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by Admin
17 February 2026 2:34 PM
“Acquittal on Benefit of Doubt Cannot Override Civil Liability for Energy Pilferage Under Clause 39.15”— In a judgment with wide ramifications on the interplay between criminal prosecution and civil liability for electricity theft, the High Court of Telangana on December 2, 2025, dismissed a writ petition filed by Madan Lal Steels Ltd. challenging recovery proceedings for electricity dues amounting to Rs. 6.55 crore, despite the company’s acquittal in a related criminal case.
Justice Nooty Ramamohana Rao held that civil recovery for pilferage of electricity remains valid even if the consumer is acquitted in criminal proceedings, provided such acquittal is not on the ground that the charges were false.
“The failure of prosecution to establish guilt in a criminal trial does not automatically extinguish civil liability unless the charge itself is declared to be false. Acquittal on benefit of doubt cannot shield the consumer from recovery under Clause 39.15 of the Terms and Conditions of Supply.”
Energy Theft Allegation and Rs. 6.5 Crore Assessment
The case arises out of an inspection on March 19, 1991, by officials of the Andhra Pradesh State Electricity Board (APSEB), during which artificial devices allegedly used to manipulate electric consumption readings were found installed at the petitioner’s premises.
On that basis, the Superintending Engineer provisionally assessed loss of energy at Rs. 7.78 crore. After hearing, the final assessment dated 31.07.1992 pegged the liability at Rs. 6.61 crore, later confirmed and marginally reduced to Rs. 6.55 crore by the appellate authority (Chief Engineer) on 23.10.2001.
The criminal prosecution launched against the petitioner and others culminated in acquittal by the Sessions Court in 2006, confirmed by the High Court on 14.11.2011 in Crl.A. No. 721/2008, citing lack of recovery of the remote-control device and intact seals, and extending benefit of doubt.
Clause 39.15: Criminal Acquittal Doesn’t Bar Recovery Unless Charge Proven False
At the heart of the dispute was Clause 39.15 of the APSEB Terms and Conditions of Supply, which specifically states:
“Neither failure to launch criminal proceedings nor the acquittal of the consumer in such proceedings on a ground other than that the charge is false shall bar the proceedings under the provision stipulated therein.”
Justice Nooty Ramamohana Rao emphasized that the acquittal was not based on a finding that the charge was false, but rather due to evidentiary gaps and absence of proof beyond reasonable doubt—which cannot negate civil liability.
“The Sessions Court acquitted the petitioner by extending the benefit of doubt; it did not hold that the charge of pilferage was false. Therefore, civil recovery is not only permissible but legally sustainable.”
The Court further noted: “Civil liability arises from the act of unauthorized consumption—distinct from the penal consequence of theft. The same incident may give rise to both. The lower standard of proof in civil proceedings supports recovery even when criminal liability fails.”
Electricity Act, 2003 Does Not Override A.P. Electricity Board (Recovery of Dues) Act, 1984
The petitioner contended that Electricity Act, 2003, particularly Section 153 (Special Court for determining civil liability) and Sections 173, 174, 185 (primacy provisions), barred recovery under the APSEB Recovery Act, 1984 or the A.P. Revenue Recovery Act, 1864.
Rejecting this, the Court observed:
“There exists no inconsistency between the Electricity Act, 2003 and the APSEB Recovery of Dues Act, 1984 or the Revenue Recovery Act. Therefore, action under Section 52-A of the Revenue Recovery Act is valid.”
Referring to Supreme Court decisions including State of Tamil Nadu v. G.N. Venkataswamy and State of Bombay v. Narothamdas Jethabhai, the Court held that the State legislature is fully competent to empower revenue authorities to recover dues as arrears of land revenue.
Limitation Period Computed from Final Appellate Judgment in Criminal Case
The petitioner also argued that the recovery notice issued in 2014 was barred by limitation, given that the final assessment was passed in 2001.
The Court rejected this objection, clarifying that cause of action for recovery crystallized only after the High Court's judgment dated 14.11.2011, which confirmed the acquittal on benefit of doubt, not on merits.
“The right to recover dues accrues only after conclusion of the criminal case. Since the writ petition was filed within three years of the final judgment in Crl.A.No.721/2008, it is well within limitation under Article 113 of the Limitation Act.”
No Relief for Delinquent Consumer Despite Acquittal
Justice Nooty found no merit in the petitioner’s claim that criminal acquittal should wipe out the civil liability.
“The same act of pilferage can entail different consequences—criminal prosecution and civil recovery. Even where prosecution fails, assessment by competent electricity authority for loss of energy remains valid.”
He concluded:
“In view of Clause 39.15 and the finality of the Chief Engineer’s order dated 23.10.2001, the petitioner’s challenge to the recovery proceedings fails.”
Holding that no constitutional or legal infirmity existed in the recovery proceedings, the High Court dismissed the writ petition with costs of Rs.5,000/-.
“I could find no merit in any of the contentions canvassed in this writ petition and it is accordingly dismissed with costs quantified at Rs.5,000/- payable to the fourth respondent.”
Recovery Survives Acquittal if Not Based on False Charge
This ruling affirms that electricity boards can recover assessed dues for pilferage even if criminal courts acquit the accused, unless such acquittal declares the charge to be false. The case also reinforces the legal validity of recovering energy dues as arrears of land revenue under State statutes, and that the Electricity Act, 2003 does not oust the jurisdiction of other validly enacted recovery mechanisms.
Date of Decision: 02 December 2025
