The Supreme Court has held that a consumer cannot be proceeded against for theft of electricity under Section 135 of the Electricity Act, 2003 merely on the basis of suspicion or minor irregularities noticed during inspection.
The bench of Justice Aravind Kumar and Justice Vipul M. Pancholi emphasised that the inspection report must itself disclose the detection of theft, the material evidence supporting such finding, and the subjective satisfaction of the authorised officer before a provisional assessment for theft can be sustained.
The petitioner had been granted an electricity connection under the High Tension Special Service (HTSS) tariff with a contract demand of 3,000 KVA. The connection was energised on July 3, 2006.
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On June 16, 2017, an electricity breakdown occurred at the company’s premises following a blast in the cubical metering unit. A team of officials of the electricity authorities inspected the installation and prepared a report. The report recorded that the metering unit chamber was slightly damaged, the K-phase CT and PTs were in proper condition, the meter reading was correct and the seals were proper. However, the B-phase CT was found cracked and damaged and was replaced.
The authorities subsequently carried out another inspection on September 26, 2017, examining the check meter and metering cubical installed at the premises. On the basis of a written report submitted by the Assistant Electrical Engineer, a criminal case was registered at Chakulia Police Station under Sections 379, 420 and 353 of the IPC and Sections 135, 137 and 138 of the Electricity Act, 2003. The electricity connection was disconnected the following day.
On September 29, 2017, the authorities issued a provisional assessment order demanding ₹3,23,71,524 towards alleged loss caused by theft of electricity. The assessment was purportedly based upon the inspection findings, consumption data and provisions of the Electricity Act and applicable regulations.
The petitioner challenged the provisional assessment and disconnection before the Jharkhand High Court. It contended that the electricity connection had been disconnected merely on suspicion of theft and in violation of the Electricity Act and the Jharkhand Electricity Supply Code Regulations, 2015.
The Single Judge accepted the challenge and, by order dated September 5, 2018, quashed the provisional assessment order. The Court found that the inspection report did not disclose conclusive evidence of theft of electricity.
The electricity authorities appealed. The Division Bench subsequently allowed the appeal and set aside the Single Judge’s decision on August 8, 2025. It held that the inspection report contained sufficient material and that the statutory mechanism under the Electricity Act constituted a complete code, making the writ petition allegedly non-maintainable because an alternative remedy was available.
The dispute consequently reached the Supreme Court.
The Supreme Court undertook an extensive examination of the distinction between “unauthorised use of electricity” under Section 126 and “theft of electricity” under Section 135 of the Electricity Act.
The Court noted that Sections 126 and 127 form part of the statutory mechanism dealing with investigation, enforcement, assessment and appeal, whereas Section 135 falls under the chapter dealing with offences and penalties.
Under Section 126, where an assessing officer concludes after inspection that electricity is being used unauthorisedly, a provisional assessment can be made. The consumer is entitled to file objections and receive an opportunity of hearing before a final assessment order is passed. A statutory appeal is available against the final assessment order under Section 127.
Section 135, however, deals with criminal liability for theft. It covers conduct such as dishonest tapping or illegal connections, tampering with meters or electrical equipment, damaging meters or apparatus so as to interfere with accurate metering, and use of electricity through a tampered meter.
The Court stressed that these provisions cannot be treated as interchangeable.
A significant aspect of the judgment is the Supreme Court’s emphasis on the criminal character of Section 135.
The Court observed that Section 135 is a criminal remedy, whereas Section 126 primarily provides a civil mechanism to assess unauthorised use of electricity. For invoking Section 135, the State must satisfy the twin requirements of actus reus and mens rea and establish the offence in accordance with the higher standard applicable to criminal proceedings.
The Court particularly focused on the fact that Section 135 begins with the expression “whoever dishonestly”. According to the judgment, the use of that expression indicates the necessity of mens rea for invoking the provision. The physical acts constituting theft may include meter tampering, tapping of electrical connections, damaging meters or apparatus, or unauthorised use of electricity in the manner contemplated by Section 135.
In contrast, unauthorised use under Section 126 may arise even without criminal intention. For example, excessive consumption beyond the sanctioned load may attract Section 126 without necessarily constituting theft under Section 135. The Court reiterated that dishonest abstraction through methods specifically contemplated by Section 135 would constitute a distinct category.
The Supreme Court then examined the procedure prescribed under the Jharkhand Electricity Supply Code Regulations, 2015.
The Court noted that under the relevant provisions, an authorised officer is required to conduct an inspection upon reliable information. Where sufficient evidence of direct theft is found, the electricity supply may be disconnected and material evidence such as wires, cables, meters or service lines may be seized.
The Regulations further contemplate preparation of a provisional assessment order after examination of the evidence and consumption pattern, accompanied by a show-cause notice setting out the reasons for alleging theft and the basis of the proposed action. The consumer is entitled to file objections and receive a hearing before the final assessment is made.
The Supreme Court summarised the procedure as comprising:
- Inspection for theft;
- Disconnection where sufficient evidence establishes direct theft;
- Removal and seizure of the meter;
- Preparation of the provisional assessment order;
- Opportunity to file objections;
- Passing of the final assessment order; and
- Restoration of electricity within 48 hours upon deposit of the assessed amount.
The Supreme Court closely examined the September 26, 2017 inspection report.
The report referred to the construction and accessibility of the cubical metering arrangement. It recorded, among other things, that the metering cubical had two compartments, that the arrangement provided access to the CT/PT chamber, that certain features allegedly enabled removal of a seal, and that the meter chamber cover could be opened easily. However, the report ultimately stated only that “further action will be as per norms.”
The report’s remarks also recorded that there was no welding on the nut, that the cubical was old and had previously been repaired, that the door could not be opened without opening the plastic seal, and that the seals were found to be correct. It suggested that a joint inspection be conducted.
The Supreme Court found these circumstances significant.
The Court concluded that the inspection report did not contain “even a whiff” of an allegation of theft, much less evidence establishing it. At the highest, the report generated suspicion regarding the condition and accessibility of the metering arrangement.
The Court held that the minor discrepancies noted during inspection were insufficient to establish theft, particularly because a charge under Section 135 must meet the strict standards applicable to criminal law.
In a significant observation, the Court stated:
“Suspicion, no matter how strong, cannot take the place of strict proof.”
The Supreme Court further noted that the State had failed to produce even a single piece of evidence that could elevate the alleged discrepancies to the level of an offence.
The Court laid down a clear standard for initiating proceedings based on alleged electricity theft.
It held that theft must first be detected during the course of inspection. The inspection report must record the fact that theft was detected and must contain details of the evidence collected during inspection.
The Court specifically ruled that the authorised officer must record a finding regarding theft and identify the evidence supporting that finding. Only where the inspection report, on its face, discloses the basis for concluding that theft occurred can a provisional assessment order based on Section 135 be sustained.
The Court cautioned that an inspection report which does not disclose the basis of alleged theft cannot subsequently be used to impose penalties merely by characterising the consumer’s conduct as theft. If the report itself does not reveal theft, a more thorough investigation would be necessary to establish whether an offence actually occurred.
The Supreme Court also attached significance to the fact that the inspection report recorded that the plastic seals were intact.
According to the Court, the fact that the meter chamber was easily accessible, by itself, did not establish dishonest intention or mens rea. The report did not contain sufficient evidence showing that the accessibility of the metering unit had actually been used to steal electricity.
The Court also found a violation of Regulation 11.8 because the authorities had not seized material evidence such as wires, cables, meters or service lines. Neither the inspection report nor the written report disclosed that any material had been seized from the consumer’s premises.
The respondents had argued that the provisional assessment and disconnection were necessary to protect the State’s revenue.
The Supreme Court rejected the argument at the threshold. It warned that accepting revenue protection as a sufficient justification would potentially give inspection authorities arbitrary powers to disconnect electricity on the basis of vague reports that do not satisfy the requirements of Section 135.
Such an approach, the Court cautioned, could turn the statutory provision intended to combat electricity theft into an instrument for abuse of process.
The Supreme Court also addressed the preliminary question concerning the availability of an alternative statutory remedy.
Ordinarily, where a statute provides an effective alternative remedy, a High Court does not normally exercise its writ jurisdiction under Article 226. However, the existence of an alternative remedy does not completely oust the High Court’s constitutional jurisdiction. Exceptions exist, particularly where the challenge concerns jurisdiction or action taken beyond the statutory framework.
The Court observed that although Section 127 provides an appellate remedy, that remedy is available against a final assessment order, not against a provisional assessment order.
Consequently, since the Electricity Act does not provide a statutory appeal against a provisional assessment order, the writ petition challenging such provisional assessment was maintainable.
This finding was particularly important because the Division Bench of the Jharkhand High Court had proceeded on the basis that the statutory mechanism was a complete code and that the writ petition should not have been entertained.
After examining the inspection report, statutory provisions and applicable regulations, the Supreme Court concluded that the Division Bench of the Jharkhand High Court had erred in overturning the Single Judge’s decision.
The Court held that the inspection report did not establish theft and that there was no recorded subjective satisfaction of the authorised officer based on evidence of theft. The Court therefore found no basis for sustaining the provisional assessment order.
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