AP High Court Quashes ₹5 Crore Demand Against PSU, Says Dispute Over Meter Recording Must Be Referred To Electricity Inspector
The Andhra Pradesh High Court has held that disputes regarding the correctness of a meter's recording must be referred to the Chief Electrical Inspector to Government (CEIG) under Section 26(6) of the Indian Electricity Act, 1910. [2026 LiveLaw (AP) 106]In doing so, the Court quashed a Rs. 5.27 crore back-billing demand raised by the Eastern Power Distribution Company of Andhra Pradesh...
The Andhra Pradesh High Court has held that disputes regarding the correctness of a meter's recording must be referred to the Chief Electrical Inspector to Government (CEIG) under Section 26(6) of the Indian Electricity Act, 1910. [2026 LiveLaw (AP) 106]
In doing so, the Court quashed a Rs. 5.27 crore back-billing demand raised by the Eastern Power Distribution Company of Andhra Pradesh Limited (APEPDCL) to Rashtriya Ispat Nigam Limited (RINL), finding that the Terms and Conditions of Supply which apply only to defective meters was wrongly invoked even though the meter itself was not defective.
The Court held that once a dispute arose regarding the period during which a functioning meter allegedly recorded lower electricity consumption (under-recording), the authorities were required to refer the matter to the Chief Electrical Inspector to Government under Section 26(6) of the Indian Electricity Act, 1910, instead of determining the issue themselves.
Granting relief to RINL, Justice Ninala Jayasurya held that Clause 22.3.3 applies only to defective or non-functional meters and its invocation was without jurisdiction, as the meter was functioning and the under-recording was due to melted wiring, not any defect in the meter. The Court observed:
“In such circumstances, that too when meter fixed is not found defective, invocation of Clause 22.3.3. and assessment of quantity of electricity thereof as rightly contended by the learned counsel for the petitioner is without jurisdiction. Any assessment towards back billing on the basis of the procedure contemplated under the said clause is illegal, not sustainable.
In the light of the expression of the Hon'ble Supreme Court in the above said decision, this Court is of the opinion that the issue with regard to less recording of readings by a meter which is not otherwise defective and the assessment towards back billing amount falls within the purview of Chief Electrical Inspector to Government under Section 26 (6) of the Indian Electricity Act. Therefore, the very issuance of notice under Clause 22.3.3.3 of Terms and Conditions of Supply and the impugned orders pursuant thereto are not sustainable for want of jurisdiction. There is no dispute with regard to the proposition that scope of judicial review of decisions of expert bodies is limited and Courts would be loathe to interfere with the same.”
Under Section 26(6) of the Indian Electricity Act, 1910, disputes regarding the correctness of an electricity meter fall within the jurisdiction of the Electrical Inspector.
The dispute arose after RINL found a major difference between the electricity consumption recorded by its Supervisory Control and Data Acquisition (SCADA) monitoring system and the readings shown by the meters installed by the distribution company. Subsequent inspections revealed that melted and defective wiring had caused the meters to record lower consumption.
After rectifying the defect, APEPDCL (distribution company) issued an assessment notice alleging that the meter had recorded lower consumption and raised a back-billing demand exceeding Rs. 5.27 crore.
RINL contended that the alleged under-recording was caused by melting and shorting of secondary circuit wires, not any defect in the meter itself, which continued to function properly. It argued that maintenance of the metering system was the distribution company's responsibility, and therefore any resulting loss could not be passed on to the consumer.
The company further submitted that disputes relating to under-recording by a functioning meter ought to have been referred to the Chief Electrical Inspector under Section 26(6) of the Indian Electricity Act, 1910, rather than being assessed under Clause 22.3.3.3 applicable to defective meters.
On the other hand, the distribution company maintained that the case did not involve a defective meter but burnt wires that resulted in lower recording of consumption. It argued that the back-billing assessment had been properly determined after correlating consumption patterns and considering relevant material.
Examining the record, the Court noted that there was no dispute that the meter itself was not defective and had not been replaced after inspection. It further observed that inspection reports attributed the under-recording to melted wires and poor maintenance of the meter box rather than any fault in the meter.
Relying on precedents including Bombay Electricity Supply & Transport Undertaking v. Laffans (India) Pvt. Ltd (2005). and Karnataka Electricity Board v. Topasa (1990), the Court observed that disputes concerning incorrect recording by an otherwise functional meter fall within the jurisdiction of the Electrical Inspector and cannot be unilaterally determined by the electricity supplier through back-billing assessments.
The Court quashed both the assessment order and the appellate order, and directed that any amount recovered from RINL be refunded or adjusted in future electricity bills.
Case Title: Rashtriya Ispat Nigam Ltd. v. Chairman, Eastern Power Distribution Company of Andhra Pradesh Ltd. & Others
Case No.: W.P. No. 5501 of 2004
Citation: 2026 LiveLaw (AP) 106
Counsel for the Petitioner: Vivek Chandra Sekhar S
Counsel for the Respondent(s): V V Satish (SC for APEPDCL)