Consumer Protection Act, 1986 – 2(1)(g) – Deficiency in service – When not – Additional demand raised by respondent no.3 alleging short billing in view of wrong multiply factor (MF) applied in the bills raised for particular period – Challenged by appellant inter alia pleading bar u/s.56, 2003 Act – Complaint dismissed by National Consumer Dispute Redressal Commission – On appeal, held: Before going into the question of bar u/s.56(2), the consumer forum is obliged to find out at the threshold whether there was any deficiency in service – Raising of an additional demand in the form of short assessment notice, on the ground that the multiply factor was wrongly mentioned in the bills raised during particular period, does not tantamount to deficiency in service – If a licensee discovers in the course of audit or otherwise that a consumer has been short billed, it is entitled to raise a demand – So long as the consumer does not dispute the correctness of the claim made by the licensee that there was short assessment, it is not open to the consumer to claim that there was any deficiency – Appellant never disputed the correctness of the respondents’ claim that the MF to be applied was 10, but it was wrongly applied as 5 – National Commission correctly pointed out that it is a case of “escaped assessment” and not “deficiency in service” – Respondents not guilty of any deficiency in service – Complaint rightly dismissed – Electricity Act, 2003 – s.56(2).
Electricity Act, 2003 – s.56(2) – Bar under – Held: Bar u/s.56(2) operates on two distinct rights of the licensee, (i) the right to recover (ii) the right to disconnect – Bar with reference to the enforcement of the right to disconnect, is an exception to the law of limitation – Limitation Act, 1963.
Electricity Act, 2003 – s.56(1) – Impact of, on s.56(2) – Discussed.
Dismissing the appeal, the Court
HELD: 1.1 The appellant never disputed the correctness of the claim of the respondents that the multiply factor (MF) to be applied was 10, but it was wrongly applied as 5. A careful reading of Section 56(2), Electricity Act, 2003 would show that the bar contained therein is not merely w ith respect to disconnection of supply but also with respect to recovery. If Subsection (2) of Section 56 is dissected into two parts it will read as follows :-(i) No sum due from any consumer under this Section shall be recoverable after the period of two years from the date when such sum became first due; and (ii) the licensee shall not cut off the supply of electricity. Therefore, the bar actually operates on two distinct rights of the licensee, namely, (i) the right to recover; and (ii) the right to disconnect. The bar with reference to the enforcement of the right to disconnect, is actually an exception to the law of limitation. Under the law of limitation, what is extinguished is the remedy and not the right. What is extinguished by the law of limitation, is the remedy through a court of law and not a remedy available, if any, de hors through a court of law. However, section 56(2) bars not merely the normal remedy of recovery but also bars the remedy of disconnection. The second part of Section 56(2) is an exception to the law of limitation. Once it is held that the term “first due” would mean the date on which a bill is issued, (as held in para 6.9 of Rahamatullah Khan) and once it is held that the period of limitation would commence from the date of discovery of the mistake (as held in paragraphs 9.1 to 9.3 of Rahamatullah Khan), then the question of allowing licensee to recover the amount by any other mode but not take recourse to disconnection of supply would not arise. But Rahamatullah Khan says in the penultimate paragraph that “the licensee may take recourse to any remedy available in law for recovery of the additional demand, but barred from taking recourse to disconnection of supply under sub-section
(2) of section 56 of the Act”.The decision in Rahamatullah Khan is distinguishable on facts. [Paras 9, 14-16 and 18][652-G-H; 653-A-F; 654-B]
Assistant Engineer (D1), Ajmer Vidyut Vitran Nigam limited and Anr. vs. Rahamatullah Khan alias
Rahamjulla (2020) 4 SCC 650:[2020] 2 SCR 929 –
distinguished.
1.2 Even otherwise there are two things in this case, which cannot be overlooked. The first is that the question whether the raising of an additional demand, by itself would tantamount to any deficiency in service, clothing the consumer fora with a power to deal with the dispute, was not raised or considered in Rahamatullah Khan. The second is the impact of Sub-section (1) of Section 56 on Sub-section (2) thereto. The fora constituted under the Consumer Protection Act, 1986 is entitled to deal with the complaint of a consumer, either in relation to defective goods or in relation to deficiency in services. The word “deficiency” is defined in Section 2(1)(g) of the Consumer Protection Act, 1986. The raising of an additional demand in the form of “short assessment notice”, on the ground that in the bills raised during a particular period of time, the multiply factor was wrongly mentioned, cannot tantamount to deficiency in service. If a licensee discovers in the course of audit or otherwise that a consumer has been short billed, the licensee is certainly entitled to raise a demand. So long as the consumer does not dispute the correctness of the claim made by the licensee that there was short assessment, it is not open to the consumer to claim that there was any deficiency. This is why, the National Commission, in the impugned order correctly pointed out that it is a case of “escaped assessment” and not “deficiency in service”. [Paras 19-21][654-C-H]
1.3 In fact, even before going into the question of Section 56(2), the consumer forum is obliged to find out at the threshold whether there was any deficiency in service. It is only then that the recourse taken by the licensee for recovery of the amount, can be put to test in terms of Section 56. The respondents cannot be held guilty of any deficiency in service and hence dismissal of the complaint by the National Commission is perfectly in order. With respect to the second aspect, namely, the impact of Subsection (1) on Sub-section (2) of Section 56, it is seen that the bottom line of Sub-section (1) is the negligence of any person to pay any charge for electricity. Sub-section (1) starts with the words “where any person neglects to pay any charge for electricity or any some other than a charge for electricity due from him”. Sub-section
(2) uses the words “no sum due from any consumer under this Section”.Therefore, the bar under Sub-section (2) is relatable to the sum due under Section 56. Sub-section (1) deals specifically with the negligence on the part of a person to pay any charge for electricity or any sum other than a charge for electricity. What is covered by section 56, under sub-section (1), is the negligence on the part of a person to pay for electricity and not anything else nor any negligence on the part of the licensee. [Paras 22-24][655-A-E]
1.4 In other words, the negligence on the part of the licensee which led to short billing in the first instance and the rectification of the same after the mistake is detected, is not covered by Sub-section (1) of Section 56. Consequently, any claim so made by a licensee after the detection of their mistake, may not fall within the mischief, namely, “no sum due from any consumer under this Section”, appearing in Sub-section (2). Subsection (1) of Section 56 deals with the disconnection of electric supply if any person “neglects to pay any charge for electricity”. The question of neglect to pay would arise only after a demand is raised by the licensee. If the demand is not raised, there is no occasion for a consumer to neglect to pay any charge for electricity. Sub-section (2) of Section 56 has a non-obstante clause with respect to what is contained in any other law, regarding the right to recover including the right to disconnect. Therefore, if the licensee has not raised any bill, there can be no negligence on the part of the consumer to pay the bill and consequently the period of limitation prescribed under Sub-section (2) will not start running. So long as limitation has not started running, the bar for recovery and disconnection will not come into effect. Hence the decision in Rahamatullah Khan and Section 56(2) will not go to the rescue of the appellant. The National Commission was justified in rejecting the complaint and there is no reason to interfere with the said Order. However, since the appellant has already paid 50% of the demand amount pursuant to an interim order passed by this Court on 19.08.2014, eight weeks time given to the appellant to make payment of the balance amount. [Paras 2227][655-E-H; 656-A-C] Mahabir Kishore & Ors. vs. State of Madhya Pradesh (1989) 4 SCC 1 : [1989] 3 SCR 596 – 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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