Supreme Court lets High Courts restore power on a 50 per cent deposit in electricity theft cases where the provisional assessment appears prima facie arbitrary, provided reasons are recorded.
New Delhi: The Supreme Court has held that a High Court may, in an appropriate case, order restoration of electricity supply to a consumer accused of theft on payment of at least 50 per cent of the provisionally assessed amount, if the assessment appears prima facie arbitrary, and has cautioned that such relief must be granted with circumspection [Dakshin Gujarat Vij Company Limited and Another v. Vaibhav Metal Crusher, with Paschim Gujarat Vij Company Limited and Another v. Jamanbhai Nanajibhai Bhuva].
A Bench of Justice Manoj Misra and Justice K.V. Viswanathan dismissed both appeals filed by the Gujarat distribution companies against orders of the Gujarat High Court. Justice Misra authored the common judgment, delivered on October 26, 2026.
How the cases arose
In the first case, the licensee alleged theft of electricity by a metal crusher unit and on January 3, 2024 issued a supplementary bill of Rs 92,99,077.55 plus Rs 23,45,845 as compounding charges, warning of prosecution. A Single Judge of the Gujarat High Court allowed the consumer to deposit 50 per cent of the bill and directed reconnection. In a Letters Patent Appeal, a Division Bench on June 25, 2024 let the consumer object before the Executive Engineer, required a decision in about three weeks, and allowed a statutory appeal if the decision went against him.
In the second case, the licensee issued a supplementary bill dated June 1, 2023 for alleged theft. The Single Judge required a 50 per cent deposit within four weeks, stayed recovery of the balance and directed that a fresh connection application be processed. The Division Bench, relying on earlier Supreme Court rulings, sent the matter back to the Single Judge for a fresh decision. The theft allegations in both cases are those of the licensees and have not been adjudicated by the Special Court.
What the Court held
The Court held that the “assessed amount” that must be paid for restoration under the third proviso to Section 135(1A) of the Electricity Act, 2003 is the amount worked out under the procedure in Section 126, with provisional assessment, objections, a hearing and a final assessment, unless the applicable Supply Code lays down its own procedure. It described the restoration provision as an emergency measure for a consumer who has suffered disconnection.
“the High Court may, for reasons to be recorded, order restoration of the supply”
Appeals and the Special Court
An appeal against the assessment order lies under Section 127, which requires a deposit of half the assessed amount before it is entertained. In theft cases, the Court said, the appellate determination is final only for the purpose of restoration and does not bind the Special Court in a criminal complaint. Civil liability for theft is fixed by the Special Court under Section 154(5), and if the amount deposited exceeds that liability, the excess is to be refunded under Section 154(6).
For High Courts, the Bench said they should take a circumspect approach to restoration petitions in theft cases and may decline restoration until the full provisional amount is deposited, depending on the facts. Where the provisional assessment appears prima facie arbitrary, restoration may be ordered on payment of at least 50 per cent of the demand, and the order should state that the assessment remains subject to the Section 127 appeal and, if there is a prosecution, to the Special Court’s determination.
The directions
The first appeal was dismissed with a clarification that the assessment remains subject to a Section 127 appeal and to the Special Court’s determination of civil liability. The second was dismissed because the remand to the Single Judge for a fresh decision was not disturbed. All pending applications were disposed of.
Why the judgment matters
The ruling settles how restoration should work when a consumer is disconnected on an allegation of theft: the money to be paid is tied to the Section 126 assessment procedure, and High Courts are given a limited power to order restoration at half the demand only when the assessment looks arbitrary and reasons are recorded.
It also keeps the roles distinct. Restoration is an interim, emergency remedy, while the final liability for theft is for the Special Court, so a deposit made now can be adjusted or refunded later. The Court has not decided whether theft occurred in either case.
Case Title: Dakshin Gujarat Vij Company Limited and Another v. Vaibhav Metal Crusher, with Paschim Gujarat Vij Company Limited and Another v. Jamanbhai Nanajibhai Bhuva [Civil Appeals arising out of SLP (C) Nos. 17868 of 2024 and 8778 of 2025] [2026 INSC 1157]
Bench: Justice Manoj Misra and Justice K.V. Viswanathan, Supreme Court of India
Date of Judgment: October 26, 2026
Appearances: Senior Advocate Ranjeet Kumar with Advocate-on-Record Pradeep Misra and Advocates Indu Misra, Daleep Dhyani and Suraj Singh for the appellants; Senior Advocate Raghenth Basant with Advocate-on-Record Jaikriti S. Jadeja and Advocates Dhruvik Patel, Hima Bhardwaj, Shivang Goel and Ishaan Aggarwal for the respondents