Supreme Court Allows Conditional Restoration of Electricity in Certain Power-Theft Cases
New Delhi, 27 October 2026: The Supreme Court of India has clarified that High Courts may, in appropriate cases, direct the restoration of electricity supply to consumers accused of electricity theft upon payment of at least 50 per cent of the provisionally assessed amount, where the assessment appears prima facie arbitrary and the court records reasons for granting relief.
A Bench comprising Justice Manoj Misra and Justice K. V. Viswanathan delivered the judgment on 26 October 2026 in Dakshin Gujarat Vij Company Limited and Another v. Vaibhav Metal Crusher, along with the connected matter of Paschim Gujarat Vij Company Limited and Another v. Jamanbhai Nanajibhai Bhuva. The appeals concerned the procedure for determining the amount payable by consumers seeking restoration of electricity after disconnection over alleged power theft.
Background of the Cases
In one of the matters, Dakshin Gujarat Vij Company Limited issued a supplementary bill to Vaibhav Metal Crusher demanding approximately ₹92.99 lakh for alleged electricity theft, along with approximately ₹23.45 lakh in compounding charges. The Gujarat High Court permitted restoration of electricity supply upon payment of 50 per cent of the demand and allowed the consumer to challenge the provisional assessment.
The distribution companies challenged the relief granted by the High Court, arguing that assessments in electricity-theft cases should be treated differently from assessments for unauthorised use of electricity under Section 126 of the Electricity Act, 2003.
Supreme Court's Findings
The Supreme Court held that, where the applicable Electricity Supply Code does not prescribe a separate procedure, the amount required for restoration of electricity under the third proviso to Section 135(1A) of the Electricity Act must be determined by following the assessment procedure under Section 126.
This procedure includes provisional assessment, an opportunity for the consumer to submit objections, a reasonable opportunity of hearing, and final assessment. The Court emphasised that these safeguards ensure procedural fairness when a consumer challenges the amount demanded for reconnection.
The Court also recognised that electricity is essential for everyday life and business. However, it cautioned that allegations of electricity theft require a circumspect approach. High Courts are not required to grant restoration in every case and may, depending on the circumstances, refuse restoration until the entire provisionally assessed amount is deposited.
When Can Electricity Be Restored on a 50% Deposit?
The Court explained that where a provisional assessment appears prima facie arbitrary, a High Court may, for reasons recorded in its order, direct restoration upon payment of an amount that is not less than 50 per cent of the demanded amount. The Court referred to the 50 per cent deposit requirement under Section 127(2), which applies to appeals against assessments.
This is not an automatic entitlement for every consumer accused of electricity theft. The decision depends on the facts of the case and the court's assessment of whether such relief is justified.
Appeal and Final Civil Liability
The Court clarified that the assessment determined through the Section 126 procedure may be challenged in an appeal under Section 127. The resulting determination is final for the limited purpose of seeking restoration of electricity supply; it does not prevent the Special Court from determining civil liability under Section 154(5) where theft prosecution is pursued.
Under Section 154(6), any excess amount deposited must be dealt with in accordance with the civil liability ultimately determined by the Special Court, including a refund where applicable.
Decision
The Supreme Court dismissed the appeals filed by the Gujarat electricity distribution companies, subject to its clarification concerning the effect of the assessment and appeal process on the Special Court's determination of civil liability. The connected appeal was also dismissed, leaving undisturbed the High Court's order remanding that matter for reconsideration.
Why the Judgment Matters
The ruling clarifies the procedure for consumers seeking restoration of electricity after disconnection over alleged theft. It balances access to an essential service with the need to address electricity theft, while preserving the consumer's opportunity to challenge an assessment and ensuring that final civil liability remains within the Special Court's jurisdiction.
Case: Dakshin Gujarat Vij Company Limited and Another v. Vaibhav Metal Crusher, with Paschim Gujarat Vij Company Limited and Another v. Jamanbhai Nanajibhai Bhuva.
Decision date: 26 October 2026
Bench: Justice Manoj Misra and Justice K. V. Viswanathan
Key provisions: Sections 126, 127, 135(1A), 154(5) and 154(6) of the Electricity Act, 2003.