Abstract: As we know that electricity losses during transmission and distribution are extremely high due to which many problems are faced such as varying voltage levels, change in the load current etc. This has been experienced due to the varying electrical consumption and power theft. Also these give rise to fault in power transmission line network and so it is necessary to implement fault detection system in transmission line network. The fault detection system is implemented for three phase electrical distribution system. A practical prototype system can be implemented for fault detection in power system and also the system is successfully designed using 8-bit Microcontrollers which allows the detection of faults. Continuous monitoring of the three phase parameters such as voltage, current and energy consumed is done using data logging system on the PC screen through hyper terminal. There is a Master Slave communication using RS 485 protocol. Communication between Master and Microcontroller is done via RS 232. Comparison of energy units between Master and Slave is done. If difference between the Master and Slave energy units is found, wireless technology GSM (global system for mobile communication) is used to send SMS to a responsible person. Introduction of the mobile communication technology GSM and Microcontroller-based RTU (remote terminal unit) i.e. Master-Slave communication is provided in the paper. This RTU functions as fault detection when abnormality or emergency happens. Also wireless mobile communication technology i.e. GSM is used simultaneously to send message to a responsible person.