Safiya Malik

The High Court of Himachal Pradesh Single Bench of Justice Ajay Mohan Goel set aside a provisional assessment raised for alleged unauthorised use of electricity, holding that such an assessment cannot be initiated merely by relying on the electricity board’s internal data. The dispute arose after the distribution licensee issued a provisional demand alleging meter tampering and under-recording of consumption, without carrying out a site inspection or examining records maintained by the consumer. The Court rejected the contention that the board’s own records could form the basis of action, observing that a provisional assessment cannot be issued on the board’s record as the expression “any person” does not include the board. The provisional assessment order was quashed, with consequential relief to follow.

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The consumer contested the demand through representations and approached the Consumer Grievance Redressal Forum, which declined jurisdiction. An appeal before the Divisional Commissioner was also dismissed on jurisdictional grounds, with an observation that the demand was not in accordance with the statutory framework governing assessment. Thereafter, proceedings were initiated before the Ombudsman, during which the original demand was withdrawn by the authority. Subsequently, a fresh provisional assessment was issued for a substantially higher amount on the same factual basis.

The consumer challenged this provisional assessment before the High Court, contending that it was issued without any inspection of the premises, equipment, or records maintained by the consumer, and thus violated the mandatory procedure under the Electricity Act and the applicable Supply Code. The authority defended the assessment on the ground that it was provisional and based on records available with it, contending that the petition was premature.

The Court examined the statutory framework governing assessments for unauthorized use of electricity and recorded that “Section 126 of the Electricity Act… provides that the provisional assessment shall be made if on an inspection of any place or premises or after inspection of equipment… or after inspection of records maintained by any person.” It noted that the statutory precondition for invoking the provision was inspection.

On facts, the Court recorded that “the provisional assessment order was not passed on the basis of any site inspection of the premises of the petitioner” and further that “the assessment order is not based on the inspection of the record maintained by the petitioner.” The Court observed that the authority relied solely on its own records, stating that “the provisional assessment order has been passed on the basis of the record available with the Electricity Board.”

Rejecting the authority’s interpretation, the Court stated that “a provisional assessment order cannot be issued on the basis of the record maintained by the Board.” It clarified that the expression “records maintained by any person” could not be stretched to include the licensee itself, as “this ‘any person’, by no stretch of imagination, can be the Board.”

The Court further observed that the statutory scheme envisages that “the proceedings would commence with the inspection of the premises by an assessing officer,” and found that this foundational requirement was absent. On maintainability, the Court recorded that “this Court has the jurisdiction to strike the same at this stage itself” where the provisional assessment is issued “in complete breach of the statutory provisions.”

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The Court ordered that “this petition is allowed. The Provisional Order of Assessment dated 15.03.2021, Annexure P-10 is quashed and set aside. Pending miscellaneous application(s), if any, also stand disposed of accordingly.”

Advocates Representing the Parties

For the Petitioners: Mr. R.L. Sood, Senior Advocate, with Mr. Manik Sethi and Mr. Vidur Kapur, Advocates
For the Respondents: Mr. Amal Nair, Advocate, with Mr. Shivom Vashisht, Advocate

Case Title: M/s Kundlas Loh Udyog v. Himachal Pradesh State Electricity Board Limited & Another
Neutral Citation: 2025: HHC:45675-DB
Case Number: CWP No. 2239 of 2021
Bench: Justice Ajay Mohan Goel