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Power Distribution Licensee Can't Demand Electricity Bill Beyond 2 Years Unless Amount Reflects As Arrears In Bill During 2-Yr Period:Bombay HC [FB] [Read Judgment]

Nitish Kashyap
22 March 2019 6:20 AM GMT
Power Distribution Licensee Cant Demand Electricity Bill Beyond 2 Years Unless Amount Reflects As Arrears In Bill During 2-Yr Period:Bombay HC [FB] [Read Judgment]
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A full bench of the Bombay High Court has held that a power distribution licensee cannot demand charges or consumption of electricity for a period of more than two years preceding the date of the first demand of such charges unless the amount of money owed is reflected in the electricity bill during the two-year period. The bench comprised of Justice SC Dharmadhikari, Justice Bharati...

A full bench of the Bombay High Court has held that a power distribution licensee cannot demand charges or consumption of electricity for a period of more than two years preceding the date of the first demand of such charges unless the amount of money owed is reflected in the electricity bill during the two-year period.

The bench comprised of Justice SC Dharmadhikari, Justice Bharati Dangre and Justice AM Badar. They were hearing a reference made to a larger bench after a single judge of the high court, while hearing a writ petition filed by the Maharashtra State Electricity Distribution Company Limited (MSEDCL), found two conflicting judgments of division benches of the high court.

The first judgment was passed by the bench of Justice FI Rebello and Justice Anoop Mohta in Awadhesh S Pandey vs. Tata Power and the second judgment was passed by the bench of Justice Ranjana Desai and Justice AA Sayed in Rototex Polyester & Anr. v Administrator, Administration of Dadra & Nagar Haveli (U.T.) Electricity Department, Silvassa & Others.

Case Background

According to the petitioner MSEDCL, the consumer who was using an industrial connection of three phase since 2003 has been paying electricity bills regularly. However, in December 2010, upon checking the meter installed at the premises of the consumer, it was noticed that there were errors in the multiplying factor. The MSEDCL issued a monthly bill dated February 8, 2011, for Rs.17,91,410. Thereafter, on May 10, 2011, a letter enclosing a final bill for the differential amount of Rs.28,37,845.25, after deducting the amount already paid, was raised for the period of September 2003 to December 2010. This is stated to be the final bill.

Aggrieved and dissatisfied with this bill, the consumer filed an application before the electricity ombudsman. However, the ombudsman passed an order in favour of the MSEDCL and held that this differential amount claimed is payable and that the said bill is legal and proper.

Thereafter, the consumer filed another application seeking quashing of the said bill which was allowed.

Multiplier Factor

Advocate General AA Kumbhakoni appeared on behalf of the MSEDCL and submitted that high tension consumers are supplied electric energy with voltage as high as about 11,000/22,000/33,000/EVH volts. If such high voltage/current supply is allowed to directly pass through an electric meter installed for measuring the quantity of electricity supplied, it would instantaneously burn or may explode.

Therefore, it is necessary that the electricity so supplied is converted by the transformation of current and voltage by providing Current Transformer and Voltage Potential Transformer units. In such cases, the actual electricity (with substantially reduced voltage and current) passes through the electric meter. The same is though proportionate to the one actually supplied, it is only a small portion of the electric energy actually supplied (like a miniature image). Thus, in such cases, the actual meter reading does not reflect the correct amount of electric energy supplied to the consumer. Resultantly, it becomes necessary to apply to such actual meter reading a proper multiplying factor so as to get the actual/correct amount of electric energy supplied to the High-Tension consumer, Kumbhakoni said.

Judgment

The court examined the Electricity Supply Act and 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)."

Further, under Sub-Section 2, the consumer is covered-

"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 concluded that there was no conflict between the said two judgments and observed-

"We do not see how, therefore, there was any conflict for Awadesh Pandey's case (supra) was a simple case of threat of disconnection of electricity supply for default in payment of the electricity charges. That was a notice of disconnection under which the payment of arrears was raised. It was that notice of disconnection setting out the demand which was under challenge in Awadesh Pandey's case. That demand was raised on the basis of the order of the Electricity Ombudsman.

"Once the Division Bench found that the challenge to the Electricity Ombudsman's order is not raised, by taking into account the subsequent relief granted by it to Awadesh Pandey, there was no other course left before the Division Bench but to dismiss Awadesh Pandey's writ petition. The reason for that was obvious because the demand was re­worked on the basis of the order of the Electricity Ombudsman. That partially allowed the appeal of Awadesh Pandey. Once the facts in Awadesh Pandey's case were clear and there the demand was within the period of two years, that the writ petition came to be dismissed.

In fact, when such amount became first due, was never the controversy. In Awadesh Pandey's case, on facts, it was found that after reworking of the demand and curtailing it to the period of two years preceding the supplementary bill raised in 2006, that the bar carved out by sub­section (2) of Section 56 was held to be inapplicable. Hence there, with greatest respect, there is no conflict found between the two Division Bench Judgments."

"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," the court held.

Read the Judgment Here

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