Electricity bill beyond 2 years cannot be demanded by Power Distribution Licensee Unless Amount Reflects As Arrears In Bill During the 2 year period: Bombay HC

A power distribution licensee cannot demand charges or consumption of electricity for a period of over two years preceding the date of first demand of such charges unless the amount owed reflects in the electricity bill during the 2 year periods, a full bench of the Bombay High Court has held.

The bench was constituted by Justice S.C. Dharmadhikari, Justice Bharati Dangre, and Justice A.M. Badar. A reference made to a larger bench was being heard after a single judge of the high court, while hearing a writ petitition filed by the Maharashtra State Electricity Distribution Company Limited (MSEDCL), found two conflicting judgments of division benches of the high court.

A bench of Justice F.I. Rebello and Justice Anoop Mohta had passed the first judgment in Awadhesh S Pandey vs. Tata Power while a bench of Justice Ranjana Desai and Justice A.A. Sayed had passed the second judgment in Rototex Polyester & Anr. v Administrator, Administration of Dadra & Nagar Haveli (U.T.) Electricity Department, Silvassa & Others.

Case Background:

The petitioner MSEDCL claimed that the consumer was using a phase three industrial connection since 2003 and had been paying his bills regularly. Upon checking the meter installed at the consumer’s premises in December 2010 however, it was found that there were errors in the multiplying factor. A monthly bill dated February 8, 2011 for RS 1791,410 was issued by the MSEDCL. A letter dated May 10, 2011, enclosing a final bill for the differential amount of RS 2,837,845.25, after deducting the amount already paid, was raised for the period between September 2003 and December 2010.

The aggrieved consumer filed an applicaton before the electricity ombudsman but the latter passed an order in favour of the MSEDCL and held that the differential amount claimed was payable and that the said bill was legal and proper.

The consumer then filed another application, seeking quashing of the said bill which was allowed. Appearing on behalf of MSEDCL, Multiplier Factor Advocate General AA Kumbhakoni said that if very high voltage or current supply was allowed to directly pass through an electric meter for measuring the quantity of electricity supplied, it would burn or explode. Hence, the electricity supplied had to be converted by transformation of current and voltage by providing current transformer and voltage potential transformer units. Thus, only a small portion of the actual electric energy supplied passes through the electric meter. So, the actual meter reading never reflects the actual amount of electric energy supplied to the consumer. As a result, a proper multiplying factor has to be applied to such meter reading to get the correct amount of electric energy supplied to the high tension consumer, said Kumbhakoni.

Judgment

After examining the Electricity Supply Act, the court noted, "Section 56 deals with disconnection of supply in default of payment. Now, where the person neglects to pay any charge for electricity or any sum other than a charge for electricity due from him to a licensee or the generating company in respect of supply, transmission or distribution or wheeling of electricity to him, then the power to disconnect is conferred and which power has to be exercised in the manner set out by subsection (1)."

"By sub­section (2), the category or the beneficiary of electric supply, namely, the consumer, is covered. As far as that consumer is concerned, by an overriding effect, sub­section (2) says that Section 56, which may have a marginal heading as disconnection of supply in default of payment, but so far as the consumer is concerned, no sum due from him under Section 56 shall be recoverable after the period of two years from the date when such sum became first due unless such sum has been shown continuously as recoverable as arrears of charges for electricity supplied. If this condition is satisfied, then alone the licensee shall cut­off the supply of electricity and not otherwise," the court stated.

Concluding that there was no conflict between the said two judgments, the court ruled, "The Distribution Licensee cannot demand charges for consumption of electricity for a period of more than two years preceding the date of the first demand of such charges. In other words, the distribution licensee will have to raise a demand by issuing a bill and the bill may include the amount for the period preceding more than two years provided the condition set out in sub­section (2) of Section 56 is satisfied. In the sense, the amount is carried and shown as arrears in terms of that provision."