New Delhi: The Supreme Court has held that, in cases of alleged electricity theft, the “assessed amount” a consumer must deposit to seek restoration of supply under the third proviso to Section 135(1A) of the Electricity Act, 2003 is to be determined through the assessment procedure of Section 126, with objections and an appeal under Section 127. That determination is final only for restoration and does not bind the Special Court, which determines civil liability under Section 154(5).
A Bench of Justice Manoj Misra and Justice K.V. Viswanathan dismissed the appeals of Gujarat distribution licensees, subject to a clarification, in a reportable judgment dated 26.10.2026 (2026 INSC 1157).
The appeals, filed by Dakshin Gujarat Vij Company Ltd. against Vaibhav Metal Crusher, and by Paschim Gujarat Vij Company Ltd. against Jamanbhai Nanajibhai Bhuva, arose from supplementary bills for alleged theft. In the first, a notice of 03.01.2024 demanded about Rs. 92.99 lakh for theft and Rs. 23.45 lakh as compounding charges. The Gujarat High Court allowed reconnection on deposit of 50 per cent and let the consumer file objections, with a Section 127 appeal available. In the second, the Division Bench remitted the matter to the single judge.
Senior Advocate Ranjit Kumar, for the licensees, argued that the assessment contemplated by the third proviso to Section 135(1A) differs from a Section 126 assessment, is meant only to enable reconnection, and carries no right to object or to appeal under Section 127. He argued that, since Section 127(4) makes the appellate order final, allowing appeals in theft cases would render Section 154(5) nugatory. Raghenth Basant, for the consumers, contended that since Section 126 is the only provision for assessment, “the assessed amount” must mean the amount assessed under it, and that an appeal is a continuation of the original proceedings.
Relying on West Bengal State Electricity Distribution Co. Ltd. v. Orion Metal Pvt. Ltd. (2020) 18 SCC 588 and Southern Electricity Supply Co. of Orissa Ltd. v. Sri Seetaram Rice Mill (2012) 2 SCC 108, the Court reiterated that assessment under Section 126 and civil liability under Section 154(5) do not exclude each other, and that, where theft by meter tampering is alleged, the licensee may both assess under Section 126(1) and lodge a complaint under Section 135, with strict proof of guilt and mens rea needed only in the criminal case.
On the licensee’s main argument, the Court held that the third proviso is “an emergency provision”, designed to let a consumer disconnected on accusation of theft seek restoration of supply, “a commodity essential for all aspects of life including business.” If the consumer had to wait for the Special Court’s determination, “the very purpose of the third proviso… would stand frustrated.” With no other provision to determine the assessed amount, and one formula in the Supply Code, adopting the Section 126 procedure “cannot be faulted.”
The Court also rejected the finality argument. It held that the finality of the appellate order under Section 127(4) is “limited to determining the amount required for restoration” and does not absolve the offender of civil liability, as Section 154(6) itself provides for refund where the civil liability is lower than the amount deposited. Summarising, the Court held:
“[I]n cases of theft where a criminal complaint is filed, the determination under Sections 126 and 127, though final for the purpose of seeking restoration of the supply of electricity under the third proviso to sub-section (1A) of Section 135, is subject to the determination of the civil liability by the Special Court under sub-section (5) of Section 154 of the 2003 Act.”
On the licensee’s plea that 50 per cent deposit is too lenient and does not deter theft, the Court acknowledged that High Courts’ constitutional powers are not wholly circumscribed by statute, but said that electricity is “an essential commodity necessary for both life and livelihood”. Because theft necessarily involves mens rea, a liberal approach may not be appropriate, and a High Court may in a given case decline restoration until the entire provisional amount is deposited, so that “a circumspect approach is required.” Yet, since assessment takes time, where the provisional assessment is prima facie arbitrary the High Court may, for reasons recorded, order restoration on payment of not less than 50 per cent, matching the deposit required for an appeal under Section 127(2).
Applying this, the Court found the High Court’s direction in LPA No. 592 of 2024 within its jurisdiction, but clarified that the determination would be subject first to a Section 127 appeal and finally to the Special Court’s civil liability if the consumer is prosecuted.
Subject to that clarification, the appeal was dismissed, and the other appeal against a mere remand order was also dismissed.
Appearances:
For the Appellants (Distribution Licensees): Mr. Ranjit Kumar, Senior Advocate.
For the Respondents (Consumers): Mr. Raghenth Basant, Advocate.
Case Title: Dakshin Gujarat Vij Company Ltd. & Anr. vs. Vaibhav Metal Crusher (with Paschim Gujarat Vij Company Ltd. & Anr. vs. Jamanbhai Nanajibhai Bhuva), arising out of SLP (C) Nos. 17868/2024 and 8778/2025, 2026 INSC 1157
