IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 11.11.2009 CORAM THE HONOURABLE MR.JUSTICE K.CHANDRU W.P.NOs.6968, 6969 of 2008, 6940 of 2006, 11585 of 2009, 23287 and 24478 of 2008 and 2078 of 2004 and M.P.NOs.1,1,2,2 and 3,3 of 2008, WPMP No.7536 of 2006, M.P.Nos.1 and 2 of 2009, 1 and 2 of 2008 and WPMP NO.159 OF 2009 W.P.Nos.6968 and 6969 of 2008: M/s.Hi-Tech Mineral Industries Covai (P) Limited, S.F.No.46, Kottagoundenpatty Village, Omalur Taluk, Salem District-636 304 rep. By its Managing Director Venkittapathy.P. .. Petitioner in both the petitions Vs. 1.The Tamil Nadu Electricity Regulatory Commission, No.17, III Main Road, Seethammal Colony, Alwarpet, Chennai-600 018. rep. By its Secretary. 2.The Chairman, Tamil Nadu Electricity Board, 800, Anna Salai, Chennai-600 002. 3.The Executive Engineer/O&M/West, Salem Electricity Distribution Circle, Tamil Nadu Electricity Board, Salem-5. 4.The Union of India, rep. By Secretary to Government, Ministry of Law and Justice, Nirman Bhavan, New Delhi. https://hcservices.ecourts.gov.in/hcservices/ 5.Secretary to Government of India, Ministry of Power, Shram Shakti Bhavan, Rafi Marg, New Delhi. .. Respondents in both the petitions W.P.No.6940 of 2006: L.Vijayakumar .. Petitioner Vs. 1.The Chairman, Tamil Nadu Electricity Board, 800, Anna Salai, Chennai-600 002. 2.The Executive Engineer/O&M, Mylapore, Chennai Electricity Distribution Circle/Central, Royapettah, Chennai-600 014. 3.The Assistant Executive Engineer/O&M, Santhome, Tamil Nadu Electricity Board, Chennai-600 004. .. Respondents W.P.No.11585 of 2009: O.Hanuman Patel .. Petitioner Vs. 1.The Chairman, Tamil Nadu Electricity Board, 144, Anna Salai, Chennai-600 002. 2.The Assistant Executive Engineer/O&M, Manali, Chennai Electricity Distribution Circle/North, Tamil Nadu Electricity Board, Chennai-600 019. .. Respondents W.P.Nos.23287 and 24478 of 2008: D.Clitus, Manager, No.1,Geason Colony, Ponniamman Nagar, https://hcservices.ecourts.gov.in/hcservices/ Kel Ayanambakkam, Chennai-600 095. .. Petitioner in both petitions Vs. 1.The Chairman, Tamil Nadu Electricity Board, 800, Anna Salai, Chennai-600 002. 2.The Secretary, Tamil Nadu Electricity Regulatory Commission, 17, 3rd Main Road, Seethamal Colony, Chennai-600 018. 3.The Executive Engineer, Tamil Nadu Electricity Board, Tuticorin District .. Respondents in W.P.No.23287/2008 1.The Chairman, Tamil Nadu Electricity Board, 800, Anna Salai, Chennai-600 002. 2.The Executive Engineer, Tamil Nadu Electricity Board, Tuticorin District. .. Respondents in W.P.No.24478/2008 W.P.No.2078 of 2004: M/s.Emkay Alloys (P) Ltd. S.F.645/1, Kalingiyam Village, Kamaraj Nagar, Kolappalur Polst, Gobi Taluk, rep. By its Managing Director, K.Durairaj. .. Petitioner Vs. 1.The Executive Engineer/O&M/ Tamil Nadu Electricity Board, Gobichettipalayam, Coimbatore District. 2.The Superintending Engineer, Gobi Electricity Distribution Circle, Tamil Nadu Electricity Board, Gobichettipalayam-638 452. https://hcservices.ecourts.gov.in/hcservices/ 3.The Chairman, Tamil Nadu Electricity Board, 800 Anna Salai, Chennai-600 002. .. Respondents W.P.No.6968 and 6969 of 2008 are preferred under Article 226 of the Constitution of India praying for the issue of a writ of declaration declaring Section 135(1A) of the Electricity Act 2003 introduced vide Electricity (Amendment) Act 2007, Regulation 1(C) of Regulation under which Regulations 19 and 23 were amended on 13.6.2007 and 12.09.2007 vide Tamil Nadu Electricity Supply (Amendment) Code 2007 and Tamil Nadu Electricity Supply (Second Amendment) Code 2007 and the proceedings of the third respondent herein in letter No.EE/O&M/W/Slm/TA2/F.Theft HT SC No.128/D No.023/08 dated 10.03.2008 and letter No.EE/O&M/W/Slm/TA2/F.Theft HT SC No.248/D No.022/08 dated 10.03.2008 respectively purported to have been issued thereunder as arbitrary, illegal, ultravires and unconstitutional. W.P.No.6940 of 2006 is preferred under Article 226 of the Constitution of India praying for the issue of a writ of certiorari to call for the records of the second respondent in his letter No.EE/O&M/Myl/AE/CAUP/F.TOE/D-3141/2006 dated 2.3.2006 and to quash the same as illegal, arbitrary and against the provisions of the Electricity Act, 2003. W.P.No.11585 of 2009 is preferred under Article 226 of the Constitution of India praying for the issue of a writ of certiorari to call for the records of the second respondent in Letter No.AEE/O&M MLI/F Theft of Energy/D23/09-10 dated 18.5.2009 and to quash the same as illegal, arbitrary and against the provisions of the Electricity Act, 2003 and the Regulations of the Supply Code 2004. W.P.No.23287 of 2008 is preferred under Article 226 of the Constitution of India praying for the issue of a writ of declaration declaring the Tamil Nadu Electricity Supply (Amendment) Code 2007 in notification No.TNERC/SC/7-4 dated 13.06.2007 issued by the second respondent as unconstitutional and ultravires the Electricity Act 2003. W.P.No.24478 of 2008 is preferred under Article 226 of the Constitution of India praying for the issue of a writ of certiorari to call for the records of the second respondent in Lr.No.E/D/U/TTN/F.Theft/D.No.1488/08, dated 30.08.2008 and to quash the same. W.P.No.2078 of 2004 is preferred under Article 226 of the Constitution of India praying for the issue of a writ of certiorari to call for the records of the second respondent in his letter No.SE/GEDC/G/AEE.G1/TA/F.Emkay T/R 710/2003 dated 23.12.2003 and to quash the same as illegal, arbitrary, violative of the principles https://hcservices.ecourts.gov.in/hcservices/ of natural justice and contrary to the provisions of the terms and conditions of supply of Electricity. For Petitioners : Mr.AR.L.Sundaresan, SC for Mr.K.Seshadri in W.P.Nos.6968 and 6969 of 2008, 6940 of 2006, 11585 of 2009 and 2078 of 2004 Mr.S.Parthasarathy, SC for Mr.C.S.Krishnamoorthy in W.P.Nos.23287, 24478 of 2008 For Respondents : Mr.P.S.Raman, AG assisted by Mr.A.Selvendhiran and Mr.J.Ravindran - - - - COMMON ORDER "Large-scale theft of electricity is a very alarming problem faced by all the State Electricity Boards in our country, which is causing loss to the State revenue running in hundreds of crores of rupees every year. In our considered view, after proper adjudication of the cases of all those who are found to be guilty of the offence of committing theft of electricity; apart from the sentence of conviction, the court should invariably impose heavy fine making theft of electricity a wholly non-profitable venture. The most effective step to curb this tendency perhaps could be to discontinue the supply of electricity to those consumers temporarily or permanently who have been caught abstracting electricity in a clandestine manner on more than one occasion. The legislature may consider incorporating this suggestion as a form of punishment by amending Section 39 of the Electricity Act, 1910." These observations made by the Supreme Court in Jagmodhan Mehatabsing Gujaral v. State of Maharashtra reported in (2006) 8 SCC 629 will set the tone for deciding the issues raised in these writ petitions questioning the vires of the amendment made to the Electricity Act, 2003 and the Regulations made thereunder. 2.These matters were grouped together and posted before this Court by the order of the Hon'ble Chief Justice, dated 29.08.2009 and were finally heard on 14.09.2009. https://hcservices.ecourts.gov.in/hcservices/ 3.Heard Mr.AR.L.Sundaresan, learned Senior Counsel representing for Mr.K.Seshadri and Mr.S.Parthasarathy, learned Senior Counsel representing for Mr.C.S.Krishnamoorthy appearing for petitioners and Mr.P.S.Raman, learned Advocate General assisted by Mr.A.Selvendhiran and Mr.J.Ravindran, learned Government Advocates. 4.In W.P.Nos.6968 and 6969 of 2008, the petitioner is one and the same person. The petitioner is a private limited company. Both the writ petitions is for a declaration that Section 135(1A) of the Electricity Act 2003 introduced by the Electricity (Amendment) Act 2007 as well as Regulation 1(C) under which Regulations 19 and 23 were amended on 13.6.2007 and 12.09.2007 by the Tamil Nadu Electricity Supply (Amendment) Code 2007 and Tamil Nadu Electricity Supply (Second Amendment) Code 2007 and the proceedings of the third Executive Engineer, Salem Electricity Distribution Circle, dated 10.03.2008 as arbitrary, illegal, ultravires and unconstitutional. 5.Both the writ petitions were admitted on 20.3.2008. The first writ petition related to the HT service connection No.128 and the second writ petition related to HT Service connection No.248 availed by the petitioner company. Pending those writ petitions, in both the writ petitions, this Court granted a direction to restore the supply of electricity on the petitioner depositing 25% of demand and balance 25% shall be deposited within a period of eight weeks, failing which disconnection of service connections may be made, by an order, dated 20.03.2008. Subsequently, applications were taken up in M.P.Nos.3 and 3 of 2008, seeking to modify the order, dated 20.3.2008. This Court granted time extension for paying the second installment. 6.In W.P.No.6940 of 2006, the challenge of the petitioner is to set aside the order, dated 2.3.2006 passed by the Executive Engineer (O&M), Mylapore, where the petitioner was a lessee of a premise in No.7, Ramakrishna Mutt Road, Mylapore, Chennai-4. By the impugned order, the petitioner's premises was found to commit energy theft and the petitioner compounded the offence by paying Rs.70,000/-. Subsequently, an assessment was made under Section 135 of the Electricity Act, 2003. Therefore, a penal levy was also made, which was directed to be paid in five installments. The first installment is at the rate of Rs.43,699/- and the other four installments is at the rate of Rs.43,698/- each. 7.Pending the writ petition, this Court granted an interim stay in WPMP No.7536 of 2006, dated 14.6.2006 to pay a sum of Rs.50000/- as a condition for the grant of stay. While attacking the order passed by the second respondent, the ground raised by the petitioner was that since he had already paid the compounding charge under Section 152 of the Electricity Act and hence, there cannot be any further demand from the respondents. Since the offence of energy theft is punishable under Section 135 of the Act, https://hcservices.ecourts.gov.in/hcservices/ no assessment order under Section 154 is permissible. 8.W.P.No.11585 of 2009 was filed by the petitioner, who was a lessee of the premises at No.2, Kamaraj Street, Rajaji Nagar, Tiruvottiyur, Chennai-19, challenging the order, dated 18.05.2009 passed by the Assistant Executive Engineer (O&M), Manali as the same being violative of provisions of the Electricity act, 2000 as well as the Regulations of the Supply Code 2004. 9.Pending the writ petition, the petitioner was directed to pay Rs.15 lakhs out of total demand of Rs.59,42,790.90. The said amount was directed to be paid in two installments and a direction to restore the power supply was also made by this court. 10.W.P.Nos.23287 and 24478 of 2008 were filed by the same person, who is the Manager of a Carbide factory functioning in the name and style of A.V. Industries, Thoothukudi District. In the first writ petition, the challenge is to the notification issued under the Tamil Nadu Electricity Supply (Amendment) Code 2007, dated 13.06.2007 as unconstitutional and ultravires of Electricity Act. In the second writ petition, the prayer is to set aside the order dated 30.8.2008 passed by the second respondent the Executive Engineer, Tamil Nadu Electricity Board. 11.The first writ petition was admitted on 22.10.2008. The second writ petition was admitted on 07.10.2008. In the first writ petition, in an application for an interim relief, only notice was ordered. In the second writ petition, this Court granted an interim stay on condition that the petitioner pays Rs.5 lakhs within a period of four weeks. When the respondent Board filed a vacate stay application, this Court recorded that the petitioner had paid altogether a sum of Rs.10 lakhs including his earlier payment and the interim stay was made absolute on condition that the petitioner pays a further lumpsum of Rs.7.5 lakhs within four weeks. 12.In W.P.No.2078 of 2004, the petitioner was a private limited company and they have challenged the order, dated 23.12.2003 issued by the Superintending Engineer, Gobi Electricity Distribution Circle as illegal and violative of principles of natural justice. The ground raised by the petitioner was that the respondents cannot presume theft of energy and they cannot decide such a dispute. No enquiry was conducted in terms of terms and conditions of Supply. The writ petition was admitted on 6.2.2004. Pending the writ petition, this Court granted an interim stay on condition that the petitioner pays Rs.10 lakhs within six weeks. The stay was made absolute and the subsequent attempt to vacate the interim order was rejected by this Court. Two applications for fixing an early date was filed by the Board, but still the matter was not taken up. 13.The petitioner also filed WPMP No.18873 of 2006 seeking to raise additional grounds. In the additional grounds, the https://hcservices.ecourts.gov.in/hcservices/ petitioner has taken a stand that the Special Court constituted under Section 153 of the Act alone is competent to decide the civil liability and the officials of the Board cannot assume the power to fix the liability. The Codes framed under Section 50 of the Electricity Act, 2003 are binding on them. 14.On behalf of the Board, various counter affidavits have been filed justifying the provisions impugned in the writ petitions including the notices issued by them. The Electricity Regulatory Commission has also filed a counter affidavit, dated 9.6.2008, justifying the amendment made to the regulations. 15.Mr.AR.L.Sundaresan, learned Senior Counsel appearing for some of the petitioners submitted that original Section 135 of the Electricity Act, 2003 was substituted by the Electricity Amendment Act, 2007 (Central Act, 26/07). The said provision dealt with the theft of electricity. By the amendment, Section 135(1-A) was introduced. The said provision reads as follows: "Section 135(1-A) Without prejudice to the provisions of this Act, the licensee or supplier, as the case may be, may, upon detection of such theft of electricity, immediately disconnect the supply of electricity: Provided that only such officer of the licensee or supplier, as authorised for the purpose by the Appropriate Commission or any other officer of the licensee or supplier, as the case may be, of the rank higher than the rank so authorised shall disconnect the supply line of electricity: Provided further that such officer of the licensee or supplier, as the case may be, shall lodge a complaint in writing relating to the commission of such offence in police station having jurisdiction within twenty-four hours from the time of such disconnection: Provided also that the licensee or supplier, as the case may be, on deposit or payment of the assessed amount or electricity charges in accordance with the provisions of this Act, shall, without prejudice to the obligation to lodge the complaint as referred to in the second proviso to this clause, restore the supply line of electricity within forty-eight hours of such deposit or payment." 16.The power granted to the officials under the amended provision that in case of detection of theft of electricity, the immediate disconnection of supply of electricity was highly arbitrary and such a provision is unconstitutional and violative of Article 14. Under the amended provision, the decision that there https://hcservices.ecourts.gov.in/hcservices/ was theft of electricity was to be arrived at by the authorities is likely to be misused. It is only after the disconnection, a complaint will be lodged in a police station within 24 hours. It is only when the licensee or the supplier deposits the assessed amount, then without prejudice to the criminal case, the supply will be restored within 48 hours. This draconian power is not contemplated under the scheme of the Act. 17.The learned Senior Counsel also submitted that Section 151 of the Electricity Act, 2003 provides for cognizable offences and Part XV of the Act provides for the constitution of the Special Courts. Section 154 provides for procedure and power of the Special Court. A combined reading of Section 154(4),(5) and (6) will show that the Special Court has been empowered to decide the matter on obtaining evidence and also can determine the civil liability against the consumer or person in terms of money for theft of energy and no amount can be charged less than the amount equivalent to 2 times of tariff rate applicable for a period of 12 months preceding the date of detection of theft of energy or exactly the period of theft is determined whichever is less. The amount of civil liability so determined shall be recovered as if it was a decree of a civil court. In the said provision, it was also stated that if the civil liability determined by the Special Court is less than the amount deposited by the consumer, the excess amount deposited by the consumer shall be refunded by the Board within a fortnight from the date of communication of the order of the Special Court together with prevailing interest fixed by the Reserve Bank of India from the date of deposit till the date of payment. 18.The said section 154 also has an explanation defining as to what it means by the term "civil liability" and it reads as follows: Explanation.—For the purposes of this section, “civil liability” means loss or damage incurred by the Board or licensee or the concerned person, as the case may be, due to the commission of an offence referred to in [Sections 135 to 140 and Section 150]. 19.The learned Senior Counsel also submitted that pursuant to the amendment made to the Act, the State Government has issued G.O.Ms.No.118, Energy Department, dated 27.11.2006, authorizing some of the officers to deal with the theft of energy and unauthorised use of electricity. The said notification has come into force on 27.11.2006. In respect of Low Tension Services including temporary services, the Executive Engineer of Transmission Utility/Wing and in case of High Tension and Extra High Tension services including temporary services, the Superintending Engineer of the State Transmission Utility/Wing had been appointed as assessment officers for compensation of theft of https://hcservices.ecourts.gov.in/hcservices/ energy as required under Sections 126, 135, 151 and 152(1) of the Electricity Act, 2003. 20.The learned Senior Counsel also pointed out that the Tamil Nadu Electricity Regulatory Commission, Chennai had issued an amendment to Tamil Nadu Electricity Supply Code by exercising power under Section 50 of the Electricity Act, 2003, providing for recovery of electricity charges. While the amended regulation was brought into effect from the date on which it was published in the Gazette on 13.6.2007, Regulations 14 and 16 have been brought into force with retrospective effect from 1.9.2004. It was considered by the Commissioner that there was necessity to amend the regulations so as to remove the difficulties and misconception. The power was exercised to amend the regulations in terms of Section 181 read with Section 50 of the Electricity Act. 21.Section 50 of the Electricity Act authorises the State Commission to specify the Electricity Supply Code providing for certain functions to be discharged by the licensee or supplier. The said section reads as follows: 50. The Electricity Supply Code.—The State Commission shall specify an Electricity Supply Code to provide for recovery of electricity charges, intervals for billing of electricity charges, disconnection of supply of electricity for non-payment thereof, restoration of supply of electricity, measures for preventing tampering, distress or damage to electrical plant or electrical line or meter, entry of distribution licensee or any person acting on his behalf for disconnecting supply and removing the matter, entry for replacing, altering or maintaining electric lines or electrical plants or meter and such other matters. 22.Under Section 181, the State Commission is empowered to make regulations as set out in the said provision. In the amended regulation, the petitioner's grievance is with reference to the introduction of Regulation 23AA. The said Regulation 23AA provides for procedure for assessment of electricity charges, disconnecting of supply of electricity and removing meter, electric line, electric plant and other apparatus in case of theft of electricity as set out therein. 23.According to the learned Senior Counsel, such power of delegation is not contemplated either under the Act or under the Rules. The learned Senior counsel submitted that such a sweeping delegation given to the authorities of the Board is highly unjust. It is an excessive delegation done by the Central Government by virtue of Section 50 of the Electricity Act. In the guise of such https://hcservices.ecourts.gov.in/hcservices/ delegation, the delegate cannot expand his power. On the contrary, Section 50 r/w Section 181 do not permit this power to be delegated. The Code framed by the Electricity Regulatory Commission must be consistent with the provisions of the Act and Rules. By such delegation, the power of the Court cannot be taken away and the Act do not contemplate conferring of such draconian power on the Electricity Board. 24.Section 135 (1-A) is oppressive as the disconnection of power is given to an executive authority without judicial approval. The authorities cannot be empowered to disconnect the supply of electricity only on the premise that there was theft of energy. Further, only by deposit of an amount as computed by them, it will be restored for which 48 hours' time has been given, during which period the Industry will suffer. The officers cannot adjudicate the factum of theft. Since maximum amount to be recovered is also prescribed under the Act, the civil liability of the consumer can also be determined by the Special Court. Any disconnection or collection of determined amount can be done only after orders were passed by the Special court, which is also empowered to adjudicate not only the criminal case, but also the civil liability of the consumer. Therefore, the learned Senior Counsel submitted that the amendment made is unwarranted and will defeat the very purpose of the liberal object behind enacting the Electricity Act, 2003. 25.Mr.S.Parthasarathy, learned Senior Counsel appearing for some of the petitioners, after referring to facts of the case in which he is appearing, referred to certain unreported decisions of this Court and stated that in the method of arriving final assessment, reasons are not expected to be given, and proper opportunity is to be given. The grant of seven days is not sufficient. By the guise of delegating power to the Regulatory Commission, the legislative functions cannot be given to them. He attacked the regulation of being excessive delegation. He further stated that a delegate cannot further delegate. He also stated that it is a colourable legislation. The word assessment has got multifaceted meaning and the power cannot be given to the authorities to make an assessment. Since the power of the criminal court has been expanded to decide the civil liability, the respondents should be made to await the final adjudication by the criminal court. 26.In reply to these contentions, Mr.P.S.Raman, learned Advocate General submitted that the impugned provisions are intra vires of the Act and there is no unconstitutionality. The Government of India has issued notification under Section 183 of the Act, by which the Central Government by a notification can remove the difficulties. Such a notification, if it is necessary for removing the difficulties and without being inconsistent provisions of the Act, can be validly issued. By the exercise of power under Section 183, the Central Government had issued the Electricity (Removal of Difficulties) Order, 2005 on 8.6.2005. https://hcservices.ecourts.gov.in/hcservices/ 27.Section 2 of the said Electricity (Removal of Difficulties) Order, 2005 reads as follows: "2.Inclusions of measures to control theft in Electricity Supply Code.-(1)The Electricity Supply Code as specified by the State Commission under section 50 of the Act shall also include the following, namely:- (i)method of assessment of the electricity charges payable in case of theft of electricity pending adjudication by the appropriate court; (ii)disconnection of supply of electricity and removing the meter, electric line, electric plant and other apparatus in case of theft or unauthorized use of electricity; and (iii)measures to prevent diversion of electricity, theft or unauthorized use of electricity or tampering, distress or damage to electrical plant, electric lines or meter. (2)The above provisions in the Electricity Supply Code shall be without prejudice to other rights of the licensee under the Act or any other applicable laws to recover the sum due and to protect the assets and interests of the licensee. 28.He stated that between 2003 and 2005, which period the new Act had come into force, the old Act will not apply and there appears to be some vacuum. In this context, he referred to an unreported judgment of this Court in M.Senthil Kumar and another Vs. The Superintending Engineer, TNEB(South), Coimbatore Electrical Distribution Circle and others in W.P.No.23188 of 2006, dated 9.10.2006. When this pointed out, in an attack on the complaint lodged for a energy theft, in paragraph 4, this Court observed as follows: "4.In these circumstances, the impugned orders dated 23.5.2006 and 19.6.2006 are quashed. It is open to the respondents to proceed in accordance with law upon the complaint, if this Court is not inclined to quash the complaint in exercise of its powers under Section 482 of the Code of Criminal Procedure in Crl.O.P.No.13688