M/S. Himadri Steel Pvt. Ltd. v. Jharkhand Urja Vikas Nigam Limited & Ors., 2026 INSC 851 (12 August 2026)
What the case was about
This case concerns the limits of a power distribution company’s authority to disconnect supply and impose massive provisional financial penalties on an industrial consumer for alleged electricity theft. M/S. Himadri Steel Pvt. Ltd., which held a High Tension Special Service (HTSS) electrical connection with a contract demand of 3,000 KVA, faced a Provisional Assessment Order of over Rs 3.23 crore and a disconnection after an inspection noted certain physical irregularities in its metering cubical. The Supreme Court had to decide whether such drastic action could be legally sustained when the inspection report itself did not conclusively find theft, and whether the company could approach the High Court directly despite statutory remedies under the Electricity Act, 2003.
The key facts
In June 2017, a blast occurred in the petitioner’s cubical metering unit. On 26 September 2017, a surprise inspection team visited the premises and prepared a report. The report noted that the cubical metering arrangement was old and had twice been repaired after an earlier blast. It recorded certain physical observations: a nut appeared welded at its midpoint, two holes were found in the meter chamber, and the cover could be opened easily without breaking the glass (para 30). However, the same report stated that there was no welding on the nut, that the door could not be opened without opening the plastic seal, and that all plastic seals were found correct and intact (para 30). The team recommended a joint inspection by officers of the Board and the consumer’s representatives, concluding that “further action will be as per norms.” The check meter showed no interference.
On the strength of this inspection report, the respondents lodged an FIR under the Electricity Act, 2003 and the Indian Penal Code, disconnected the petitioner’s electricity supply, and on 29 September 2017 issued a Provisional Assessment Order claiming Rs 3,23,71,524 towards alleged theft of electricity. No material evidence was seized from the premises as mandated under the Jharkhand (Electricity Supply Code) Regulations, 2015.
Himadri Steel challenged the order before the Jharkhand High Court. A Single Judge allowed the writ petition on 5 September 2018, holding that the inspection report disclosed no conclusive evidence of theft. The Division Bench reversed this in LPA No. 648 of 2018 on 8 August 2025, holding that the writ petition was not maintainable in view of alternative statutory remedies and that the report contained sufficient material. The petitioner then approached the Supreme Court.
The questions before the Court
The Court framed two questions for determination:
1. Whether the remedy of a writ petition was available to the petitioner when statutory remedies are available under the Electricity Act, 2003?
2. Whether the petitioner could be held accountable under Section 135 of the Electricity Act, 2003 — that is, were the ingredients of theft actually satisfied?
What the Court decided and why
On maintainability, the Court held that a writ petition against a Provisional Assessment Order is indeed maintainable. It clarified that Section 127 of the Electricity Act provides a statutory appeal only against a final order of assessment, and not against a provisional order (para 21). Because the Act does not provide a statutory appeal against a Provisional Assessment Order, the High Court’s jurisdiction under Article 226 of the Constitution remains open.
On the merits, the Supreme Court ruled firmly in favour of the steel company. It held that the Provisional Assessment Order was unsustainable because the inspection report on which it rested did not disclose any finding or conclusive evidence of theft of electricity, nor did it record the subjective satisfaction of the authorised officer (para 34). The Court emphasized that only if the inspection report records a clear finding on theft and gives details of evidence collected during the inspection that unerringly disclose theft of electricity can such an order be sustained; such a finding must be apparent on a bare reading of the report (para 34).
Applying this standard, the Court found that the present inspection report disclosed no details or evidence of theft and recorded no subjective satisfaction of the authorised officer (para 34). The observations about the old, twice-repaired cubical and the purportedly easy access were undermined by the report’s own concurrent finding that all seals were intact and the door could not be opened without disturbing the seal (para 30). Mere suspicion, however strong, cannot substitute for the strict proof required to establish theft under Section 135. The Court also rejected the respondents’ “revenue protection” argument, noting that it could not justify bypassing these procedural and evidentiary safeguards.
Further, the respondents had failed to seize any material evidence from the premises, a mandatory requirement under the applicable Regulations. Since the inspection itself did not detect theft and no material was seized, the disconnection was improper and the provisional assessment order could not stand.
Accordingly, the Court allowed the appeal, set aside the Division Bench’s order in LPA No. 648 of 2018, and restored the Single Judge’s order dated 5 September 2018, with no order as to costs (para 38).
Why it matters
This judgment is a significant safeguard for industrial and domestic consumers. It clarifies that electricity distribution companies cannot use provisional assessment machinery as a shortcut to impose crippling financial liabilities or disconnect supply based on vague suspicion. By insisting that an inspection report must itself contain an unambiguous finding of theft supported by concrete evidence, the Court has raised the evidentiary threshold and curbed the potential for harassment.
The ruling also settles an important procedural point: because Section 127 does not provide an appeal against provisional assessment orders, consumers can validly approach the High Court under Article 226 without being forced into a statutory funnel that offers no immediate relief. In an era where power utilities increasingly wield punitive assessment powers, the decision reinforces that procedural safeguards under the Electricity Act and the applicable Supply Code Regulations cannot be diluted in the name of revenue recovery. Companies facing similar actions can now rely on this precedent to insist that inspection reports speak clearly before their power is cut off.