Holding

Tampering with an electricity meter is not covered by Section 26(6) of the Electricity Supply Act, 1910, and therefore no reference to the Electrical Inspector is required.

Summary

The respondent, a consumer of electricity, alleged that the meter installed by the appellant was defective and that the demand of Rs.1,07,326 raised for alleged tampering was illegal. He filed a complaint before the District Consumer Disputes Redressal Forum seeking that the matter be referred to the Electrical Inspector under Section 26(6) of the Electricity Supply Act, 1910. The Forum, the State Commission and the National Commission all held that a reference to the Electrical Inspector was required. On appeal, the Supreme Court examined the scope of Section 26(6) and held that tampering or fraudulent manipulation of a meter is not covered by that provision; the provision applies only where the meter is technically defective but still "correct" within prescribed error limits. Consequently, the reference to the Electrical Inspector was unnecessary and the orders of the lower forums were set aside. The appeal was allowed without any order as to costs.

Issues considered

Whether tampering with an electricity meter falls within the ambit of Section 26(6) of the Electricity Supply Act, 1910 requiring reference to an Electrical Inspector.
Whether the demand raised by the electricity board in a tampering case is illegal under the Consumer Protection Act, 1986.

Legislation cited

Consumer Protection Act, 1986s. 15, s. 21

Subjects

electricity metertamperingSection 26(6)Electrical InspectorConsumer Protection Actdemandnatural justicefraud

Judgment

SUB DIVISIONAL OFFICER (P), UHBVNL A
v.
DHARAMPAL

NOVEMBER 15, 2006

[ARIJITP/ :;AYAT ANDLOKESHWARSINGHPANTA,JJ.] B
•
Electricity Supply Act, 1910:

s. 26(6)-Reference to Electrical Inspector-Tampering with electricity
meter-Demand raised purporting to be charges for actual consumption of C
energy-Held, tampering with meter is not covered by s.26(6)-Therefore,
reference in terms of s.26(6) was not called for-Consumer Protection Act,
1986.

The inspecting staff of the appellant found that there was tampering with D
the electricity meter installed at the factory premises of the respondent, and,
therefore, raised a demand ofRs.1,07,326/- purporting to be charges payable
for actual consumption of energy. The respondent filed a complaint before
the District Consumer Disputes Redressal Forum and prayed that reference
should be made to the Electrical Inspector in terms of s.26(6) of the Indian
Electricity Act, 1910. The District Forum held that demand was illegal and E
instead the reference ought to have been made in terms of s.26 (6) of the Act
The appeal of the appellant was dismissed by the State Consumer Disputes
Redressal Commission and so was its revision by the National Consumer
Disputes Redressal Commission.

Jn the appeal filed by the appellant it was contended that in the case of F
tampering there was no scope for reference to the Electrical Inspector in
terms of s.26(6).

Allowing the appeal, the Court

. HELD: It has clearly been held by this Court that the case of tampering G
with the meter is not covered by Section 26(6) of the Electricity Supply Act,
1910. Jn this view of the matter, the District Forum, State Commission and
the National 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
1175 H
1176 SUPREME COURT REPORTS [2006) SUPP. 8 S.C.R.

A authorities are quashed. (1183-A-B)

* M.P. Electricity Board v. Basantihai, (1988) 1 SCC 23; Bombay
Electricity Supply and Transport Undertaking v. Laffans (India) (P) Ltd. &
Anr., (2005] 4 SCC 327; State of W.B. and Ors. v. Rupa Ice Factory (P) Ltd.
and Ors., (2004) 10 SCC 635; Belwal Spinning Mills Ltd. and Ors. v. UP.
B State Electricity Board and Anr., (1997] 6 SCC 740; and J.M.D. Alloys Ltd.
v. Bihar State Electricity Board, (2003) 5 SCC 226, relied on.

MP.E.B. & Ors. v. Smt. Basantihai, AIR (1988) SC 71, held inapplicable.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4979 of2006.
c
From the final Judgment and Order dated 12-5-2004 of the National
Consumer Disputes Redressal Commission, New Delhi in Revision Petition
No. 487 of 2004.

Neeraj Kumar Jain, Bharat Singh, Sanjay Singh, Vikrant Hooda and Ugra
D Shankar Prasad for the Appellant.

Dr. Ramesh K. Haritash, Dharam Singh and Dr. Kailash Chand for the ' ·
Respondent.

The Judgment of the Court was delivered by
E
ARIJIT P ASAYAT, 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
F terms of Section 21 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.
G The Inspecting staff found that there was tampering with the meter and,
therefore, a demand of Rs.l,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').

H
SUB DIVISIONAL OFFICER (P), UHBVNL v. DHARAM PAL [PASA YAT, J. ]1177

The basic stand of the respondent as complainant was that prior to .the A
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, B
the demand was raised for alleged tampering with the meter. With reference
to the inspection report it was averred that the seals w':!re found intact arid,
therefore, there was no question of any tampering. It was, therefore, prayed
that reference should be made to the Electrical Inspector for action in te~s
of Section 26(6) of the Indian Electricity Act, 1910 (in short 'the Act'). It w11s
further submitted that notice was to be given before raising of demand. Th/s C
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 made in terms of Section 26(6) of the Act. D
j
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 E
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 · F
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 G
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 ofrectrfying 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
H
1178 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R.

A 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
B 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
c of this judgment, are reproduced hereunder:-

The Indian Electricity Act, 1910

"26. Meters.- (l) In the absence of an agreement to the contrary, the
amount of energy supplied to a consumer or the electrical quantity
D 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
E 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,
F 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 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,
G 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:

H Provided that the licensee shall not be at liberty to take off or

(
SUB DIVISIONAL OFFICER (P), UHBVNL v. DHARAM PAL [PASAYA T, J. ]1179

remove any such meter if any difference or dispute of the nature A
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 met~r B
referred to in sub-section (I) is or is not correct, the matter shall be
decided, upon the application of either party, by an Electrical lnspectot;
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 C
not, in the opinion of such Inspector, have been correct; but save as
aforesaid, the register of the rr.eter shall, in the absence of fraud, be
conclusive proof of such amount or qnantity:

Provided that before either a licensee or a consumer applies to the'
Electrical Inspector under this sub-section, he shall give to the other D
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 ,E
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 F
"57. Meters, maximum demand indicators and other apparatus on
consumer's premises. -

(I) Any meter or maximum demand indicator or other apparatus,
placed upon a consumer's premises in accordance with Section 26 G
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: H.
•
!--
1180 SUPREME COURT REPORTS {2006) SUPP. 8 S.C.R.

A Provided that for extra high voltage consumers the limit or error
shall be + 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 ;.
B
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
c 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
D in this behalf.

(5) Every supplier shall maintain a register of meters showing the date I.\
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
E 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."
F
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 MP. Electricity Board v. Basantibai, [l 988] (
1 SCC 23, Belwal Spinning Mills ltd and Ors. v. UP. State Electricity
Board and Anr., [1997] 6 SCC 740 and J.MD. Alloys Ltd. v. Bihar
G 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,
H
(
SUB DIVISIONAL OFFICER (P), UHBVNL v. DHARAM PAL [PASAYA T, J. ]1181

specially sub-section (6) thereof, in very many details, also taking into A
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 B
not correct. Section 26(6) will have no applicability (i) ifthe 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 c
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 D
,-< 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.MD. 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 E
any 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; Conforming to or agreeing
with fact; Accurate.

8. As to what would be a "correct" meter, there is sufficient indication F
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-
I
rules (l) 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 Q
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 H
~
~
1182 SUPREME COURT REPORTS [2006) SUPP. 8 S.C.R.

A 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 J::
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,
B J
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, whether plus or minus.
c 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 ofW.B. and Ors. v. Rupa lee Factory (P) Ltd and Ors., [2004]
D 10 sec 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 I had tapped the
electric energy directly from the transformer to the LT distribution
E 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 MP
Electricity Board v. Basaniibai and J.MD. Alloys Ltd v. Bihar SEB
it has been held that in cases of tampering or theft or pilferage of t-
F t
1
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,
G 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 Mp_,E.B. & Ors. v. Smt. Basantibai, AIR (1988) SC 71 more
H particularly, paragraph 13 thereof, a bare reading of the decision shows that
~
SUB DIVISIONAL OFFICER (P), UHBVNL v. D~RAM PAL [PASA YAT, J. JI 183

the same did not relate to a case of tampering and, therefore, has no application A
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
t quashed. B
The appeal is allowed but without any order as !o costs.

RP. Appeal allowed.