PART – X11
Investigation And Enforcement
- If on an inspection 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
officer 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
person benefited by such use.
- The order of provisional assessment shall be served upon the person
in occupation or possession or in charge of the place or premises in
such manner as may be prescribed.
- The person, on whom a notice has been served under subsection (2)
shall be entitled to file objections, if any, against the provisional
assessment before the assessing officer, who may, after affording a
reasonable opportunity of hearing to such person, pass a final order
of assessment of the electricity charges payable by such person.
- 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: Provided that in case the person deposits the assessed amount he
shall not be subjected to any further liability or any action by any
- If the assessing officer reaches to the conclusion that unauthorised
use of electricity has taken place, it shall be presumed that such unauthorized
use of electricity was continuing for a period of three months immediately
preceding the date of inspection in case of domestic and agricultural
services and for a period of six months immediately preceding the date
of inspection for all other categories of services, unless the onus
is rebutted by the person, occupier or possessor of such premises or
- The assessment under this section shall be made at a rate equal to
one-and-half times the tariff rates applicable for the relevant category
of services specified in sub-section (5). Explanation.- For the purposes
of this section,
- “ assessing officer” means an officer of a State Government or
Board or licensee, as the case may be, designated as such by the State
- “ unauthorised use of electricity” means the usage of electricity
- by any artificial means; or
- by a means not authorised by the concerned person or authority
or licensee; or
- through a tampered meter; or
- for the purpose other than for which the usage of electricity
- Any person aggrieved by a final order made under section 126 may,
within thirty days of the said order, prefer an appeal in such form,
verified in such manner and be accompanied by such fee as may be specified
by the State Commission, to an appellate authority as may be prescribed.
- No appeal against an order of assessment under sub-section (1) shall
be entertained unless an amount equal to one third of the assessed amount
is deposited in cash or by way of bank draft with the licensee and documentary
evidence of such deposit has been enclosed along with the appeal.
- The appellate authority referred to in sub-section (1) shall dispose
of the appeal after hearing the parties and pass appropriate order and
send copy of the order to the assessing officer and the appellant.
- The order of the appellate authority referred to in sub-section (1)
passed under sub-section (3) shall be final.
- No appeal shall lie to the appellate authority referred to in subsection
(1) against the final order made with the consent of the parties.
- When a person default in making payment of assessed amount, he, in
addition to the assessed amount shall be liable to pay, on the expiry
of thirty days from the date of order of assessment, an amount of interest
at the rate of sixteen per cent per annum compounded every six months.
Orders for securing compliance
- The Appropriate Commission may, on being satisfied that a licensee
has failed to comply with any of the conditions of licence or a generating
company or a licensee has failed to comply with any of the provisions
of this Act or rules or regulations made thereunder, at any time, by
order in writing, direct any person (hereafter in this section referred
to as “ Investigating Authority” ) specified in the order to investigate
the affairs of any generating company or licensee and to report to that
Commission on any investigation made by such Investigating Authority:
Provided that the Investigating Authority may, wherever necessary, employ
any auditor or any other person for the purpose of assisting him in
any investigation under this section.
- Notwithstanding anything to the contrary contained in section 235
of the Companies Act, 1956, the Investigating Authority may, at any
time, and shall, on being directed so to do by the Appropriate Commission,
cause an inspection to be made, by one or more of his officers, of any
licensee or generating company and his books of account; and the Investigating
Authority shall supply to the licensee or generating company, as the
case may be, a copy of his report on such inspection.
- It shall be the duty of every manager, managing director or other
officer of the licensee or generating company, as the case may be, to
produce before the Investigating Authority directed to make the investigation
under subsection (1), or inspection under sub-section (2), all such
books of account, registers and other documents in his custody or power
and to furnish him with any statement and information relating to the
affairs of the licensee or generating company, as the case may be, as
the said Investigating Authority may require of him within such time
as the said Investigating Authority may specify.
- Any Investigating Authority, directed to make an investigation under
sub-section (1), or inspection under sub-section (2), may examine on
oath any manager, managing director or other officer of the licensee
or generating company, as the case may be, in relation to his business
and may administer oaths accordingly.
- The Investigating Authority, shall, if it has been directed by the
Appropriate Commission to cause an inspection to be made, and may, in
any other case, report to the Appropriate Commission on any inspection
made under this section.
- On receipt of any report under sub-section (1) or sub-section (5),
the Appropriate Commission may, after giving such opportunity to the
licensee or generating company, as the case may be, to make a representation
in connection with the report as in the opinion of the Appropriate Commission,
seems reasonable, by order in writing—
- require the licensee or the generating company to take such action
in respect of any matter arising out of the report as the Appropriate
Commission may think fit; or
- cancel the licenece; or
- direct the generating company to cease to carry on the business
of generation of electricity.
- The Appropriate Commission may, after giving reasonable notice to
the licensee or the generating company, as the case may be, publish
the report submitted by the Investigating Authority under sub-section
(5) or such portion thereof as may appear to it to be necessary.
- The Appropriate Commission may specify the minimum information to
be maintained by the licensee or the generating company in their books,
the manner in which such information shall be maintained, the checks
and other verifications to be adopted by licensee or the generating
company in that connection and all other matters incidental thereto
as are, in its opinion, necessary to enable the Investigating Authority
to discharge satisfactorily its functions under this section.
For the purposes of this section, the expression “ licensee or the generating
company” shall include in the case of a licensee incorporated in India—
- all its subsidiaries formed for the purpose of carrying on the
business of generation or transmission or distribution or trading
of electricity exclusively outside India; and
- all its branches whether situated in India or outside India.
- All expenses of, and incidental to, any investigation made under
this section shall be defrayed by the licensee or generating company,
as the case may be, and shall have priority over that debts due from
the licensee or the generating company and shall be recoverable as an
arrear of land revenue.
- Where the Appropriate Commission, on the basis of material in its
possession, is satisfied that a licensee is contravening, or is likely
to contravene, any of the conditions mentioned in his licence or conditions
for grant of exemption or the licensee or the generating company has
contravened or is likely to contravene any of the provisions of this
Act, it shall, by an order, give such directions as may be necessary
for the purpose of securing compliance with that condition or provision.
- While giving direction under sub-section (1), the Appropriate Commission
shall have due regard to the extent to which any person is likely to
sustain loss or damage due to such contravention.
The Appropriate Commission, before issuing any direction under section
- serve notice in the manner as may be specified to the concerned licensee
or generating company;
- publish the notice in the manner as may be specified for the purpose
of bringing the matters to the attention of persons, likely to be affected,or
- Consider suggestions and objections from the concerned licensee or
generating company and the persons, likely to be affected, or affected.