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Supreme Court of India
M/S Prem Cottex vs Uttar Haryana Bijli Vitran Nigam … on 5 October, 2021Author: V. Ramasubramanian
Bench: Hemant Gupta, V. Ramasubramanian
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.7235 OF 2009
M/S PREM COTTEX … Appellant
Versus
UTTAR HARYANA BIJLI VITRAN NIGAM LTD.
& ORS. … Respondents
JUDGMENT
V. Ramasubramanian, J.
1. Challenging an Order of the National Consumer Disputes
Redressal Commission (for short “National Commission”), dismissing
their consumer complaint on the ground that there was no deficiency in
Signature Not Verified
Digitally signed by R
Natarajan
Date: 2021.10.05
17:05:49 IST
Reason:
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service on the part of the licensee (electricity distribution company), the
consumer of electricity has come up with the above statutory appeal.
2. We have heard Sh. K.C. Mittal, learned counsel for the appellant
and Mr. Arun Bhardwaj, learned Additional Advocate General for the
State of Haryana, appearing for the respondents.
3. The appellant is carrying on the business of manufacturing cotton
yarn in Panipat, Haryana. The appellant is having a L.S. connection,
which got extended from 404.517 KW to 765 KW with C.D 449 KVA to
850 KVA, on 3.08.2006.
4. After 3 years of the grant of extension, the appellant was served
with a memo dated 11.09.2009 by the third respondent herein, under
the caption “short assessment notice”, claiming that though the multiply
factor (MF) is 10, it was wrongly recorded in the bills for the period from
3.08.2006 to 8/09 as 5 and that as a consequence there was short
billing to the tune of Rs.1,35,06,585/. The notice called upon the
appellant to pay the amount as demanded, failing which certain
consequences would follow.
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5. Aggrieved by the said notice, the appellant gave a representation on
22.09.2009 and then filed a consumer complaint before the National
Commission, contending inter alia that the demand made by the
respondents is the outcome of a glaring mistake and gross negligence on
their part and that under Section 56 of the Electricity Act, 2003 (for
short “the Act”), no amount due from a customer is recoverable after a
period of two years from the date on which it became first due.
6. By an Order dated 1.10.2009, the National Commission dismissed
the complaint on the ground that it is a case of “escaped assessment”
and not a case of “deficiency in service”. Aggrieved by the said Order, the
appellant is before us.
7. While ordering notice in the above appeal on 13.11.2009, this
Court granted interim stay of the impugned order. However, on an
application filed on behalf of the respondents for vacating the interim
order, this Court modified the stay Order on 19.08.2014 directing the
appellant to pay to the first respondent herein, 50% of the demand
amount within six weeks with a condition that in case the appellant
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succeeded, the said amount shall be refunded with interest @ 9% p.a.
Accordingly, the appellant has paid a sum of Rs.54,03,293/, on
24.09.2014. The appellant claims to have already paid a sum of
Rs.13,50,000/ on 9.10.2009 itself and this amount, together with the
amount deposited on 24.09.2014 pursuant to the interim order of this
Court, constituted 50% of the amount as demanded in short assessment
notice dated 11.09.2009.
8. The sheet anchor of the case of the appellant is Section 56(2) of the
Act and the exposition of law made by this Court in the decision in
Assistant Engineer (D1), Ajmer Vidyut Vitran Nigam limited and
Anr. vs. Rahamatullah Khan alias Rahamjulla1.
9. Before we proceed to consider the statutory provision and the
decision of this Court relied upon by the appellant, it is relevant to take
note of the fact that 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. The only grievance raised by the
1 (2020) 4 SCC 650
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appellant both in their representation and in their consumer complaint
was that they cannot be made to suffer on account of the negligence on
the part of the respondents and that on the basis of the bill already
raised, they have charged their customers and that it may not be
possible for them to go back to their customers with an additional
demand now. In addition, the bar under Section 56 was also pleaded.
10. Section 56 of the Electricity Act, 2003 reads as under:
“56. Disconnection of supply in default of payment.
(1) Where any 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, the licensee or the generating company may, after
giving not less than fifteen clear days’ notice in writing, to
such person and without prejudice to his rights to recover
such charge or other sum by suit, cut off the supply of
electricity and for that purpose cut or disconnect any electric
supply line or other works being the property of such licensee
or the generating company through which electricity may have
been supplied, transmitted, distributed or wheeled and may
discontinue the supply until such charge or other sum,
together with any expenses incurred by him in cutting off and
reconnecting the supply, are paid, but no longer:
Provided that the supply of electricity shall not be cut off
if such person deposits, under protest,
(a) an amount equal to the sum claimed from him, or
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(b) the electricity charges due from him for each month
calculated on the basis of average charge for electricity
paid by him during the preceding six months,
whichever is less, pending disposal of any dispute between
him and the licensee.
(2) Notwithstanding anything contained in any other law
for the time being in force, 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 unless
such sum has been shown continuously as recoverable as
arrear of charges for electricity supplied and the licensee shall
not cut off the supply of the electricity.”
11. In Rahamatullah Khan (supra), three issues arose for the
consideration of this Court. They were (i) what is the meaning to be
ascribed to the term “first due” in Section 56(2) of the Act; (ii) in the case
of a wrong billing tariff having been applied on account of a mistake,
when would the amount become first due; and (iii) whether recourse to
disconnection may be taken by the licensee after the lapse of two years
in the case of a mistake.
12. On the first two issues, this Court held that though the liability
to pay arises on the consumption of electricity, the obligation to
pay would arise only when the bill is raised by the licensee and
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that, therefore, electricity charges would become “first due” only
after the bill is issued, even though the liability would have arisen
on consumption. On the third issue, this Court held in Rahamatullah
Khan (supra), that “the period of limitation of two years would
commence from the date on which the electricity charges became first due
under Section 56(2)”. This Court also held that Section 56(2) does not
preclude the licensee from raising an additional or supplementary
demand after the expiry of the period of limitation in the case of a
mistake or bonafide error. To come to such a conclusion, this Court also
referred to Section 17(1)(c) of the Limitation Act, 1963 and the decision
of this Court in Mahabir Kishore & Ors. vs. State of Madhya
Pradesh2.
13. Despite holding that electricity charges would become first due
only after the bill is issued to the consumer (para 6.9 of the SCC Report)
and despite holding that Section 56(2) does not preclude the licensee
from raising an additional or supplementary demand after the expiry of
2 (1989) 4 SCC 1
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the period of limitation prescribed therein in the case of a mistake or
bonafide error (Para 9.1 of the SCC Report), this Court came to the
conclusion that what is barred under Section 56(2) is only the
disconnection of supply of electricity. In other words, it was held by this
Court in the penultimate paragraph that the licensee may take recourse
to any remedy available in law for the recovery of the additional demand,
but is barred from taking recourse to disconnection of supply under
Section 56(2).
14. But a careful reading of Section 56(2) would show that the bar
contained therein is not merely with 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.
15. Therefore, the bar actually operates on two distinct rights of the
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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. To be
precise, 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.
This is why we think that the second part of Section 56(2) is an
exception to the law of limitation.
16. Be that as it may, 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
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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 subsection (2) of section 56 of the Act”.
17. It appears from the narration of facts in paragraph 2 of
Rahamatullah Khan (supra) that this Court was persuaded to take the
view that it did, on account of certain peculiar facts. The consumer in
that case was billed under a particular tariff code for the period from
July2009 to September2011. But after audit, it was discovered that a
different tariff code should have been applied. Therefore, a show cause
notice was issued on 18.03.2014 raising an additional demand for the
period from July2009 to September2011. Then a bill was raised on
25.05.2015 for the aforesaid period. Therefore, the consumer
successfully challenged the demand before the District Consumer
Forum, but the Order of the District Forum was reversed by the State
Commission on an appeal by the licensee. The National Commission on
a revision filed by the consumer, set aside the order of the State
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Commission and restored the order of the District Forum. It was this
Order of the National Commission that was under challenge before this
Court in Rahamatullah Khan (supra).
18. Eventually, this Court disposed of the appeals, preventing the
licensee from taking recourse to disconnection of supply, but giving
them liberty to take recourse to any remedy available in law for recovery
of the additional demand. Therefore, the decision in Rahamatullah
Khan (supra) is distinguishable on facts.
19. Even otherwise there are two things in this case, which we cannot
overlook. 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 (supra).
The second is the impact of Subsection (1) of Section 56 on Subsection
(2) thereto.
20. The fora constituted under the Consumer Protection Act, 1986 is
entitled to deal with the complaint of a consumer, either in relation to
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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 as follows:
“2(1)(g) “deficiency” means any fault, imperfection,
shortcoming or inadequacy in the quality, nature and manner
of performance which is required to be maintained by or
under any law for the time being in force or has been
undertaken to be performed by a person in pursuance of a
contract or otherwise in relation to any service;
21. 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 points out that it is a case of “escaped
assessment” and not “deficiency in service”.
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22. 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. If the case on hand is tested on this parameter, it will be
clear that 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.
23. Coming to the second aspect, namely, the impact of Subsection (1)
on Subsection (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. Subsection (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”.
24. Subsection (2) uses the words “no sum due from any consumer
under this Section”. Therefore, the bar under Subsection (2) is
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relatable to the sum due under Section 56. This naturally takes us to
Subsection (1) which 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
subsection (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.
25. 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 Subsection (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 Subsection (2).
26. The matter can be examined from another angle as well. Sub
section (1) of Section 56 as discussed above, deals with the
disconnection of electric supply if any person “neglects to pay any
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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. Subsection (2) of Section 56 has a nonobstante 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 Subsection (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.
27. Therefore, we are of the view that the National Commission was
justified in rejecting the complaint and we find no reason to interfere
with the Order of the National Commission. Accordingly, the appeal is
dismissed. However, since the appellant has already paid 50% of the
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demand amount pursuant to an interim order passed by this Court on
19.08.2014, we give eight weeks time to the appellant to make payment
of the balance amount. There shall be no order as to costs.
…..…………………………..J.
(Hemant Gupta)
.…..………………………….J.
(V. Ramasubramanian)
NEW DELHI
OCTOBER 05, 2021
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