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SUPREME COURT OF INDIA
Hemant Gupta, V. Ramasubramanian, JJ.
M/s Prem Cottex - Appellant
Versus
Uttar Haryana Bijli Vitran Nigam Ltd. & Ors. - Respondents
Civil Appeal No.7235 of 2009
Decided On : 05-10-2021
(A) Electricity Act, 2003 – Section 56(2) – Limitation Act, 1963 – Section 17(1)(c) – Recovery of due amount from consumer by licensee – Bar of limitation – Bar contained in Section 56(2) is not merely with respect to disconnection of supply but also with respect to recovery – Bar with reference to enforcement of right to disconnect, is actually an exception to law of limitation – What is extinguished by law of limitation, is remedy through a Court of law and not a remedy available, if any, de hors through a Court of law – However, Section 56(2) bars not merely normal remedy of recovery but also bars remedy of disconnection – Negligence on part of licensee which led to short billing in first instance and rectification of same after mistake is detected, is not covered by Sub-section (1) of Section 56 – Consequently, any claim so made by a licensee after detection of their mistake, may not fall within mischief, namely, “no sum due from any consumer under this Section”, appearing in Sub-section (2) – If licensee has not raised any bill, there can be no negligence on part of consumer to pay bill and consequently period of limitation prescribed under Sub-section (2) will not start running – So long as limitation has not started running, bar for recovery and disconnection will not come into effect. (Paras 14, 15, 25 and 26)
(B) Consumer Protection Act, 1986 – Sections 2(1)(g), 2(1)(o) – Electricity Act, 2003 – Section 56 – Electricity – Deficiency in service – Raising of an additional demand in form of “short assessment notice”, on the ground that in bills raised during a particular period of time, multiply factor was wrongly mentioned, cannot tantamount to deficiency in service – If a licensee discovers in course of audit or otherwise that a consumer has been short billed, licensee is certainly entitled to raise a demand – So long as consumer does not dispute correctness of claim made by licensee that there was short assessment, it is not open to consumer to claim that there was any deficiency – National Commission, in impugned order correctly points out that it is a case of “escaped assessment” and not “deficiency in service” – Respondents cannot be held guilty of any deficiency in service and dismissal of complaint by National Commission is perfectly in order – Appeal dismissed. (Paras 21, 22 and 27)
Facts of the case:
Challenging an Order of the National Consumer Disputes Redressal Commission, dismissing their consumer complaint on the ground that there was no deficiency in service on the part of licensee (electricity distribution company), consumer of electricity has come up with present statutory appeal. By an Order dated 1.10.2009, National Commission dismissed complaint on the ground that it is a case of “escaped assessment” and not a case of “deficiency in service”.
Findings of Court:
Even before going into question of Section 56(2), consumer forum is obliged to find out at the threshold whether there was any deficiency in service. It is only then that the recourse taken by the licensee for recovery of the amount, can be put to test in terms of Section 56. If the case on hand is tested on this parameter, it will be clear that the respondents cannot be held guilty of any deficiency in service and hence dismissal of the complaint by the National Commission is perfectly in order.
Result : Appeal dismissed.
JUDGMENT :
V. Ramasubramanian, J.
1. Challenging an Order of the National Consumer Disputes Redressal Commission (for short “National Commission”), dismissing their consumer complaint on the ground that there was no deficiency in service on the part of the licensee (electricity distribution company), the consumer of electricity has come up with the above statutory appeal.
2. We have heard Sh. K.C. Mittal, learned counsel for the appellant and Mr. Arun Bhardwaj, learned Additional Advocate General for the State of Haryana, appearing for the respondents.
3. The appellant is carrying on the business of manufacturing cotton yarn in Panipat, Haryana. The appellant is having a L.S. connection, which got extended from 404.517 KW to 765 KW with C.D 449 KVA to 850 KVA, on 3.08.2006.
4. After 3 years of the grant of extension, the appellant was served with a memo dated 11.09.2009 by the third respondent herein, under the caption “short assessment notice”, claiming that though the multiply factor (MF) is 10, it was wrongly recorded in the bills for the period from 3.08.2006 to 8/09 as 5 and that as a consequence there was short billing to the tune of Rs.1,35,06,585/-. The notice called upon the appellant to pay the amount as demanded, failing which certain consequences would follow.
5. Aggrieved by the said notice, the appellant gave a representation on 22.09.2009 and then filed a consumer complaint before the National Commission, contending inter alia that the demand made by the respondents is the outcome of a glaring mistake and gross negligence on their part and that under Section 56 of the Electricity Act, 2003 (for short “the Act”), no amount due from a customer is recoverable after a period of two years from the date on which it became first due.
6. By an Order dated 1.10.2009, the National Commission dismissed the complaint on the ground that it is a case of “escaped assessment” and not a case of “deficiency in service”. Aggrieved by the said Order, the appellant is before us.
7. While ordering notice in the above appeal on 13.11.2009, this Court granted interim stay of the impugned order. However, on an application filed on behalf of the respondents for vacating the interim order, this Court modified the stay Order on 19.08.2014 directing the appellant to pay to the first respondent herein, 50% of the demand amount within six weeks with a condition that in case the appellant succeeded, the said amount shall be refunded with interest @ 9% p.a. Accordingly, the appellant has paid a sum of Rs.54,03,293/, on 24.09.2014. The appellant claims to have already paid a sum of Rs.13,50,000/- on 9.10.2009 itself and this amount, together with the amount deposited on 24.09.2014 pursuant to the interim order of this Court, constituted 50% of the amount as demanded in short assessment notice dated 11.09.2009.
8. The sheet anchor of the case of the appellant is Section 56(2) of the Act and the exposition of law made by this Court in the decision in Assistant Engineer (D1), Ajmer Vidyut Vitran Nigam limited and Anr. vs. Rahamatullah Khan alias Rahamjulla, (2020) 4 SCC 650 .
9. Before we proceed to consider the statutory provision and the decision of this Court relied upon by the appellant, it is relevant to take note of the fact that the appellant never disputed the correctness of the claim of the respondents that the multiply factor (MF) to be applied was 10, but it was wrongly applied as 5. The only grievance raised by the appellant both in their representation and in their consumer complaint was that they cannot be made to suffer on account of the negligence on the part of the respondents and that on the basis of the bill already raised, they have charged their customers and that it may not be possible for them to go back to their customers with an additional demand now. In addition, the bar under Section 56 was also pleaded.
10. Section 56 of the Electricity Act, 2003 reads as under:
(1) Where any perso
(1) What is extinguished by law of limitation, is remedy through a Court of law and not a remedy available, if any, de hors through a Court of law.(2) Raising of an additional demand in form of “shor....
The court established that an electricity company can issue revised bills for bona fide mistakes in billing, reinforcing the consumer's obligation to pay based on accurate meter readings.
The right to recover electricity dues through civil suits is not barred by the two-year limitation for disconnection proceedings under Section 56(2) of the Electricity Act.
The court established that while disconnection for non-payment is limited to two years, the right to recover amounts through civil proceedings remains intact.
Supplementary bills can be raised for mistakes, but disconnection for non-payment after two years is prohibited under Section 56(2) of the Electricity Act, 2003.
A licensee cannot exercise the power of electricity disconnection for the recovery of arrears that are more than two years old, unless such sums were continuously shown as recoverable in previous bil....
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