ORDER
1. The demand for payment of Rs. 6,25,018-35 P. under Annexure-D against the petitioner is the grievance for consideration in this writ petition.
2. The petitioner has asked for quashing the impugned notice under Annexure-D dated 11-5-1983.
3. Annexure-D makes interesting reading and it would be necessary and relevant to reproduce the same :–
"KARNATAKA ELECTRICITY BOARD
No.AEE,. ESD-3,. AAO/984-91 Office of the
Assistant Executive Engineer,
El. ESD-3 Sub-Dvn. 'B' Station,
KEB M. g: Road, Bangalore-1
Dt. : 11th May, 1983
BY REGISTERED POST ACKNOWLEDGMENT DUE
M/s. DECCAN STEEL LIMITED,
No. 29/1, Kengal Hanumanthaiah Road,
BANGALORE-560027
Sir,
Sub : Inspection of H. T. Installation -- R.R.No. E4 HT-75 by M. T. Division Staff.
Ref : i) E.E. (El.) M. T. D\n. letter No. 171-176 dt. 23-4-83;
ii) S. P. Vigilance letter No. MT/175/ 83/ 84 dt. 4-5-1983.
The Executive Engineer, (Elecl.) KEB M. T. Division and Superintendent of Police (Vigilance) KEB in their letters cited above have reported that, at the time of inspection of the above installation on 19-4-1983, it is stated to have found that the seals provided to the main door and also the KWH, KVARH and KVAH meters main covers found to be not genuine. The KWH, readings taken by the Asst. Ex. Engr. (Elecl.) ESD-4 Sub-Dvn. ITI on the following dates and also the readings taken by M. T. Staff on the date of inspection (19-4-1983) are as follows :
16-4-1983
KWH Reading
3684-96
17-4-1983
-do-
3685-72
18-4-1983
-do-
3677-19
19-4-1983
-do-
3680-91
Further, it has been reported in the above letters, that from the above readings that the theft of energy by the consumer by tampering the main cover seals of the meters for getting access to the inside of the meters and setting wrong readings by the human agency is evident, which is against the supply regulations. Hence, the quantity of energy dishonestly abstracted in the above meter has been assessed on burning hours basis as detailed hereunder, which is based on the Regulation41D and 41E(1) of E.S.R.
C.D. 2200 x 0.85 x 16 x 30 = 897600 Units P.M.
Penal Charges for 897600 Units at three times the normal rate of 22.5 Ps. per unit
6,05,880-00 Ps.
Elecy. Tax on 897600 Units at 5 Ps. per unit
44,880-00 Ps.
Total :
Rs. 6,50,760-00 Ps.
Less Energy Charges Plus Tax Claimed on 93606 units at normal rates for April, 1983 (-)
25,741-65 Ps.
NETT BACK BILLING CHARGES
Rs. 6,25,018-35 Ps.
In the circumstances explained above, you are hereby directed to pay the Back billing charges of Rs. 6,25,018-35 Ps. within SEVEN days from the date of this letter, failing which, the installation is liable for disconnection without further notice.
Yours faithfully,
Sd/-
Asst. Executive Engineer, Elecl.
ESD-3 Sub-Dvn. KEB.B’lore.”
4. The point for consideration is whether the demand made cannot be sustained for breach of natural-justice.
5. It appears that the Executive Engineer (Elecl.) KEB M. T. Division and Superintendent of Police (Vigilance) KEB reported to the concerned that at the time of inspection of the H. T. installation — R.R.No. E4 HT-75 on 19-4-1983 found that the seals provided to the main door and also the KWH, KVARH and KVAH meters main covers were not genuine. The date of inspection and other dates when meter readings were taken have been mentioned in the notice vide Annexure D.
6. It is seen from the second paragraph of the impugned notice that it was reported in the letters of the Executive Engineer (Elecl.) and the Superintendent of Police (Vigilance) that from the above readings there was theft of energy by the consumer by tampering with the main cover seals of the meters in order to steal access to the inside of the meters and for setting wrong readings by the “human agency” violative of the Electricity Supply Regulations. It is on this basis, the concerned authority reached the conclusion that a particular quantity of energy was dishonestly abstracted as assessed on the basis of burning
hours in accordance with Regns.41D and 41E(1).
7. The notice has been issued by res-pondent-2. An analysis of Annexure-D indicates that the surmise of respondent-2 as could be seen from Anncxure-D is based on two letters one written by the Executive Engineer (Elecl.) and the other written by the Superintendent of Police (Vigilance), K.E.B. What is sought to be made out from the said letters is that at the time of inspection of the installation on 19-4-1983 the seals which were provided to the main door and also the KWH, KVARH and KVAH meters main covers were found to be not genuine. I am unable to find out from this notice whether at the time of inspection the presence of the petitioner or its representative was summoned before the inspection was carried out and whether a mahazar was drawn up and whether the petitioner or its representative was a party to the mahazar. At least this much could be said and that is the said material particulars are not forthcoming from the impugned notice Annexure-D. Again reliance has been placed on the said letters for reaching the conclusion that from the readings taken on 16-4-1983, 17-4-1983, 18-4-1983 and 19-4-1983 there was theft of energy by the consumer by tampering
with the main cover seals of the meters for secyring access to the inside of the meters and setting wrong readings by the human agency. The second paragraph of the impugned notice is entirely based on the reports from the Executive Engineer (Flecl.) and the Supcr-intendent of Police (Vigilance) without disclosing at least the material part of the reports on which reliance is placed. Mere allegation cannot he accepted as proof. The real question is whether the reports submitted by the aid authorities is based on proved facts particularly in view of the gravity of the imputations made against the consumer. The implications of the allegations against the consumer are so grave that there is the allegation of theft of energy, the allegation of sueh a theft being made by the consumer by tampering with the main cover seals of the meters, the allegation that the tampering took place in order to gain access to the inside of the meters and also the allegation that the access was for the purpose of setting wrong readings hy human agency and ultimately the allegation that the consumer resorted to dishonest abstraction of energy. At this juncture, it is necessary to refer to Regn, 41(e)(1) of the Electricity Supply Regulations which reads as follows:
“Where it is established to the satisfaction of the Local Officer that a consumer has dishonestly abstracted, used or consumed or maliciously caused energy to be wasted or diverted, such officer shall estimate the value of the electrical energy thus abstracted, used or consumed, wasted or diverted for a period of 6 months or for such period as may be deemed justified in the circumstances of any given case, at thrice the normal rate of tariff applicable to the installation from which the energy is abstracted, used, consumed, wasted or diverted or at thrice the normal rate of tariff applicable to the purpose for which the energy is abstracted, used, consumed, wasted or diverted, whichever is higher and demand and collect the same by including the same in the next hill or by a separate bill. Such amount shall be deemed to be arrears of eleletricity charges. Neither failure to launch a prosecution nor the acquittal of the consumer in any criminal case launched against him on
this account on a ground other than that the prosecution case is false shall bar the proceedings under this provision. The levy of this compensation shall be without prejudice to the Board’s right to disconnect the service of the consumer and/or take such other action as it is entitled to under law. Any consumer aggrieved against an order of assessment made by the Local Officer may first pay the amount demanded and then may appeal to the Superintending Engineer, within a fortnight of communication of the order.”
8. In order to make out a case of dishonest abstraction of energy by the consumer, the decision making authority is expected to hold a proper enquiry affording a reasonable opportunity of hearing to the consumer against whom grave charges are made. Such an enquiry and a reasonable opportunity of hearing could be inferred by implication from the provisions of Regn. 41(e)(1) itself. The words “where it is established to the satisfaction of the Local Officer that a consumer has dishonestly abstracted” would indicate that the decision making authority as well as the fact finding authority have to establish that a consumer has dishonestly abstracted electrical energy or used or consumed or maliciously caused energy to be wasted or diverted which contemplates not merely abstraction or use or consumption of energy either by dishonest abstraction in the former case and maliciously causing energy to be wasted or diverted in the latter case and necessarily in order to establish and to be satisfied with the existence of element of dishonesty or the element of malice, which is attributed to the consumer, principles of natural justice demand that there should be a fair and reasonable hearing of the petitioner who could be expected to have an explanation to offer in defence against the allegations. A unilateral decision based on surmise without being subject to the test of an explanation from the consumer would hardly satisfy the requirements of fair play and justice.
9. There is no material on record before me to establish that there was sufficient material for the Local Officer to satisfy himself regarding dishonest abstraction of
energy. Since dishonest abstraction of energy is the basis on which the authority has proceeded to issue the demand notice under Annexurc-D, it would be necessary to find out whether or not the investigating authority had furnished satisfactory and adequate material to enable the issue of Annexure-D. In the normal course when tampering of the meter is suspected, it is necessary that there should be not only a mahazar, but also an agreed description of the state of affairs at the installation in question witnessed by both the parties by which I mean the inspecting authority as well as the consumer. It is difficult to lend legitimacy to an inspection made in the absence of the consumer or his representative unless either the consumer or the representative fails to appear at the time of inspection in spite of notice to either of them. In the circumstances of the case, it is not at all possible to reconcile with the allegations made and conclusions reflected in An-nexure D demanding payment of a substantial sum of Rs. 6,25.018-35 from the petitioner.
10. In adecision of this Court rendered in Rohan Sacks & Plastics Industries v. K.E.B., (1988) 2 Kant LJ 538, S. G. Doddakale-gowda, J. observed as follows in a case of a similar nature alleging theft of energy in para 7 at page 540:
“This Court is only concerned with the civil consequence that would flow from non-observance of minimum requirement of principles of natural justice re : non-application of mind by the Board in its proper perspective inclusive of its failure to inform the petitioner the mode or method adopted to abstract power would amount to theft and resultant position of running of factory coming to standstill. The demand made for payment of a sum of Rs. 2,38,907.25 Ps. without complying with the principles of natural justice must be held to be illegal and void. As the impugned action, results in civil consequence, assuming for the sake of argument that there is an alternative remedy under Regulation41, it is no bar for interference under Article 226 of the Constitution of India.”
11. I am in respectful agreement with the view taken by the learned Judge. This is not only a case where the petitioner is confronted with civil consequences, but also penal consequences by way of prosecution for alleged breach of statutory provision. I am satisfied that there is no valid basis for issue of Annexure-D not only on account of the conspicuous absence of incriminatory proof of dishonest abstraction of energy, but also because of denial of a reasonable opportunity of hearing to the petitioner in violation of principles of natural justice.
12. For the reasons stated above, the writ petition is allowed and the impugned notice under Annexure-D is quashed. In the circumstances of the case, there shall be no order as to costs. This does not, however, mean that the authority is precluded from holding a fresh enquiry in accordance with law,
13. Petition allowed.