Electrical Dispute under Electricity Act-2003 Under Section 135 and Section 126

Electricity  Disputes

Nature of Disputes

The electricity disputes can broadly be divided into the following heads:

A. Theft and unauthorized use of electricity

B. Commercial Disputes

C. Metering Disputes

D. Billing Disputes

A. Theft and unauthorized use of electricity

The theft of electricity can be divided into two heads;

Theft by tampering the meter which is called DAE and Direct Theft.

Before coming into operation the Electricity Act, 2003, the theft of electricity through tampering of meters was called Fraudulent Abstraction of  Energy  (FAE).

The settlement of such cases was governed under circular dated 10.03.1999 issued by the then Delhi Vidyut Board (DVB). In terms of the said circular, if no FIR had been registered against the user/consumer the FAE bill could be settled under 4×3 formula and in case the FIR had been registered, the FAE bill could be settled under 6×3 formula. The said formula used to be


L : Connected Load (found at the time of inspection/raid at site

D : No. of Days (30 in case of Domestic Connection, 25 in case of Nondomestic

(commercial and industrial connection)

H : No of Hours (8 in case of Domestic, 11 in case of non-domestic (commercial) and 10 in case of Industrial; in case the industry was running double shifts, the no. of hours will be doubled.

F : Factor (40% in case of domestic, 60% in case of commercial and

industrial.During the course of settlement of cases, it was observed in certain cases

certain officers of the DVB lodged the FIR immediately after the inspection/raid

was carried out and as such no opportunity could be granted to the consumer to

deposit the amount of the theft bill under 4×3 formula. Accordingly, another

circular dated 31.03.2000 was issued by the then DVB wherein it was stated thatin such cases where no opportunity was granted to the consumer to deposit the amount under 4×3 formula, the cases could be settled under the same formula even if the FIR was lodged. After the Electricity Act, 2003 came into force, the theft of electricity is governed under Section 126 and Section 135 of the said Act. The said two sections of the Act were amended w.e.f. 29.05.2007. Section 126 of the Act deals with unauthorized use of the electricity. Prior to the amendment of 29.05.2007, the unauthorized use of electricity under this Section meant the usage of electricity

(i)                by any artificial means or

(ii)               by means not authorized by the concerned authority or the E or

(iii)              through a tampered meter or (iv) for the purpose other than for  which the   usage of electricity was authorized. By virtue of amendment which came into force on 29.05.2007, another sub-clause was added namely if the usage of electricity is for the premises or areas other than those for which the supply of electricity was authorized. Under Section 12 6 of the Act the procedure for assessment for the unauthorized use of electricity has also been provided. As per the unamended Section the assessment could be made for a period of 3 months immediately  preceding the date of inspection in case of domestic or agricultural services and for a period of 6 months preceding the date of inspection for all other services. Subsection (6) provided that the said assessment would be made at a rate equal to 1.5 times the tariff application for the relevant category of services. However, by virtue of amendment which came into force w.e.f. 29.05.2007, the rate of 1.5 times was substituted with the words twice and the period of assessment was substituted as 12 months preceding the date of inspection for all categories of services. Under the unamended Section 126 in case the Distcom company raised an assessment bill for the unauthorized use of electricity and the payment of such bill was made by the consumer within the due date, such assessment could not be revised  subsequently by the concerned Distcom. However, by virtue of amendment which came into force w.e.f. 29.05.2007, this subsection has been deleted. The procedure for booking a case for pilferage of energy has been provided in DERC (Performance Standards – Metering and Billing) Regulations, 2002. These regulations were, however, amended by DERC Supply code and Performance Standards Regulations, 2007 w.e.f. 18.04.2007. As per un-amended regulation no.26 (ii), in case of suspected DAE, if consumption pattern for the last 1 year was reasonably uniform and was not less than 75% of the assessed consumption when the meter was less than 10 years old and not less than 65%the assessed consumption when meter was more than 10 years old, further proceedings were dropped and final assessment was not raised. Un-amended regulation 26(iv) provided that in case the DAE was established, the Distcom company could raise the assessment bill under 6×5 formula. That is to say 5 times of the amount calculated on the basis of LDFH formula and for the period of 6 months prior to the date of inspection. Under the amended regulations of 2007, in terms of the Regulation no.52, if the consumption pattern for the last 1 year is reasonably uniform and is not less than 75% of the assessed consumption (irrespective of the fact as to whether the meter is more than 10 years old) no further proceedings can be taken and the provisional DAE assessment bill if raised, shall be withdrawn. The said regulation further provides that the assessment bill will be raised for the past 12 months as per the assessment formula prescribed in annexure 13. In annexure 13 the details of LDFH formula have been given.

Regulation no.30 of the DERC regulations 2002 provided that “While making the assessment bill, the licensee shall give credit to the consumer for the payments already made by the consumer for the period of the assessment bill. The assessed bill shall be prepared after excluding the consumption recorded by the meter.” From the above regulation it is clear that while preparing the assessment

DAE bill, the consumer was to be given the adjustment of the units recorded as per of  meter for the period of 6 months for which the DAE bill had been raised. In spite of this clear language of the regulation, it was noticed that the Distcom companies while raising the DAE assessment bill were giving the adjustment of the value of the units consumed from the amount calculated under 6×5 formula. This point was examined by the Hon’ble Delhi High Court in the case of Bimla Gupta Vs.NDPL, 134 (2006) DLT 174. In this judgement it was held that the Distcom company was bound to first calculate the total actual consumption in terms of units consumed and paid for, exclude them while computing consumption in terms of the Regulation 24 (iv) and thereafter appropriate factor should be applied on the balance units. The above interpretation given by the Hon’ble Delhi High Court, however, has been frustrated after the new regulations of 2007 came into operation w.e.f. 18.04.2007. Regulation no.56 of 2007 now provides “While making theassessment bill, the licensee shall give credit to the consumer for the payments already made by the consumer for the period of the assessment bill.”

Section 135 of the Electricity Act, 2003 provides that the person who commits theft of electricity shall be punishable with imprisonment for a term which may extend to three years or with fine or with both.

The term “Theft of Electricity” was defined as follows prior to the amendment of 29.05.2007:

Whoever dishonestly (a) taps, makes or causes to be made any connection with overhead, underground or under water lines or cable or service wires of a licensee or supplier; (b) tampers a meter, installs or uses a tampered meter,current reversing transformer, loop connection or any other device or methodwhich interferes with the accurate metering of electric current or otherwise results in a manner whereby the electricity is stolen or wasted; or (c) damages or destroys an electric meter apparatus equipment or wire as to interfere with theproper or accurate metering of electricity.

However under the amendment effective from 29.05.2007 two new clauses have been added under the definition of theft of electricity which are as under:

(d) Whoever uses electricity through a tampered meter or

(e) Whoever uses electricity for the purpose other than for which the usage was authorized.

Thus, it will be seen from above, that even the use of electricity for the purpose other than for which of which it is authorized (which was earlier known as misuse of supply), has been included under the definition of theft of electricity w.e.f. 29.05.2007. Prior to the amendment of May, 2007, a consumer was charged 1 ½ times of the consumption charges as misuse penalty for use of the electricity 8 for a purpose other than for which it was sanctioned. But now after the amendment of May, 2007, a consumer can be charged under LDHF 12×2 formula like in a case of theft of electricity. The said amendment appears to be quite harsh.

After the privatization and after strict provisions in respect of theft and misuse of electricity have become operational under the Electricity Act, 2003 as amended in 2007, it has been noticed that the Distcom companies have started raising inflated theft bills in some cases. In certain cases it was observed that in case the consumer failed to make the payment of the theft bills within the due date, the Distcom companies immediately filed criminal complaints in the court of Learned Special Judge, (Electricity Matters) and the Learned Special Judge would grant interim bail only if the consumer deposited substantial amount against the theft bills. In respect of many such cases the consumers who were asked to deposit substantial amount against the theft bills to obtain interim bail challenged such orders in the Hon’ble High Court. The Hon’ble High Court quashed the condition with regard to the deposit of the substantial amount in many such cases which are reported in Vol. 145 (2007) DLT 101, H.S.Pannu Vs. Govt. of NCT of Delhi, The Hon’ble High Court of Delhi has rendered some other judgements also to protect the interest of the consumer keeping in view the stringent provisions in respect of theft of electricity. For instance in the case of Harvinder Motors, 135 (2006) DLT 198, It was held that the consumption pattern must be examined property by the Assessing Officer before passing the order of assessment. Similar view was taken in the case of Udham Singh Vs. BSES, 136 (2007) DLT 500 and Kanhiya Lal Sharma Vs. DVB, 139 (2007) DLT 81. In the case of Jagdish Narain Vs. NDPL,140 (2007) DLT 307, the Hon’ble High Court granted relief to the consumer as there was no indication from the inspection report that any device/film was used to slow down the meter. In the case Radhey Shyam Vs. NDPL, 143 (2007) DLT 598  (DB), it was held by the Hon’ble Delhi High Court that in case consumer makes a request to cross examine the witness including member of inspecting team, the adjudicating authority should pass a reasoned order if such a request is rejected.

Cognizance of Offences with regard to Theft of Electricity: In case of theft of electricity the Distcom companies raised the DAE/Direct Theft bills and in case the consumer does not make the payment of the said bills, the concerned Distcom can file a complaint in writing as provided in Section 151 of the Electricity Act, 2003. Such complaint is filed in the Special Courts constituted under Section 153 of the Act. In case the offence is proved, such a consumer can be awarded imprisonment up to 3 years or with fine or with both. Under Section 154 (5) of the Act, the Special Courts shall also determine the civil liability against such a consumer and that amount shall not be less than the amount equivalent to 2times of the tariff rate applicable for a period of 12 months preceding the date of detection of theft of energy or the exact period of theft, if determined, whichever is less.

It may also be relevant to note here that the first offence of theft of energy is compoundable and the procedure for the compounding of the offence has been provided in Section 152 of the Electricity Act. Under Section 152 of the Act, the compounding can be done by the appropriate Government or any officer authorized by it in this behalf.


  • Dear sir,

    for domestic supply of Electricity

    if one owns a house and in firs floor except plastering and white wash power connection(2006) was given to ground floor after that 2012 the refurbishing/maitanance work started for first floor and the eb support has not been utilised but water for the work purpose from the over tank was taken as and when requirement was there but not from the pump.

    Now is it mandatery to the change the tarrief as commercial from domestic

  • satnam singh

    who can entertain the case u/s 135 and how much money deposit ed in PSEB 30% and send new section 135act

  • Joy.P.V

    Sir, A consumer has been issued a Provisional Assessment Bill for nnecteunauthorised extension of Cod Load.Now that the consumer apply for a new connection to the premises at which the UAE has been taken.Can the new connection be effected pending the penal assessment

  • sabu.s


  • sabu.s

    i wants know the assessing authority under section 135