Earl Wilson, an American journalist, once said, “Benjamin Franklin may have discovered electricity, but it was the man who invented the meter who made all the money.” There is great depth in this quote– production and supply of ‘Electricity’ and regulating the usage of the same are two sides of the same coin. On one side is the consumer for whose utilization electricity is produced, and on the other are the distributors of the electricity, who account and charge the customers for the usage of the same.
Legislations have been enacted in the past and the most recent being The Electricity Act of 2003, has armonized the functioning and interest of these two sides of the coin, ie, customers and the distributors of electricity.
The electricity sector was earlier regulated by the Indian Electricity Act, 1910 and The Electricity Supply Act, 1948 and the various rules and regulations framed thereunder. However, the advent of economic liberalization and the consequent emergence of industrialization and development necessitated reforms in the electricity sector in order to make it more in tune with the changing times. These changes were reflected in the Electricity Act 2003, which the Parliament passed after repealing all earlier enactments.
The Constitution of India lists electricity in the Concurrent List, ie, both the Central and State governments can frame policies regarding electricity supply, except for nuclear power which is in the exclusive domain of Central Government. Hence, the industry structure remained monopolistic till the reforms were undertaken in 1991. After 1991 not only was the public sector monopoly removed from the industry, regulation of the industry was delegated to regulatory commissions and in some cases assets of public enterprises were also privatised.
Initial attempts at attracting private investment in electricity industry failed. A highly publicised power generation project in the state of Maharashtra was implemented but had to be closed down in few years time. The project was negotiated between the State Government of the day and a consortium of private companies. The contracts were signed between Maharashtra State Electricity Board (MSEB), public sector distributor, and Dhabhol Power Plant, the generation company promoted by Enron Corporation. Subsequently, the project was re-negotiated twice owing to the changes in the ruling political party in the state. Eventually the project was shut down when MSEB failed to honour the payment for its purchases despite the escrow accounts, guarantees by the State and Central Governments. The case could not be resolved amicably and the matter went to international arbitrator and courts.
To a large extent the failure of these projects to carry on is result of institutional weaknesses in terms of incomplete contracts, regulatory uncertainties and political interference in the regulatory process. The electricity regulation, in its modern meaning of term, appeared in India through a World Bank and DFID assisted package of electricity reforms implemented in the year 1995 in the state of Orissa. Subsequently, the Central Government enacted Electricity Regulatory Commissions Act 1998, which was later repealed and replaced with Electricity Act, 2003.
Insofar, the NCT of Delhi was concerned, by virtue of the Delhi Electricity Reforms Act, 2000, the erstwhile Delhi Vidyut Board (“DVB”) was “unbundled” and distribution of electricity was handed to three electricity distribution Companies which were joint ventures with the Government of NCT of Delhi. These three companies are: BSES Rajdhani Power Limited- primarily serving southern and outer part of the city; BSES Yamuna Power Limited- serving Central and East Delhi; and North Delhi Power Company – serving North Delhi.
One of the main disputes that has arisen since privatization is the allegation of theft of electricity against the consumers by the power distribution company or DISCOM. The Electricity Act, 2003 defines two main types of electricity theft:
In both the above-referred cases, section 135 of the 2003 Act provides that, only authorized inspection team can raid the premises of the consumer to find out the way in which the electricity theft is being committed. The Inspection team members are bound under law to prepare the inspection report, the load report and the seizure memo (if any) and provide a copy of the same to the consumer. Subsequently, a bill is raised for theft of electricity and if the consumer does not pay the same, then DISCOM can file a criminal complaint.
As far as electricity theft cases are concerned, the following issues have to borne in mind:
The jurisdiction of ordinary criminal courts has been excluded for theft of electricity cases. The complaint for theft of electricity can be filed by the DISCOM directly in the Special Electricity Court constituted under Section 153 of the Act, which is headed by a judge holding a rank of an Additional Sessions Judge (ASJ). Section 154 of the Act provides that the ASJ can directly take cognizance of the criminal complaints filed without the same being committed to him by a Magistrate. The provisions of Section 154(3) provide that the Special Electricity Court can conduct the criminal case in a summary manner, though the offence of theft of electricity is cognizable and non-bailable and can carry a maximum sentence of five years upon conviction.
Section 157 of the 2003 Act is an important provision. It gives Special Court the powers of review which is otherwise not available to criminal courts unless the grounds contained in Section 362 of Criminal Procedure Code are satisfied. Lawyers who are defending consumers in the Special Court can approach the High Court under Section 482 if the summoning order is flawed. Additionally, during the trial under Section 154 of the
Act, if sufficient evidence comes on record, then the accused can prefer a review of the summoning order.
Another common dispute between distributing company and the consumer pertains to ‘Unauthorized Use of Energy’ (UUE), provisions for which are contained in Sections 126 and 127 of the 2003 Act. When a consumer misuses his electricity connection for a purpose other than the sanctioned purpose, then UUE is made out, for example, if a domestic connection is used by a consumer for commercial or industrial purposes, then UUE is made out, as in such cases the tariff for domestic use is lower than the tariff for industrial or commercial usage.
Lawyers have to be bear in mind whether the DISCOM has raised a provisional assessment bill after the raid on the consumer. If the said bill is disputed by the consumer, it will have to be assessed whether a personal hearing before an officer of the DISCOM, known as the Assessing Officer, is given to the consumer and that the consumer has had an effective chance to present his case before the said officer. The consumer must also be provided copies of the Inspection Report, Load Report and the Videography. After the personal hearing, the Assessing Officer has to pass a reasoned order referred to as a ‘speaking order’. Pursuant to the speaking order, the final bill is issued and if the same is not paid, then the DISCOM is entitled to disconnect the electricity and proceed for recovery of the dues by way of civil suit. It is pertinent to note that UUE is not a criminal offence and the accused cannot be prosecuted by way of a criminal complaint in the Special Electricity Court.
Billing disputes are another common type of disputes between consumers and DISCOM. The 2003 Act has created special mechanism for redressal of consumer disputes. The consumer need not apply to the Consumer District Redressal Forums created under the Consumer Protection Act 1986. Instead, special Tribunals called the Consumer Grievances Redressal Forum (CGRF) are created by pursuant to Section 42 (5) of the 2003 Act which have exclusive jurisdiction to hear all cases pertaining to consumer grievances pertaining to electrical services. The Delhi Electricity Regulatory Commission (DERC) which is the regulatory body for the electricity sector in Delhi has issued the DERC Regulations of 2004 whereby the powers, procedures and functions of the CGRF have been specified.
The Delhi High Court has entertained various writ petitions under Article 226 of the Constitution against the inspections pertaining to theft of electricity, UUE and for other disputes. Some of the landmark cases have been discussed hereunder:
In the instant case, the High Court was dealing with the issue as to whether the civil courts will have jurisdiction to try cases pertaining to Section 126/127 of the Electricity Act 2003 and also cases pertaining to theft of electricity under Section 135 read with Section 138 of the said Act. It was held that the jurisdiction of civil courts is excluded for entertaining any suit or proceeding in respect of any matter which the assessing officer referred to in Section 126 or the appellate authority referred to under Section 127 or the adjudicating officer appointed under this Act has to determine. It was further held that no injunction shall be granted by any court or any authority in respect of any action ought to be taken in pursuance of power conferred under the Act. While dealing with the cases pertaining to theft of electricity under jurisdiction of the civil courts is not expressly barred, but the power to try offences punishable under Sections 135 to 139 is conferred exclusively on the Special Electricity Court. It was also held that the jurisdiction to determine any dispute regarding the quantum of civil liability in theft cases irrespective of whether the allegation of theft is disputed also lies with the Special Electricity Court even in those cases where no criminal complaint is filed against the consumer.
In this case, the High Court was dealing with the issue as to whether the Special Electricity Court should be directed to hear the accused and pass orders accordingly or to mandatorily follow summary procedure as provided under Section 154(3) of the Act. The High Court held as under:
“A plain reading of the above provision reveals that the intention of the Parliament was that cases concerning theft or illegal abstraction of electricity, attracting the offence under Section 135 to 140 and Section 150 of the Act, should be tried, to start with, in a summary way. Since the substantive portion of the above provision itself empowers the Special Court in this regard, it is unnecessary for the Special Court to give reasons for trying the case in a summary way. The procedure under Section 154(3) is indeed a departure from the procedure of trial of warrant cases under the Cr PC. Section 154(3) contains a non-obstante clause which indicates that it is a departure from the normal procedure. Even Section 155 of the Act, which otherwise makes the entire Cr PC applicable, begins with the words “save as otherwise provided in this Act”.
In this case, the High Court was confronted with the issue as to whether the Special Electricity Court has the power to review its summoning order under section 157 of the Electricity Act, 2003. The court ruled that the Special Court takes cognizance of the offence in terms of Section 151 of the Act and usually the summoning of the accused happens simultaneously. There is no question of the Electricity Court beginning to exercise its powers in the course of the trial in terms of the Section 154(3) of the Act without the accused appearing before the court in response to the summon. The power under section 157 of the Act is limited to permitting recall of an order passed by the Special Court under section 154 of the Act and not to the order taking cognizance and issuing summon. Accordingly, the Special Electricity Court does not have power to review the summoning order under section 157 of the Act.
In this case, the High Court was dealing with the issue as to whether the Special Electricity Court is entitled to pass conditional bail orders for deposit of certain amount in cases of theft of electricity. It was held that the Special Electricity Court is empowered to impose condition of deposit of certain amount at the time of granting bail to the accused in cases pertaining to theft of electricity.
The issue before the High Court in this case was whether the Special Electricity Court was justified in suo- moto issuing notices and initiating proceedings under section 340 of Cr PC against the BSES and its officers in cases where criminal complaints for theft of electricity were filed against the accused/ registered consumers who were subsequently and during the course of proceedings before the Special Electricity Court, discovered to be dead as on the date of inspection. This was a totally new area as there is no judicial pronouncement on this issue. The High Court opined that intention and mens rea are the essential ingredients in cases under section 340 of Cr PC and since criminal complaints were filed before the Special Electricity Court under the bonafide belief that the accused/registered consumer was alive, proceedings for perjury was not maintainable.
In the instant writ petition, the High Court while relying upon two judgments of the Supreme Court, namely, Chairman, Grid Corporation of Orissa & Ors v. Sukamani Das (Smt) & Anr. 1999(7) SCC 298 and SDO, Grid Corporation of Orissa Ltd & Ors v. Timudu Oram 2005(6) SCC 156 , held that in matters pertaining to electrocution a writ petition is not maintainable since it involves disputed questions of fact which must be left to Civil Courts.
Reform in the power sector is a debated issue in any country, India being no exception. Being a relatively new legislation, various ambiguities persist in the Electricity Act, 2003, although the judiciary is playing an important role in clarifying the same. However, a deeper understanding of the legislation will assist the legal fraternity to guide the aggrieved consumers towards redressal of their grievances in the best possible manner. The Central and State Governments cannot relinquish their responsibility of providing adequate electricity for the economic development and well-being of the people. Promotion of public sector companies to build power-generating divisions is the need of the hour. But a sine qua non is that these companies should be given adequate technical, managerial and financial independence coupled with detachment from political interference.
Bhagwat Prasad Agarwal Advocate (Delhi)
I would say yes. Statistically speaking, prior to 2003, there was 50-60% electricity theft in India and the provisions of the earlier Indian Electricity Act 1910 were not sufficient to curb electricity theft in India. The Electricity Act 2003 has been able to successfully determine civil liability, while in the older legislation there was no provision for the same. Even if theft was established, the maximum penalty was for three years or fine or both. But as per Sections 154 and 155 of the new Act of 2003, the special judge of Electricity Tribunal can determine the civil liability which will not be less than two times the tariff rate applicable for 12 months preceding the date of inspection, or the exact period of theft, whichever is less.
Yes, It would be just to say that after the passing of the Act of 2003, electricity theft has substantially reduced. Taking the situation in Delhi, in 2003, in the NDPL area, electricity theft was 53% which has now been reduced to 14.47%. In 2002, in the BSES Yamuna Power Limited area, theft was 63.1% and it has now reduced to 23.1%. Similarly, in Rajasthan Power Corporation Ltd. area, electricity theft has been reduced from 51.2% to 31%. So, within 7 years of its existence, instances of electricity theft have reduced to a quite a large extent.
In rest of the country, cases of electricity theft have not been reduced as much as it has been in Delhi or Mumbai. In Delhi, we may say that many private companies distributing electricity came into existence at the beginning of this Century and these distributors were able to reduce their losses by taking resort to the Electricity Act 2003.
What has been observed is that the report prepared by the inspection team is often incorrect. For example, in calculating the connector load, they sometimes take excess load. Suppose I have three premises having three different connections with respectively different loads. While holding the inspection, as a matter of practice, they calculate the load of all three premises together. In such a case, if one meter is tampered, the entire load is reflected against that particular meter while it should have reflected in each of the meters. The result is that it tampers with the load of the rest of the two premises. The correct thing to do would be using electronic meters which would prevent the inspectors from taking the connector load which is often the wrong load.
I believe, DERC in Delhi has done a tremendous job for NDPL, BSNL, YPL and RPL. Consumers have been able to directly approach these forums and get redressal.
No, I won’t say that. In any matter, while inspecting the premises, seals of the meter were found tampered with, a report should not be formed by the authorities without verifying the meter-reading in the lab and without the usage of scientific method. Suppose in Delhi, all meters are electronic meters and seal of a meter is found tampered, it is the duty of the DISCOM to send the meter to an NABL accredited laboratory and to download data of the meter thereafter. When data is found to be tampered, then they should conduct a study by the conventional pattern and then establish theft. But often, what happens is, without sending the tampered meter to the NABL lab, they themselves declare the meter as tampered and raise the provisional bill, which is not the correct way.
I personally believe that there is some scope for amendment in the Electricity Act because scientific methods are not being used to resolve matters. Nowadays easily affordable and available scientific methods can be used for inspection, and yet it is not being done. People who inspect premises should be at least of the managerial rank, but here in Delhi, some trainees are also seen conducting the inspection which is not right. Only experts should be allowed to do so for the effective implementation of the provisions of this enactment.
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