Assessment under Section 135 of Electricity Act Cannot Be Mechanical: Punjab & Haryana High Court on Procedural Fairness

Introduction

In Rattan Singh v. State of Haryana & Ors., the Punjab and Haryana High Court underscored that civil liability arising from alleged theft of electricity cannot be imposed without adherence to principles of procedural fairness. The Court emphasised that even in proceedings connected with Section 135 of the Electricity Act, 2003, the affected consumer must be made aware of the material relied upon and be afforded an opportunity to respond before liability is crystallised.

Statutory Framework

The case arose from writ petitions challenging inspection reports, assessment orders, and compounding-related actions initiated by electricity authorities. The petitioners contended that such actions were taken without prior notice, disclosure of the material relied upon, or an opportunity of hearing.

The Court examined the scheme of the Act and reiterated the distinction between:

• Section 126: dealing with unauthorised use of electricity, which expressly provides for a provisional assessment followed by an opportunity to file objections and a hearing before final assessment; and
• Section 135: dealing with theft of electricity, which is a criminal offence involving dishonest abstraction or consumption and is triable by a Special Court.

The authorities’ approach was found problematic insofar as liability appeared to have been determined without engaging the affected party in a meaningful manner.

Natural Justice

A key issue before the Court was whether the absence of an explicit hearing requirement under Section 135 permits authorities to determine liability without adhering to principles of natural justice.

The Court answered in the negative, reiterating the settled principle that where an action entails civil consequences, compliance with natural justice is presumed unless expressly excluded.

However, it is important to clarify the doctrinal position:

• Section 135 itself primarily deals with criminal prosecution.
• Civil liability in theft cases is typically determined by the Special Court under Section 154(5) of the Electricity Act, 2003, not through a standard “assessment order” akin to Section 126.

Within this framework, the Court emphasised that any determination impacting civil liability whether through administrative action or proceedings leading up to adjudication must satisfy minimum standards of fairness. This includes:

• disclosure of adverse material; and
• a meaningful opportunity to respond.

A mere formal or illusory opportunity, without disclosure of the basis of allegations, was held to be insufficient.

Mechanical Exercise of Power and Its Legal Defect

The Court found that the impugned actions suffered from procedural infirmity. The authorities had:

• failed to provide an effective show cause opportunity;
• not disclosed the material forming the basis of allegations; and
• proceeded in a manner suggestive of a predetermined outcome.

Such action was characterised as a mechanical exercise of power, falling short of the standards expected of administrative or quasi-judicial decision-making.

Jurisdictional Consequences and Remedies

On the issue of remedies, the Court reiterated the statutory scheme:

• Orders under Section 126 are appealable before the designated Appellate Authority under the Act, and the jurisdiction of civil courts is barred.
• Offences under Section 135 are triable by the Special Court, which is also empowered under Section 154(5) to determine civil liability in theft cases.

Accordingly, remedies must be pursued within the framework prescribed under the statute.

Conclusion

The decision reinforces that enforcement actions under the Electricity Act, 2003 cannot bypass procedural safeguards. Even in cases involving allegations of electricity theft, authorities must avoid a mechanical approach and ensure that affected parties are given a fair and meaningful opportunity to respond before adverse consequences are imposed.