Court’s Decision
The Supreme Court, in a judgment authored by Justice Sanjay Karol and Justice Prashant Kumar Mishra, allowed the appeal of a company director convicted under Sections 39 and 44 of the Indian Electricity Act, 1910, setting aside the conviction imposed by the Bombay High Court (Aurangabad Bench). The Court emphatically held that mere suspicion or inferential conclusions cannot form the basis of conviction for theft of electricity and that the statutory presumption under Section 39 can only arise after the prosecution establishes the use of an artificial or unauthorized means for abstraction of energy.
The Court restored the acquittal originally granted by the Trial Court and observed:
“Possibilities, estimations, and inferences cannot substitute proof. The presumption under Section 39 arises only when an artificial means for theft is proved.”
Accordingly, the appellant was acquitted of all charges, and the High Court’s judgment convicting him for electricity theft and meter tampering was quashed.
Facts
The case stemmed from allegations that the director of a private steel company at Jalna had tampered with the electricity meter supplied by the Maharashtra State Electricity Board (MSEB). In March 1993, officials noticed a 36.6% discrepancy between energy supplied and recorded consumption. During inspection in April–May 1993, MSEB officers found three holes of 4 mm in the meter box, alleging that wires were inserted through these holes to slow the meter’s functioning.
The meter was resealed, and subsequent readings showed a reduced disparity of 10%. MSEB quantified the alleged theft at around ₹30 lakhs and filed an FIR on 25 June 1993. After investigation, a charge sheet was filed under Sections 39 and 44 of the Indian Electricity Act.
The Trial Court acquitted both accused—directors of the company—holding that the prosecution failed to prove “dishonest abstraction” or “tampering” beyond reasonable doubt. However, the High Court reversed the acquittal, convicting the accused and sentencing each to one year of rigorous imprisonment and a ₹2 lakh fine, holding that the sealing of holes increased consumption and that the company must therefore have been responsible for the theft.
Issues
- Whether the High Court erred in reversing the Trial Court’s acquittal without sufficient evidence of artificial means used for theft.
- Whether the presumption of guilt under Section 39 of the Electricity Act could be applied without proving unauthorized means of abstraction.
- Whether tampering under Section 44(c) was established when no direct evidence of interference was presented.
Petitioner’s Arguments
Counsel for the appellant argued that the High Court erred in presuming guilt without concrete proof of theft. The Trial Court had rightly found that the prosecution’s evidence was speculative and lacked corroboration. It was submitted that all witnesses had based their conclusions merely on inference, not on any observed act of tampering or theft.
The petitioner pointed out contradictions among the prosecution witnesses: the panch witness admitted ignorance of the contents of the panchanama; the Executive Engineer conceded his findings were based on guesswork; and the complainant acknowledged that the conclusion of theft was “entirely based on inference”.
It was further contended that the presumption under Section 39 can only arise when the prosecution first proves the existence of artificial means or unauthorized connections, which had not been demonstrated. Moreover, the High Court’s reasoning that the increase in consumption post-sealing proved theft was flawed and legally insufficient to establish dishonest abstraction.
Respondent’s Arguments
The prosecution and MSEB defended the High Court’s conviction, asserting that the existence of three holes in the meter box clearly suggested tampering for slowing down the meter, and the subsequent increase in consumption after sealing confirmed the manipulation.
They argued that under Section 39, once artificial means exist, a presumption arises that theft was committed by the consumer unless rebutted. The officials’ inspection and sealing reports, it was claimed, constituted sufficient circumstantial evidence. It was also contended that the complaint was validly filed by a competent MSEB officer under Section 50 of the Act.
Analysis of the Law
The Court analyzed the scope of Sections 39 and 44 of the Indian Electricity Act, emphasizing that conviction under these provisions requires proof of dishonest abstraction using artificial means. The Court reiterated that the presumption under Section 39 is not automatic — it operates only after the prosecution first proves that unauthorized devices or methods were used.
Section 39 criminalizes dishonest abstraction, consumption, or use of energy, while Section 44 penalizes tampering with meters or apparatus. The Court held that both provisions require positive proof of tampering or fraudulent use, not mere suspicion.
Relying on Satya Narain Prasad v. Bhagwan Ramdas (1995 Supp (4) SCC 629), the Court observed that dishonest abstraction of electricity becomes theft only through a legal fiction, and hence strict proof is necessary. Similarly, the Court relied on Avtar Singh v. State of Punjab (AIR 1965 SC 666), holding that only when artificial means exist does the presumption under Section 39 operate.
The Court further cited Kalamani Tex v. P. Balasubramanian (2021) 5 SCC 283, underscoring the limited scope of appellate interference with acquittals—such reversal is permissible only when the Trial Court’s findings are perverse or manifestly illegal. Here, the High Court had not demonstrated any such perversity.
Precedent Analysis
- Satya Narain Prasad v. Bhagwan Ramdas (1995 Supp (4) SCC 629) — Clarified that dishonest abstraction under Section 39 constitutes theft by legal fiction and requires proof of unauthorized means before presumption can arise.
Applied to affirm that proof of artificial means is a prerequisite to presumption. - Avtar Singh v. State of Punjab (AIR 1965 SC 666) — Held that Section 39 creates a fiction deeming dishonest abstraction to be theft; hence conviction must follow only upon strict proof of such abstraction.
Reinforced that inferences without factual foundation cannot sustain conviction. - Vadivelu Thevar v. State of Madras (1957 SC) — Classified witness reliability, emphasizing that testimony based on inferences or approximations is “wholly unreliable.”
Cited to categorize the prosecution witnesses’ statements as unreliable. - Kalamani Tex v. P. Balasubramanian (2021) 5 SCC 283) — Reaffirmed that appellate courts should not interfere with acquittals unless there is a manifest error or perversity.
Relied upon to hold that the High Court exceeded its appellate jurisdiction.
Court’s Reasoning
The Court meticulously evaluated each prosecution witness and found the entire case built on assumptions rather than tangible proof:
- The panch witness admitted signing documents without understanding or observing the alleged tampering.
- The Deputy Engineer (PW-2) conceded that his report was based on guesswork and made under superior pressure.
- The complainant (PW-3) admitted that conclusions of theft were based entirely on inference, with no verification of whether the holes could actually be used for abstraction.
- The testing officer (PW-4) admitted that he merely suspected misuse “due to existing holes.”
- The Superintending Engineer (PW-5) also acknowledged that the presence of holes was used merely to justify the charge.
The Court observed that none of the witnesses verified whether wires were inserted through the holes or whether the meter had indeed malfunctioned due to such interference. No one had seen any employee of the company tampering with the meter. The original seal of the meter was intact, undermining the prosecution’s case.
In light of these deficiencies, the Court held that the prosecution failed to establish any artificial means, and therefore the presumption of guilt under Section 39 could not arise. Similarly, since no physical tampering was proved, the charge under Section 44(c) also collapsed.
The Court concluded that the High Court had wrongly overturned the acquittal without identifying any perversity or legal error in the Trial Court’s findings.
Conclusion
The Supreme Court held that:
- The prosecution failed to prove beyond reasonable doubt the use of any artificial means for electricity theft.
- The presumption under Section 39 was not triggered, as the foundational facts were not proved.
- The conviction under Section 44(c) lacked evidentiary basis, as no tampering was proved.
Accordingly, the Court set aside the High Court’s conviction, restored the Trial Court’s acquittal, and discharged the appellant’s bail bonds.
“In criminal jurisprudence, suspicion, however grave, cannot substitute proof. For the presumption under Section 39 to arise, the prosecution must first establish artificial means for theft — a requirement not met in this case.”
Implications
This judgment reaffirms the principle that criminal liability under electricity laws demands strict proof of tampering or unauthorized abstraction. It safeguards consumers and industrial establishments from wrongful prosecution based on assumptions or defective inspections. The decision clarifies that presumption clauses like Section 39 cannot be invoked mechanically and that courts must guard against speculative inferences when personal liberty is at stake.
The verdict also serves as guidance to electricity boards, emphasizing the need for scientific verification and concrete evidence before filing criminal cases of electricity theft.
FAQs
1. Can a person be convicted of electricity theft merely because meter readings show discrepancies?
No. Mere discrepancies or consumption variations do not prove theft unless artificial means or unauthorized tampering are established.
2. When does the presumption under Section 39 apply?
Only after the prosecution proves that artificial or unauthorized means were used for abstraction of electricity.
3. What if witnesses base conclusions only on inferences?
As per the Supreme Court, such testimony is wholly unreliable and cannot form the basis of a criminal conviction.
