Electricity Act, 2003: s. 56(2) – Disconnection of supply in default of payment – Term ‘first due’ in s.56(2) – Meaning of – Commencement limitation period of two years, when – Held: Electricity charges would become “first due” only after the bill is issued to the consumer, even though the liability to pay may arise on the consumption of electricity – Period of limitation of two years would commence from the date on which the electricity charges became “first due” u/s. 56(2) – This provision restricts the right of the licensee company to disconnect electricity supply due to nonpayment of dues by the consumer, unless such sum has been shown continuously to be recoverable as arrears of electricity supplied, in the bills raised for the past period – Furthermore, s. 56(2) does not preclude the licensee company from raising an additional or supplementary demand after the expiry of the limitation period u/s. 56(2) in the case of a mistake or bona fide error – However, licensee company cannot take recourse to the coercive measure of disconnection of electricity supply, for recovery of the additional demand – As per s. 17(1)(c) of the Limitation Act in case of a mistake, the limitation period begins to run from the date when the mistake is discovered for the first time – On facts, licensee company discovered the mistake of billing under wrong tariff Code on 18.03.2014 and raised an additional demand on 18.03.2014 for the period July, 2009 to September, 2011 – Limitation period of two years u/s. 56(2) had by then already expired – Period of limitation would commence from the date of discovery of the mistake – Licensee company may take recourse to any remedy available in law for recovery of the additional demand, but is barred from taking recourse to disconnection of supply of electricity u/s. 56(2) – Limitation Act, 1963 – s. 17(1)(c).
Disposing of the appeals, the Court
HELD: 1.1 Section 56 of the Electricity Act, 2003 provides for disconnection of supply in the case of default in payment of electricity charges. The obligation of a consumer to pay electricity 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 fails to pay the charges within the stipulated period, they get carried forward to the next bill as arrears. [Para 6.2, 6.3][938 E-H]
1.3 The proviso to Section 56(1) carves out an exception by providing that the disconnection will not be effected if the consumer either deposits the amount “under protest”, or deposits the average charges paid during the preceding six months. Subsection (2) of Section 56 by a non obstante clause provides that notwithstanding anything contained in any other law for the time being in force, 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”, unless such sum was shown continuously recoverable as arrears of charges for the electricity supplied, nor would the licensee company disconnect the electricity supply of the consumer. [Paras 6.4 and 6.5][938H; 939 A-C] Chandavarkar Sita Ratna Rao v. Ashalata S. Guram. (1986) 4 SCC 447 : [1986] 3 SCR 866 – referred to.
1.4 The liability to pay arises on the consumption of electricity. The obligation to pay would arise when the bill is issued by the licensee company, quantifying the charges to be paid. Electricity charges would become “first due” only after the bill is issued to the consumer, even though the liability to pay may arise on the consumption of electricity. [Para 6.6][939 F-H]
1.5 Sub-section (1) of Section 56 confers a statutory right to the licensee company to disconnect the supply of electricity, if the consumer neglects to pay the electricity dues. This statutory right is subject to the period of limitation of two years provided by sub-section (2) of Section 56 of the Act. The period of limitation of two years would commence from the date on which the electricity charges became “first due” under sub-section (2) of Section 56. This provision restricts the right of the licensee company to disconnect electricity supply due to non-payment of dues by the consumer, unless such sum has been shown continuously to be recoverable as arrears of electricity supplied, in the bills raised for the past period. If the licensee company were to be allowed to disconnect electricity supply after the expiry of the limitation period of two years after the sum became “first due”, it would defeat the object of Section 56(2). Section 56(2) however, does not preclude the licensee company from raising a supplementary demand after the expiry of the limitation period of two years. It only restricts the right of the licensee to disconnect electricity supply due to non-payment of dues after the period of limitation of two years has expired, nor does it restrict other modes of recovery which may be initiated by the licensee company for recovery of a supplementary demand. Section 56(2) does not preclude the licensee company from raising an additional or supplementary demand after the expiry of the limitation period under Section 56(2) in the case of a mistake or bona fide error. It however, does not empower the licensee company to take recourse to the coercive measure of disconnection of electricity supply, for recovery of the additional demand. As per Section 17(1)(c) of the Limitation Act, 1963 in case of a mistake, the limitation period begins to run from the date when the mistake is discovered for the first time. [Para 7.3, 7.4, 8, 9][941 D-H; 942 A-B; 942 D-F]
Mahabir Kishore and Ors. v. State of Madhya Pradesh (1989) 4 SCC 1 : [1989] 3 SCR 596 – referred to.
2. In the instant case, the licensee company raised an additional demand on 18.03.2014 for the period July, 2009 to September, 2011. The licensee company discovered the mistake of billing under the wrong Tariff Code on 18.03.2014. The limitation period of two years under Section 56(2) had by then already expired. The period of limitation would commence from the date of discovery of the mistake i.e. 18.03.2014. The licensee company may take recourse to any remedy available in law for recovery of the additional demand, but is barred from taking recourse to disconnection of supply of electricity under sub-section
(2) of Section 56 of the Act. [Para 9][942 B-C; 943 B-D] Tata Powers v. Reliance Energy, (2008) 10 SCC 321 : [2008] 10 SCR 293; State of Andhra Pradesh v.
National Thermal Power Corporation Ltd. (2002) 5 SCC
203 : [2002] 3 SCR 278; Swastic Industries v.
Maharashtra State Electricity Board (1997) 9 SCC 465 : [1997] 1 SCR 532 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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