'Consumer Cannot Claim Interest On Statutory Deposit Made U/S 127(2) Of Electricity Act': Bombay High Court
The Bombay High Court has held that a consumer has no enforceable statutory right to claim interest on the mandatory pre-deposit made under Section 127(2) of the Electricity Act, 2003, when the assessment of unauthorised use of electricity is set aside in appeal. The Court observed that the deposit under Section 127(2) is a condition precedent for maintaining the statutory appeal and is not a payment towards tariff or consumption charges; in the absence of any express statutory provision creating a reciprocal obligation on the licensee to pay interest, the Court held that interest cannot be awarded on equitable considerations.
Justice Amit Borkar was hearing a writ petition filed challenging the order of the Appellate Authority under Section 127 of the Electricity Act, which had set aside the final assessment order passed by the Assessing Officer for alleged unauthorised use of electricity, but had declined to grant interest on the statutory deposit made by the petitioner. The petitioner operated a plastic granule manufacturing unit and had deposited 50% of the assessed amount, aggregating to ₹6,75,000, as required under Section 127(2) to maintain the appeal. Upon success in appeal, the Appellate Authority directed a refund or adjustment of the deposit but rejected the claim for interest, leading to the present petition.
The Court examined the statutory scheme under Sections 126 and 127 of the Act and held that Section 127(6) expressly fastens liability to pay interest only on the consumer in the event of default in payment of the assessed amount and does not contemplate payment of interest by the licensee where the assessment is set aside. The Court rejected the petitioner's argument that a principle of reciprocity must be read into the statute, holding that courts cannot supply a casus omissus by creating a right which the legislature has consciously omitted.
“If the legislature had intended to create a reciprocal obligation upon the licensee, it could have done so by simple words. It has not done so. The Court cannot supply what is known as a casus omissus,” the Court observed.
It further held that Section 62(6), which provides for refund of excess tariff recovered with interest, operates in an entirely different field and has no application to a statutory pre-deposit under Section 127(2). It observed:
Section 62(6) contemplates a situation where a licensee or generating company recovers a price or charge in excess of the tariff determined under Section 62… The present case is different in character. The petitioner did not pay the amount in question as a tariff or consumption charge under Section 62. The amount of 50% was deposited because the statute compelled such a deposit as a precondition to maintain the appeal.”
The Court further noted that the deposited amount had already been adjusted against subsequent electricity bills, negating any claim of unjust enrichment by the licensee.
Accordingly, the High Court held that the Appellate Authority had acted within its jurisdiction in refusing to grant interest and that no interference was warranted under Article 227 of the Constitution. The writ petition was dismissed with no order as to costs.
Case Title: Illiyas Mangroo Shaikh v. Bombay Electricity Supply and Transport Undertaking & Ors. [WRIT PETITION NO.8545 OF 2015]