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Disconnection of Supply of Electricity is not a permissible mode of recovery of dues or arrears rais

AJMER VIDYUT VITRAN NIGAM LIMITED& Anr v. RAHAMATULLAH KHAN ALIAS RAHAMJULLACIVIL APPEAL NO . 1672 OF 2020 (ARISING OUT OF SLP(CIVIL) NO. 5190 OF 2019) – February 18, 2020

The bench consisting of Hon’ble Justice Uday Umesh Lalit and Hon’ble Justice Indu Malhotra pronounced the judgement for the case.

The issues which have arisen for consideration in the present Civil Appeal are : – What is the meaning to be ascribed to the term “first due” in Section 56(2) of the Electricity Act, 2003?  , In the case of a wrong billing tariff having been applied on account of a mistake, when would the amount become “first due”? , Whether recourse to disconnection of electricity supply may be taken by the licensee company after the lapse of two years in case of a mistake?

Mr Puneet Jain, representing the licensee company contended that the power to disconnect electric supply under section 56(1) may be exercised when a company neglects to pay the electricity charges or any other sum due and payable by him. If the demand is not paid within the stipulated time, then the power of disconnection under section 56(1) may be resorted to. The section also provides the conditions when such a power may be invoked, the procedure and the manner of the exercise of such power, the period for which such power can remain effective and the circumstances under which a power cannot be exercised.

The subsection (2) of section 56 bars the remedy of disconnection of supply for default of payment, if the consumer deposits the amount demanded under protest or if the demand has been raised two years after the “first due”. The starting point of limitation would be from the date when the bill is raised by the licensee company. The bar of limitation is applicable only on the exercise of power of disconnection.

It was further submitted that the starting point of limitation would be from the date when the mistake is discovered. As the section 56(1) clearly states that the act empowers the licensee to disconnect the electric supply if the consumer neglects to pay his dues. The disconnection would only take place if the consumer has consumed electricity and the bill has been generated. If  the consumer neglects to pay the bill served on him within the stipulated period , the licensee can resort to coercive modes of recovery provided in the act.

The period of limitation under section 56(2) cannot be extended by raising a supplementary bill. The sum “due” raised in the original bill and not paid by the consumer, must be continuously shown as arrears of charges in subsequent bills for using the coercive mode of disconnection of electric supply.

Electricity is considered to be a “good” in the case “Andhra Pradesh v. National thermal power corporation ltdand under the sale of goods act, a purchaser of goods is liable to pay for it at the time of purchase or consumption.

Section 56 provides for disconnection of supply in the case of default in payment of electricity charges. The section also provides that if a person neglects to pay “ any charge” for electricity or any sum other than a charge of electricity due from him to a licensee company , the licensee after giving fifteen days written notice may disconnect the electricity supply until such charges are incurred . The obligation of a consumer to pay for electric charges arises after the bill is issued by the licensee company. The bill sets out the time within which the charges are to be paid. If the consumer does not pay the charges, then they get carry forwarded as arrears. However the exception is that the disconnection will not be effected if the consumer either deposits the amount under protest or deposits the average charges paid during preceding six months . At the same time, no sum due from any consumer shall be recoverable under section 56 after the expiry of two years from the date when the sum became “first due”.

Next dealing with  whether the period of limitation of two years provided by section 56(2) of the act, would be applicable to an additional or supplementary demand ,

The ministry of power submitted that “it has been considered necessary to provide for such a restriction to protect the consumers from arbitrary billings”. In Swastic Industries .v. Maharashtra state electricity board, it was held that “ it would thus be clear that the right to recover the charges is one part of it and right to discontinue supply of electrical energy to the consumer who neglects to pay charges is another part of it”. Sub section (2) of section 56 restricts the right of the licensee company to disconnect electricity supply due to non-payment of dues by consumer unless such sum has been shown continuously to be recoverable as arrears of electricity supplied. The sub section however does not preclude the licensee company from raising a supplementary demand after the expiry of the limitation period of two years, nor does it restrict other modes of recovery which may be initiated by the licensee company for recovery of a supplementary demand

The present civil appeal is thus disposed.

– Medhiyaa Ramesh

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