New Delhi: The Supreme Court has dismissed an appeal filed by a power distribution company against its consumer, holding that a demand for minimum consumption guarantee charges raised in 2007 for a period in 1998 was barred by the two-year limitation prescribed under Section 56(2) of the Electricity Act, 2003.
The Bench of Justice S.V.N. Bhatti and Justice N.V. Anjaria was hearing a civil appeal against a judgment of the Allahabad High Court, Lucknow Bench, which had dismissed a writ petition filed by the distribution licensee against an order of the Electricity Ombudsman setting aside its demand and had also held certain provisions of the U.P. Electricity Regulatory Commission Regulations, 2007 permitting a licensee to approach the Ombudsman to be ultra vires Section 42(6) of the Act.
The dispute arose from a 1997 agreement under which the appellant, unable to immediately supply the full 4000 KVA load applied for by its consumer, sanctioned only 2000 KVA. In 1998, the appellant offered the balance 2000 KVA, but the consumer declined the additional supply. Nearly nine years later, in February 2007, the appellant raised a demand of over Rs. 57 lakh towards minimum consumption guarantee charges for the period February to September 1998, treating the consumer as liable for the full 4000 KVA on the premise that it had been ready to supply the balance load.
The consumer's challenge to this demand resulted in a split verdict before the Consumer Grievance Redressal Forum, following which the Electricity Ombudsman set aside the demand, finding that the consumer had never consented to the additional load, that no additional load had in fact been released, and that the demand was barred by limitation under Section 56(2) of the Act. The High Court, in dismissing the appellant's writ petition, upheld these findings and further held that the Regulations could not confer a remedy of representation to a distribution licensee before the Ombudsman, since Section 42(6) permits only a consumer to invoke that remedy.
Before the Supreme Court, counsel for the appellant did not seriously press the challenge to the validity of the Regulations, acknowledging that such arguments stood diminished in light of the decision in K.C. Ninan v. Kerala State Electricity Board & Ors. The central question that remained was whether the 2007 demand conformed to the limitation period prescribed under Section 56(2) of the Act.
Relying on its earlier decision in Assistant Engineer (D1), Ajmer Vidyut Vitran Nigam Limited v. Rahamatullah Khan Alias Rahamjulla, the court reiterated that electricity charges become “first due” only when a bill is issued, and that the two-year limitation period under Section 56(2) runs from that date, restricting the licensee's right to disconnect supply for non-payment, though not barring other modes of recovering a supplementary demand. Applying this principle, the court found that no bill had been raised for the additional load either during 1998 or in the years that followed, and that the demand raised for the first time in 2007, for a period nine years earlier, could not be sustained.
Holding that this view disentitled the appellant from raising the demand under Section 56(2), the court dismissed the appeal along with any pending applications.
Appearances:
For the Appellant: Mr. Rakesh Uttamchandra Upadhyay, Advocate on Record.
Case Title: Dakschinanchal Vidyut Vitran Nigam Ltd. vs. Vidut Lokpal, Uttar Pradesh and Others, Civil Appeal No. 5099 of 2013
