Introduction:

In Executive Engineer G.E.B. now Paschim Gujarat Vij Company Ltd. & Ors. v. Mulraj Ice Factory, Proprietor Hariharprasad Zaverilal & Ors., R First Appeal No. 1673 of 1996, the Gujarat High Court through Justice Devan M Desai delivered a significant ruling reaffirming that allegations of electricity theft must be strictly proved and cannot rest on mere assumptions or speculative laboratory observations. The appeal was filed by the Executive Engineer of the Gujarat Electricity Board now Paschim Gujarat Vij Company Ltd challenging the trial court decree that had cancelled electricity theft bills issued against Mulraj Ice Factory and ordered refund with interest. The dispute arose from supplementary bills issued in 1995 on the allegation that the consumer had dishonestly abstracted electricity based on a laboratory report suggesting that a plastic strip could be inserted into the gap between the meter cover and glass. The High Court was tasked with examining whether such a report, absent concrete evidence of tampering or dishonest abstraction, was sufficient to fasten liability for theft and justify recovery of substantial sums from the consumer.

Arguments on Behalf of the Appellants:

The appellants, represented by Ms Lilu K Bhaya, contended that the trial court had erred in rejecting the electricity company’s claim of theft and in cancelling the supplementary bills. It was argued that during laboratory testing of the electricity meter, a green foreign substance was detected inside the meter and that the testing report indicated that a plastic strip could be inserted into the gap between the meter cover and the glass. According to the appellants, this finding pointed towards the possibility of dishonest abstraction of electrical energy. They submitted that under Section 33B of the Indian Electricity Act, tampering with the meter or interfering with its normal functioning constitutes theft of electricity. The electricity authority maintained that the presence of foreign material and the physical possibility of inserting an object into the meter created a strong inference of manipulation intended to reduce recorded consumption. The appellants further contended that electricity theft often involves sophisticated methods and that direct evidence of tampering may not always be readily available. Therefore, circumstantial evidence such as laboratory findings should be considered sufficient to establish dishonest abstraction. It was argued that the supplementary bill of ₹10.07 lakh was issued after technical evaluation and that the trial court had failed to appreciate the seriousness of the irregularities detected. The appellants also asserted that public utilities suffer substantial losses due to electricity theft and that courts should not lightly interfere with assessment made by technical authorities. According to them, the consumer bore the responsibility to ensure that the meter installed at its premises was not interfered with and that the laboratory findings raised a presumption of malpractice which the consumer had failed to rebut. On these grounds, the appellants sought reversal of the trial court decree and validation of the supplementary demand raised against the factory.

Arguments on Behalf of the Respondents:

The respondents, represented by Mr P M Lakhani and Mrs R P Lakhani, opposed the appeal and supported the trial court’s findings. They argued that the checking squad of the electricity company had inspected the premises and found no evidence of tampering or interference with the meter. The respondents emphasized that no irregularity was detected at the site during inspection and that the allegation of theft surfaced only after laboratory testing. It was contended that the laboratory report did not conclusively establish tampering but merely stated that a plastic strip could be inserted into the gap between the meter cover and the glass. Such a statement, according to the respondents, was speculative and did not prove that any strip had actually been inserted or that the consumer had engaged in dishonest abstraction of electricity. The respondents further submitted that the report did not record any damage to internal mechanisms, any disruption of seals, or any alteration of recording components. They highlighted that apart from the possibility noted in the report, the rest of the meter was found to be in proper working condition. It was also argued that the electricity company had failed to examine the person who conducted the laboratory testing and prepared the report, thereby depriving the consumer of an opportunity to cross examine the expert. The respondents contended that serious allegations of theft require clear and convincing evidence and cannot be sustained on conjecture. They pointed out that the supplementary bill was issued during the pendency of the suit without satisfactory explanation and appeared to be an attempt to pressurize the consumer. The respondents maintained that the burden of proving theft squarely lay upon the electricity company and that such burden had not been discharged. They therefore prayed for dismissal of the appeal and affirmation of the trial court’s decree cancelling the theft bills and directing refund with interest.

Court’s Judgment:

Justice Devan M Desai, after considering the submissions and examining the record, upheld the findings of the trial court and dismissed the appeal. The Court began by reiterating a fundamental principle of civil jurisprudence that the party making a positive assertion must prove it. In the present case, the defendants had asserted that the plaintiffs had dishonestly used electrical energy. Such an allegation, the Court observed, cannot be established by requiring the consumer to negatively disprove it. The burden of proof rested squarely upon the electricity company. The Court scrutinized the laboratory report and found that it merely stated that a green foreign substance was noticed and that a plastic strip could be inserted into the gap between the meter cover and glass. The Court held that the mere possibility of insertion does not equate to proof that such insertion actually occurred or that it resulted in dishonest abstraction of electricity. The report did not record any conclusive finding of tampering, manipulation, or interference with the internal mechanism of the meter. The Court further noted that the inspection team had not detected any tampering at the consumer’s premises and that no other convincing evidence had been produced. Importantly, the electricity company had not examined the individual who conducted the laboratory testing and prepared the report, thereby weakening the evidentiary value of the document. The Court observed that technical reports must be supported by testimony if they are to form the basis of serious financial liability. The supplementary bill had been issued during the pendency of the suit without adequate justification, and the explanation offered by the appellants was found unsatisfactory. Justice Desai emphasized that electricity theft is a serious allegation with civil and potentially criminal consequences and therefore must be established by cogent and reliable evidence. Courts cannot permit public authorities to recover large sums on the basis of assumptions or speculative inferences. Finding that the electricity company had failed to discharge its burden of proof, the High Court affirmed the trial court decree cancelling the supplementary bills and directing refund with interest. The appeal was accordingly dismissed.