MADHYA GUJARAT VIJ COMPANY LIMITED v. PANOLI INTERMEDIATES (INDIA) PVT. LTD

C/SCA/23464/2022 JUDGMENT DATED: 17/03/2026 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 23464 of 2022

FOR APPROVAL AND SIGNATURE:

HONOURABLE MR. JUSTICE HEMANT M. PRACHCHHAK Sd/- ========================================================== Approved for Reporting Yes No No ========================================================== MADHYA GUJARAT VIJ COMPANY LIMITED Versus PANOLI INTERMEDIATES (INDIA) PVT. LTD. & ANR.

========================================================== Appearance:

MR DIPAK R DAVE(1232) for the Petitioner(s) No. 1 MR ASHISH JHA(5591) for the Respondent(s) No. 1 MS NIRALI SARDA AGP for the Respondent(s) No. 2 ========================================================== CORAM:HONOURABLE MR. JUSTICE HEMANT M. PRACHCHHAK

Date : 17/03/2026

JUDGMENT

1. Rule returnable forthwith. Mr. Ashish Jha, learned counsel waives service of notice of rule on behalf of respondent No.1 and Ms. Nirali Sarda, learned AGP waives service of notice of rule on behalf of responden t No.2.

2. Present petition is led by the petitioner under A rticles 14, 19(1)(g), 226 and 227 of Constitution of India r/w the provisions of the Electricity Act, 2003 challenging the impugned order dated 7.9.2022 passed by respondent Page 1 of 13 C/SCA/23464/2022 JUDGMENT DATED: 17/03/2026 No.2 in Appeal No.2153 of 2022 under Section 127 of the Electricity Act whereby respondent No.2-Chief Electrical Inspector, Appellate Authority has quashed and set aside the supplementary bill issued by the petitioner for unauthorized use of the electricity.

3. The facts giving rise to present petition are that respondent No.1 was having an HT electricity connection bearing Consumer No.13076 with a contracted load of 1500 KVA. The installation of respondent No.1 was inspected by the representatives of the petitioner on 26.04.2018. During the inspection, it was found that respondent No.1 was utilizing electricity supply in adjacent Plot Nos.156A and 156B, which are owned by respondent No.1. Such extension and use of electricity was unauthorized and carried out without any prior intimation or permission from the petitioner.

3.1 In view of the above facts, a provisional assessment under Section 126 of the Electricity Act, 2003 was issued on 03.05.2018. After granting an opportunity of hearing to respondent No.1 and considering its reply, the assessment was nalized on 05.06.2018 and a bill amounting to Rs.22,70,458.89 came to be issued to respondent No.1.

3.2 Being aggrieved by the said nal assessment bill, respondent No.1 preferred an appeal before respondent Page 2 of 13 C/SCA/23464/2022 JUDGMENT DATED: 17/03/2026 No.2 under Section 127 of the Electricity Act, 2003. The petitioner appeared in the said proceedings and led i ts reply opposing the appeal.

3.3 The appeal was heard by respondent No.2. However, during the course of hearing, respondent No.1 neither relied upon nor brought to the notice of the petitioner any order passed by this Hon’ble Court in Special Civil Application No.6748 of 2010. The said order was neither pressed into service nor referred to in the pleadings or oral submissions made before respondent No.2.

3.4 It was only after the impugned order came to be received that the petitioner came to know that respondent No.2 had relied upon the aforesaid decision and, on that basis, set aside the assessment bill. Thus, the petitioner was deprived of an opportunity to deal with or distinguish the said judgment, and the same was considered behind the back of the petitioner.

3.5 The reliance placed on the order passed in Special Civil Application No.6748 of 2010 is wholly misplaced.

The said order is contrary to the law laid down by the Division Bench of this Hon’ble Court in Paschim Gujarat Vij Company Ltd. vs. Paras Ship Breakers, reported in 2010 (3) GLR 1917.

3.6 Against the said order passed in Special Civil Page 3 of 13 C/SCA/23464/2022 JUDGMENT DATED: 17/03/2026 Application No.6748 of 2010, a Letters Patent Appeal being LPA No.135 of 2019 was preferred, which came to be admitted and the operation of the impugned order was stayed. The said interim protection continued, and subsequently, the concerned consumer paid the entire assessed amount. In view thereof, the said Letters Patent Appeal came to be disposed of in Lok Adalat.

3.7 In these circumstances, the order passed in Special Civil Application No.6748 of 2010 had ceased to have any binding e@ect and could not have been relied upon. H ad the said order been brought to the notice of the petitioner during the appellate proceedings, the petitioner would have pointed out these crucial facts, including the stay granted in the Letters Patent Appeal and the subsequent settlement. However, without a@ording any such opportunity, respondent No.2 has erroneously relied upon the said order and set aside the assessment.

4. Being aggrieved by and dissatised with the impugned order dated 07.09.2022 passed by respondent No.2 in Appeal No.2153 of 2022, the petitioner has preferred the present petition.

5. Heard Mr. Dave, learned counsel for the petitioner, Mr.

Ashish Jha, learned counsel for respondent No.1 and Ms.

Nirali Sarda, learned AGP for respondent No.2.

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C/SCA/23464/2022 JUDGMENT DATED: 17/03/2026 6. Mr. Dave, learned counsel for the petitioner has submitted that since it is an admitted fact that the respondent was consumer of the petitioner company then by using an extension they have extended the power supply to its adjacent plot and thereby they have committed an o@ence and committed breach of provision of Regulation 7.51 of the Gujarat Electricity Regulato ry Commission. Mr. Dave, learned Counsel for the petitioner has submitted that without considering the decision of this Court passed in the matter of Paschim Gujarat Vij Company Ltd. (supra) the respondent authority has passed the impugned order.

6.1 Mr. Dave, learned counsel for the petitioner has also submitted that respondent No.2 without hearing the petitioner on the aspect of order passed in Special Civ il Application No. 6748 of 2010, suo motu take cognizance of the said order and the bill has been set aside. He has further submitted that the said order would no longer hold the eld in view of order passed in Letters Patent Appeal No.135 of 2019 and despite that the said order has been relied upon by the respondent No.2 and the b ill has been set aside.

6.2 Mr. Dave, learned counsel for the petitioner has also submitted that the impugned order came to be passed de hors the provisions of law, provisions of the supply code and evidence on record and therefore, the same deserves Page 5 of 13 C/SCA/23464/2022 JUDGMENT DATED: 17/03/2026 to be quashed and set aside.

6.3 Mr. Dave, learned counsel for the petitioner has submitted that the impugned order is illegal, arbitrar y, unjust, improper and bad in law and therefore, the same deserves to be quashed and set aside.

7. As against that , Mr. Jha, learned counsel for respondent No.1 relied upon the aidavit-in-reply led on behalf of respondent No.1 and submitted that the respondent No.1-consumer is using the electricity supply in adjacent plot and there is no extension as alleged by the petitioner and being aggrieved and dissatised with that and by producing relevant documents the respondent has preferred the Appeal before the Appellate Authority under Section 127 of the Electricity Act and after considering the facts of the case the Appellate Authori ty has passed the impugned order which is just and proper and in consonance with the settled legal principle and thus, the petition is devoid of any merits and the sam e deserves to be dismissed.

7.1 Mr. Jha, learned counsel for the respondent No.1 has further submitted that the allegations made against the present respondent No.1 that the said respondent connected the load to the adjacent plot but it is u sed in the same premises and therefore, there is no allegation that it was extended and it was used by the adjacent plot Page 6 of 13 C/SCA/23464/2022 JUDGMENT DATED: 17/03/2026 and therefore, the impugned bill which is issued under Section 126 of the Electricity Act is not tenable in th e eye of law and therefore, the Appellate Authority has after appreciating the said contention and after considering the facts of the case has made relevant observation in paragraph No.5 which is in consonance with the settled legal principle and therefore, there is no interference is required to be called for in present petition and there is no illegality committed by the Appellate Authority in passing the impugned order.

7.2 Mr. Jha, learned counsel for respondent No.1, has submitted that though it is an admitted position that the respondent was a consumer of the petitioner company, the allegation regarding unauthorized extension of power supply to the adjacent plots is misconceived and not established in accordance with law. It is submitted tha t there is no breach of Regulation 7.51 of the Gujarat Electricity Regulatory Commission, as alleged by the petitioner.

7.3 Mr. Jha, learned counsel for respondent No.1 has also submitted that the Appellate Authority has after taking into account all the relevant aspect and after evaluating the evidence placed on record, passed impugned order which is in consonance with the provisions of law and therefore, this Court may not entertain present petition.

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C/SCA/23464/2022 JUDGMENT DATED: 17/03/2026 7.4 Learned counsel for respondent No.1 has further submitted that the impugned order has been passed in accordance with law, after due consideration of the provisions of the Supply Code and the evidence on record, and therefore, it does not su@er from any illegality, arbitrariness or perversity.

8. I have gone through the relevant documents and materials placed on record. I have also gone through the record of the petition and impugned order passed by the Appellate Authority.

9. It appears that the against the order passed in Speci al Civil Application No.6748 of 2010, a Letters Patent Appeal being LPA No.135 of 2019 was preferred, which came to be admitted and the operation of the impugne d order was stayed and the said interim protection continued, and subsequently, the concerned consumer paid the entire assessed amount and the said Letters Patent Appeal came to be disposed of in Lok Adalat..

10. In the decision of the Division Bench of this Court relied upon by learned counsel for the petitioner in ca se of Paschim Gujarat Vij Company Ltd (supra), the Division Bench of this Court held as under:- "On this basis, we are of the view that this is a clear case of unauthorized use of electricity covered Page 8 of 13 C/SCA/23464/2022 JUDGMENT DATED: 17/03/2026 under Section 126 of the Act. We may recall that the erstwhile consumers namely Khodiyar Rolling Mills a nd Paras Ship Breakers who had factories situated in pl ot no. 2/B and 4 respectively had defaulted in paying their electricity bills. Their electricity connections were therefore, disconnected. In ordinary circumstances, by virtue of agreement between the parties, particular ly, if those consumers had sold their plots to some other entities through private negotiations, the Electricity Company would have resisted granting any new electr ic connection on such premise without the past dues be ing paid up in toto either by the previous owner or by the new purchaser. If we were to accept the contention of the consumer that all that the consumer has done is an innocuous extension of electricity connection in a neighboring plot, use of which is being enjoyed by the same consumer for which the consumer also pays the full electricity charges, we would be negating and totally bypassing the right of the Electricity Company to s eek full recovery of its past dues of electricity before granting new electrical connection on the same premises.

11. After considering the relevant facts and provision, the Division Bench of this Court, disposed of the petition and observed in paragraph No.14 as under:

"We may recall that in Special Civil Application No.

16707/2007,the consumer has challenged order dated 19.2.2007 passed by the Electrical Inspector. Same order to the extent it is adverse to the Company ha s been challenged in Special Civil Application No.6665/2008. We 8nd that the Electrical Inspector, having accepted the case of unauthorized use of electricity by the consumer, interfered with the di sputed bill on other grounds which were not tenable. The Electrical Inspector relied on the meter installed by the consumer on its furnace to hold that such consumpti on should be excluded from consideration of unauthoriz ed consumption.

We 8nd that the approach of the Electrical Page 9 of 13 C/SCA/23464/2022 JUDGMENT DATED: 17/03/2026 Inspector was wholly incorrect. It is undisputed th at the meter installed on the furnace was purchased by the consumer and was not supplied by the Company.

Reading recorded by such a meter cannot form the ba sis for segregating the consumption of electricity.

The Company in its petition has taken following gro und in this respect :

“(e) The Learned Appellate Authority has failed to appreciate that only the energy meter (TVM)

installed by the petitioner is considered to be standard apparatus to measure energy because this apparatus is checked from time to time in the premises of the consumers by the oicials of the petitioner. No other meter present in the premises of the consumer is taken in consideration except meter installed by the petitioner because the meter installed other than the petitioner are purchased and installed by the consumer themselves for getting various bene8ts lie electricity duty exemption, D.G. Set, Oice Lighting, recording, factory lighting recording, etc. The reading of furnace meter considered by the learned Appellate Authority is totally misleading since the said furnace meter is not tested or sealed by the petitioner. The respondent no.1 had failed to produce any sealing certi8cate in respect of the said furnace meter.”

No reply has been 8led refuting the averments. Even otherwise factual aspects are not in dispute. We uphold the said objection, conclude that interference by the Electrical Inspector in th is case was uncalled for. The order is therefore, quashed."

12. Considering the facts of the case and in view of Section 126 of the Electricity Act, the Division Bench o f this Court came to the conclusion that the order passed by the Electrical Inspector to the extent is against t he Page 10 of 13 C/SCA/23464/2022 JUDGMENT DATED: 17/03/2026 provision of law and requires to be quashed and set aside.

The said Section 126 of the Electricity Act reads as under:- "Section 126: (Assessment): --- (1) If on an inspect ion of any place or premises or after inspection of the equipments, gadgets, machines, devices found connected or used, or after inspection of records maintained by any person, the assessing oicer comes to the conclusion that such person is indulging in unauthorized use of electricity, he shall provisionally assess to the best of his judgement the electricity charges payable by such person or by any other pers on bene8ted by such use.

(2) The order of provisional assessment shall be se rved upon the person in occupation or possession or in charge of the place or premises in such manner as may be prescribed.

[(3) The person, on whom an order has been served under sub- section (2) shall be entitled to 8le obj ections, if any, against the provisional assessment before the assessing oicer, who shall, after aording a reaso nable opportunity of hearing to such person, pass a 8nal order of assessment within thirty days from the date of s ervice of such order of provisional assessment of the elec tricity charges payable by such person.] (4) Any person served with the order of provisional assessment, may, accept such assessment and deposit the assessed amount with the licensee within seven days of service of such provisional assessment order upon him:

2 [***]

[(5) If the assessing oicer reaches to the conclus ion that unauthorised use of electricity has taken plac e, the assessment shall be made for the entire period duri ng which such unauthorized use of electricity has taken place and if, however, the period during which such Page 11 of 13 C/SCA/23464/2022 JUDGMENT DATED: 17/03/2026 unauthorised use of electricity has taken place cannot be ascertained, such period shall be limited to a peri od of twelve months immediately preceding the date of inspection.] (6) The assessment under this section shall be made at a rate equal to [twice] the tari rates applicable fo r the relevant category of services speci8ed in sub-section (5).

Explanation.- For the purposes of this section,- (a) “assessing oicer” means an oicer of a State Government or Board or licensee, as the case may be , designated as such by the State Government;

(b) “unauthorised use of electricity” means the usa ge of electricity – (i) by any arti8cial means; or (ii) by a means not authorised by the concerned person or authority or licensee; or (iii) through a tampered meter; or [(iv) for the purpose other than for which the usage of electricity was authorised; or (v) for the premises or areas other than those for which the supply of electricity was authorized.”

13. It is crystal clear that the respondent No.1 has misused the power connection originally granted in its favour by extending the supply to an adjacent plot, w hich is an admitted fact. However, without considering this fact and the ratio laid down by the Division Bench of t his Court in the case of Paschim Gujarat Vij Company Ltd.

(supra), the Electrical Inspector has passed the impugned order, which, in my view, does not deserve to be sustained and is required to be quashed and set aside.

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C/SCA/23464/2022 JUDGMENT DATED: 17/03/2026 14. For the foregoing reasons, the petition is hereby allowed. The impugned order dated 7.9.2022 passed by respondent No.2 in Appeal No.2153 of 2022 under Section 127 of the Electricity Act is hereby quashed and set aside. Rule is made absolute.

Sd/-

(HEMANT M. PRACHCHHAK,J)

SURESH SOLANKI

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Original copy of this order has been signed by the Hon'ble Judge.

Digitally signed by: SURESHKUMAR MOTIBHAI SOLANKI(HC00208), PRINCIPAL PRIVATE SECRETARY, at High Court of Gujarat on 24/03/2026 17:26:56