Holding

Clause 39.9.2 provides only a reasonable opportunity, not an automatic right of cross‑examination; the consumer must establish the necessity of such cross‑examination.

Summary

The appellant, Transmission Corporation of A.P. Ltd., issued a provisional and then a final assessment of Rs.1,41,270 against the respondent, a low‑tension consumer, alleging pilferage of electricity. The respondent objected and appealed under the Terms and Conditions of Supply, seeking a right to cross‑examine the officials whose statements formed the basis of the assessment. The High Court allowed the petition, holding that where a report alleging pilferage is relied upon, the consumer is entitled to cross‑examination. The Supreme Court held that Clause 39.9.2 of the Terms and Conditions does not create an automatic right of cross‑examination; it merely mandates a "reasonable opportunity" which must be assessed on the facts. The consumer must demonstrate the necessity of cross‑examination, especially when only accounts are used. Since the respondent failed to show why cross‑examination was required, the Court set aside the High Court order and disposed of the appeal in favour of the appellant.

Issues considered

The scope of Clause 39.9.2 of the Terms and Conditions of Supply of Electrical Energy under the Electricity (Supply) Act, 1948 with respect to a consumer's right to cross‑examine officials whose statements are used for final assessment.
Whether the High Court erred in holding that cross‑examination is automatically required when a report alleging pilferage is relied upon.

Legislation cited

Electricity (Supply) Act, 1948s. Section 49

Subjects

electricity supplypilferagecross‑examinationnatural justicereasonable opportunityconsumer rightsfinal assessment

Judgment

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"'~ TRANSMISSION CORPORATION OF A.P. LTD. AND ORS. A

-
v.
MIS SRI RAMA KRISHNA RICE MILL

FEBRUARY 20, 2006

[ARIJITPASAYAT ANDR.V. RAVEENDRAN, JJ.] B
~
_j
Electricity (Supply) Act, 1948-Terms and Conditions of Supply of
Electrical Energy-Clause 39.9 sub clause (1) to (3)-Pilferage of energy by
consumer-Final Order of assessment made on bais of reports of departmental
officer without granting opportunity to consumer-Opportunity to cross-examine
c
departmental officer-Grant of-Held: Right of cross examination is not
inbuilt-Terms and conditions of supply do not contemplate recording oral or
documentary evidence-However provides for reasonable opportunity which
depends on factual situation-Consumer has to make out a case for cross-
examination which would be duly considered by the Adjudicating Authority. D

1 Appellant no. I-Corporation successor company of erstwhile A.P.
State Electricity Board inspected business premises of respondent and
made provisional assessment alleging pilferage of energy and raised a
demand. Thereafter, appellant issued notice to respondent proposing to
charge on final assessment. Respondent filed its objections and E
subsequently final order of assessment was passed confirming the amount
stated in the notice. Respondent filed an appeal under the Terms and
Conditions of Supply of Electrical Energy of State Electricity Board
praying for grant of opportunity to cross-examine certain officials of the
Corporation on basis of whose statements final assessment was made but
~· F
the same was refused. Respondent filed writ petition which was allowed
holding that if the authorities relied on statement or report pointing out
the act of pilferage petitioner would be entitled to call such person for
cross-examination. Hence the present appeal.

Disposing of the appeal, the Court G

·~
HELD: 1.1. ·The parameters of the ·principles of natural justice
cannot be covered by any straight-jacket formula. It would vary depending
upon the circumstances involved. [376-F)

371 H
372 SUPREME COURT REPORTS [2006] 2 S.C.R.

A 1.2. Under Clause 39.9.:Z of Terms and Conditions of Supply it cannot
be laid down as a rule of universal application that whenever the statement
of departmental officer i!> pressed into service for the purpose of
adjudication, a right of cross examination is in built. The Terms and
Conditions of Supply did no1t contemplate anything like recording oral or
B documentary evidence in the way as is normally done in the Courts of law.
But Clause 39.9.2 itself provides for a reasonable opportunity being
granted. What would be a re:~sonable opportunity would also depend upon
the fact situation. (377-E; 3"'6-G)

Advanced Law lexicon by P. Ramanatha Aiyar 3rd Edition, Vol.4 pages
C 3959 and 3968, referred to.
1.3. In order to establish that cross-examination is necessary, the
consumer has to make out a case for the same. Merely stating that the
statement of an officer is being utilized for the purpose of adjudication
would not be sufficient in all cases. If an application is made requesting
D for grant of an opportunity 'to cross examine any official, the same has to
be considered by the adjudicating authority who would have to either
grant the request or pass a reasoned order if he chooses to reject the
application. In that event an adjudication being concluded, it shall be
certainly open to the consumer to establish before the appellate authority
E as to how he has been prejudiced by the refusal to grant opportunity to
cross-examine any official. Where the reliance is only on accounts prepared
by a person, cross examination is not necessary. But where it is based on
reports alleging tampering or pilferage, the fact situation may be different.
Before asking for cross examination the consumer may be granted an
opportunity to look into the documents on which the adjudication is
F proposed. In that event, he will be in a position to know as to the author
of which statement is neces!1ary to be cross-examined. The applications
for cross-examination are not to be filed in routine manner and equally
also not to be disposed of by adjudicator in casual or routine manner.
There has to be application of mind by him. (377-G, H; 378-A-C)

G 1.4. In the instant case without even granting an opportunity to the
respondent, the final order of assessment was passed. Merely taking note
of the objection filed cannot be said to be compliance of the provisions
contained in Clause 39.9.2. Therefore, respondent had made a prayer 'f
before the appellate authority. Respondent did not indicate as to why the
H cross-examination was necessary. If a fresh application is made, the same
TRANSMISSION CORPN. OF A.P. LTD.''· STATEOFRAJASTHAN [PASAYAT,J.] 373

""''"!''
would be duly considered by the appellate authority, keeping in view the A
principles. (376-E; 377-D-F(

Hyderabad Vanaspathi ltd. v. A.P. State Electricity Board and Ors.,
( 1998( 4 SCC 470 and The State of Jam mu and Kas_hmir and Ors. v. Bakshi
Gu/am Mohammad and Anr., (1966] Suppl. SCR 401, distiguished.
B
M.P. Electricity Board v. Harsh Wood Products, (1996( 4 SCC 522;
The New Prakash Transport ~o. Ltd. v. The New Suwarna Transport Co. Ltd,
....
_) (1957] SCR 98; Nagendra Nath Bora and Anr. v. Commissioner of Hills
Division and Appeals, Assam and Ors., [1958] SCR 1240 and Khem Chand
v. Union of India, AIR (1958) SC 200, referred to.
c
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2137 of2000.
.,
From the Judgment and Order dated 16.6.1999 of Andhra Pradesh High
Court in Writ Petition No. 7586/1999.

Ashok Grover and Rakesh K. Sharma for the Appellant. D
Y. Prabhakara Rao for the Respondents.
I
~
The Judgment of the Court was delivered by

ARIJIT PASA YAT, J. Challenge in this appeal is to the legality of the E
judgment rendered by a Division Bench of the Andhra Pradesh High Court.
The controversy lies within a very narrow compass and, therefore, the factual
position needs to be noted in brief. The appellant No.1-corporatiun is the
successor company of the erstwhile Andhra Pradesh State Electricity Board
(in short the 'Board').
F
The business premises of the respondent were inspected by the officials
of the appellant No. I-Corporation. The respondent was a low tension category
consumer. On 10.9.1993 a provisional assessment was made alleging pilferage
of energy and a sum of Rs.27,610/- was demanded. It was indicated to the
respondent that if it wanted to avoid disconnection it shou Id deposit 50% of
G
the amount fixed on provisional assessment. The same was deposited. On
JS; 12.1993 a show cause notice was issued proposing to charge Rs.1,41,270/
-I - on final assessment. The respondent filed its objection. On 29.9.1998 the
final assessment was made confirming the amount indicated in the show
cause notice.
H
374 SUPREME COURT REPORTS 120061 2 S.C.R.

A Appeal as provided under the Terms and Conditions of Supply of Y'
Electrical Energy of the Andhra Pradesh State Electricity Board was filed.
The said Terms and Cona itions of Supply were notified by the Board in
exercise of powers conferr~d by Section 49 of the Electricity (Supply) Act,
1948. A prayer was madt' to grant opportunity to cross examine certain
officials of the appellant No. I-Corporation on the basis of whose statements
B the final assessment was made. By order dated 6.3 .1999 the request was
declined on the ground that there was no provision for such a prayer being
accepted. A Writ Petition v.as filed before the High Court. While hearing the
matter on the issue, learned Single Judge noted that there were inconsistent
views expressed by different learned Single Judges. This is how the matter
C was referred to a Division Bench. By the impugned order the High Court
noted that there was no dis11ute that the amount on being determined by the
final assessment on the ground of alleged pilferage if recovered would result
in civil consequences. Therefore, the enquiry being quasi judicial in nature
fair play is required and fair play implies the fair opportunity which includes
cross examination of persons whose statements were going to be relied by the
D authorities. The High Coun: accordingly held as follows:

"In the instant case, if the authorities an~ relying only on accounts
and not on any statements or reports, may be the cross examination
of any person who has prepared the accounts is not necessary. But if
any statement or report is made pointing out the act of pilferage, the
E petitioner shall be· entitled to call the said person for cross
examination".

Learned counsel for -.he appellants submitted that the High Court's
view about the desirability of granting opportunity for cross examination is
F not supportable in law. According to him, the officers have no personal
interest in the matter and, threfore, their statements are to be considered in
the proper perspective by the authority making the final assessment. There
was no question of any cross examination of such persons. Strong reliance
was placed on a decision of this Court in Hyderabad Vanaspathi Ltd v. A.P.
State Electricity Board and Ors., (1998] 4 SCC 470, more particularly,
G paragraphs 39 and 43. With reference to a decision of this Court in The New
Prakash Transport Co. ltd v The New Suwarna Transport Co. ltd., (1957]
SCR 98 it was submitted that the Terms and Conditions of Supply do not
envisage grant of an opportunity for cross examination as the procedure '
-{

provided for does not contemplate of anything like recording oral evidence
H and receiving documentary evidence in the normal way as in Courts of law.
I
TRANSMISSION CORPN. OF AP. LTD.; •. STATE OF RAJASTHAN [PASAYAT, J.] 375

-,.;"i' What is necessary is granting a fair and proper hearing and this has been A
done. With reference to another decision of this Court in Nagendra Nath
Bora and Anr. v. Commissioner of Hills Division and Appeals, As,sam and
Ors., [1958] SCR 1240 it was submitted that as in the said case, the rules in
the present case make no provisions for the reception of evidence oral or
documentary and even for issuing of any notice; therefore also the High
Court was not right. Finally, with reference to a decision of this Court in The
B
State of Jammu and Kashmir and Ors. v. Bakshi Gu/am Mohammad and
..j Anr., [1966] Suppl. SCR 40 I it was submitted that the right to hearing did
; not include the right to cross examine and the right must depend upon the
circumstances.
c
In response, learned counsel for the respondent submitted that Clause
39.9.2 provides for grant of a "reasonable opportunity" to the consumer. If
the statements of the officers are to be relied upon without being tested by
cross-examination, the consumer will be highly prejudiced and, therefore, the
right to cross-examine them is in built in clause 39.9.2 of the Terms and
Conditions of Supply. Clause 39.9.2 deals with final ~ssessment. Sub-clauses D
(l) to (3) thereof are extracted below for ready reference :
4 39.9.1 After the provisional assessment notice is served upon the
~
consumer as mentioned in clause 39.3 thereof. The Officer
authorized in this behalf by the Board (see statement referred to
in clause 39.4 above) shall issue a show cause notice in the
E
forms prescribed therefore advising the consumer to file his
representation, if any, within 30 days from the receipt of the
notice.
39.9.2 The said officer of the Board shall, after the expiry of the aforesaid
notice period, enquire into the matter and after giving reasonable
F
opportunity to the consumer and taking into account all relevant
facts and circumstances shall decide whether the consumer has
committed malpractice or pilferage of energy and if so satisfied
proceed to assess to the best of his judgment, the loss sustained
by the Board on account of such malpractice or pilferage of G
energy by the consumer. The consumer may be represented by
an advocate or any other person at the time of personal hearing
\ provided the consumer files proper Vakalatnama or power of
{
Attorney as the case may be.
39.9.3 The final assessing authority shall then pass an order setting out H
t
376 SUPREME l'OCRT REPORTS [2006] 2 S.C.R.

A his conclusions and •:he reasons thereof and communicate a copy
of the order to the consumer and demand the amount, if any. due
from the consumer on the basis of such order after giving credit
to the amounts.paid by him.

At this juncture, it is to be noted that in paragraph 39 of Hyderabad
B Vanaspathi 's, case (supra) what was observed by this Court was in relation
to disconnection and for that purpose reliance was placed on an earlier decision
of this Court in M.P. Electricity Board v. Harsh Wood Products. [1996] 4
SCC 522. At the stage of issuing notice of dis-connection there is no question
of granting any opportunity to the consumer. On the basis of prima facie
C view of the concerned officer, notice of disconnection is issued. In that context
it was held both in M.P. electricity Board's and Hyderabad Vanaspathi's
cases (supra) that the procedure laid down was not in violation of the principles
of natural justice. So far as paragraphs 43 of Hyderabad Vanaspathi 's case
(supra) is concerned, that related to the absence of personal lis or interest of
adjudicator . In that backgrot.nd it was held that merely because the
D departmental authority was adjudicating there was no prejudice involved.
Those principles are not of any assistance in the present case. In the case at
hand without even granting of an opportunity to the respondent, the final
order of assessment was passed. Merely taking note of the objection filed
cannot be said to be compliance of the provisions contained in Clause 39.9.2.
E Therefore, the respondent had made a prayer before the appellate authority.
The parameters of the principles of natural justice cannot be covered by any
straight-jacket formula. It would vary depending upon the circumstances
involved. It is true that the Terms and Conditions of Supply did not contemplate
anything like recording oral or documentary evidence in the way as is normally
F done in the Courts oflaw. But the Clause 39.9.2 itself provides for a reasonable
opportunity being granted. What would be a reasonable opportunity would
also depend upon the fact situation. In Advanced Law Lexicon by P.
Ramanatha Aiyar (3rd Edition, Vol.4 page 3959 and 3968) the word
"reasonable" has been describt:d as follows:

G "(i) What is 'fair' and proper under the circumstances.

(ii) The expression "r1easonable" is not susceptible of a clear and
precise definition. A thing which is reasonable in one case may not
be reasonable in another. Reasonable does not mean the best, it means
most suitable in a given set of circumstances.
H (iii) There is no point on which a greater amount of decision is to be
I

TRANSMISSION CORPN. OF AP.LTD . .-. STATE OF RAJASTHAN [PASA YAT,J] 377
found in Courts of law and equity than as to what is reasonable : It A
is impossible a priori to state what is reasonable as such in. all cases.
You must have the particular facts of each case established before
you can ascertain what is meant by reasonable under the circumstance
Lord Romilly. M.R. Labouchere v. Dawson, (1872), LR 13 Eq.CA.325.

In Khem Chand v. Union of India, AIR (1958) SC 200 a Constitution B
Bench of this court explained the meaning of 'reasonable opportunity' thus
-4 in the context of Article 311(2) of the Constitution of the, 1950 (in short the
- ). 'Constitution):

(a) an opportunity to deny his guilt and establish his innocence.
(b) an opportunity to defend himself by cross-examining t~e witnesses
c
produced against him and by examining himself or any other
witnesses in support of his defence; and finally
(c) an opportunity to make his representation as to why the proposed
punishment should not be inflicted on him." D
The nature of adjudication under Clause 39.9.2 of Terms and Conditions
of Supply is some what different from an enquiry under Article 311 (2) of the
.Constitution. It cannot be laid down as a rule of universal application that
whenever the statement of departmental officer is pressed into service for the
purpose of adjudication, a right of cross examination is in built. On the other E
hand, what was said in Bakshi's case (supra) has also really no relevance·
because that was a case where no penal consequences were involved and the
Commission was only a fact finding Commission and, therefore, is clearly
distinguishable of facts.

In order to establish that the cross examination is necessary, the consumer F
has to make out a case for the same. Merely stating that the statement of an
officer is being utilized for the purpose of adjudication would not be sufficient
in all cases. If an application is made requesting for grant of an opportunity
to cross examine any official, the same has to be considered by the adjudicating
authority who shall have to either grant the request or pass a reasoned order
if he chooses to reject the application. In that event an adjudication being G
concluded, it shall be certainly open to the consumer to establish before the
appellate authority as to how he has been prejudiced by the refusal to grant
opportunity to cross-examine any official. As has been rightly noted by the
High Court in the impugned judgment where the reliance is only on accounts
prepared by a person, cross examination is not necessary. But where it is H
t

378 SUPREME COURT REPORTS 120061 2 S.C.R.

A based on reports alleging tampering or pilferage, the fact situation may be
different. Before asking for cross examination the consumer may be granted
an opportunity to look into the documents on which the adjudication is
proposed. In that event, he will be in a position to know as to the author of
which statement is necessary to be cross-examined. The applications for crnss-
B examination are not to be filed in routine manner and equally also not to be
disposed of by adjudicator in casual or routine manner. There has to be
application of mind by him. Similarly, as noted above, the consumer has to
show as to why cross examination is necessary.
..
In the instant case th•! respondent had not indicated as to why the
C cross-examirration was necessary. If a fresh application is made, the same
shall be duly considered by the appellate authority, keeping in view the
principles indicated above. The appeal is accordingly disposed of. No costs.

N.J. Appeal disposed of.