Supreme Court gives big relief to Himadri Steel, sets aside ₹3.23-crore power theft demand
SUMAN K SHRIVASTAVA Ranchi, August 16: The Supreme Court has given major relief to Himadri Steel Pvt. Ltd., setting aside a provisional…
SUMAN K SHRIVASTAVA
Ranchi, August 16: The Supreme Court has given major relief to Himadri Steel Pvt. Ltd., setting aside a provisional assessment of ₹3.23 crore for alleged electricity theft and holding that suspicion or minor irregularities in a metering system cannot by themselves establish the offence of power theft.
A Bench of Justice Aravind Kumar and Justice Vipul M. Pancholi, in its judgment dated August 12, 2026, restored the September 5, 2018 order of the Jharkhand High Court Single Judge, which had quashed the provisional assessment against the company.
₹3.23-Crore Assessment Followed 2017 Inspection
Himadri Steel had an electricity connection under the High Tension Special Service (HTSS) tariff, with a contract demand of 3,000 KVA. The connection was energised on July 3, 2006.
In June 2017, a blast occurred in the cubical metering unit at the company’s premises. The unit was repaired by officials on June 16. The repair report recorded that the metering chamber was slightly damaged, the K-phase CT and all PTs were in proper condition, the meter reading was correct and the sealing was proper. The B-phase CT, however, was found cracked and damaged and was replaced.
Authorities inspected the premises again on September 26, 2017. Based on the inspection report, an FIR was registered at Chakulia police station under Sections 379, 420 and 353 of the IPC and Sections 135, 137 and 138 of the Electricity Act, 2003. The electricity connection was disconnected the next day.
On September 29, the authorities issued a provisional assessment of ₹3,23,71,524, alleging loss caused by electricity theft.
High Court Had Quashed the Assessment
Himadri Steel challenged the provisional assessment before the Jharkhand High Court, arguing that its power connection had been disconnected merely on suspicion of theft.
The Single Judge allowed the writ petition on September 5, 2018, and quashed the provisional assessment, holding that the inspection report did not disclose conclusive evidence of electricity theft.
The electricity authorities challenged the decision before a Division Bench. On August 8, 2025, the Division Bench reversed the Single Judge’s order, holding that the inspection report contained sufficient material and that the company had an alternative statutory remedy under the Electricity Act. Himadri Steel then approached the Supreme Court.
SC: Writ Petition Was Maintainable
The Supreme Court first considered whether the company could approach the High Court despite the statutory remedies under the Electricity Act.
The Court held that while High Courts normally refrain from exercising writ jurisdiction when an alternative statutory remedy exists, such a remedy does not completely bar jurisdiction under Article 226.
Importantly, the Court noted that the statutory appeal under Section 127 is available against a final assessment order, not a provisional assessment order. Since there was no statutory appeal against the provisional assessment in question, the writ petition was maintainable.
Theft and Unauthorised Use Are Not the Same
The judgment also draws an important distinction between unauthorised use of electricity under Section 126 and theft of electricity under Section 135.
According to the Supreme Court, Section 126 primarily provides a civil remedy for unauthorised use, while Section 135 deals with the criminal offence of electricity theft.
For Section 135 to apply, the authorities must establish the physical act as well as dishonest intention, or mens rea. The Court said the offence has to meet the higher threshold applicable to criminal law.
What Did the Inspection Report Show?
The September 26 inspection report pointed to alleged irregularities in the metering cubicle. It referred to a welded nut, two holes in the meter chamber, a cover that could reportedly be opened easily without breaking the glass and additional space around a cable slot.
However, the report’s own remarks stated that there was no welding on the nut, the cubicle was old and had earlier suffered a blast and repairs, the door could not be opened without opening the plastic seal, and all plastic seals were found correct.
‘Suspicion Cannot Take the Place of Strict Proof’
The Supreme Court found the inspection report insufficient to establish theft.
The Court said the report contained no allegation of electricity theft, much less evidence of it. At best, there was suspicion, on the basis of which the FIR was registered.
It held that the alleged minor discrepancies were not enough to prove electricity theft, which has to meet the strict standards of criminal law. The Court emphatically observed: “Suspicion, no matter how strong, cannot take the place of strict proof.”
The Court further said the inspection report must itself reveal that theft had been detected and must record details of the evidence collected. In this case, there was neither evidence of theft nor subjective satisfaction of the authorised officer.
No Evidence Was Seized
The Supreme Court also found a violation of Regulation 11.8 of the Jharkhand Electricity Supply Code Regulations, 2015, which requires seizure of material evidence such as wires, cables and meters where sufficient evidence of direct theft is found.
The Court noted that neither the inspection report nor the written report disclosed that any material had been seized from the company’s premises.
Supreme Court Restores 2018 Order
The Court rejected the argument that the assessment and disconnection were justified to protect State revenue, warning that vague reports cannot be used to give inspecting authorities arbitrary powers to disconnect consumers.
The Supreme Court therefore set aside the Division Bench’s August 8, 2025 order and restored the Single Judge’s September 5, 2018 order, allowing Himadri Steel’s appeal with no order as to costs.
