M/s Himadri Steel Pvt Ltdv.Jharkhand Urja Vikas Nigam Ltd & Ors

Supreme Court Restores Order Quashing Electricity Theft Assessment, Holds Suspicion Alone Insufficient

Case Snapshot

Case Name: M/s. Himadri Steel Pvt. Ltd. v. Jharkhand Urja Vikas Nigam Ltd. & Ors.

Citation: 2026 INSC 851

Bench: Justice Aravind Kumar & Justice Vipul M

Date of Judgment: August 12, 2026

Area of Law: Electricity Law, Administrative Law, Criminal Law

The Judgment in One Line

Suspicion of theft of electricity without substantive evidence in inspection report cannot sustain provisional assessment; writ petition maintainable despite alternative remedy.

Why This Judgment Matters

This landmark judgment clarifies the distinction between "unauthorised use of electricity" under Section 126 and "theft of electricity" under Section 135 of the Electricity Act, 2003. The Supreme Court held that theft requires proof of dishonest intention (mens rea) and substantive evidence—mere suspicion is insufficient. The Court also affirmed that writ petitions are maintainable against provisional assessment orders even when statutory remedies exist, as Section 127 only provides appeal against final orders. This protects consumers from arbitrary assessments based on vague inspection reports and ensures that the State cannot bypass evidentiary requirements by labeling suspicion as theft.

Background

The petitioner, a steel company, was granted an electrical connection under HTSS Tariff with a contract demand of 3000 KVA on July 3, 2006. On September 26, 2017, a cubical metering unit blast caused an electricity breakdown. An inspection was conducted, and the report noted that the metering arrangement was accessible, a seal nut was welded, and holes were found in the meter chamber. However, all seals were intact. The report concluded with "further action will be taken as per norms."

Based on this report, a Provisional Assessment Order was issued under Section 135 of the Electricity Act, 2003, demanding ₹3,23,71,524. The electricity connection was disconnected. The petitioner filed a writ petition, which the Single Judge allowed, quashing the assessment. The Division Bench reversed this, holding that the writ petition was not maintainable due to alternative remedies. The petitioner appealed to the Supreme Court.

Issues Before the Court

1. Whether the writ petition was maintainable when statutory remedies under the Electricity Act were available.

2. Whether the ingredients of "theft of electricity" under Section 135 of the Electricity Act, 2003 were satisfied in the present case.

3. What is the distinction between "unauthorised use of electricity" under Section 126 and "theft of electricity" under Section 135.

What Did the Supreme Court Hold?

The Supreme Court allowed the appeal, restored the Single Judge's order, and quashed the Provisional Assessment Order. The Court's reasoning was comprehensive:

Writ Petition Maintainable: The Court held that while statutory remedies are available, they do not oust the writ jurisdiction under Article 226. Section 127 of the Electricity Act provides an appeal only against a final order of assessment under Section 126(3), not against a provisional assessment order. Since the Act does not provide an appeal against a provisional order, the writ petition was maintainable.

Distinction Between Section 126 and Section 135: The Court drew a clear distinction between the two provisions. Section 126 deals with "unauthorised use of electricity" and is civil in nature—it applies even without intention. Section 135 deals with "theft of electricity" and is criminal in nature—it requires proof of "dishonesty" (mens rea) and the offence must be proved beyond reasonable doubt. All thefts are unauthorised use, but not all unauthorised use is theft.

Ingredients of Section 135 Not Satisfied: The Court examined the inspection report and found that it did not contain any allegation of theft, much less evidence. The report noted that seals were intact, and the observations about accessibility did not establish dishonest abstraction. The words "further action will be taken as per norms" were too vague. Suspicion, however strong, cannot replace proof.

No Seizure of Evidence: Under Regulation 11.8 of the Jharkhand (Electricity Supply Code) Regulations, 2015, upon detection of theft, all material evidence including wires, cables, and meters must be seized. No such seizure took place. This was a clear violation of the prescribed procedure.

No Mens Rea Established: The Court applied the definition of "dishonestly" from Section 24 of the IPC—intention to cause wrongful gain or loss. The inspection report did not establish any dishonest intention. The minor discrepancies noted did not rise to the level of an offence under Section 135.

Protection of Consumer Rights: The Court emphasized that covering a metering unit with a metal sheet for protection from sun and rain is common practice and does not indicate theft. The authorities cannot use suspicion as a basis for penalizing consumers.

Key Legal Principles

1. Writ petition maintainable against provisional assessment — Section 127 provides appeal only against final orders; no bar on writ jurisdiction for provisional orders.

2. Section 126 and 135 operate in distinct fields — Section 126 is civil (unauthorised use); Section 135 is criminal (theft requiring dishonesty).

3. Theft requires proof of mens rea — "dishonestly" under Section 135 requires intention to cause wrongful gain or loss; suspicion is insufficient.

4. Inspection report must contain evidence — a vague report without details of theft cannot sustain a provisional assessment.

5. Seizure of evidence is mandatory — under Regulation 11.8, material evidence must be seized upon detection of theft.

6. Burden of proof lies on the State — the State must prove theft beyond reasonable doubt; mere suspicion cannot take the place of proof.

7. Consumer protection is paramount — the Electricity Act protects consumers from arbitrary disconnection and assessment.

Important Precedents

Southern Electricity Supply Co. of Orissa Ltd. v. Sri Seetaram Rice Mill, (2012) 2 SCC 108

• Held that statutory remedies do not oust writ jurisdiction; High Courts can entertain writs in exceptional cases, especially where pure questions of law or vires are involved.

W.B. State Electricity Distribution Co. Ltd. v. Orion Metal (P) Ltd., (2023) 7 SCC 180

• Held that theft under Section 135 will fall within the definition of unauthorised use under Section 126; authorities are empowered to make provisional and final assessment even in cases of theft.

Kerala SEB v. Thomas Joseph, 2025 SCC OnLine SC 235

• Laid down principles: Section 126 is a code in itself; unauthorized use is of wider connotation; purpose is to prevent revenue loss and misuse.

K. Satyanarayana Reddy v. Southern Power Distribution Co. Ltd., (2025) 9 SCC 72

• Held that mens rea is essential for invoking Section 135; the provision is criminal in nature and requires proof beyond reasonable doubt.

Practical Impact

For advocates: This judgment is crucial when defending consumers against electricity theft allegations. It establishes that a vague inspection report without evidence of dishonesty cannot sustain a provisional assessment. Advocates must argue that Section 135 requires mens rea and substantive evidence, not mere suspicion. The judgment also confirms that writ petitions are maintainable against provisional orders, providing an immediate remedy for consumers.

For future litigation: The judgment clarifies the distinction between Sections 126 and 135, preventing the State from using the criminal provision (Section 135) when the facts only support a civil claim (Section 126). It also reinforces the requirement of seizure of evidence and the need for a detailed inspection report.

May be cited: In any electricity dispute where a consumer is charged with theft under Section 135 based on a vague inspection report, and in cases challenging the maintainability of writ petitions against provisional assessment orders.

Lawcurb Quick Insight

The Court's observation that "suspicion, no matter how strong, cannot take the place of strict proof" is significant. The State cannot label a consumer as a thief based on mere suspicion—it must produce evidence of dishonest abstraction. This protects consumers from arbitrary action by electricity boards.

Lawcurb Practice Note

When challenging a Provisional Assessment Order under Section 135, emphasize the absence of evidence of dishonesty in the inspection report. Argue that the report must contain specific details of theft and that the mandatory seizure of evidence under Regulation 11.8 was not complied with.

Remember This Ratio

Theft of electricity under Section 135 requires proof of dishonesty and substantive evidence; mere suspicion without evidence is insufficient.

Exam Lens

Q: What is the distinction between Section 126 and Section 135 of the Electricity Act, 2003? A: Section 126 deals with "unauthorised use of electricity" and is civil in nature—it applies even without intention. Section 135 deals with "theft of electricity" and is criminal in nature—it requires proof of "dishonesty" (mens rea) and the offence must be proved beyond reasonable doubt. All thefts are unauthorised use, but not all unauthorised use is theft.

Q: Is a writ petition maintainable against a provisional assessment order under the Electricity Act? A: Yes. Section 127 of the Electricity Act provides an appeal only against a final order of assessment under Section 126(3), not against a provisional assessment order. Since the Act does not provide an appeal against a provisional order, the writ petition is maintainable.

Q: What must an inspection report contain to sustain a provisional assessment under Section 135? A: The inspection report must contain specific evidence of theft, including details of dishonest abstraction. A vague report stating "further action will be taken as per norms" is insufficient. The report must record the subjective satisfaction of the authorized officer and the evidence collected during inspection.

Final Outcome

• Appeal allowed — the Supreme Court set aside the Division Bench's order.

• Single Judge's order restored — the Provisional Assessment Order dated September 27, 2017, is quashed.

• No theft established — the inspection report did not contain evidence of dishonest abstraction of electricity.

• Writ petition maintainable — alternative remedies did not bar writ jurisdiction against a provisional assessment order.

• No costs — pending applications disposed of.

Lawcurb Verdict

This judgment is a significant victory for electricity consumers. By clarifying the distinction between unauthorised use and theft, the Court has prevented the State from using the criminal provision (Section 135) when the facts only support a civil claim. The requirement of substantive evidence and proof of dishonesty ensures that consumers are not penalized based on mere suspicion. The affirmation of writ jurisdiction against provisional orders provides an effective remedy for consumers facing arbitrary assessments. A balanced and principled decision that protects consumer rights while upholding the rule of law.

This report is prepared by Lawcurb for educational and informational purposes only. It is a concise summary of the judgment and should not be construed as legal advice. Readers are encouraged to refer to the original judgment before relying on any legal proposition.