# 15 (ADDL.) S.C.R. 211 THE EXECUTIVE ENGINEER AND ANR v. M/S SRI SEETARAM RICE MILL

- **Citation:** [2011] 15 S.C.R. 211
- **Court:** Supreme Court of India
- **Decided:** 2011-10-20
- **Case number:** Civil Appeal No. 8859 of 2011
- **Bench:** S.H. Kapadia, K.S. Radhakrishnan, Swatanter Kumar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/15-addl-s-c-r-211-the-executive-engineer-and-anr-v-m-s-sri-seetaram-rice-mill-27594
- **Pages:** 71

## Headnote

Electricity Act, 2003:
Salient features of the Act - Discussed.
Legislative history and object of enactment - Discussed.
s. 126 - Applicability of - Held: Consumption of electricity
A
B
c
in excess of sanctioned load would be unauthorized use of D
electricity and would attract applicability of s. 126 of the Act.
s. 126 - Scope of, with reference to construction of the
words 'unauthorized use' and 'means' - Discussed.
s. 126 and s. 135 - Distinction between - Discussed.
s. 126 - Assessment and computation under - Manner
·of - Discussed.
E
s. 127 - Appealable order - Held: In view of the language
F
of s.127 of the Act, only a final order of assessment passed
uls.126(3) is an order appealable uls.127 and a notice-cumprovisional assessment made uls.126(2) is not appealable -
Thus, the High Court should normally decline to interfere in
a final order of assessment passed by the assessing officer G
in terms of s. 126(3) of the Act in exercise of its jurisdiction
under Article 226 of the Constitution of India.
s. 127 - Statutory alternative remedy available u/s. 127 of
the Act - Writ petition - Scope of interference with provisional
211
ti
212
SUPREME COURT REPORTS [2011) 15 (ADDL.) S.C.R.
A order of assessment/show cause notice - Held: Keeping in
view the functions and expertise of the specialized body
constituted under the Act including the assessing officer, it
would be proper exercise of jurisdiction, if writ court upon
entertaining and deciding the writ petition on a 1urisdictiona/
B issue, remand the matter to the competent authority for its
adjudication on merits and in accordance with law- If exercise
of jurisdiction by the Tribunal ex facie appears to be an
exercise of jurisdiction in futility then it will be permissible for
the High Court to interfere in exercise of its jurisdiction - In
c · the instant case, the respondents-consumers were required
to fife objections as contemplated uls. 126 (3) of the Act
against the provisional order of assessment- It was only when
a final order of assessment was passed that the respondents
could prefer a statutory appeal which, admittedly, was not done
0 in the case in hand - High Court did not commit any error of
jurisdiction in entertaining the wn"f petition against the order
raising a jurisdictional challenge to the notice/provisional
assessment order - However, High Court transgressed its
jurisdictional /imitations while travelling into the exclusive
E domain of the Assessing Officer relating to passing of an order
of assessment and determining factual controversy of the
case - Constitution ·of India, 1950 - Article 226.
Constitution of India, 1950:
F
Article 226 - Scope of interference with tr1e provisional
order of assessment/show cause notice - Discussed.
Article 226 - Alternative remedy - Maintainability of writ
petition - Discussed.
G
Interpretation of statutes:
Purposive interpretation - Held: The statute should be
read as a whole - Its different provisions may have to be
construed together to make consistent construction of the
H whole statute relating to the subject matter - A construction
1
EXECUTIVE ENGINEER AND ANR. v. SRI
213
. SEETARAM RICE MILL
which will improve the workability of the statute, to be more A
effective and purposive, should be preferred to any other
interpretation which may lead to undesirable results.
Expression 'means', 'means and includes' and 'does not
include' - Held: When the Legislature has used a particular 8
expression out of these three, it must be given its plain
meaning while even keeping in mind that the use of other two
expressions has not been favoured by the Legislature.
of.
Fiscal and penal laws - Interpretation of.
Object and reason of enactment - Relevancy of.
Discussions of Standing Committee - Relevancy of.
Words and phrases:
Word 'dishonest', 'authorisation', 'malpractice' - Meaning
Word 'means' - Meaning of, in· the context of s. 126 of the
Electricity Act, 2003 - Discussed.
Expression 'unauthorised use of electricity' - Meaning of,

## Text

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[2011] 15 (ADDL.) S.C.R. 211
THE EXECUTIVE ENGINEER AND ANR.
v.
M/S SRI SEETARAM RICE MILL
(Civil Appeal No. 8859 of 2011)
OCTOBER 20, 2011
[S.H. KAPADIA, CJI., K.S. RADHAKRISHNAN AND
SWATANTER KUMAR, JJ.]
Electricity Act, 2003:
Salient features of the Act - Discussed.
Legislative history and object of enactment - Discussed.
s. 126 - Applicability of - Held: Consumption of electricity
A
B
c
in excess of sanctioned load would be unauthorized use of D
electricity and would attract applicability of s. 126 of the Act.
s. 126 - Scope of, with reference to construction of the
words 'unauthorized use' and 'means' - Discussed.
s. 126 and s. 135 - Distinction between - Discussed.
s. 126 - Assessment and computation under - Manner
·of - Discussed.
E
s. 127 - Appealable order - Held: In view of the language
F
of s.127 of the Act, only a final order of assessment passed
uls.126(3) is an order appealable uls.127 and a notice-cumprovisional assessment made uls.126(2) is not appealable -
Thus, the High Court should normally decline to interfere in
a final order of assessment passed by the assessing officer G
in terms of s. 126(3) of the Act in exercise of its jurisdiction
under Article 226 of the Constitution of India.
s. 127 - Statutory alternative remedy available u/s. 127 of
the Act - Writ petition - Scope of interference with provisional
211
ti
212
SUPREME COURT REPORTS [2011) 15 (ADDL.) S.C.R.
A order of assessment/show cause notice - Held: Keeping in
view the functions and expertise of the specialized body
constituted under the Act including the assessing officer, it
would be proper exercise of jurisdiction, if writ court upon
entertaining and deciding the writ petition on a 1urisdictiona/
B issue, remand the matter to the competent authority for its
adjudication on merits and in accordance with law- If exercise
of jurisdiction by the Tribunal ex facie appears to be an
exercise of jurisdiction in futility then it will be permissible for
the High Court to interfere in exercise of its jurisdiction - In
c · the instant case, the respondents-consumers were required
to fife objections as contemplated uls. 126 (3) of the Act
against the provisional order of assessment- It was only when
a final order of assessment was passed that the respondents
could prefer a statutory appeal which, admittedly, was not done
0 in the case in hand - High Court did not commit any error of
jurisdiction in entertaining the wn"f petition against the order
raising a jurisdictional challenge to the notice/provisional
assessment order - However, High Court transgressed its
jurisdictional /imitations while travelling into the exclusive
E domain of the Assessing Officer relating to passing of an order
of assessment and determining factual controversy of the
case - Constitution ·of India, 1950 - Article 226.
Constitution of India, 1950:
F
Article 226 - Scope of interference with tr1e provisional
order of assessment/show cause notice - Discussed.
Article 226 - Alternative remedy - Maintainability of writ
petition - Discussed.
G
Interpretation of statutes:
Purposive interpretation - Held: The statute should be
read as a whole - Its different provisions may have to be
construed together to make consistent construction of the
H whole statute relating to the subject matter - A construction
1
EXECUTIVE ENGINEER AND ANR. v. SRI
213
. SEETARAM RICE MILL
which will improve the workability of the statute, to be more A
effective and purposive, should be preferred to any other
interpretation which may lead to undesirable results.
Expression 'means', 'means and includes' and 'does not
include' - Held: When the Legislature has used a particular 8
expression out of these three, it must be given its plain
meaning while even keeping in mind that the use of other two
expressions has not been favoured by the Legislature.
of.
Fiscal and penal laws - Interpretation of.
Object and reason of enactment - Relevancy of.
Discussions of Standing Committee - Relevancy of.
Words and phrases:
Word 'dishonest', 'authorisation', 'malpractice' - Meaning
Word 'means' - Meaning of, in· the context of s. 126 of the
Electricity Act, 2003 - Discussed.
Expression 'unauthorised use of electricity' - Meaning of,
in the context of s.126 of the Electricity Act, 2003 -
Discussed.
c
D
E
An agreement was entered into between appellant
F
no.1 and the respondent for supply of power to the
respondent. The respondent was categorized as medium
industry category and accordingly accorded the
contracted load. This category dealt with the contract
demand of 99 KVA and above but below 110 KVA. On
G
10th June, 2009, the Executive Engineer inspected the
business premises of the respondent's unit and issued
a dump report. In the dump report, it was stated that there
was unauthorized use of electricity and Maximum
Demand (MD) had been consumed up to 142 KVA. On
H
214
SUPREME COURT REPORTS (2011] 15 (ADDL) S.C.R.
A 25th July, 2009, provisional assessment order was issued
by the appellants to the respondent by taking the
contracted demand as that applicable to large industry
and the respondent was required to file objections, if any,
and to also pay the amount. On the same day, intimation
B was also issued to the respondent that there was
unauthorized use of electricity falling squarely within the
ambit of provisions of Section 126 of the Electricity Act,
2003. The demand was raised assessing the consumer
for the period from June 2008 to August 2009 for a sum
C of Rs.7,77,300/·. This was computed for 15 months at the
rate of Rs.200 per KVA (i.e., tariff for large industry)
multiplied by two times, aggregating to the claimed
amount The respondent did not file its objections/reply
but challenged the said provisional assessment order
0 and the intimation of unauthorized use before the High
Court by filing writ petition on the grounds of lack of
authority and jurisdiction on the part of the Executive
Engineer. Ii was also contended that no inspection was
conducted in the business premises till date of dump, i.e.,
10th June, 2009 when alleged unauthorized use of
E electricity was found. The respondent also challenged
the maintainability and sustainability of the order of
provisional assessment in calculating the dump charges
for a period of 15 months from June 2008 to August 2009
on the basis of dump charges relating to large industry
F while the respondent was classified as medium scale
industry.
The High Court held that the words 'unauthorized use
of electricity' and 'means' as provided in Explanation to
G Section 126 of the 2003 Act were exhaustive; overdrawal
of MD would not fall under the scope of 'unauthorized
use of electricity' as defined under the 2003 Act, and the
appellants had no jurisdiction to issue the intimation and
pass the assessment order in terms of Section 126 of the
H 2003 Act.
EXECUTIVE ENGINEER AND ANR. v. SRI
215
SEETARAM RICE MILL
In the instant appeal, the questions which arose for A
consideration were: (1) wherever the consumer
consumes electricity in excess of the maximum of the
contracted load, would the provisions of Section 126 of
the 2003 Act be attracted on its true scope and
interpretation; (2) whether the High Court, in the facts and
B
circumstances of the case, was justified in interfering with
the provisional order of assessment/show cause notice
in exercise of its jurisdiction under Article 226 of the
Constitution of India; and (3) was the writ petition before
the High Court under A~icle 226 of the Constitution of c
India not maintainable because of a statutory alternative
remedy being available under Section 127 of the 2003
Act.
Allowing the appeal, the Court
D
HELD: 1. To address the issues like deterioration in
performance of the Boards and the difficulties in
achieving efficient discharge of functions, a better,
professional and regulatory regime was introduced
under the Electricity Bill, 2001, with the policy of E
encouraging private sector participation in generation,
transmission and distribution of electricity and with the
objective of distancing regulatory responsibilities from
the Government by transferring the same to the
Regulatory Commissions. The need for harmonizing and
rationalizing the provisions of the earlier statutes was met F
by creating a new, self-contained and comprehensive
legislation. Another object was to bring unity in
legislation and eliminate the need for the respective State
Governments to pass any reform Act of their own. This
G
Bill had progressive features and strived to strike the right
balance between the economic profitability and public
purpose given the current realities of the power sector
in India. This Bill was put to great discussion and then
emerged the Electricity Act, 2003 ( 'the 2003 Act'). The
H
216
SUPREME COURT REPORTS [2011) 15 (ADDL.) S.C.R.
A 2003 Act had notably provided for private sector
participation, private transmission licences for rural and
remote areas, stand alone systems for generation and
distribution, the constitution of an Appellate Tribunal,
more regulatory powers for the State Electricity
B Regulation Commission and provisions relating to theft
of electricity. The additional provisions were introduced
in the 2003 Act in relation to misuse of power and
punishment of malpractices such as over-consumption
of sanctioned electric load which are not covered by the
c provisions relating to theft; all .of which had significant
bearing upon the revenue focus intended by the
Legislature. This is the legislative history and objects and
reasons for enacting the 2003 Act. To ensure better
regulatory, supervisory and revenue recovery system, as
0 expressed in the objects and reasons of the 2003 Act,
there was definite concerted effort in preventing
unauthorized use of electricity on the one hand and theft
of electricity on the other. The present case falls in the
former. [Paras 2, 3] [238-F-H; 239-A·FJ
E 2. Question (1)
2.1.1 It is clear from the object of enactment of
Electricity Act, 2003 that 'revenue focus' was one of the
principal
consideratle~s that weighed with the
F Legislature while enacting this law. The regulatory regime
under the 2003 Act empowers the Commission to frame
the tariff, which shall be the very basis for raising a
demand upon a consumer, depending upon the category
to which such consumer belongs and the purpose for
G which the power is sanctioned to such consumer. The
contention on behalf of the respondent cannot be
accepted that the provisions of Section 126 of the 2003
Act have to be given a strict and textual construction to
the extent that they have to be read exhaustively in
absolute terms. This is a legislation which establishes a
H
EXECUTIVE ENGINEER AND ANR. v. SRI
217
SEETARAM RICE MILL
regulatory regime for the generation and distribution of A
power, as well as deals with serious fiscal repercussions
of this entire regime. The two maxims which should be
applied for interpretation of such statutes are ex
visceribus actus (construction of the act as a whole) and
ut res magis valeat quam pereat (it is better to validate a
B
thing than to invalidate it). It is a settled cannon of
interpretative jurisprudence that the statute should be
read as a whole. In other words, its different provisions
may have to be construed together to make consistent
construction of the whole statute relating to the subject c
matter. A construction which will improve the workability
of the statute, to be more effective and purposive, should
be preferred to any other interpretation which may lead
to undesirable results. [Para 10] [244-G-H; 245-A-E]
2.1.2. It is true that fiscal and penal laws are normally D
construed strictly but this rule is not free of exceptions.
In given situations, this Court may, even in relation to
penal statutes, decide that any narrow and pedantic,
literal and lexical construction may not be given effect to,
as the law would have to be interpreted having regard to
E
the subject matter of the offence and the object that the
law seeks to achieve. The provisions of Section 126, read
with Section 127 of the 2003 Act, in fact, becomes a code
in itself. Right from the initiation of the proceedings by
conducting an inspection, to the right to file an appeal
F
before the appellate authority, all matters are squarely
covered under these provisions. It specifically provides
the method of computation of the amount that a
consumer would be liable to pay for excessive
consumption of the electricity and for the manner of G
conducting assessment proceedings. In other words,
Section 126 of the 2003 Act has a purpose to achieve, i.e.,
to put an implied restriction on such unauthorized
consumptic>n of electricity. The provisions of the 2003
Act, applicable regulations and the Agreement executed
H
218
SUPREME COURT REPORTS [2011] 15 (ADDL.) S.C.R.
A between the parties at the time of sanction of the load
prohibit consumption of electricity in excess of maximum
sanctioned/ installed load. In the event of default, it also
provides for the consequences that a consumer is likely
to face. It embodies complete process for assessment,
B determination and passing of a demand order. This
defined legislative purpose cannot be permitted to be
frustrated by interpreting a provision in a manner not
intended in law. This Court would have to apply the
principle of purposive interpretation in preference to
c textual interpretation of the provisions of Section 126 of
the 2003 Acl This Court would prefer to adopt purposive
interpretation so as to ensure attainment of the object and
purpose of the 2003 Act, particularly, of the provisions of
Section 126 in question. [Para 11] [245-F-H; 246-A-E]
D
Bairam Kumawat v. Union of India & Ors. (2003) 7 SCC
628; Superintendent and Remembrancer of Legal Affairs to
Government of West Bengal v. Abani Maity (1979) 4 SCC 85:
1979 (3) SCR 472 - relied on.
E
2.1.3. The relevancy of objects and reasons for
enacting an Act is a relevant consideration for the court
while applying various principles of interpretation of
statutes. Normally, the court would not go behind these
objects and reasons of the Act. The discussion of a
F Standing Committee to a Bill may not be a very
appropriate precept for tracing the legislative intent but
in .given circumstances, it may be of some use to notice
some discussion on the legislative intent that is reflected
in the substantive provisions of the Act itself. The
G Standing Committee on Energy, 2001, in its discussion
said, 'the Committee feel that there is a 11eed to provide
safeguards to check the misuse of these powers by
unscrupulous elements'. The provisions of Section 126
of the 2003 Act are self-explanatory, they are intended to
covtir situations other than the situations specifically
H
EXECUTIVE ENGINEER AND ANR. v. SRI
219
SEETARAM RICE MILL
covered under Section 135 of the 2003 Act. This would
A
further be a reason for this Court to adopt an
interpretation which would help in attaining the legislative
intent. Therefore, the provisions of Section 126 of the
2003 Act should be read with other provisions, the
regulations in force and they should be so interpreted as
B
to achieve the aim of workability of the enactment as a
whole while giving it a purposive interpretation in
preference to textual interpretation. [Paras 13-14] [250-AE]
2.2. Distinction between Sections 126 and 135 of the
C
2003 Act.
2.2.1. Upon their plain reading, the mark differences
in the contents of Sections 126 and 135 of the 2003 Act
are obvious. They are distinct and different provisions
D
which operate in different fields and have no common
premise in law. Sections 126 and 127 of the 2003 Act read
together constitute a complete code in themselves
covering all relevant considerations for passing of an
order of assessment in cases which do not fall under
E
Section 135 of the 2003 Act. Section 135 of the 2003 Act
falls under Part XIV relating to 'offences and penalties'
and title of the Section is 'theft of electricity'. The Section
opens with the words 'whoever, dishonestly' does any
or all of the acts specified under clauses (a) to (e) of SubF
section (1) of Section 135 of the 2003 Act so as to abstract
or consume or use electricity shall be punishable for
imprisonment for a term which may extend to three years
or with fine or with both. Besides imposition of
punishment as specified under these provisions or the
G
proviso thereto, Sub-section (1A) of Section 135 of the
2003 Act provides that without prejudice to the provisions
of the 2003 Act, the licensee or supplier, as the case may
be, through officer of rank authorized in this behalf by the
appropriate commission, may immediately disconnect the
H
220
SUPREME COURT REPORTS (2011] 15 (ADDL.) S.C.R.
A supply of electricity and even take other measures
enumerated under Sub-sections (2) to (4) of the said
Section. The fine which may be imposed under Section
135 of the 2003 Act is directly proportional to the number
of convictions and is also dependent on the extent of load
B abstracted. In contradistinction to these provisions,
Section 126 of the 2003 Act would be applicable to the
cases where there is no theft of electricity but the
electricity is being consumed in violation of the terms and
conditions of supply leading to malpractices which may
c squarely fall within the expression 'unauthorized use of
electricity'. [Para 15] [250-G-H; 251-A-E]
2.2.2. Section 135 of the 2003 Act deals with an
offence of theft of electricity and the penalty that can be
imposed for such theft. This squarely falls within the
D dimensions of Criminal Jurisprudence and mens rea is
one of the relevant factors for finding a case of theft. On
the contrary, Section 126 of the 2003 Act does not speak
of any criminal intendment and is primarily an action and
remedy available under the civil law. It does not have
E features or elements which are traceable to the criminal
concept of mens rea. Thus, the expression 'unauthorized
use of electricity' under Section 126 of the 2003 Act deals
with cases of unauthorized use, even in absence of
intention. These cases would certainly be different from
F cases where there is dishonest abstraction of electricity
by any of the methods enlisted under Section 135 of the
2003 Act. A clear example would be, where a consumer
has used excessive load as against the installed load
simpliciter and there is violation of the terms and
G conditions of supply, then, the case would fall under
Section 126 of the 2003 Act. On the other hand, where a
consumer, by any of the means and methods as specified
under Sections 135(a) to 135(e) of the 2003 Act, has
abstracted energy with dishonest intention and without
H authorization, like providing for a direct connection
EXECUTIVE ENGINEER AND ANR. v. SRI
221
SEETARAM RICE MILL
bypassing the installed meter, the case would fall under A
Section 135 of the Act. Therefore, there is a clear
distinction between the cases that would fall under
Section 126 of the 2003 Act on the one hand and Section
135 of the 2003 Act on the other. There is no commonality
between them in law. They operate in different and
B
distinct fields. The assessing officer has been vested with
the powers to pass provisional and final order of
assessment in cases of unauthorized use of electricity
and cases of consumption of electricity beyond
contracted load will squarely fall under such power. The c
legislative intention is to cover the cases of malpractices
and unauthorized use of electricity and then theft which
is governed by the provisions of Section 135 of the 2003
Act. [Paras 16-17) [252-D-H; 253-A-C]
2.2.3. Section 135 of the 2003 Act significantly uses
D
the words 'whoever, dishonestly' does any of the listed
actions so as to abstract or consume electricity would be
punished in accordance with the provisions of the 20(}3
Act. 'Dishonesty' is a state of mind which has to be
shown to exist before a person can be punished under · E
the provisions of that Section. The word 'dishonest' in
normal parlance means 'wanting in honesty'. A person
can be said to have 'dishonest intention' if in taking the
property it is his intention to cause gain, by unlawful
means, of the property to which the person so gaining
F
is not legally entitled or to cause loss, by wrongful means,
of property to which the person so losing is legally
entitled. 'Dishonestly' is an expression which has been
explained by the Courts in terms of Section 24 of the
Indian Penal Code, 1860 as 'whoever does anything with G
the intention of causing wrongful gain to one person or
wrongful loss to another person is said to do that thing
dishonestly'. All these explanations clearly show that
dishonesty is a state of mind where a person does an act
with an intent to deceive the other, acts fraudulently and
H
222
SUPREME COURT REPORTS [2011] 15 (ADDL.) S.C.R.
A with. a deceptive mind, to cause wrongful loss to the
other. The act has to be of the type stated under Subsections (1)(a) to (1)(e) of Section 135 of the 2003 Act. If
these acts are committed and that state of mind, mens rea,
exists, the person shall be liable to punishment and
B payment of penalty as contemplated under the provisions
of the 2003 Act. In contradistinction to this, the intention
is not the foundation for invoking powers of the
competent authority and passing of an order of
assessment under Section 126 of the 2003 Act. [Paras18C 19, 22] [253-D-G; 254-C-D]
Dr. S. Dutt v. State of U.P. AIR 1966 SC 523: 1966 SCR
493 - relied on.
The Law Lexicon (2nd Edn. 1997) by P. Ramanatha
D Aiyar; Collins English Dictionary; Black's Law Dictionary
(Eighth Edition) - referred to.
E
2.3. The ambit and scope of Section 126 with
reference to the construction of the words 'unauthorised
use' and 'means'
2.3.1. The provisions of Section 126 contemplate the
following steps to be taken: (i) An assessing officer is to
conduct inspection of a place or premises and the
equipments, gadgets, machines, devices found
F connected or used in such place. (ii) The formation of a
conclusion that such person has indulged in
unauthorized use of electricity. (iii) The assessing. officer
to provisionally assess, to the best of his judgment, the
electricity charges payable by such person. (iv) The order
G of provisional assessment to be served upon the person
concerned in the manner prescribed, giving him an
opportunity to file objections, if any, against the
provisional assessment. (v)The assessing officer has to
afford a reasonable opportunity of being heard to such
H person and pass a final order of assessment within 30
EXECUTIVE ENGINEER AND ANR. v. SRI
223
SEETARAM RICE MILL
days from the date of service of such order of provisional
A
assessment. (vi)The person, upon whom the provisional
order of assessment is served, is at liberty to pay the said
amount within seven days of the receipt of such order
and where he files such objections, final order of
assessment shall be passed, against which such person
B
has a right of appeal under Section 127 of the 2003 Act
within the prescribed period of limitation. [Para 23) [254-
!=-H; 255-A-E]
2.4. Assessment and Computation
c
2.4.1. Wherever the assessing officer arrives at the
conclusion that unauthorized use of electricity has taken
place, the assessment shall be made for the entire period
during which such unauthorized use of electricity has
taken place and if such period cannot be ascertained, it D
shall be limited to a period of 12 months immediately
preceding the date of inspection and the assessment
shall be made at the rate equal to twice the tariff
applicable for the relevant category of service specified
under these provisions. This computation has to be taken
E
in terms of Sections 126(5), 126(6) and 127 of the 2003 Act.
[Para 24) (255-F-G]
2.4.2. The expression 'unauthorized use of electricity'
on its plain reading means use of electricity in a manner
F
not authorized by the licensee of the Board.
'Authorization' refers to the permission of the licensee to
use of electricity', subject to the terms and conditions for
such use and the law governing the subject. The supply
of electricity to a consumer is always subject to the
provisions of the 2003 Act, State Acts, Regulations G
framed thereunder and the terms and conditions of
supply in the form of a contract or otherwise. Generally,
when electricity is consumed in violation of any or all of
these, it would be understood as 'unauthorized use of
electricity'. But this general view will have to be examined
H
224
SUPREME COURT REPORTS (2011] 15 (ADDL.) S.C.R.
A in the light of the fact that the legislature has opted to
explain this term for the purposes of Section 126 of the
2003 Act. The 'unauthorized use of electricity' means the
usage of electricity by the means and for the reasons
stated in sub-clauses (i) to (v) of clause (b) of Explanation
e to Section 126 of the 2003 Act. Some of the illustratively
stated circumstances of 'unauthorised use' in the section
cannot be construed as exhaustive. The 'unauthorized
use of electricity' would mean what is stated under that
Explanation, as well as such other unauthorized user,
c which is squarely in violation of the statutory or
contractual provisions. [Paras 27-28] [256-E-G; 256-F-G]
2.4.3. 'Unauthorized' is a concept well-recognized
under different statutes, for example, under Section 31A
of the Delhi Development Act, 1957 (the 'DOA Act') the
D authority has the power to seal the 'unauthorized'
development, if the misuser of the premises would come
within the ambit of unauthorized development. But if
such misuse does not come within the ambit of
'unauthorized development', such power is not available
E to the authority. Simplicitor misuse, therefore, may not fall
within the ambit of unauthorized development under the
provisions of the ODA Act. The unautho~ized use of
electricity in the manner as is undisputed on record
clearly brought the respondent 'under liability and in
F blame' within the ambit and scope of Section 126 of the
2003 Act. [paras 29, 31] [258-H; 259-A-B; 259-F]
G
M. C. Mehta v. Union of India (2006) 3 SCC 391 - relied
on.
2.4.4. The expression 'means' used in the definition
clause of Section 126 of the 2003 Act can have different
connotations depending on the context in which such
expression is used. The word ordinarily includes a
mistaken but reasonable understanding of a
H communication. 'Means' by itself is a restrictive term and
EXECUTIVE ENGINEER AND ANR. v. SRI
225
SEETARAM RICE MILL
when used with the word 'includes', it is construed as
A
exhaustive. In those circumstances, a definition using the
term 'means' is a statement of literal connotation of a term
and the courts have interpreted 'means and includes' as
an expression defining the section exhaustively. While
determining whether a provision is exhaustive or merely
B
illustrative, this will have to depend upon the language
of the Section, scheme of the Act, the object of the
Legislature and its intent. [Para 32] [259-G; 260-A-C]
Black's Law Dictionary (Eighth Edition) page 1001 -
referred to.
C
2.4.5: 'Purposive construction' is certainly a cardinal
principle of interpretation. Equally true is that no rule of
interpretation should either be over-stated or overextended. This rule of interpretation can be applied to the
instant case. It points to the conclusion that an
interpretation which would attain the object and purpose
of the Act has to be given precedence over any other
interpretation which may not further the cause of the
statute. The development of law is particularly liberated
' both from literal and blinkered interpretation, though to
a limited extent. The precepts of interpretation of
contractual documents have also undergone a wide
ranged variation in the recent times. The result has been
subject to one important exception to assimilate the way
in which such documents are interpreted by judges on
the common sense principle by which any serious
utterance would be interpreted by ordinary life. In other
words, the common sense view relating to the implication
D
E
F
and impact of provisions is the relevant consideration for
G
interpreting a term of document so as to achieve
temporal proximity of the end result. Another similar rule
is the rule of practical interpretation. This test can be
effectuatedly applied to the provisions of a statute of the
present kind. It must be understood that an interpretation
H
226
SUPREME COURT REPORTS [2011) 15 (ADDL.) S.C.R.
A which upon application of the provisions at the ground
reality, would frustrate the very law should not be
accepted against the common sense view which will
further such application. [paras 33-35) [260-D-H; 261-AB]
B
2.4.6. Once the court decides that it has to take a
purposive construction as opposed to textual
construction, then the legislative purpose sought to be
achieved by such an interpretation has to be kept in mind.
Keeping in view the legislative scheme and the
C provisions of the 2003 Act, it will be appropriate to adopt
the approach of purposive construction on the facts of
this case. The provisions of Section 126 of the 2003 Act
are intended to cover the cases over and above the cases
which would be specifically covered under the
D provisions of Section 135 of the 2003 Act. In other words,
the purpose sought to be achieved is to ensure stoppage
of misuse/unauthorized use of the electricity as well as
to ensure prevention of revenue loss. It is in this
background that the scope of the expression 'means' has
E to be construed. If it is held· that the expression 'means'
is exhaustive and cases of unauthorized use of electricity
are restricted to the ones stated under Explanation (b) of
Section 126 alone, then it shall defeat the very purpose
of the 2003 Act, inasmuch as the different cases of breach
F of the terms and conditions of the contract of supply,
regulations and the provisions of the 2003 Act would
escape the liability sought to be imposed upon them by
the Legislature under the provisions of Section 126 of the
2003 Act. Thus, it will not be appropriate for the courts
G to adopt such an approach. The Legislature has
intentionally omitted to use the word 'includes' and has
only used the word 'means' with an intention to explain
inter alia what an unauthorized use of electricity would
be. It must be noticed that clause (iv) of Explanation (b)
H and sub-Section (5) of Section 126 of the 2003 Act were
EXECUTIVE ENGINEER AND ANR. v. SRI
227
SEETARAM RICE MILL
both amended/substituted by the same amending Act 26
Ai
of 2007, with a purpose and object of preventing
unauthorised use of electricity not amounting to theft of
electricity within the meaning of Section 135 of the 2003
Act. This amendment, therefore, has to be given its due
meaning which will fit into the scheme of the 2003 Act and
B
would achieve its object and purpose. The expression
'means' would not always be open to such a strict
construction that the terms mentioned in a definition
clause under such expression would have to be
inevitably treated as being exha.ustive. There can be a c
large number of cases and examples where even the
expression 'means' can be construed liberally and
treated to be inclusive but not completely exhaustive of
the scope of the definition, of course, depending upon
the facts of a given case and the provisions governing 0
that law. [Paras 36-38] (261-B-G; 262-A-E]
K. V. Muthu v. Angamuthu Ammal (1997) 2 SCC 53:
1996 (10) Suppl. SCR 188; Union of India v. Prabhakaran
Vijaya Kumar & Ors. (2008) 9 SCC 527: 2008 (7) SCR 673
- relied on.
E
2.4.7. It cannot be stated as an absolute proposition
·of law that the expression 'means' wherever occurring in
a provision would inevitably render that provision
exhaustive and limited. This rule of interpretation is not
F
without exceptions as there could be statutory provisions
whose interpretation demands somewhat liberal
construction and require inclusive construction. An
approach or an interpretation which will destroy the very
purpose and object of the enacted law has to be avoided.
G
The other expressions used by the Legislature in various
sub-clauses of Explanation (b) of Section 126 of the 2003
Act are also indicative of its intent to make this provision
wider and of greater application. Expressions like 'any
artificial means', 'by a mearis not authorised by the
H
228
SUPREME COURT REPORTS [2011] 15 (ADDL.) S.C.R.
A licensee' etc. are terms which cannot be exhaustive even
linguistically and are likely to take within their ambit what
is not specifically stated. For example, 'any artificial
means' is a generic term and so the expression 'means'
would have to be construed generally. The expressions
B 'means', 'means and includes' and 'does not include' are
expressions of different connotation and significance.
When the Legislature has used a particular expression
out of these three, it must be given its plain meaning
while even keeping in mind that the use of other two
c expressions has not been favoured by the Legislature.
To put it simply, the Legislature has favoured non-use of
such expression as opposed to other specific
expression. In the instant case, the Explanation to
Section 126 has used the word 'means' in
0 contradistinction to 'does not include' and/or 'means and
includes'. This would lead to one obvious result that even
the Legislature did not intend to completely restrict or limit
the scope of this provision. [Paras 41-42] (265-B-E; 267A-C]
E
Eureka Forbes Ltd. v. Allahabad Bank (2010) 6 SCC
193: 2010 (5) SCR 990 - relied on.
2.4.8. Unauthorised use of electricity cannot be
restricted to the stated clauses under the explanation but
F has to be given a wider meaning so as to cover cases of
violation of terms and conditions of supply and the
regulations and provisions of the 2003 Act governing
such supply. 'Unauthorised use of electricity' itself is an
expression which would, on its plain reading, take within
G its scope all the misuse of the electricity or even
malpractices adopted while using electricity. It is difficult
to restrict this expression and limit its application by the
categories stated in the explanation. It is indisputable %~t
the electricity supply to a consumer is restricted nd
H controlled by the terms and conditions of supP,ly, he
EXECUTIVE ENGINEER AND ANR. v. SRI
229
SEETARAM RICE MILL
regulations framed and the provisions of the 2003 Act.
A
The requirement of grant of licence itself suggests that
electricity is a controlled commodity and is to be
regulated by the regulatory authorities. If a person
unauthorisedly consumes electricity, then he can
certainly be dealt with in accordance with law and
B
penalties. may be imposed upon him as contemplated
under the contractual, regulatory and statutory regime.
The Orissa Electricity Regulatory Commission, in exercise
of its powers under Section 181 (2)(t), (v), (w) and (x) read
with Part VI of the 2003 Act, Orissa Electricity Reforms c
Act, 1995 and all other powers enabling it in that behalf,
made the regulations to govern distribution and supply
of electricity and procedure thereof such as system of
billing, modality of payment, the powers, functions and
applications of the distribution licensees form for supply 0
and/or suppliers and the rights and obligations of the
consumers. These were called 'Orissa Electricity
Regulatory Commission Distribution (Conditions of
Supply) Code, 2004 ('Conditions of Supply) vide
notification dated 21st May, 2004. This Agreement was
E
undisputedly executed between the parties. Clause (2) of
the Agreement deals with Conditions of Supply. It stated
that consumer had obtained and perused a copy of the
Grid Corporation of Orissa Ltd. (General Conditions of
.Supply) Regulations, 1995, understood its content and
undertook to observe and abide by all the terms and
F
conditions stipulated therein to the extent they are
applicable to him. The respondent was a consumer under
the 'medium industry category'. [Para 43] [267-D-H; 268A-D]
G
2.4.9. Minimum energy charges are to be levied with
reference to 'contract demand' at the rate prescribed
under the terms and conditions. These clauses of the
Agreement clearly showed that the charges for
consumption of electricity are direct!Y.,relatable to the
H
230
SUPREME COURT REPORTS [2011] 15 (ADDL.) S.C.R.
A sanctioned/connected load and also the load consumed
at a given point of time if it is in excess of the sanctioned/
connected load. The respondent could consume
electricity up to 110 KVA but if the connected load
exceeded that higher limit, the category of the respondent
B itself could stand changed from 'medium industry' to
'large industry' which will be governed by a higher tariff.
Chapter VII of the Conditions of Supply classified the
consumers into various categories and heads. The
electricity could be provided for a domestic, LT Industrial,
C LT/HT Industrial, Large Industry, Heavy Industries and
Power Intensive Industries, etc. In terms of Regulation 80,
the industry would fall under LT/HT category, if it relates
to supply for industrial production with a contract
demand of 22 KVA and above but below 110 KVA.
However, it will become a 'large industry' under
D Regulation 80(10) if it relates to supply of power to an
industry with a contract demand of 110 KVA and above
but below 25,000 KVA. Once the category stands
changed because of excessive consumption of
electricity, the tariff and other conditions would stand
E automatically changed. The licensee has a right to
reclassify the consumer under Regulation 82 if it is found
that a consumer has been classified in a particular
category erroneously or the purpose of supply as
mentioned in the agreement has chang id or the
F consumption of power has exceeded the limit of that
category etc. The Conditions of Supply even places a
specific prohibition on consumption of excessive
electricity by a consumer. The cumulative reading of the
terms and conditiops of supply, the contract executed
G between the parties and the provisions of the 2003 Act
showed that consumption of electricity in excess of the
sanctioned/ connected load shall be an 'unauthorised
use' of electricity in terms of Section 126 of the 2003 Act.
This is for the reason that overdrawal of electricity
H amounts to breach of the terms and conditions of the
EXECUTIVE ENGINEER AND ANR v. SRI
231
SEETARAM RICE MILL
contract and the statutory conditions, besides such A
overdrawal being prejudicial to the public at large, as it
is likely to throw out of gear the entire supply system,
undermining its efficiency, efficacy and even increasing
voltage flur.tuations. In somewhat similar circumstances,
where the consumer had been found to be drawing B
electricity in excess of contracted load and the general
conditions of supply of electricity energy by the Board
and clause 31(f) of the same empowered the Board to
disconnect supply and even levy higher charges as per
the tariff applicable, this Court held that such higher tariff c
charges could be recovered. [Paras 44-46] [268-F-H; 269A-D, F-H; 270-A-C]
Bhilai Rerollers & Ors. v. M.P. Electricity Board & Ors.
(2003) 7 SCC 185: 2003 (2) Suppl. SCR 787; Orissa State
Electricity Board & Anr. v. IP/ Steel Ltd. & Ors. (1995) 4 SCC D
328 - relied on.
2.4.10. Certain malpractices adopted by the
consumer for consuming electricity in excess of the
contracted load could squarely fall within the ambit and
E
scope of Section 126 of the 2003 Act as it is intended to
provide safeguards against pilferage of energy and
malpractices by the consumer. The Regulations framed
in exercise of power of subordinate legislation or terms
and conditions imposed in furtherance of statutory F
provisions have been held to be valid and enforceable.
They do not offend the provisions of the 2003 Act. In fact,
the power to impose penal charges or disconnect
electricity has been held not violative even of Article 14
of the Constitution of India.