clause 16.10.3
which deals with fuel surcharge and it nowhere lays down that this
additional surcharge will also be levied at thrice the rate per unit of the
Tariff. The two clauses namely 16.9 and 16.10.3 have to be read separately      p
and there being no specific provision for assessing the fuel surcharge at
thrice .the rate per unit, it is not possible to hold that in such a case the
fuel surcharge should also be charged at thrice the rate per unit.
                                                     [705-G, H; 706-A, B, CJ

      1.5. In terms of the order of the Chief Engineer the bill was prepared G
which was challenged by the petitioner by filing the writ petition before
the High Court under Article 226 of the Constitution. The High Court
was not hearing an appeal against the decision of the Chief Engineer.
The scope of inquiry in such a matter is a limited one. There is no dispute
that the Chief Engineer issued notice to the petitioner mentioning all the H
    694                      SUPREME COURT REPORTS                    [2003] 2 S.C.R.

A   relevant facts to which the petitioner gave a reply. The petitioner was
    also afforded an opportunity of hearing and it appeared through a counsel,
    who made submissions and thereafter the Chief Engineer passed the
    order. The Chief Engineer has taken into consideration relevant factors
    and the findings recorded by him are clearly borne out from the material
B   available before him. It cannot be said that the order passed by him is
    unreasonable or perverse in any manner. The High Court, therefore,
    rightly took the view that the order passed by the Chief Engineer that
    the compensatory bill is to be prepared in accordance with Clause 16.9 of
    the Tariff could not be interfered with in a writ petition under Article
    226 of the Constitution. (705-C, D, E; 704-A, BJ
c        State of U.P. and Ors. v. Maharaja Dharmander Prasad Singh, AIR
    (1989) SC 997 and Apparel Export Promotion Council v. A.K. Chopra, JT
    [1999) 1 SC 61, referred to.

            CIVIL APPELLATE JURISDICTION : Civil Appeal No. 8394 of
D   2002.

          From the Judgment and Order dated 18.4.2000 of the Patna High Court
    in L.P.A. No. 1665 of 1999.

                                         WITH
E
            C.A. No. 8395 of 2002.

         Gopal Subramanium, V.R. Reddy, Santosh Kumar, Chandra Kant,
    Avinash Kumar, Rakesh K. Sharma, Mihir Kr. Jha and Navin Prakash for the
    appearing parties.
F
            The Judi;1nent of the Court was delivered by

           G.P. MATHUR, J. These appeals are directed against the judgment
    and order dated 18.4.2000 of a Division Bench of Patna High Court, by
    which the Writ Petition preferred by Mis. J .M.D. Alloys Ltd. was partly
G   allowed and the Bihar St1te Electricity Board was directed to serve a fresh
    bill as per the observations made in the judgment and to restore the electricity
    connection within two days of the payment of the said bill.

           Mis. J.M.D. Alloys Ltd. (hereinafter referred to as the petitioner) has
    a high tension industrial connection of electricity for running induction furnaces
H   for manufacturing steel ingots. The officials of the Bihar State Electricity
       J.M.D. ALLOYS LTD."· BIHAR STA TE ELECTRICITY BOARD [G.P. MATHUR, J.]   695

Board (hereinafter referred to as "the electricity board") inspected the             A
petitioner's factory premises 6n 26th and 27th August, 1999 and found that
the seal fixed on CT/PT box was tampered. An FIR was lodged at the
concerned police station on 27.8.1999 alleging that the petitioner had
committed theft of 6.96 lakh units and had thereby caused a loss of Rs.2.58
crores to the Electricity Board. The Electricity Board thereafter issued a bill
dated 31.8.1999 for Rs.8,~5,77, 131. This bill was challenged by the petitioner      B
by filing CWJC No. 8939 of 1999 before the High Court. The learned Single
Judge, who heard the writ petition vide his judgment/order dated 27.9.1999
directed that a show cause notice in the light of the observations made in the
judgment be given to the petitioner within a week and it will be open to the
petitioner to raise all its defences against the charge of committing theft of       C
electrical energy and/or drawing electrical energy at a load higher than its
contracted demand. It was further directed that the show notice shall be given
by the General Manager-cum-Chief Engineer, Central Bihar Area, Electricity
Board, Patna, or by ariy other officer of the Electricity Board of equal or
higher rank and he shall pass final order after giving an opportunity of
hearing to the petitioner. The liability of the petitioner was to be determined      D
afresh on the basis of the final order passed by the Chief Engineer.

       The Chief Engineer (Transmission) Bihar State Electricity Board
thereafter issued a notice dated 13.10.1999 to which a reply was given by the
petitioner on 20.10.1999. After affording an opportunity of personal hearing         E
and considering the reply, the Chief Engineer passed an order on 27.10.1999
holding that Clause 16.9 (b) and (c) of Tariff is attracted and the consumer
Mis J.M.D. Alloys Ltd. is liable to pay compensatory bill in terms of the
aforesaid clauses of the Tariff. In accordance with the decision of the Chief
Engineer, a fresh bill dated 29.10.1999 for Rs.7,85,77,131 was issued. This
bill was again challenged by the petitioner by filing a Writ Petition which          F
was dismissed by a learned Single Judge on 13.12.1999. Against the said
decision the petitioner preferred a Letters Patent Appeal which was partly
allowed by the Division Bench by the impugned judgment and order dated
18.4.2000. The Division Bench held that the petitioner is liable to pay
electricity charges in accordance with Clause 16.9 of the Tariff. However            G
with regard to fuel surcharge it was held that the same cannot be levied at
thrice the rate in accordance with Clause 16.9 of the Tariff, which permits
consumption of electricity to be assessed at thrice the rate per unit. Feeling
aggrieved by the aforesaid decision, Mis J.M.D. Alloys Ltd. have preferred
Civil Appeal No.8394 of 2002 and the Bihar State Electricity Board has
preferred Civil Appeal No.8395 of 2002.                                              H
    696                     SUPREME COURT REPORTS                   [2003] 2_ S. C.R.

A         As stated earlier, the Chief Engineer (Transmission), Bihar State
   Electricity Board, issued a notice dated 13.10.1999 to the petitioner. The
   notice was issued on the grounds, inter alia, that the inspection of the business
   premises of the petitioner was conducted from 14.15 hours to 20.30 hours on
   26.8.1999 and thereafter on the following day; that on examination of CT/PT
   unit and its terminal box, the seal bearing No.045660P which was put on CTI
B PT terminal box on 14.5.1999, was found to be tampered with and the signature
   of the authority was also not found on the same; that a seizure memo of the
        '
   tampered seal was prepared on the same day; that on account of the fact that
   the seal on the terminal box had been removed, it had become easily accessible
   to the consumer and by fiddling with the terminals, namely by removing the
C wires or putting wires of higher resistance, the flow of energy to the metering
   unit was manipulated to show a very low recording of both KVA and unit
   consumption; that the total capacity of induction furnaces on operation was
   12 M. T. for which energy requirement was 7200 KV A but the petitioner had
   entered into a contract demand of 4850 KV A and, therefore, the consumer
 . was engaged in theft of electricity and was consuming energy at a much
D higher load than the contracted demand; that the supplier of the furnaces to
   the petitioner, namely Megatherm Electronic Pvt. Ltd. had reported to the
   Director General of Police (Vigilance), Bihar State Electricity Board
   consumption equivalent to approximately 3000 KV A for running the furnaces
   exclusive of auxiliary load like water supply, cooling systems, cranes, etc;
E that the feasibility report given to the Electricity Board by the petitioner
   showed that the minimum required energy for each MT furnace was 500
   KV A for the furnace alone besides I 00 KV A for auxiliary load and thus 600
   KV A was required for each MT furnance; that the electronic meter showed
   that the power had been. consumed by the factory on an average basis of
   21.25 hours per day which runs into two shifts of 12 hours each having 40
F workers in each shift ar,::! the load and the capacity of two furnaces showed
   production of 3000 MT ingots every month and, therefore, the minimum
   consumption of power was 16.20 Iakh units per month whereas bills had
   been paid on an average of 9.24 lakh units per month; that the theft of power
   was further substantiated from the meter reading of J.D. Feeder at 33il I KV
G Air Force Sub-station Bihta and abo the c!?.im filed by the petitioner under
   clause 13 efthe agreement and on the basis of the aforesaid facts and material
   it was obvious that the petitioner had been committing theft of electricity on
   a massive scale by tampering with the seal of the CT/PT terminal cover. The
   petitioner was accordingly directed to show cause as to why a bill in terms
   of Clause 16.9 of the Tariff Notification be not raised. The petitioner give a
H reply to the show cause notice raising various pleas and denying that it had
      J.M.D. ALLOYS LTD. v. BIHAR STATE ELECTRICITY BOARD [G.P. MATHUR, J.]   697

committed any theft of electricity. It was pleaded that the meter had been A
regularly inspected by different teams of the Electricity Board but no tampering
of the seal of the CT/PT terminal cover had been found; that the furnaces can
operate only to the extent of 80% of its rated capacity; that the Electricity
Board itself had assessed the capacity of the connected load at 5100 KV A,
which was very near to the contracted demand; that the meter installed in the B
factory premises never recorded a maximum demand of more than the
contracted demand; that the assumption that 100 KVA per ton is required for
auxiliary load was not based on facts and that in the case of a high tension
industrial consumer the connected load is of no relevance because to constantly
monitor the load availed of by a high tension consumer a Trivector meter,
containing the maximum demand indicator is compulsorily installed. It was C
further submitted that the seal in CT/PT unit had not been tampered with and
the allegation regarding tampering of the seal was being investigated by the
Investigating Officer of the criminal case registered against the petitioner and
his report shall be considered by the Court of law at the appropriate time.

      The Chief Engineer after consideration of the material and the                D
submissions made held that the theft of electricity cannot be found physically
and this has to be worked out from evidences parameters and various
circumstances under which the consumer is availing power. He passed a
detailed order on 27.10.1999 and the relevant part of the findings recorded
by him are being reproduced below:
                                                                                    E
           "It appears from Annexure I of show-cause notice that two nos.
       of induction furnaces of six M.T. capacity each totalling 12 MT were
       in operation. This is supported by the facts with the inspection report
       that the total capacity of Transformer was 7230 KY A. The CTPT
       cover terminal seal which was found tampered was unsigned. There F
       were large number of officials of the Board including Executive
       Magistrates and therefore there is no reason to disbelieve that seal of
       terminal cover of CTPT was tampered. The capacity of the furnaces
       being 12 MT it is evidently clear that the power was used unauthorised
       by the consumer because the consumption recorded in the meter was
       much less than what it ought to have been on actual load i.e. 7200 G
       KVA (600 X 12 T). In this connection the Annexure-3 & 4 the
       vouchers of the purchase of induction furnace from Megatherm, show
       the capacity of induction furnace, 6 MT as 2500 KW i.e. equivalent
       to 3000 KVA therefore the load of 12 M.T. Furnace besides@ KVA/
       MT as auxiliary load totaling to 7200 KY A as the actual load. It is H
                                                                                          ).__


    698                       SUPREME COURT REPORTS                    [2003] 2 S.C.R.

A           not out of place to mention here that the induction furnace Association
            of Bihar has proposed and agreed that the load of induction furnace
            could be 600 KVA per M.T.

                 This is also brought to my notice that on average basis the power
             was consumed at the average period of21.25 hrs. per day. The factory
B            runs into two shifts with 40 workers in each shift. So far as the nos
             of days of pilferage is concerned, it has been rightly interpreted and
             assessed the maximum period of six months for the assessment of
             compensatory amount under clause 16.9 of Tariff.

                 The variant factors of the consumption as per formula i.e.
C            LEFXHED have been thoroughly taken care of in the formula provided
             in the Tariff.

                 From the facts and circumstances as set forth above, it is absolutely
             clear that clause 16.9 (b) and (c) of Tariff is attracted and the consumer
             Mis JMD Alloys is liable to pay the compensatory bill in terms of
D            clause 16.9 of Tariff."

            In accordance with the order of the Chief Engineer, a fresh electricity
    bill was prepared on 29.10.1999 for Rs.4,09,32,925 towards the cost of units
    of electricity and Rs.3,90,73,217 towards fuel surcharge. After adding the
    electricity duty and charges for rental of transformer and fuse replacement,
E   etc. a bill was issued for Rs.8,85,77, 131.

           Shri Gopal Subramanium, learned senior counsel for the petitioner, has
    submitted that the factory premises of the petitioner had been inspected on
    14.5.1999 and then again on 20.7.1999 and no irregularity of any kind had
F . been found on the said dates and, therefore, the allegation that the petitioner
    had tampered with the seal of CT/PT unit is wholly incorrect. There was no
    material or evidence to show that any effort had been made by the petitioner
    to interfere with the metering unit which may have the effect of showing
    lesser consumption of energy. Learned counsel has also submitted that in
    absence of any evidence relating to presence of artificial means which would
G have rendered abstraction of electrical energy possible the provisions of Clause
    16.9 of the Tariff could not be made applicable and the electricity bill issued
    to the petitioner is incorrect. It has also been urged that the last inspection of
    the petitioner's premises having been done on 20. 7.1999, there is no
    justification for counting the period of dishonest abstraction of energy as 180
H days (six months) and, therefore, the bill issued to the petitioner is for much
           l.M.D.ALLOYS LTD. r. BIHARSTATEELECTRICITYBOARD[G.P. MATHUR,!.]    699

     longer period which was not permissible in law. The learned counsel has          A
     further submitted that the findings recorded by the Chief Engineer are wholly
     incorrect as instead of basing his order on the actual production of steel, he
     has gone by the capacity of the furnaces. Shri Subramanium has also urged
     that the faulty recording of the meter has to be judged from the standpoint
     of Section 26(6) of the Indian Electricity Act, 1910 and the matter should       B
     have been referred to Electrical Inspector.

            Shri V.R. Reddy, learned senior counsel for the Electricity Board, has
     submitted that Section 26(6) of the Indian Electricity Act has no application
     to a case where the seal fixed on CT/PT terminal box had been tampered with
     and the recording of consumption by the meter had been effected by recourse C
     to artificial means. Learned counsel has laid stress on the fact that the Chief
     Engineer, after considering all the relevant material and circumstances has
     recorded a categorical finding that the seal of the CT/PT terminal box had
     been tampered with and the petitioner had exceeded the contracted load atid
     had also dishonestly abstracted electrical energy to a very large extent.
     According to the learned counsel, the findings recorded by the Chief Engineer D
     being based upon relevant material are not open to challenge in proceedings
     under Article 226 of the Constitution of India, In support of the appeal
     preferred by the Electricity Board, Shri Reddy has submitted that the surcharge
     being part of the electricity bill, the Division Bench of the High Court had
     erred in holding that the same was chargeable on per unit basis and not at E
     thrice the value thereof. According to the learned counsel, in view of Clause
     16.9 of the Tariff, the fuel surcharge has also to be levied at three times the
     units assessed.

            It may be stated at the very outset that a detailed show cause notice
     dated 13.10.1999 mentioning all the relevant facts was served upon the F
     petitioner to which the petitioner gave a reply on 20.10.1999. The order of
     the Chief Engineer mentions that the petitioner was afforded an opportunity
--   of personal hearing and its counsel appeared before him and argued the
     matter on 25.10.1999 and 26.10.1999. The Chief Engineer has recorded a
     clear finding that the seal on CT/PT terminal box was found to be tampered
     with. A seal bearing No.045660P had been put on the CT/PT terminal box G
     on 14.5.1999 and the authority fixing the seal had put his signatures thereon.
     At the time of the inspection on 27.8.1999, the seal was found to be tampered
     with, which was seized by the inspecting team. The seal did not contain the
     signature of the authority who had put the seal. The record shows that the
     inspection had been done by a high level team consisting of as many as 8 H
    700                      SUPREME COURT REPORTS                    [2003) 2 S.C.R.

A responsible officers, some of whom had come from the headquarters of the
    Electricity Board at Patna. An Executive Magi,trate was also a member of
    the team. The Manager of the petitioner himself lodged a report on 28.8.1999
    with the Deputy Superintendent of Police, Danapur (Patna), alleging that 8
    officers of the Bihar State Electricity Board with armed force visited and
B   tested the installation and the members of the team with the help of screw
    and plier themselves tampered with the cover of the LT terminal box of CTI
    PT and the plastic seal was removed and brought down by one of the Executive
    Engineers. However, in reply to the show cause notice filed by the petitioner,
    tampering of the seal was denied and it was pleaded that the matter was being
    investigated by the investigating officer of the criminal case registered against
C   the petitioner and his report shall be considered by the Court at the appropriate
    time. The Chief Engineer after considering the entire material and taking into
    consideration the fact that there were large number of officers of the Board
    at the time of the inspection, has recorded a finding that the seal had been
    tampered with. It is an admitted position that in the factory of the petitioner
    there were two furnaces, each of 6 MT and thus the total capacity was 12
D   MT. The manufacturer of the induction furnaces namely, Megatherm Electronic
    Pvt. Ltd. had given in writing that the load of 6 MT induction furnace was
    2500 KV which is equivalent to 3000 KV A and, therefore, the actual load of
    the furnaces installed at the petitioner's factory, after taking into consideration
    the auxiliary load, came to 7200 KVA. The Induction Furnaces Association
E   of Bihar of which the petitioner is also a member, had agreed and proposed
    that the load of an induction furnace could be taken to be 600 KV A per MT.
    On consideration of these factors the Chief Engineer came to a conclusion
    that the actual load of the petitioner's factory was 7200 KVA. The other
    material which has been considered by the Chief Engineer is that on an
    average the power was consumed for 21.25 hours per day as the factory was
F   running in two shifts with 40 workers in each shift and, therefore, the number
    of units being actually consumed were much higher than that recorded in the
    meter. On the basis of these findings, the assessment has been made of the
    compensatory amount under Clause 16.9 of the Tariff.                                  --
G       The contention that the dispute regarding tampering of the seal of CTI
  PT terminal unit should have been referred to the Electrical Inspector, has
  hardly any merit. In Madhya Pradesh Electricity Board and Ors. v. Basantibai,
  [1988] 1 SCC 23, it has been held that a dispute regarding the commission
  of fraud in tampering with the meter and breaking the body seal is one
  outside the ambit of Section 26(6) of the Indian Electricity Act and the
H Electrical Inspector has no jurisdiction to decide such cases of fraud. It was
       JM.D. ALLOYS LTD. v. BIHARSTATEELECTRICITYBOARD [GP MATHUR,J]                                 70)

further held that under Section 26(6), the only dispute which can be decided                               A
by the Electrical Inspector is as to whether the meter is correct and is accurately
recording the reading or there is some fault in the same. Since in the present
case it has been found that the seal on the CT/PT terminal box had been
tampered with and the natural working of the meter had been affected by
taking recourse to external devices, a dispute of this kind cannot be referred                             B
to an Electrical Inspector.

      The next contention raised is that the period of 180 days for which theft
of electricity has been assessed is absolutely wrong and has no rational basis.
The Electricity Board has proceeded on the footing that Clause 16.9 of the
Tariff framed by the Bihar State Electricity Board with the approval of the                                C
State Government is applicable. Clause 16.9 of the Tariff reads as under:

        "16.9 (A) Detection of unauthorised load:- If at any time the consumer
        is found exceeding the contracted load without specific permission of
        the Board, the Board may without prejudice to its other rights under
        the agreement or under the provisions of the Electricity Act, estimate                             D
        the value of the electrical energy, so extracted, consumed or used
        shall be calculated as below and may also disconnect the supply
        without notice:-
        !.    Necessary assessment for compensation in the following
              malpractice and theft of energy cases shall be made as below:-                               E
              (a)

              (b)    In case of using energy by creating obstruction in running
                     of meters or interfering with the system of supply or
                     wires etc.
                                                                                                           F
                     (c) ·········································································
                     Unit assessed = L x F x H x D

                     Where L = ............................................................. .

                                H= ............................................................. .         G
                     D= is the no. of days for which the pilferage took place
                     which can be established from production of satisfactory
                     evidence by the consumer. In case there is no possible
                     evidence to establish the period, this factor be taken H
                                                                                                              )

    702                       SUPREME COURT REPORTS                                         [2003] 2 S.C.R.

A                       equivalent to 180 or the no. of days elapsed from the date
                        of connection/installation of meter till the date of detection
                        of the pilferage whichever is less.

                        F= ...........................................................................
                 II.
B
                 Ill.   Method of charging the assessed units as indicated in
                        para I & II above.

                        (a) The consumption so assessed shall be charged at thrice
                        the rate per unit of the Tariff applicable to the consumer
c                       excluding the consumption recorded by the meter and the
                        latter shall be charged at the appropriate tariff rates. The
                        amount billed at this (thrice the tariff rate) shall not be
                        taken into consideration for the purpose of computing
                        consumer's liability to' pay monthly/minimum guarantee.
D
                        (b) ........................................................................ ..

             IV. When connected load is more than the sanctioned load in case
                 of all categories LT connection except Domestic Service.

                 Assessment charge:- Rs. C x M (LD-LS) x 3 Where, M=
E                Minimum consumption guarantee charge per BHP per month as
                 applicable in the tariff schedule.
                 LD = is the load detected in BHP at the time of inspection.
                 LS = is the load sanctioned to the consumer in BHP
F                C = This factor be taken equivalent to six months or no. of
                 months or part thereof elapsed from the date of connection/
                 installation whichever is less."

        The relevant part of the Tariff quoted above shows that in the cases of
  theft of electricity or dishonest abstraction of electrical energy the assessment
G for compensation has to be done on the basis of a formula wherein 'D' stands
  for number of days for which the pilferage took place and where there is no
  possible evidence to establish the period, this factor can be taken to be
  equivalent to I 80 days. Similarly, in a case where connected load is more
  than the sanctioned load, the assessment charge has to be done on the basis
H ofa formula where 'C' stands for six months or the number of months or part
      J.M.D. ALLOYS LTD. v. BIHARSTATEELECTRICITYBOARD[G.P. MATHUR,!.]      703

thereof elapsed from the date of connection/installation, whichever is less.        A
Therefore under the Tariff in both the cases the period can be taken as 180
days or six months. It is on the basis of this formula that the assessment for
consumption of units has been done for 180 days. In Hyderabad Vanaspathi
Ltd v. A.P. State Electricity Board and Ors., [1998] 4 SCC 470, it has been
held that the terms of conditions for supply of electricity to consumers notified   B
by the Board in exercise of power under Section 49 of Electricity (Supply)
Act, 1948 and made applicable to all consumers availing supply of electricity,
are statutory in character. This being the legal position, the Electricity Board
in our opinion rightly applied Clause 16.9 of the Tariff and there is no
infirmity in the assessment made and the bill prepared in pursuance thereof.

       Shri Gopal Subramanium has also submitted that after the inspection
                                                                                    c
had been done on 27.8.1999, an FIR had been lodged against the petitioner
on the same day by Shri Om Prakash, Assistant Executive Engineer at the
Police Station and a criminal case was registered under Section 39/44 of
Indian Electricity Act. This case was investigated and thereafter a final report
was submitted, which was accepted by the concerned Magistrate and as a D
result of this order, the petitioner stands exonerated from the charge of theft
of electricity and no compensatory bill could be issued by taking recourse to
Clause 16.9 of the Tariff. Shri V.R. Reddy, learned senior counsel for the
Electricity Board has submitted that before accepting the final report, the
learned Magistrate had issued notice to Shri Om Prakash, Assistant Executive E
Engineer, but the said notice was not served upon him as he was transferred
from Patna on account of his allocation to Jharkhand State and as such· no
representation could be made on behalf of the Electricity Board against the
final report. Subsequently, an application has been moved on behalf of the
Electricity Board before the concerned Magistrate for recall of the order by
which final report was accepted. In our opinion, the mere acceptance of final F
report by the Magistrate cannot amount to a finding by the criminal Court
that theft of electricity was not committed. The accused was not even
summoned, no charge was framed nor any evidence was recorded. In such
a situation, it cannot be held that the criminal Court has recorded any finding
to the effect that the petitioner has not committed theft of electricity. That G
apart, the purpose of a trial under Section 39/44 of the Indian Electricity Act
is entirely different and the object is to punish and sentence the person who
is alleged to have committed the offence. The trial of an accused in a criminal
case can have no bearing in the matter of assessment made in accordance
with the tariff of the value of electricity dishonestly abstracted or consumed.
Therefore, the contention raised on the basis of alleged acceptance of the H
                                                                                             >-
    704                      SUPREME COURT REPORTS                       (2003) 2 S.C.R.

A   final report in the criminal case has absolutely no merit.

           It is to be noted that in pursuance of the order passed on 27.9.1999 by
    the High Court in CWJC No.8939 of 1999, the Chief Engineer decided the
    matter holding that the petitioner had exceeded the contracted load and had
    also committed theft of electricity and consequently assessment of
B   compensatory amount had to be done in accordance with Clause 16.9 of the
    Tariff. In terms of the order of the Chief Engineer the bill dated 29.10.1999
    was prepared which was challenged by the petitioner by filing the writ
    petition before the High Court under Article 226 of the Constitution. The
    High Court was not hearing an appeal against the decision of the Chief
C   Engineer. The scope of inquiry in such a matter is a limited one. We would
    like to quote here what was said by Venkatachaliah, J. in State of UP. and
    Ors. v. Maharaja Dharmander Prasad Singh, AIR (1989) SC 997 (para 28),
    which reads as under :

            "However, Judicial review under Article 226 cannot be converted
D           into appeal. Judicial review is directed, not against the decision, but
            is confined to the examination of the decision making process. In
            Chief Constable of the North Wales Police v. Evans, (1982) I W.L.R.
          · 1155 refers to the merits-legality distinction in judicial review. Lord
            Hailsham said:

E               "The purpose of judicial review is to ensure that the individual
            receives fair treatment, and not to ensure that the authority, after
            according fair treatment, reaches on a matter which it is authorised
            by law to decide for itself a conclusion which is correct in the eyes
            of the Court."

F               Lord Brightman observed:

                " ................. .Judicial review, as the words imply, is not an appeal
            from a decision, but a review of the manner in which the decision
            was made .."

G           And held that it would be an error to think:

                 " ........... that the Court sits in judgment not only on the correctness
            of the decision making process but also on the correctness of the
            decision itself;.

H               When the issue raised in judicial review is whether a decision is
           J.M.D. ALLOYS LID. v. BIHAR STATE ELECTRICITY BOARD [G.P. MATIIUR,J.]   705

--          vitiated by taking into account irrelevant, or neglecting to take into
            account of relevant factors or is so manifestly unreasonable that no
                                                                                          A

            reasonable authority entrusted with the power in question could
            reasonably have made such a decision, the judicial review of the
            decision-making process includes examination, as a matter of law, of
            the relevance of the factors .........."
                                                                                          B
           In Apparel Export Promotion Council v. A.K. Chopra, JT (1999) I SC
     61, Chief Justice Anand held as under :

                 "Judicial Review, not being an appeal from a decision, but a
             review of the manner in which the decision was arrived at, the <;ourt
             while exercising the power of Judicial Review must remain conscious          c
             of the fact that ifthe decision has been arrived at by the Administrative
             Authority after following the principles established by law and the
             rules of natural justice and the individual has received a fair treatment
             to meet the case against him, the Court cannot substitute its judgment
             for that of the Administrative Authority on a matter which fell squarely     D
             within the sphere of jurisdiction of that authority."

            There is no dispute that the Chief Engineer issued notice to the petitioner
•    mentioning all the relevant facts to which the petitioner gave a reply. The
     petitioner was also afforded an opportunity of hearing and it appeared through
     a counsel, who made submissions on two days and thereafter the Chief                 E
     Engineer passed the order. As discussed earlier, the Chief Engineer has taken
     into consideration relevant factors and the findings recorded by him are clearly
     borne out from the material available before him. It cannot be said that the
     order passed by him is unreasonable or perverse in any manner. The High
     Court therefore rightly took the view that the order passed by the Chief
     Engineer that the compensatory bill is to be prepared in accordance with             F
     Clause 16. 9 of the Tariff could not be interfered with in a writ petition under
     Article 226 of the Constitution.

           The Bihar State Electricity Board feels aggrieved by that part of the
     judgment and order of the Division Bench of the High Court by which it has           G
     been held that the surcharge cannot be levied at thrice the rate per unit and
     has accordingly filed Civil Appeal No.8395 of2002. Shri V.R. Reddy, learned
     senior counsel for the Electricity Board has submitted that the cost of a unit
     of electricity is not fixed and on the contrary it is dependent upon the fuel
     surcharge. The formula for calculating the fuel surcharge is a long and
     complicated one and is given in Clause 16.10.3 of the Tariff. A host of              H
                                                                                        \

                                                                                        ).

                             SUPREME COURT REPORTS                   [2003) 2 S.C.R.
    706
A factors have to be taken into consideration in calculating the fuel surcharge
  and they depend upon many variables. Shri Reddy has submitted that since
  the surcharge has necessarily to be taken into consideration and has to be
  added in the cost of electricity and, therefore, in accordance with part (Ill)
  of Clause 16.9 of the Tariff, it should also be assessed at three times the rate
  per unit. We are unable to accept the contention raised. Clauses 16.9 and
B 16.10.3 are separate and distinct clauses in the Tariff. Clause 16.9 lays down
  the formula for calculating the value of the electrical energy abstracted or
  consumed by a consumer by exceeding the contracted load or by creating
  obstruction in running of meter. Part (III) of this clause deals with method
  of charging the assessed units and sub-para (a) thereof lays down that the
C consumption so assessed shall be charged at thrice the rate per unit of the
  Tariff applicable to the consumer excluding the consumption recorded by the
   meter and the latter shall be charged at the appropriate Tariff rates. Clause
   16.10.3 is a separate clause which deals with fuel surcharge and it nowhere
   lays down that this additional surcharge will also be levied at thrice the rate
  per unit of the tariff. The two clauses namely 16.9 and 16.10.3 have to be
D read separately and there being no specific provision for assessing the fuel
   surcharge at thrice the rate per unit, it is not possible to hold that in such a
  case the fuel surcharge should also be charged at thrice the rate per unit.

           We are, therefore, of the opinion that the view taken by the High Court
E is perfectly correct and calls for no interference. In the result, both the appeals
    lack merit and are hereby dismissed. No costs.

    N.J.                                                        Appeals dismissed.