 unauthorized connection under the Electricity Act. And as we all know that Mr. S S Naganan, a senior advocate from Karnataka Bar Association, is a well-known name under the, not only under the Electricity Act, his previous session on our platform, on partnership actors doing tremendously well. And he takes topics of vast different spectrums. One day I was googling and found that he has taken a session on the reservation, sometimes on different aspects, even on the constitutional aspects. And he himself, otherwise also being a chartered accountant, his nuances towards the financial matters and integrities are also well-received. Since we are all running, not we as, despite the fact that Mr. Naganan has pressing engagement, he had acceded to our request. We will not take much time and we'll straight away request, sir, to take things forward. Over to you, sir. Thank you, Vika. Good evening, fellow seekers of law and fellow professionals and maybe a few students who have joined in. The field of electricity is something which has been of great interest, but the law has been a very slow progress. If you see the first law relating to electricity was in 1910, Indian Electricity Act. Thereafter, the second legislation which came about was just after independence, the 1948 Electricities Electric Supply Act. Now, from 1948 onwards, there was no change in the legislative measures. Till we come to the late 90s, when after the liberalization process started, it became imperative for government to see what is the best way in which we can augment electric supply in the country. Historically speaking, the entire electricity sector was owned by the state and state agencies. So in other words, the generator was a state company, the distribution company was the same state entity, transmission was the same state entity, large number of consumers and consumer organizations and all the local bodies, they were consumers, they were also in the state sector. But slowly with the activity of the private sector coming, we got rid of this five-year planning that we had with Russia. And finally, during Rajiv Gandhi's Prime Minister ship, Philip was given to private sector, private enterprises. In fact, I remember late Mr. Nani Palkivala's lecture, if India has grown, it is not because of the government, it is in spite of the government. That's what he always used to say. So that means the enterprise of the Indian people is so fantastic that all these problems did not curtail them. But nevertheless, it's a hard fact that supply never got augmented. Now there are three problems for it. The first problem was it means huge capital. And you see in the past, the earliest power generation station in the country was proud to say in the state of Karnataka, then called state of Mysore. They harnessed hydroelectric power for the first time in Shiva Samudram. And thereafter, there were three or four power projects that were set up in Karnataka with hydel power. One of the biggest to them being the Shravati power project near Shumaga. Now the other sector, that is, all electric generation was mainly this, except that in some parts of the country, we had nuclear power and thermal power also. And most of this was in private and public sector, except in some areas like the Tatas had a power company in Maharashtra, Bombay area, except these exceptions. So when the law was sought to be reformed, thanks largely to World Bank telling the Indian government that if you don't reform your legislations and nobody is going to come and invest in your country. So it was in that background that the electricity reform started in the year 1998 with the Electricity Regulatory Commission sector, Central Legislation. Electricity is in the concurrent list of the seven scheduled to the constitution. So with the Commission's Act, the attempt to endeavor was to put in place an independent regulatory body for the sector. Now, the sector has got three main players. One is a person who generates power. Two is a person who distributes the power. He takes it from generation point and brings it to a point where consumption is taking place. From the hills of Shumaga, power has to come all the way to Bangalore and so this transmission is something which somebody does and when it reaches Bangalore, who is the one who's going to deliver it to your doorstep? The last mile connectivity, that is a distribution company. And lastly, the consumer. Now, the question has arisen as to whether what is electricity? Can you see electricity? You cannot see it. You can only feel it if you put your hand into a socket or if you put a bulb and you see the bulb is burning, that means there is electricity. So this is something which you can only see experience but not actually feel it in that sense. So electricity, what are goods generally? The sale of goods act says you can buy and sell goods. Now for goods to be bought and sold, the goods must be there. So the question arose whether these electricity, is it goods for the purpose of sale of goods act and other legislations? So Supreme Court said, yes, these are goods, though you can only perceive it and you can't actually pack it in a bag and take it home, you can actually use it. Now the bridging of these three entities, that is the generator, the transmission company and the distribution company had to be done by means of this regulatory framework. I'll not dwell too much on the framework of the legislation and how it has worked but I have to just give you some idea of the players in the market now because if you don't know who are the players, it's not going to be possible for you to appreciate all this. Now so in the past, government was doing everything. They were generating power, they were transmitting it, they were distributing it, they were collecting the charges, they were fixing the price also. Now the result was nobody was willing to come and invest. So this reform measure, what he did, he put in place an independent regulator under the Electricity Regulatory Commission's Act of 1998 and the state also, Karnataka and Orissa and Andhra and three, four progressive states also had their own state legislations to set up these commissions. These commissions were to regulate all the players. Now the object of this legislation was that the generation will increase which we have now seen today, Karnataka I'm thinking is in surplus power, they are distributing power to other states which are in need of power today. Now in the initial period, what was the sector that was generating with the growing population, industrialization, urbanization, power consumption is keeping on going at a very exponentially high rate. How do you make that demand met is that you got to increase your supply. So for supply in Karnataka, we have the power corporations called the Karnataka Power Corporation which is a government owned company, bullion government, they are in the business of generating power. Then you have a distribution company called the Karnataka Power Transmission Corporation Limited. Now before this reform measure came, there was one behemoth called the Karnataka Electricity Board which was again a department to the government and that board was doing all these functions with the reform pressures, they bundled it out and they said the transmission will be done by the transmission company. The distribution from the point of where the consumption takes place that should be handled by a distribution company and the consumer is the one who's going to be dealing with the distribution companies, he won't be dealing with transmission company or generating company. Now this entire process involved the decontrol from government and wasting it into an independent regulatory body. Now this regulatory body could fix the tariff, it could fix the terms of supply, it could take care of all the problems that the sector faced. The object being that if somebody wants to invest money, the entity should be able to set up here, all our rules should be granted, they will put in their private capital and enterprise, electricity will be generated, will be transmitted, distributed and the consumer will get electricity of good quality and the consumer will pay a reasonable price. All these aspects have to be regulated. Now we are dealing with the last aspect of it. Now you see if a distribution company does not get the revenue which is supposed to get, now it supplies X million units per day in the city of Bangalore, let us see. Whereas their collection is only going to be X divided by two million units. That means 50% of the power which is coming into Bangalore, I have to give you just an example or illustration to understand these are not factual figures I'm giving you. So if only 50% of the power that is coming into Bangalore is being used by somebody, it is being metered and in my house we have an electric meter and power comes, you can see that rotator is rotating and end of the month you get a bill and if you don't pay, they'll come and cut your electricity. It's the mechanism that is there. So the regulator wanted to ensure that all power that is supplied is properly billed. Now what is proper billing? There are a lot of regulations. The electricity regulatory commission has formulated what is called as a electricity supply and distribution code. Now as a part of the regulatory functions of the regulatory commission, they regulate all the players, they regulate the persons who are supplying power to the transmission companies. They're regulating how the transmission companies charges to the distribution company. They're regulating how much the distribution company will charge to the consumer. They're also regulating what are the obligations of the consumer. Now, so this is a composite whole enactment that is there. Today's topic relates to one aspect, one facet of it. See, it doesn't need too much discussion to say that if all the power that is supplied is not properly billed, charged, collected, the system is not going to work. Now I'll tell you an endemic problem that has been there. If these distribution companies, they purchase power from the generating companies. Now the distribution companies, they're not able to realize entire sale value of the energy that is being distributed by them. So their cash flow goes for a six. They don't have enough money to pay for the power. And who is a supplier? The supplier is a state-owned company called the Power Corporation. They're also private suppliers who have set up power generation plants. We see a constant tussle. They, the bills submitted are not paid. And the supply companies say that we don't have money because our cash flow is hampered. Why? Because I'm not able to collect from my consumers. So for ensuring that this does not happen, the act contains some provisions. So today we're going to talk about those provisions. I'll not dwell much about the scope of the Electricity Act but I'll come straight to the point and place before you certain provisions in the law which have created some little confusion but they have fortunately been, the cobwebs have been removed by a few decisions of the Supreme Court and of the various other high courts also about which I will refer. Now in this enactment, part number 12 which contains the sections 126 to 130. This is the five sections that are involved in this plot. Now the heading of the part is investigation and enforcement. Now why do you need an investigation and an enforcement? Now you look at power consumers. Okay, if I want power, I go to a distribution company. And now the electricity code formulated by the independent regulator says, anybody who wants power, the distribution company is bound to supply. And also one more new provision. If a generating company generates power and it wants to transmit the power using the state-owned electrical lines. Now for example, if I set up a power plant in let us say somewhere in the Hilly district of Kurg, I set it up, giving an example. In Kurg there's not much consumption because it's all big forests and coffee and plantations and things like that. So there is a big city close by maybe Mysore. So they want to move the power to Mysore. There's a five star hotel in Mysore which wants to use the energy that is generated in Kurg. Till now there was no provision. In the new regulatory framework there is what is called as an open access. So a generating company can use the electrical lines that we all see everywhere to convey the power which they generate to a point which they want to take it to. So they pay a charge for this transmission which is called a wheeling charge. There's also a concept of banking I'm not going to. Why I'm giving you this is see once electricity is generated it cannot be stored. Electricity has to be constantly on the move. It is like Lakshmi Chanchala. She won't sit in one place. She'll keep on moving. Same way electricity. The minute you generate one unit of energy that energy has to go somewhere that energy has to be consumed. So this is a very delicate exercise that is being done. Now unlike many other natural resources for example, water. You can store water in the Vonsun tank and you can use it for irrigation during the time that you have to do cultivation. But the electricity is not like that. The only way you can control the supply and consumption of energy is either you shut down certain areas which they call as unauthorized shutdown or unscheduled shutdowns of electricity. That means certain number of hours they won't give power in a particular area. The reason being that they want to restrict the consumption of power in that area. The other one is you shut down the generator. Supposing in the last few days they've had excellent rain, very good weather and banglore. Of course some places it has rained too much but because of that all of us have stopped using air conditioners. So imagine what happens now. One week ago when the temperature is very hot every house used to have three air conditioners running. Now nobody is using air conditioners so the consumption has come down. The lockdown effect is large number of industries are closed down. People are working from home. Officers don't have lighting as they used to have because staff is not there. So that means power consumption has come down. Manufacturing activity has come down. So what I'm saying is this mismatch is always there. Now to cover this mismatch there are some regulations. Now one of the important basis for all this new legislation is that the system will be such that a generator will be assured of a good quality, good price for his power. A transmission company will be assured of a charge for transmitting power belonging to anybody. The distribution company will be assured that it will get power of good quality of the quantity they require at a fair price. The consumer who is going to use the power he is assured of a very transparent methodology which the commission uses to fix a power tariff. I think few days ago we saw in the newspaper I think it was yesterday, 35 say increased per unit for certain categories. They've exempted certain smaller categories also. So this exercise is done by the commission. So the commission regulates all this with the object of ensuring that the system works smoothly, seamlessly and is able to achieve what we are supposed to achieve. See, thanks to all this regulation the non-conventional energy generation in our state has gone up phenomenally. We are now I think nearly 50% of the energy that is being generated in the state is from non-conventional energy, which is wind which could be solar power and hydroelectric is a natural based thing which is a clean power. All these are clean. The ones which are polluting are the thermal units, nuclear units, others are not polluting. Now with this background you, these provisions in chapter 12, they relate to how meters have to be established. Now the supply code contains detailed provisions. It says how meters should be installed, what type of meters should be installed, how the consumption should be measured, what safety precautions should be taken and how metering should be made, how billing should be made, how the payment should be made. We have now seen a sea change in everything. You can sit on the click of your button, you can pay electricity bill now. You don't have to go anywhere now. You can just click it and make the payment. All these are thanks to technological advancements. Now you see, when a person continues to pay electricity, supposing he is consuming, let us say, he is consuming 1,000 units of energy in his house for a month. Now he wants to do some goal mark. He fidgets with the meter and makes sure that the meter stops running for half a day. So his consumption, when it is 2,000, will show only 1,000. And he's paying the bills very promptly. Now what happens in such case? This is what the law describes as unauthorized use. Now you see, I'll just read the definition. It's very simple and very clear in section 126. It talks of five situations where the use of power is unauthorized. Now I have a house. I've got two or three meters in my house. I've got certain capacity. I've told them I've got three air conditioners, two fans, one refrigerator, and all these other appliances. They make an assessment and they give me a particular demand. And I'm using it. Now, when does it become unauthorized? If you see the definition, it says, unauthorized use means usage of electricity by artificial means. By means not authorized by the concerned person or authority through tampered meter for the purpose other than for which electricity was authorized for premises other than those for which supply was authorized. I'll give you examples for each of them. This is the meaning of unauthorized use of electricity. Section 126 is saying that if you do any of these things, it is unauthorized use. Now artificial means means they have, they put a magnet near the rotor. So the rotor stops working or it goes very slow. That is unauthorized. Artificial means you are interfering with the metering equipment. Or there are other ways. You see a power line outside is very common in villages. If they want to have a function in their house or light up their house, they'll just take a pole and connect it to the line and they draw the power. So this is unauthorized, artificial means. Then by means not authorized by the person. Now I've got a connection for my house. I am building a new floor I'm putting up in the house. So I need extra power for that. This power I'm getting is for residential use. That is not, that is considered as commercial use. So can I use it? No, that's unauthorized. Tampered meter I've already given you the example. Then for a purpose other than for which it's authorized. I'm a residential house. I'm using it. I can use power for my house. But if I start a tailoring factory in my house, I have 20 people working here. Then it is commercial use and not a residential use. So different purpose. Then for a premises other than those for which supply. Now I've got a house here. My neighbor has no power for some reason. I draw a line from my house and connect to his house. That means the power given to me is being used by him. Maybe it is meter, but it is not for the purpose for which it has given. Another example I'll give you. It's a, let's say a commercial establishment. They start using part of that commercial establishment for running an industry. Now it is a low tension power. They start and put up a lot of equipment. Now you take a load for say 10 kilowatts for your house, but you put in so many equipment which will show the consumption at very high demand. You see there are two factors in a power. One is the number of units, it's called kilowatt hours. Another one is the maximum demand. That means what is the maximum power you're drawing at any point of time? Supposing you switch on all the air conditioners, refrigerator, water heater, all the lights, fans, everything in your house, a certain amount of current is drawn that is called the maximum demand that is there. So you have to pay when you ask for a 10 kilowatt that means you pay a particular rate per kilowatt. That's a fixed charge. The reason why this fixed charge is made is you may ask for that power anytime the minute you start paying for the demand. So the electricity company has to make available that much power. So the definition is very clear. If you do any of these things, you become an unauthorized use of power. Now section 126 contemplates just like a tax legislation. They can inspect your house if they find that you're connected all unauthorized equipment or you're indulging in unauthorized use as defined here, then what can they do? They can make a provisional assessment to the best of his judgment. And the provisional assessment must be given to this person who is in the place that is who is the one who's consuming. And once he gives it, he has a right to file an objection and after objections are filed the authority will have to hear you and he has to pass an order. And once he passes an assessment order as they call it then that payment has to be made. When they find that there is an unauthorized use then there is a penalty provision and it says that the rate payable will be twice the tariff applicable for the relevant category. So in other words, mine is an LT connection in my house low tension it is called. My office has got a high tension connection because it's a big building and the whole building is connected with that one transformer. Now what is the tariff applicable? I was telling you about the tariff mechanism. The electricity regulatory commission will fix the tariff for different categories of it. So if for LT, the rate of power is let us say five rupees per unit if it is. When unauthorized use take place they will charge me double that rate at 10 rupees per unit. Now this issue has come in number of cases invariably this administrative review, judicial review of administrative actions. Many times these companies don't bother about procedure they come straight away, cut their electricity make a demand huge sums are called asked for without following proper procedures. Matter has come up before Karnataka High Court in number of cases. And in one judgment in ILR 2009 Karnataka 294 the Karnataka High Court came to the conclusion that this is an assessment procedure natural justice has to be followed. So you have to have a proper inspection there must be a provisional order there must be a reply there must be an adjudication there must be an order. Once all this happens only the demand would be lawful. Now what happens after a demand is made there's an appeal available under section 127. I was mentioning to you about the state commission. The state commission can formulate regulations or rules for the appointment of an appellate authority. So the state commission does not do the appeal it will formulate rule and set up in a proper mechanism in terms of which an appellate authority will independently here and there are detailed provisions relating to this. Then there are other provisions relating to how the investigation is to burn, et cetera. Now I come to another provision the confusion that is a reason which is the reason why this topic was selected in this manner by Mr. Vikas is the you see there is a separate provision in part number 14 of the electricity act. This part number 14 starts with section 135 which is theft of energy, theft of electricity. Now you saw there that if you do something which you're not supposed to do which is unauthorized use, you can then be prosecuted. And you can be asked to pay the difference plus you can be called upon to pay 100% more as penalty. That is one consequence. The second consequence is if it constitutes theft now what is theft is a matter that has come up because the section itself defines theft. First thing it uses starts the word dishonestly. So those of us who are familiar with penal code we know that then there's such a word is used it talks of mental intention which we call as mens rya. So that means a person to be guilty of theft that he must act dishonestly. What does he do dishonestly? What should he do to be called a theft? He taps makes or causes any connection with overhead or underground line. The example I was giving you there's an underground line going unauthorizedly you connect that is theft. Then he tampers with any meter or installation. Then he damages or destroys an electric meter. No, very easy. Just after meeting reading takes place you have got some big marriage in your house you break the electric meter. Consumption will stop that is the metering will stop you will go and complain. They will come to you after 15 days. And this 15 days your wedding is over in the family with all them all and writing and everything. So what did you do? You tampered with the meter or you tampered with the calibration. You know, I was dealing with one case such an interesting case. It was a steel re-rolling bill. What they did there was that they place some huge magnets just behind the metering equipment. The result of that was that the meter was running at 50% of the speed it should normally run because that's a metallic disc which is moving measuring it. So they did that. And when they came to know only double now supposing the man has been doing this for one year and he gets caught at the end of one year what happens then? Now you may be able to recover 50% but how will you quantify it? You will take average. Now a wedding time consumption will be three times the average. So you still get away with less. So that is why theft is a separate provision which gives you a real shock. And that is if you use this electricity through tampered meter or you use electricity for a different purpose then all these when coupled with a dishonest intention then it amounts to theft. Now, in addition to section 135 there are also other provisions relating to theft of electric lines, et cetera, et cetera. Now, when there is a penal code says that if you take somebody's life wantonly it is murder and you are liable for punishment. Now, how do you put in force these punishments? That means what is the mechanism that you should have for this? Now, a question is often arisen. If supposing they proceed against you for unauthorized use can they also proceed against you for theft? Is there an overlap here? Now, for that decision of the Supreme Court beautifully analyzes this. 2013, eight Supreme Court cases page 49 where the Supreme Court examines this and says that this consumer forum, civil court all these don't have jurisdiction to go into this issue because invariably when something like this happens somebody will go and file a suit for injunction somebody will go to a consumer forum and say this company is rendering me service or supplying electrical energy they're harassing me now and their conduct is not good and there is deficiency in service to cover up the deficiency they're harassing me like this. Can you go to consumer forum? In this judgment, the Supreme Court said no the forum is only the forum that is created in this act. Recently a few months ago or less than a month ago I argued a case before the Gulbarra bench exactly same issue happened. For many years there's a rears of electricity in one unit after sometime that unit was sold and then other company bought that unit in an auction by BIFR. The new company came and said I see this energy I didn't consume I'm not liable to pay this. So the question arose whether the new entity who was bought that unit will be liable or not that's a long story. But finally the court came to the conclusion that the new person who comes and steps into the shoes of the old consumer that new consumer will also be liable to pay for the arrears that were there in the earlier. There's a separate regulation for that. Now one of the issues that we raised before the court there was we said look here, why should the high court examine all these correctness of this demand? There is a mechanism available. There are regulations. There is a bill that is sent. There is an investigation that was done. If that is found to be wrong or incorrect nothing prevents that person from taking recourse. There's a two-tire mechanism. There's an appeal. Then there's an ombudsman under the regulations. So this consumer should actually go and exercise those powers rather than how will the high court decide this as a factual investigation. So the court accepted our argument and dismissed their repetition observing that you cannot come to high court for this. You have to go through this mechanism that is provided in the supply court and in the act. Why I'm mentioning this is in this judgment of the Supreme Court that issue arose and the Supreme Court laid down no, no, you have to go through the normal process only which is prescribed in the act. One other issue arose. Now, when they proceed against you for violation of hard section 126 they made an assessment. They are giving you a natural justice. They have fixed the amount. They have imposed the penalty. You challenged it in appeal. Appeal reduced the penalty but confirmed the demand. That is over. Now can they parallelly institute criminal proceedings under section 153 is a question because theft is an offense. If you have committed theft then you are liable to be punished. The section itself says what is the punishment? No, in a case like that in this judgment in the two judgments of the Supreme Court 2006 volume eight Supreme Court cases 629. And 2011 volume 10 Supreme Court cases 779. In these two judgments the court examined the entire scheme of the act and came to the conclusion that civil liability is one. Damage liability is another one. Criminal liability is a third one. And the lot ships laid down. These are three parallel proceedings that can be instituted. It is like this, if you defame somebody you can be punished under section 500 IPC for defamation. At the same time that person can sue you for civil loss that is cost you. If it is oral they'll call it libel slander. If it is written it is libel. And it can be libel or slander. Both are defamation. It's an injury in tort. Therefore you can be sued. Same principle is applied. And the Supreme Court said that these are actually independent provisions and it is possible to proceed from both sides. Now in one judgment Supreme Court had to examine what is the difference between theft and unauthorized use. So a very recent judgment. 2019 Supreme Court cases online 1077. And in this case the court was concerned and they pointed out that to be theft there must be mensria. There must be definite intention. There must be a case of a willful action that is being done by the person. See, we all know that in domestic enquiries probability could be the basis for an order to be made. In civil courts balance of probabilities is a judgment standard. In criminal cases beyond all reasonable doubt. So each one has a different standard of proof. Now same thing in theft unless a dishonest motive and intention is alleged and made good it cannot amount to theft. It can only be unauthorized use. So if it is not premeditated and with a dishonest intention then the consequences you will pay for energy. You will pay double the rate matter ends. But if it is done with intention then it is amounting to theft in which event you are liable to be tried by a set of special courts. If you see section 153 of the electricity act in part number 15, there are detailed provisions which relates to constitution of special courts. Now why are these special courts needed? The special court is needed because theft is an offense. Nowadays it has sort of become the order of the day or fashion I don't know what it is. For land grabbing there is a special court. For offenses against politicians there is a special court. For tax matters dispute there is a special court. I remember I used to appear quite regularly it is called the economic offenses court presiding officer of the special court for economic offenses. Like this various special courts are set up that is because to ensure that these are cases which are against society. Therefore they need some expeditious disposal and some element of specialization of the honorable judges who sit in these courts would also be very useful. And now they're thinking of special courts for check this on our cases under the negotiable instruments act. So section 153 onwards this is dealing with setting up a special courts. What is the procedure to be followed by those special courts and what punishments they can give. There are some special provisions for appeal from there, revision from there and unlike normal criminal courts which don't have power of review that is well settled in the criminal procedure court once a judgment is pronounced that court cannot review its own order unlike what can be done in civil cases because the civil procedure court contains a provision enabling the court to review on certain grounds. There are certain definite grounds order 47 lays down what they are and if those grounds are there then the court itself can either see a motto or an application review its own order and say that this order is correct or not correct or reaffirm that order. Whereas in criminal cases that right is not available. Now in this act they make a special provision relating to review also and say though this is a criminal proceeding the court which passed the order the special court has the right and power to review these decisions. Now I must briefly mention to you about two or three other statutes also. The state government, the state legislature has enacted two statutes and these statutes are meant to enable recovery of dues. So there is an act called the power transmission corporation recovery of dues act of 1976. So in other words, this is a separate enactment which enables a public recovery of dues which the consumer has not paid and how it is to be recovered what is the methodology to be recovered arrears of a random new et cetera. All those are provisions which are made in this and these can be recovered by taking recourse to this enactment. Similarly in the supply code also the state electricity commission has also made detailed provisions relating to assessment, determination of the sum due and how exactly this amount is determined and what are the time in which these amounts must be paid. So I think if you see overall the conspectors of these two main provisions then I think the confusion though there is some overlap ultimately the object to the provision is what one must see. You see the consequences of any action there could be three consequences. One could be a departmental action. I'll give you an example from tax legislation. You file an income tax return the assessing authority looks into the return examines various provisions in it and comes to the conclusion that you have suppressed some part of your income and says I'm going to add so many rupees as your income and levy tax. So first consequence, your income which has escaped has been brought to book and a tax is levied at the normal rate of tax. Second consequence, the officer says you have deliberately suppressed this you have concealed these facts. So this is an offense. This is a violation which you have done and there's a section 271 which says that for concealment a person can be proceed against and a penalty can be imposed. So in a case like that what will happen is the penalty is something we should be prescribed and there's a procedure for that. So that is a second consequence. The third consequence the income tax act itself in 276C onwards provides that a person who has suppressed facts who has concealed facts whose assessment has been brought to book and he taxes demanded, penalty is levied he or she can also be prosecuted for an offense. Same thing like many offenses are there if you don't file a return you can be prosecuted for that. If you file a false return you can be prosecuted for that. If you declared an income of 1 lakh and you access for 1 crore then there's a false return that you file so you can be punished for that false return. So that means there are three consequences that flow that is what courts have pointed out here. There is a civil liability. The civil liability is to make good the amount. There is a penal liability of double the amount. There is a criminal liability of having to face prosecution. Of course, Supreme Court has been somewhat very liberal in many cases. I think on the facts of a certain case courts may take a particular view. In the two cases I just now referred to 2006 and 2011 Supreme Court. Both cases the punishment was imposed, upheld right up to Supreme Court. Then it was 17 years by the time the Supreme Court was deciding the case. They took note of the fact that you've already paid the money that you have suffered so many months of prosecution and now after so many years we reduce the sentence to one of fine. That's an appropriate power which the appropriate court can exercise. That power is always available to remit the sentence, to reduce the sentence depending on the facts and circumstances of the case. But generally this has been my experience that very rarely does somebody proceed further, get convicted, suffer imprisonment and undergo the sentence and not come across anybody though any number of cases are filed. So sometimes you think these are deterrent provisions. If you have a deterrent provision that itself is sufficient to put some kind of a scare in some people at least law-abiding people will think I may be subjected to all this harassment I may have to go to jail therefore let me be on the right side of the law. So the law on the point unauthorized use theft there is some element of overlap but the position is very clear that these are parallel remedies and it is possible for one to be subjected to more than one methodology and the special courts that have been set up they are an effective deterrent for these cases to happen. And you see I must tell you one more aspect before I conclude that aspect is I was telling you about the regulatory commission. Now if 10 units of power are generated in Sharawati technically speaking 9.5 units should be in my house consumed that means I should have built the electricity company should have purchased the 10 units and build for 9.5 units and collected the money. Now if this does not happen what is the reason for it? This is the exercise you see electricity regulatory commission has been doing one of the things that they are doing they are trying to find out and they are actually pushing the distribution companies and the transmission companies both to find out what is the reason that when you are buying 10 units of energy you are building only six units and recovering money for six. What is the reason for this? So the answer many answers are given by these distribution companies for whom I appear they say that there is what they call as a one is called a technical loss another is called a commercial loss. Now a commercial loss is in the example of theft case I was telling you I have consumed 1000 units but I am building I am managing to see that my bill runs only 500 units that means this remaining 500 units is something which is going unbuilt this 500 units electricity company is paying you see they paid money to the generator the generator has actually spent money to generate because he has equipment he has plant machinery so many other things for generating power all this he has spent so who's the one who's benefiting it? So this difference the electricity distribution and transmission companies say this is a commercial loss in the other example I was giving during a wedding you want to light up your house you just take it from the pole in villages it happens very often nowadays it's come down I gather but it still happens so this is what is commercial loss that is loss which is consumption but not built so the commission is holding a stick and driving the distribution companies to reduce their commercial loss they're saying no all the pump sets have to be monitored all of them have to be metered we need to know how many units of energy an electrical pump set is being used an agricultural system is using how many months is he using how many days how many hours how much power is he using this we need to know you can't push everything and say that this is a commercial loss now the other aspect is technical loss now if 10 units of power are generated in Sarawati by the time it comes to Bangalore it may reach only 9 units here again this is just a hypothetical number I'm giving you this is not actuals just for you to understand and appreciate what happened to this one unit did it vanish does power evaporate or does it leak anywhere like if you've got a pipe and you put water at one end by the time it comes to your lawn at the other end of the house some four or five percent of water will leak out is it like that that is called technical loss now technical loss the you see whenever the power has to go through a a conductor now a conductor is this in technical jargon conductor is nothing but a wire we see this overhead electric lines they are called conductors there are different types of conductors and depending on the thickness and the size they are given different names for them and the thickness and the size depends upon the quantum of power that you want to transmit also and the voltage at which you transmit the power also now we are consuming power at 220 volts here in America it is 110 volts in Europe everywhere it is 220 volts now that is the voltage at which I am using power here but when power is generated in Charavati and it's being transmitted here it is being transmitted not at 220 volts because then it would take one hour for the power to come here large volume of power has to come so therefore they transfer it at 11,000 kilovolts per hour 11,000 kV you would have seen the board that means 11,000 kilovolts is the speed the voltage at which power is being transmitted now the reason why that is done is the higher the voltage the lesser is the resistance this is a simple physical physics is what a gather of course I am not a science student I don't know that but this is what I have gathered in the course of what shall I say experience with the electricity sector so the higher the voltage the lesser the resistance that means the conductor is being fed at 11,000 kV and it is transmitting this energy at a certain speed so the resistance is less there so even with that lesser resistance the power has to go up and down it's called a step up and a step down transformer from 11th see when it's generated it may not be at 11,000 kV it may be lower voltage it goes up it's called step up to 11,000 then it is transmitted then it received in pinia from Shumogai it comes to pinia let us say pinia this is a huge receiving station what do they do there first thing they do is you would have seen huge transformers are there they receive the power at 11,000 kV they bring it down first to 4,000 then the next step they bring it down to 1,000 then they bring it down when distribution takes place to distribution center it comes further down and when it comes to my area there is a transformer just near my house the power is coming there at 440 volts and from there when it comes to my house it is stepped on to 220 volts that's how it works now when these step up and step down happens there is a certain element of loss that takes place so that loss is what they call as a technical loss so the commission is keeping a hawk's eye on this and asking the electricity companies how will you reduce the technical loss tell us what methodologies can you use what switch gear can you use what modern methodologies can you use what are the other types of conductors that you can use the commission also I've got a technical expertise there's a technical member there there's a technical advisor to the commission all of them are very competent people and they look at these things and advise them why I'm referring to these two things are that these two are intrinsically linked to the recovery process see it is very easy for the distribution companies to say sir there are 10 lakh agricultural pump sites are there in our state and they are consuming so much power we don't know how much so the commission said if you don't know how much you monitor them you have a there's a feeder system there now you know of course it's modernized to a great extent now and it's working super efficiently also see at any point of time the control systems are so good that if there is a transformer failure in one transformer fails in a HD transformer in less than two to three minutes the controlling substation gets that information to say that this transformer in this location has failed for this reason they can immediately attend to it these are all technical advancements that have come now why this is important is this is the only way in which they can reduce the technical losses and to ensure that all the power that is generated at a great cost you see many a times power is purchased the solar power they were being purchased at 15 rupees a unit slowly progressively it has come down due to various factors but nevertheless it is now in the range of about 3 rupees now the competitive bidding has come down to below 3 rupees a unit also now this power has to be conserved and used properly so I think overall these provisions which we see about unauthorized use and theft they are wholesome provisions and in my view they have been working quite efficiently only thing is that in enforcement stage because of the sheer volumes and also we can't lose track of the society today the society is full of corruption I am yet to come across a single department where we can say that there is no corruption corruption could be of many kinds I don't need to go into all that but one is that and the second thing is that the enforcement mechanism we have to still improve it in terms of systems you see that is what I think in the future is because in America they don't have meter readers we still have meter readers here there is a methodology there is a SCADA system which monitors everything that is happening and you were able to do everything now I haven't gone to a bank for last I don't know how many years but does that mean that I have not been doing any banking at all? obviously banking has been done but everything is on the phone now you just do an app and call anybody and send money to anybody and do everything so these modern technologies have to be used and the law is I think a good wholesome one and I think it should be usefully employed and enforced thank you very much we have some time for questions if anybody has any questions Vikas ji please take over I am not able to see any questions on my screen also we have the questions I am unmuting Trivikram also here joined okay if jurisdiction of consumer court is barred in relation to the dispute center it should happen jurisdiction of the consumer court is barred in relation to the disputes under the electricity act no most of the consumer disputes which went to consumer court in the point of my talk I mentioned they will make an allegation to say that service is deficient now consumer courts they are not technical people they don't have expertise to decide whose fault it is there is a specialized mechanism available and that mechanism is available in the electricity it is a very simple mechanism why should you go to consumer court you can go file a suit if you want but even in a suit the question is going to be see I'll give one more example now income tax officer you file a return for 1 lakh he assesses you for 10 lakhs can you go and file a suit to say declare that this 10 lakh assessment order is illegal answer is no because this income tax act says no suit shall lie to question any order passed under the act why because there is a mechanism available you have an appeal, you have a second appeal you have a tribunal, you have a high court you have a supreme court so that route you should follow think it's a right decision consumer courts cannot handle this because it's too complicated so there is a judgment if I recollect of justice honourable justice thing we said that the judiciary barred I remember a lot of cases were transferred they said you adopt the regulatory commissions provision which have been provided correct that's the law and qua electricity also whether it's a theft or whether it is a unauthorized there is a judgment by honourable justice Tantar Kumar which deciphered the distance between an unauthorized electricity connection and qua the theft wherein they said that let's assume there's a wire line there it's an unauthorized or you have one more AC at your place rather than the five sanctioned road then it says it's an unauthorized electricity connection but if you what you said it's a kundi like in Punjabi they say it's a kundi that you pull out an electricity take to your place etc and you are drawing to a kilowatts etc beyond your limit then it says it's a theft around DS why electricity producer in our country is monopolized why it can't be privatized and provide more options to consumers actually the privatization process is on today from 100% generation by state sector I think the state sector generation has come down dramatically especially in wind solar thermal all of them hydroelectric power lot of hydroelectric power is now being generated in private sector so state is not now spending more money that is why this regulatory framework has helped the state to invite people to come and participate put their capital and supply their energy there's a huge capacity generated by private sector what is the maximum percentage of technical loss allowed I think it's somewhere in the range of 2-3% I may be right and may be wrong but I'm just telling you from my memory what about COVID period during which residents were charged excess on ground that all the families were at home and using more electricity than usual yeah you were at home you should have had only 1 meal instead of 2 biryani's but you had biryani morning and evening plus you had andakari in the night so you are using more gas more electricity so you got to pay for it here I mean nothing comes free in this world no it's only India that you know we think of it free free I'll give you one example you know it's how absurd the government how it works my flat in Delhi I have not been going there for some time now because of COVID I have a refrigerator and some one small appliance running there and my consumption in that flat I've been you know in the range of about 200 units or 150 units a month I'm getting a subsidy from government my credit balance in my electricity account is going on increasing why because my consumption is below 100 units or so so I don't need that subvention but this is how the subvention works so all of us wants everything free you know I think it's high time we paid why should we be allowed to park a car free in your road give me one reason nowhere in the world it is allowed why only in India you can pay you can buy a car you can pay 25 lakhs for a car but if the local authority tells you look here we need to look after the roads we need to sweep them we need to keep them clean please pay 500 rupees a month for parking your car on the street oh the heavens will come down so electricity is not free can you clarify the difference between a technical loss and a commercial loss? I think I once said that technical loss is the one between which is caused due to technical reasons with on account of the system there is also you know there is some amount of power it is called reactive power now inside a transformer or even in a generator when a generator is generating power there is some element of power which is used in the process of generation so those like these just two three examples these are the reasons for the technical loss commercial loss is that somebody uses the power and doesn't pay for it so these theft and unauthorized use provisions are the ones to tackle the commercial loss the last question whether electricity board could disconnect the electricity connection based on the letter from the title owner at the house the co-pastor is saying the civil suit is under process I there has been lot of cases on this question you know about unauthorized connections being given katha not being there and principal regulations not followed occupancy certificate not there in all these cases courts have taken the view that the electricity company cannot go into all these things so long as there is a consumer it is your business to give supply in some cases courts have taken the view that if the entire building is unauthorized that there's no occupancy certificate and they come and ask you for power at that time your the electricity supply company is entitled to say sorry I'm not going to give you power but interstate disputes between members of a family or somebody may not be a good ground to deny electrical connection so long as pavement is being made by something so we have taken all the questions and we have touched the base in the right time I will ask the victim to propose a vote of thanks coupled with COVID guidelines to be followed in the right sense over to you thank you thank you Mr. Vikas Chitrat thank you sir as usual it is a it was a erudite presentation I have two questions before I extend my thanks note one is the one question is it is a continuation of the last question posed by one of the learned members suppose there is a eviction suit pending before the civil court and the landlord he gets the electricity connection disconnected and presently the tenant could be residing at that premises and he even approaches the high court that there is no electricity connection and his fundamental right is infringing and most of the times even the high courts have dismissed the case to approach the civil court so is there any leading case or what is your opinion on this particular issues you see it goes like this there is a building there is a landlord there is a tenant now the tenant is using the electricity and the obligation that is the tenant is the consumer of the electricity now if the electricity supply company has to disconnect power in a case like this they must follow a certain procedure they can't simply be the landlord comes and says you disconnect power they can't do it what reason will they give the reason that they can give is my bill is not paid or there is unauthorized use if either of these are not there and no procedure is followed merely because landlord says that my tenant is there you connect disconnect power and they do it I have no doubt in my mind that high court will interfere and wrap them on the knuckles and say you have no business to do this right sir most of these offenses sir these are compoundable and in one of the cases in fact that is related to my own colleague there was immediately one fine day some official from the electricity board he comes and he says that it is in fact they have taken a domestic connection and it is you know the commercial sorry domestic connection and they are running it on they are using it as a commercial connection and immediately the next day he makes a representation that he is ready to pay the fine and he is also ready to pay the backdated bill amount whatever for the commercial connection and subsequent to that the moment he files or makes a representation there's a fire registered against the person so and illegally also they ask about 5 to 6 lakhs to rectify it so how to go about these rent there's a repetition pending before the court as well that's what I said you know the enforcement mechanism is what shall I say shrouded with these two big problems one is the enormous pressure of work on them because they don't have enough number of people to police correctly two is they don't have enough competent people to actually enforce them and the third and the greatest problem in our country as I see it is the lack of a consensus corruption free environment it's a real unfortunate situation you know very upset because I'm ready to pay along with the backdated bill but and the offenses are compounded but but still an FIR is registered again I will have to run bill to post the officer will say go to the special court the special courts are not functioning now so and since last 45 days there is no electricity connection what happened to the repetition a repetition notice has been issued and we will have to pursue it no entry model no entry model but did not interfere normally in cases where there is a the supply has been going on and it is disconnected in such cases if the consumer comes before the high court and says sir they made a demand I am paying this money please restore the electricity because electricity is essential immunity for my life 99% of the cases the high court is granting interim release I am saying reconnect and directing the petitioner to pay the money especially once they are in advanced copy given to the electricity board council yeah and it's a compoundable offense in the act itself so last question we are taking the definition of an assessing officer at section 126 does it include private persons to do the assessment no there is no such provision at all it has to be an officer that is vested with the powers assessing officer means officer of state government or board or licensee sir sir yeah sorry to interrupt that particular licensee I just have to say that whether that licensee is having that power of private person because now the private companies are becoming licensee so is that any in the central act that licensee is having a definition and doing the assessment that that is the main question because in some way franchisee models are also existing and franchisees are coming as an authorized officers of licensee now when it comes to licensee licensee in some part of India also they are also private organization so my point is that sir whether these private organizations have that power to make assessment under this under section 126 that has been explained in that particular explanation what is the intention of the central act I think to see section 12 of the central act it says who are the persons who are authorized to supply transmit distribute undertake these are the three categories of people okay now under section 14 there is a specific provision for licensing appropriate commission may grant a license to any person for transmission distribution trading in an area so in other words once a private entity in the example you are giving there is a private entity and that private entity has obtained a license to distribution work in a particular area under section 14 the assessing officer definition will relate to that licensee if he holds a license now another question which was saying is that they give it on franchise to somebody now you see this assessment which you are talking about in section 126 you cannot equate it to an assessment of a tax or anything like that the word assessment there means to determine what is the amount of energy that has been unauthorizedly used and make a demand so who has it who is it that has supplied the energy it is a distribution company and the power to make the assessment is given to an officer of the assessment of the distribution company only so I don't see anything wrong with that and also there is another safeguard the safeguard is that once the demand is made you have a right of an appeal you're an ombudsman so there's an independent and that ombudsman and affiliate authority are not officers of the license so it is possible to have that here sir one example I wanted to give in Odisha I belong from Odisha High Court and also presently also I am the team lead of working in Tata Power there in Odisha previously the southern part of Odisha was taken by Reliance Power now what are the assessment that has been made by the Reliance Power officers they are pending till now in the court now those assessments are in challenged now now Reliance Power has gone away now who is the person to be taken into consideration as a liability part that is now we are in as in Tata Power is coming as a licensee over there now whatever the fault that private company has done previously now the liability will be again upon us that is the part I wanted to take in any central any rules is there to do that assessing officer will be the officers which has to be appointed by the government or central government in that way is there any possibility no no you see the law doesn't provide that at all you see the whole object is different you know so in the facts of the case that you're narrating we need to look at carefully how that transition took place you see the reason why this power is given to the supply company is that they have supplied the power they must recover that price so if that company is no longer there but it has actually supplied the power that company can still continue to defend its action and recover the money that's what it should be unless the new company which comes in which steps into the shoes of the old company if the in the transition phase you have taken over all the receivables of the previous company then you can step into the shoes as an assignee otherwise that company alone should continue yeah okay thank you all very much thank you sir thank you thank you for the end of today's session but our thanks would be a very small thing to say but anytime your presentation we are always enlightened sir so once again on behalf of Mr. Vikas Chetrad beyond law CLC and my personal we have many thanks to you for this erudite and eloquent presentation sir thank you so much thanks thanks thanks thank you sir thank you to everybody enjoy the weekend let your hair down enjoy relax thank you so do stay connected with us tomorrow on section 141 of the contract act on the discharge of surety thank you everyone stay safe stay blessed okay Mr. Vikram bye bye everyone see you thank you Mr. Vikas