Full Judgment Text
AFR
COURT OF JUDICATURE AT ALLAHABAD
WRIT - C No. - 12303 of 2026
M/S Om Food Manufacturing Center
.....Petitioner(s)
Versus
State Of U.P. And 2 Others
.....Respondent(s)
Counsel for Petitioner(s) : Kumar Ankit Srivastava
Counsel for Respondent(s) : C.S.C., Udit Chandra
Court No. - 29
HON'BLE ARINDAM SINHA, J.
HON'BLE SATYA VEER SINGH, J.
(Per Arindam Sinha, J.)
1. Petitioner is before us contending enjoyment of
commercial connection. On application for enhancement
of load, it was increased to 140KV on 14th July, 2023.
Subsequent to the increase, petitioner regularly paid
consumption charge bills. After lapse of two years, the
supply company issued notice that there was mistake in
applying rate for the charges for electricity earlier
consumed and made demand in excess of Rs.
54,00,000/-. Increase of load and installation of meter
were not in hands of petitioner. There is no allegation of
theft but of mistake made by the supply company.
Petitioner is being sought to be penalised on threat of
disconnection.
2. On 23rd April, 2026 we had recorded order, carrying
our query. It will appear from paragraph 3 of the order,
reproduced below.
"3. We see that the supply company is raising a dispute
in respect of bills already paid and due discharge
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obtained by petitioner. Dispute because the supply
company says that there was omission and incorrect
bills were raised. On query Mr. Chandra seeks
adjournment to demonstrate applicable provision,
whereunder the supply company can raise demand on
incorrect bills."
Mr. Kumar Ankit Srivastava, learned advocate appears
on behalf of petitioner. Mr. Piyush Shukla, learned
advocate, Standing Counsel appears for State and Mr.
Udit Chandra, learned advocate for respondent nos. 2
and 3 (the supply company).
3. Today Mr. Chandra relies on judgment of the Supreme
Court in Assistant Engineer, Ajmer Vidyut Vitran
Nigam Limited v. Rahamatullah Khan alias
Rahamjulla reported in (2020) 4 SCC 650, paragraph 8
in Law Finder print. The paragraph is reproduced below.
"8. Applying the aforesaid ratio to the facts of the
present 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.
Section 56(2) did 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 did not however,
empower the licensee company to take recourse to
the coercive measure of disconnection of electricity
supply, for recovery of the additional demand.
WRIC No. 12303 of 2026
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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.
In
Mahabir Kishore and Ors. v. State of Madhya
Pradesh, (1989) 4 SCC 1 this Court held that:-
"section 17(1)(c) of the Limitation Act, 1963,
provides that in the case of a suit for relief
on the ground of mistake, the period of
limitation does not begin to run until the
plaintiff had discovered the mistake or could
with reasonable diligence, have discovered
it. In a case where payment has been made
under a mistake of law as contrasted with a
mistake of fact, generally the mistake
become known to the party only when a
court makes a declaration as to the invalidity
of the law. Though a party could, with
reasonable diligence, discover a mistake of
fact even before a court makes a
pronouncement, it is seldom that a person
can, even with reasonable diligence,
discover a mistake of law before a judgment
adjudging the validity of the law."
(emphasis supplied)
In the present case, 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 section (2) of Section 56 of the Act ."
(emphasis supplied)
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4. For purpose of convenience, section 56 in Electricity
Act, 2003 is reproduced below.
" Section 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
(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
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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."
It follows, subsequent demand on discovery of mistake
can be made as on law declared, on interpretation of
section 56. No other provision has been shown. The law
declared says, there cannot be recovery to distress of the
consumer. Upon perusal of initial notice dated 1st July,
2025 and subsequent notice dated 24th October, 2025
we see that original demand of aggregate Rs.
54,14,196.88/- stood increased to Rs. 62,03,152/-. The
initial notice speaks only of mistake detected. There is no
statement regarding bonafide error. Petitioner was
thereby presented with allegation of discovery without
any opportunity for him to test its correctness.
Furthermore, there are items of charge and other entries
in the bill, including for rebate. They do not bear
particulars. Mr. Chandra submits, he be allowed time to
obtain instruction regarding upward revision in the
demand. As aforesaid, law declared is that subsequent
discovery of bonafide mistake leading to additional
charge, can be recovered.
5. Section 56(1) provides for procedure of 15 clear days'
notice in writing, to recover the charge, including by
cutting off supply of electricity. Sub-section (2) provides
for limitation. Rahamatullah Khan (supra) says, coercive
action cannot be taken. In other words, the supply
company not having recourse to coercive steps for
recovery, must obtain civil remedy on a principal sum and
may claim interest on the principal sum as a claim in the
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action. There cannot be upward revision in the demand,
after it is made. The supply company cannot
progressively increase its demand.
6. In this case we direct the supply company to present
the discovery of mistake and proper calculation, with
applicable rebate given to petitioner, for payment within
the prescribed time. In event of non-payment, the supply
company has to resort to civil remedy, to recover. At this
stage Mr. Chandra relies on a subsequent judgment of
the Supreme Court in M/s Prem Cottex v. Uttar
Haryana Bijli Vitran Nigam Ltd. reported in (2021) 20
SCC 200 , paragraphs 18 and 21 in Law Finder print.
Paragraph 18 is reproduced below.
"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."
We do not see that Rahamatullah Khan (supra) was
overruled. On the contrary, the Supreme Court in
distinguishing Rahamatullah Khan (supra) on facts
strengthens our appreciation of the judgment as law
declared.
7. The writ petition is thus allowed and disposed of .
May 6, 2026
Mohini
(Arindam Sinha,J.)
(Satya Veer Singh,J.)
Digitally signed by :-
MOHINI RAI
High Court of Judicature at Allahabad