What this judgment does NOT decide: it does not decide whether either consumer committed theft, and it does not fix any consumer's final civil liability, which remains for the Section 127 appeal and, on prosecution, the Special Court under Section 154(5).
- Case
- Dakshin Gujarat Vij Company Ltd. & Anr. v. Vaibhav Metal Crusher; Paschim Gujarat Vij Company Ltd. & Anr. v. Jamanbhai Nanajibhai Bhuva
- Court
- Supreme Court of India
- Decision
- Citation
- 2026 INSC 1157
- Bench
- Manoj Misra; K. V. Viswanathan
- Judgment by
- Manoj Misra
- Case numbers
- Civil Appeal No. 13894 of 2026 (arising out of SLP (C) No. 17868 of 2024); SLP (C) No. 8778 of 2025
- Outcome
- Final judgment dismissing both licensees' appeals, with the clarification that the restoration determination is subject to a Section 127 appeal and finally to the Special Court's Section 154(5) determination.
What the Court decided
On 26 October 2026, a Bench of Justices Manoj Misra and K. V. Viswanathan dismissed two appeals by Gujarat distribution licensees, Dakshin Gujarat Vij Company Ltd. and Paschim Gujarat Vij Company Ltd., and upheld the Gujarat High Court's handling of electricity-theft supplementary bills.
The Court summarised three conclusions on the Electricity Act, 2003: the 'assessed amount' to be deposited for restoration of supply disconnected for theft, under the third proviso to Section 135(1A), is determined — absent a specific procedure in the Supply Code — by the same procedure as for unauthorised use; that amount is subject to appeal under Section 127, but in theft cases the appellate determination is final only for restoration purposes and does not bind the Special Court; and if the deposited amount exceeds the civil liability later fixed by the Special Court under Section 154(5), the excess is refundable under Section 154(6).
Two theft bills reach the High Court
In the first case, Vaibhav Metal Crusher was accused of theft under Section 135 of the 2003 Act. On 3 January 2024 the Dakshin Gujarat Vij Company issued a notice styled as a supplementary bill demanding Rs. 92,99,077.55 towards theft of electricity and Rs. 23,45,845 towards compounding charges, warning that prosecution under Section 135 would follow if the amount was not paid.
A Single Judge of the Gujarat High Court, following an earlier decision in Letters Patent Appeal No. 1445 of 2023, permitted Vaibhav to deposit 50 per cent of the bill amount including reconnection charges, and directed reconnection on such deposit. The licensee appealed, arguing that reconnection on a 50 per cent deposit was unwarranted for theft, that no prior hearing was needed before raising a theft demand, and that only the Special Court could determine civil liability under Section 154(5) and (6), so a writ petition was not the appropriate remedy.
The Division Bench disposed of both the appeal and the writ petition on 25 June 2024: Vaibhav could reply to the 3 January 2024 notice within two weeks, the Executive Engineer had to deal with all objections before proceeding further, the supplementary bill would abide by that decision, and the deposits already made would abide by it too, with reconnection kept subject to the fresh decision. If the decision went against Vaibhav, it could appeal under Section 127, with the deposits adjusted against the appeal deposit.
In the second case, Jamanbhai Nanajibhai Bhuva challenged a supplementary bill of 1 June 2023 raised by the Paschim Gujarat Vij Company for theft. A Single Judge directed him to deposit 50 per cent within four weeks, stayed recovery of the balance, and gave liberty to apply for a fresh connection, which the licensee had to process without delay and could not refuse merely because arrears stood against the premises. The licensee's Letters Patent Appeal No. 474 of 2024 led the Division Bench to remit the matter to the Single Judge, after noticing this Court's decisions in West Bengal State Electricity Distribution Company Ltd. v. Orion Metal Pvt. Ltd. and SOUTHCO v. Sri Seetaram Rice Mill.
The issue
The licensees contended that the High Court had no business restoring supply on part payment in theft cases: the statutory scheme, they said, reserves civil liability to the Special Court under Section 154, and a lenient restoration direction undermines deterrence against theft.
The Court's answer, in paras 39–40, was that a provisional assessment that is prima facie arbitrary cannot leave the consumer without supply through the whole length of the assessment and appeal process, and that the constitutional court retains power to protect against arbitrary state action even within a self-contained statutory code — while theft, which necessarily involves criminal intent, calls for a circumspect approach.
The Court's reasoning
The Court accepted that the powers of a constitutional court cannot be totally circumscribed by statutory provisions, though self-imposed restraint is necessary where a self-contained statutory code applies. Electricity is an essential commodity for life and livelihood, and its deprivation may have serious consequences, so in an appropriate case the High Court may protect a person from arbitrary action of the State and its instrumentalities, including a distribution licensee.
But theft is different from mere unauthorised use: it necessarily involves mens rea, so a liberal approach may not be appropriate. Each case must be addressed on its own facts, and if the facts warrant, the High Court might even decline restoration until the entire provisionally assessed amount is deposited. A circumspect approach is required for restoration petitions in theft cases.
At the same time, the assessment procedure takes time: a provisional assessment under Section 126(1) is served under Section 126(2) to enable objections, a final assessment follows only after a reasonable opportunity of hearing, and the final assessment is appealable. Where the provisional assessment is prima facie arbitrary, the High Court may, for reasons to be recorded, order restoration on payment of not less than 50 per cent of the demanded amount — the figure tracks Section 127(2), under which an appeal is entertained only on deposit of half the assessed amount.
The forum question was answered by separating the stages. The assessed amount for restoration is determined by the unauthorised-use procedure where the Supply Code prescribes nothing specific. It is subject to a Section 127 appeal, and in theft cases that appellate determination is final only for the limited purpose of restoration. Where a criminal complaint is filed, it does not bind the Special Court, which alone determines civil liability under Section 154(5); any excess over that liability is refunded under Section 154(6).
Outcome and limits
With one clarification, the Court left the Division Bench's order in LPA No. 592 of 2024 untouched: the High Court was well within its jurisdiction in directing restoration on a 50 per cent deposit, and the consumer could contest the provisional assessment and then deposit the balance finally assessed. The clarification is that the determination is, in the first place, subject to a Section 127 appeal and, finally, subject to the Special Court's civil liability determination under Section 154(5) if the consumer is prosecuted.
The appeal in LPA No. 474 of 2024 was also dismissed: that order merely remands the matter to the Single Judge, who will decide it in accordance with law. All pending applications stood disposed of.
The judgment does not decide whether either consumer actually committed theft, and it does not fix any consumer's final civil liability — that is for the Section 127 appeal and, on prosecution, the Special Court. The 50 per cent restoration direction is a floor for prima facie arbitrary provisional assessments, not a tariff applicable to every theft case.
BANTHRY ANALYSISFor law students
Map the three forums before you memorise the outcome: the assessing officer under Section 126, the appellate authority under Section 127, and the Special Court under Section 154(5). The judgment's contribution is to keep all three alive at once, each final for its own purpose, rather than letting one swallow the others.
Note the disciplined use of the 50 per cent figure: it is borrowed from Section 127(2)'s appeal-deposit rule and confined to prima facie arbitrary provisional assessments, with reasons to be recorded. A restoration order that skips the arbitrariness finding and the reasons would not fit this judgment.
READING PROMPTSQuestions for a closer reading
- Why is the Section 127 appellate determination final only for restoration purposes in theft cases?
- How does the Court reconcile the High Court's restoration power with the Special Court's role under Section 154?
- Why does the Court fix 50 per cent as the floor, and what condition must a restoration order satisfy?
