AMBUJA CEMENTS LTD. vs. THE MAHARASHTRA STATE ELECTRICITY DISTRIBUTION CO. LTD. AND ANR

suresh FB-901-903-10764.2011.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.10764 OF 2011
Maharashtra State Electricity
Distribution Company Limited
through its Superintending Engineer
O & M Circle
Sindhudurg Kudal. ....  Petitioner
­ Versus ­ 
1. The Electricity Ombudsman
    606, Keshava
    Bandra Kurla Complex
    Bandra (E), Mumbai­400 051.
2. Sub­Divisional Officer
    B.S.N.L. Deogad
    Sindhudurg – 416613. ....  Respondents
WITH
WRIT PETITION NO.6783 OF 2009
Maharashtra State Electricity 
Distribution Company Ltd., 
Pune Rural Circle, Pune, 
Administrative Building, 
nd
2  Floor, Block No.301, 
Rasta Peth, Pune – 11. ….  Petitioner
­ Versus ­
1. Venco Research And Breeding
    Farms Pvt. Ltd., Village Rule,
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   Tal. Velha, Pune Panseth Road,
   Post Girinagar, Pune – 411 025.
2. The Electricity Ombudsman,
    606, KESHAVA, Bandra­Kurla
    Complex, Bandra (E),
    Mumbai – 400 051. ….  Respondents
WITH
WRIT PETITION NO.495 OF 2015
M/s Intox Pvt. Ltd.,
a Company registered under the
Companies Act, 1956, having its
registered office at Gat No.375,
Uravade, Tal: Mulshi, 
Dist: Pune – 412 108 through its
Director & CEO, Dr. Prabhakar
Yeshawant Naik.  ….  Petitioner
­ Versus ­
1. The Superintending Engineer,
    Maharashtra State Electricity
    Distribution Company Ltd.,
    Pune Rural Circle, Administrative
nd
    Building, 2  Floor, Block No.301,
    Rasta Peth, Pune 411 011.
2. The Maharashtra Electricity
    Regulatory Commission, 
    World Trade Centre, Centre No.1,
th
    13  Floor, Cuffe Parade, Colaba,
    Mumbai – 400 005.
3. State of Maharashtra ….  Respondents
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WITH
WRIT PETITION NO.4573 OF 2016
Ultra Tech Cement Limited,
Navi Mumbai Cement Unit,
Plot No.53­55 & 61­64, Sector 1,
Dronagiri Industrial Area, 
Post JNPT, Nava Seva,
Navi Mumbai – 400 707,
through its General Manager
Shri M.B. Prabhu ….  Petitioner
­ Versus ­
1. Maharashtra State Electricity
    Distribution Co. Ltd. (MSEDCL)
    through its Superintending
    Engineer, MSEDCL, Vashi Circle,
    Off. Plot No.5, Nr. Abhudaya
    Bank Building, Sector 17,
    Vashi, Navi Mumbai.
2. The Chief Engineer (Commercial)
    MSEDCL, Bandra, Mumbai.
3. The Add. Executive Engineer,
    Uran Sub­Division, Uran, Tal. Panvel,
    District – Raigad.
4.  The State of Maharashtra ….  Respondents
WITH
WRIT PETITION NO.5367 OF 2016
1. Bulk Cement Corporation (India)
    Limited, Plot No.W­7, Sector­KWC,
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    Kalamboli, Raigad, Navi Mumbai
    ­ 410 218, Maharashtra.
2. Jitendra Kumar of Mumbai,
    Indian Inhabitant, Senior General
    Manager of Petitioner No.1, having
    his office at Plot No.W­7, Sector­KWC,
    Kalamboli, Raigad, Navi Mumbai
    ­ 410 218, Maharashtra. ….  Petitioners
­ Versus ­
1. The Maharashtra State Electricity
    Distribution Company Limited,
    having its registered office at
    Prakashgad, Bandra (East),
    Mumbai – 400 051.
2. The Superintending Engineer,
    Maharashtra State Electricity
    Distribution Company Limited,
    having his office at Plot No.5,
    Abhyudaya Bank Bldg., Sector 17,
    Vashi, Navi Mumbai. ….  Respondents
WITH
WRIT PETITION NO.9858 OF 2016
Ambuja Cements Limited,
Moha Village, Near Ulwa Reti Bunder,
Post: Ulwa, Taluka: Panvel,
District­Raigad 410306, Maharashtra. ….  Petitioner
­ Versus ­
1. The Maharashtra State Electricity
    Distribution Company Limited,
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    O & M Circle, Vashi, 'Vidyut',
st
    1  Floor, Plot No.5, Near Abhudaya
    Bank Building, Sector 17, Vashi,
    Navi Mumbai.
2. The Superintending Engineer,
    Maharashtra State Electricity
    Distribution Company Limited,
    having his office at Plot No.5,
    Abhyudaya Bank Building, 
    Sector 17, Vashi, Navi Mumbai. ….  Respondents
Mr. A.A. Kumbhakoni, Advocate General with 
Mr. Rahul Sinha & Mr. S.B. Lolge i/by DSK Legal for 
the Petitioner in WP­10764/2011  And  for Respondent 
No.1 in WP­4573/2016,  And  for the Respondents in WP­
Nos.5367 & 9858 of 2016.
Mr. Abhay Nevagi with Mr. Sandesh Shukla, Mr. Amit 
Singh & Mr. Santosh Sawant i/by Abhay Nevagi & 
Associates for the Petitioner in WP­495/2015.
Mr. R.S. Apte, Senior Advocate i/by Mr. Padmanabh D. Pise
for the Petitioner in WP­4573/2016.
Mr. Rahul Narichania, Senior Advocate with 
Mr. Nidhish Mehrotra, Mr. Darshan Furia & Ms Zoya
Syed i/by Mr. Ashish Mehta for the Petitioner/s in 
WP­Nos.5367 & 9858 of 2016.
Ms Neeta Masurkar with Mr. S.G. Thakur & Ms Nieyaati
Masurkar for Respondent No.2 in WP­10764/2011.
Mr. Gautam Ankhad with Mr. Ankur Shah i/by Mr. 
Hemant Sethi for Respondent No.1 in WP­6783/2009.
Ms Shruti D. Vyas, “B” Panel Counsel for the State in
all matters.
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AND
ORIGINAL SIDE
WRIT PETITION  NO.498 OF 2009
The Municipal Corporation of Greater
Mumbai, through the General Manager,
Brihanmumbai Electric & Transport
Undertaking having its Head Office
at BEST House, BEST Marg,
Mumbai – 400 001. ….  Petitioner
­ Versus ­
1. Beach Tower Condominium,
    a body registered under the provisions
    of Sec.2 of the Maharashtra Apartments
    Ownership Flats Act, 1971, having
    their registered office at P. Balu Marg,
    Prabhadevi, Mumbai – 25.
2. The Electricity Ombudsman,
    appointed by the Maharashtra
    Electricity Regulatory Commission,
    under Section 42(5) of the 
    Electricity Act, 2003, having
    its office at 606, 'KESHAVA',
    Bandra Kurla Complex,
    Bandra (East), Mumbai­400 051. ….  Respondents
Ms Kavita Anchan with Mr. Arsh Mishra i/by M/s. M.V.
Kini & Co. for the Petitioner.
Mr. Abhishek Khare with Ms P. Kedia & Ms Bindu Bhatia
i/by Khare Legal Chambers for Respondent No.1.
AND
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ORIGINAL SIDE
WRIT PETITION  NO.1850 OF 2013
1. Brihan Mumbai Electric Supply and
    Transport Undertaking through its
    General Manager, having office at
    BEST Bhavan, BEST Marg,
    Mumbai – 400 001.
2. Ravindra Shivram Kale,
    Aged 53 years, Divisional Engineer
    of Energy Audit Dept., Electric
th
    Supply Division, 4  Floor, Tardeo
    Bus Station Sankool, R.S. Nimkar 
    Marg, Mumbai – 400 008. ….  Petitioners
­ Versus ­
1. Maker Tower E and F premises
    Co­op. Soc. Ltd., Ground to Top
    Floor, Maker Tower Pump Room,
    Bldg. No.85, G.D. Somani Marg,
    Cuffe Parade, Colaba,
    Mumbai – 400 005.
2. The Electricity Ombudsman,
    Mumbai, established by Maharashtra
    Electricity Regulatory Commission,
    under Section 42(6) of the 
    Electricity Act, 2003, having its
    office at 606, 'KESHAVA', Bandra
    Kurla Complex, Bandra (East),
    Mumbai – 400 051. ….  Respondents
Ms Kavita Anchan with Mr. Arsh Mishra i/by M.V. Kini
& Co. for the Petitioners.
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Mr. Shyam Mehta, Senior Advocate with Mr.  Arijit
Maitra i/by Mr. Madhusudan G. Gawde for 
Respondent No.1.
           CORAM:  S.C. DHARMADHIKARI,
                  A.M. BADAR &
                  SMT. BHARATI H. DANGRE, JJ.
   
       RESERVED ON:  OCTOBER 31, 2018
    PRONOUNCED ON:  MARCH 12, 2019 
  JUDGMENT (  Per Shri S.C. DHARMADHIKARI, J.     ):  
1. Civil  Writ  Petition   No.10764   of  2011   was  placed
before a Learned Single Judge of this Court on 24­1­2012. He
made the following order:­
“1 Heard Ms. Raksha Gala, for the Petitioner.
th
2 On 17  January,2012, following order was passed:­
“1 Heard Ms. Gala, Advocate for Petitioner.
2 The impugned bill seeking difference of electricity
charges levied on the basis of multiplying factor one
instead of multiplying factor of 2 was issued in the
month   of   December   2010   for   the   period   of
September, 2003 to December, 2010.   Prima facie
Sub­Section 2 of Section 56 of the Indian Electricity
Act, 2003 will not empower the Petitioner to recover
any amount for period of 2 years prior to the date
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of demand namely prior to December, 2008. The
learned Advocate for the Petitioner has relied upon
the Judgment of Division Bench (Ranjana Desai and
A.A. Sayed, JJ)  in the case of Rototex Polyester &
anr. v/s. Administrator, Administration of Dadra
and   Nagar   Havli   (U.T.)   Electricity   Department,
Silvassa & Ors. 2010 (4) BCR 456.
The   Electricity   Ombudsman   relied   upon   the
following Judgments of the High Court.
(a) Judgment of the Division Bench in W.P.
(L) No.221 of 2006 Mr. Awadesh S. Pande (of M/s.
Nand/A/15) v/s. Tata Power Co. Ltd.
(b) M.S.E.D.C.L. v/s. Green World Magnum
Enterprises   (WP   No.2894/2007   decided   on
7/9/2007).
(c) M.S.E.D.C.L   v/s.   Venco   Research   &
Breeding   Farm   Pvt.   Ltd.   (W.P.   No.6783/2009
decided on 5/3/2010).
The learned Advocate for the Petitioner seeks time of
one   week   to   produce   the   aforesaid   3   Judgments
referred at Serial Nos.(a) to(c) above.  Stand over
th
to   24   January,   2012.     Parr­heard.     High   on
board.”
3 Advocate Ms. Gala has brought to my notice the
relevant Judgments.   She has also brought to my notice
that the Judgment of the Division Bench in the case of
Rototex Polyester & Another  was brought to the notice of
the authorities of the Electricity Ombudsmen.   However,
the   same   has   not   been   referred     in   the   impugned
Judgment. 
4 RULE .   Since   prima   facie,   in   my   opinion   the
impugned   order   of   the   Electricity   Ombudsman   is   in
accordance with the provisions of Sub­Section 2 of Section
56 of the Electricity Act, 2003 and since the Respondent is
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also a public sector undertaking namely B.S.N.L., I do not
think that this is a fit case  for granting interim relief as
prayed for in the Petition.  Hence, prayer for interim relief
is refused. The Writ Petition is, however, admitted in view
of   the   importance   of   the   issue   regarding   correct
interpretation   of   Sub­Section   2   of   Section   56   of   the
Electricity Act, 2003 and the direct   conflict of opinion
between the Judgments of two Division Benches of this
Court as elaborately  stated by me herein after.
5 On a careful perusal of various Judgments brought
before me, it is clear that there is a clear conflict between
two Judgments  of  this Court. On the interpretation   of
Section 56(2) of the Indian Electricity Act, 2003, in the
present case, it is the case of the Petitioner that instead of
applying   correct   multiplier   factor   2,   wrong   multiplier
factor   1   was   applied.   According   to   the   Petitioner,
therefore, a wrong bill for a lesser amount was issued.
Hence,   by   the   impugned   bill   seeking   recovery   of   the
difference, which bill is issued in the month of December,
2010, Petitioner sought recovery of the difference for the
period from September, 2003 to December, 2010.   In so
far as period preceding two years of December, 2010 is
concerned, in my opinion, there is no difficulty in the way
of the Petitioner since even Sub­Section 2 of Section 56
does not bar such recovery. However, in my opinion, the
problem and dispute arises when the Distribution Licensee
like Petitioner seeks to recover Electricity charges and dues
beyond a period of two years.  In a case where such dues
have   not   been   continuously   shown   as   recoverable   as
arrears of charges for electricity supplied, Section 56(2)
bars   the   recovery.   The   Division   Bench   of   this   Court
(Coram:  Smt. R. P. Desai and A.A. Sayed JJ.) which has
decided Rototex Polyester  and another v/s. Administrator,
Administration   and   others   [2010   (4)   BCR   456],   was
considering the case where demand notice was issued on
rd
3  October, 2007 claiming difference in the charges from
July 2003 to July 2007.  In that Judgment of the Division
Bench,   this Court followed the earlier Judgment of the
Division Bench,  this Court in the case of Bharat Barrel &
Drums   Manufacturing   Company   Pvt.   Ltd.   v/s.   The
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Municipal   Corporation   for   Greater   Bombay   [AIR   1978
Bombay 369].
6 Section 56 (2) of the Electricity Act, 2003 reads
thus:­
“(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.”
7 The   Electricity   Ombudsmen   has   relied   upon   the
Judgment of the Division Bench of this Court in the case of
Mr. Awadhesh S. Pandey v/s. Tata Power Company Ltd. &
Others   (Coram: F. I. Rebello and Anoop V. Mohta, JJ.)
[AIR 2007 Bombay 52],.   Para 7 of the said Judgment
reads thus:­
“  Para­7: ­ We then come to the next issue as
to whether the demand made by respondent No.1 is
contrary   to   the   provision   of   Section   56   of   the
Electricity Act.  We have, already narrated the facts.
th
The   Electricity   Ombudsman   by   his   order   of   18
July, 2006, held that the respondent No.1 is entitled
to   recover   past   dues   by   correcting   multiplying
factor.     The   question   posed   by   the   Electricity
Ombudsman   to   itself   was   whether   the   recovery
could be made for the entire period of 26 months
i.e. for a period from October, 2003 to November,
2005   and   that   too   belatedly   in   January,   2006.
After considering the various provisions including
the regulations, the Ombudsman held, only those
charges for a period of two years previous to the
demand could be recovered and that the arrears for
the consumption in January 2004 became first due
in February, 2004 as supplementary bill was raised
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in 2006 and these dues having been within two
years are recoverable under the provisions of Section
56(2) of the Electricity Act.
*
Submission of counsel for the petitioner is
that the provisions of Section 56 do not empower
respondent No.1 to recover any amount if the period
of two years has elapsed no can electricity supply be
cut   off   for   non­payment   of   those   dues.   In   other
words, what is sought to be contended is that if the
demand or part of the demand is time barred the
provisions of Section 56 would not be attracted. We
are afraid, we cannot subscribe to that proposition.
Section 56(1) is a special provision, enabling the
generating company or the licensee to cut­off supply
of electricity until such charges or sum as demanded
under Section 56(1) is paid. Relying on sub­section
(2), it was strongly urged that Section 56(1) cannot
be resorted to after the period of two years from the
date when such demand became first due.   In our
opinion, sub­section (2) only provides a limitation,
that the recourse to recovery by cutting of electricity
supply is limited for a period of two years from the
date when such sum became due.  As long a sum is
due, which is within two years of the demand and
can   be   recovered,   the   licensee   of   the   generating
company can exercise its power of coercive process of
recovery   by   cutting­of   electricity   supply.   The
Electricity   Act   has   provided   that   mechanism   for
improvement  of supply of electricity and to enable
the licensee or generating company to recover its
dues.   Apart   from   the   above   mechanism,
independently it can make recovery by way of a suit.
In   our   opinion,   therefore,   the   impugned   order
passed by the Electricity Ombudsman does not suffer
from any error apparent on the fact of the record
and consequently there is no merit in this petition.”
8 On the other hand as stated above, Advocate for the
Petitioner relied on the observation in the Judgment of
Division Bench in the case of Rototex (supra). The relevant
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paragraphs 12 to 18 reads thus:­
“  Para­12:­  Bharat Barrel & Drum Manufacturing
Company   Private   Limited   v.   The   Municipal
Corporation   for   Greater   Bombay
MANU/MH/0057/1978:   AIR   1978   Bom.369,   a
Division Bench of this Court was concerned with a
situation where additional amounts for eleven years
period were claimed from the consumer on the basis
of failure to multiply the reading by 2 (two) and
not on the basis of faulty meter. The question was
whether the licensee had to restrict its claim to six
months.  The Division  Bench  observed that  under
Section   26   of   the   Indian   Electricity   Act,   1910
restriction as to six months does not seem to apply
to a claim made by the licensee on the ground that
there was a failure to multiply the reading by the
changed multiplication factor.
Para­13:­  In U.A. Thadanis case (supra), learned
Single   Judge   of   this   Court   was   concerned   with
similar fact situation.  Two bills were raised on the
consumer demanding additional amounts because
multiplying   factor   was   wrongly   charged.   It   was
argued by the consumer on the basis of Sub­section
(6) of Section 26 that the Electrical Inspector could
determine   the   quantum   of   electricity   during   the
statutory  period of six months and for the period
anterior to it the reading registered in the disputed
meter   will   have   to   be   presumed   to   be   correct.
Relying on the judgment of this Court in Bharat
Barrel, learned Single Judge held that the restriction
as to six months period provided in Section 26 has
no application to a demand made by the licensee or
the Electricity Board for the unpaid amount for the
electricity   consumed   if   the   consumer   was   under­
billed due to clerical mistakes or human error or
such like mistakes.
Para­14:­  The principle which can be deduced from
the above judgments is that in case the consumer is
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under­billed on account of clerical mistake such as
the present case, where the multiplication factor had
changed from 500 to 1000, but due to oversight,
the   department   issued   bills   with   500   as
multiplication factor instead of 1000, the bar of
limitation   cannot   be   raised   by   the   consumer.
Though Section 26(6) of the Indian Electrical Act,
1910 is not in pari materia with Section 56(2) of
the Electricity Act, 2003, in our opinion, the present
case would be governed by the above principle and,
hence, the challenge raised by the petitioners must
fail.
Para­15:­  The question raised in this petition can
be examined from yet another angle keeping Section
56(2) of the Electricity Act, 2003 with which we are
concerned here in the forefront.
Para­16:­  In   Yatish   Sharmas   case   tariff   was
changed from GP1 to GP2.   Between 19/1/2000
and 27/5/2000, the readings of the electronic meter
were not taken. A supplementary bill was raised by
the petitioner Corporation therein on the basis of
the   average   monthly   consumption.   By   the
supplementary bill, a demand of Rs.78,187.17 was
raised on the consumer and debited to the amount
of   the   bill   for   the   month   of   April,   2004.   The
consumer raised a grievance before the Consumer
Grievance Redressal Forum. The matter ultimately
reached   the   Ombudsman.   He   held   that   the
supplementary bill was raised after a period of four
years from the date when it became first due and,
hence, the amount was recoverable under Section
56(2) of the Electricity Act, 2003. The Ombudsman
order was challenged in this Court.
Para­17:­  The   issue   which   arose   before   learned
Single   Judge   was   what   interpretation   should   be
placed on the words when such sum becomes first
due.   The   question   was   whether   the   Ombudsman
view that since the arrears for consumption became
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due   immediately   upon   the   usage   of   energy,   the
supplementary bill raised in August, 2004 for the
disputed   period   between   January,   2000   to   May,
2000 was barred under Section 56(2).
Para­18:­  While   dealing   with   this   submission,
learned Single Jude referred to Delhi High Courts
judgment in H.D. Shourie v. Municipal Corporation
of  Delhi  MANU/DE/0356/1987:  AIR   1987  Delhi
219, where the Delhi High Court was considering
the expression due appearing in Section 24 of the
Electricity Act, 2003. The Delhi High Court observed
that if the word due is to mean consumption of
electricity,  it would mean that electricity  charges
would   become   due   and   payable   the   moment
electricity   is   consumed   and   if   charges   in   respect
thereof are not paid then even without a bill being
issued, a notice of disconnection would be liable to
be issued under Section 24, which could not have
been the intention of the legislature. The Delhi High
Court observed that the word due in this context
would mean due and payable after a valid bill has
been sent to the consumer. Learned Single Judge
followed this view and set aside the Ombudsmans
order which had taken a contrary view.  We are in
respectful agreement with learned Single Judge.  In
this case, the demand notice with revised bill dated
3/10/2007 was, according to the petitioners, served
on them on 9/11/2007.  Therefore, the revised bill
amount   first   became   due   on   9/11/2007.   Hence,
Section 56(2) of the Electricity Act 2003 would not
come in the way of the respondents from recovering
the   said   amount   under   the   revised   bills.   The
impugned   order   dated   12/9/2008   warrants   no
interference.”
It is clear that the earlier Judgment of the Division
Bench in the case of Mr. Awadesh Pandey (supra) was not
brought   to   the   notice   of   the   Division   Bench   which
subsequently decided the case of Rototex (supra).
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9 According to me there is a direct conflict between
the observation  made in paragraph 7 of the Judgment  of
the Division Bench  in  the  case  of Mr. Awadesh Pandey
(supra) and paragraphs 14 and 17 of the Judgment in
Rototex (supra). This  conflict will have to be resolved by a
Larger   Bench,   since   the   similar   issue   regarding
interpretation   of   Section   56   (2)   is   arising   in   several
matters coming before this Court.  
10 Before   making   order   of   reference,   I   deem   it
necessary to indicate reasons for making reference, I am
unable to agree with the view taken by the Division Bench
in the case of Rototex (supra) as also the Judgment of the
Learned Single Judge in the case of Yatish Sharma.  Even
if the argument of the Petitioner is accepted, then even in
the case where the Petitioner has committed an error in
applying multiplier factor, the Petitioner can wake up after
several years, without there being any limitation on the
period   within   which   said   error   can   be     noticed   as   is
contended by the Petitioner. For example, a consumer may
be charged only by applying multiplier factor '1', instead of
'2'. On this basis, bills will be raised by the Distribution
Licensee and consumer in good faith and being un­aware
of the mistake made by the Licensee, will go on paying
amount of the Electricity charges and on that basis, the
consumer may fix the sale price of its goods in case it is a
manufacturing   activity   or   commercial   activity   and
accordingly, charge its normal customer for the goods or
the   services   provided   to   the   said   consumer.   If   the
Distribution Licensee is allowed to wake up after several
years   and   serve   bill   for   a   differential   amount   and
thereafter, argues that the amount became due only after
service   of   such   bill   for   a   differential   amount,   in   my
opinion,   then   this   will   not   only   be   contrary   to   the
legislative intent under Section 56(2) of the Electricity Act,
2003 but it will also result in the situation where an
innocent consumer may be suddenly faced with a huge
demand in respect of the bill even beyond two years of
service of bills and will be forced to pay the same without
any corresponding mechanism for  recovery of charges of
difference   of   the   said   amount   from   his   customer   or
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consumer to whom said consumer of electricity may have
provided goods or service. This  will be clearly unjust and
arbitrary. In my opinion, interpretation of  Section 56(2)
done by the Division Bench in the case of Rototex Polyester
(supra)   results   in   a   situation   where   the   Distribution
License can wake up and issue a supplementary bill after
any number of years without there being any limitation on
the numbers of years after which said supplementary bill is
issued and can thereafter, claim that the amount becomes
dues from the date on which it is sought to have been
levied and demanded by presenting a bill by claiming that
the amount   becomes due only when the supplementary
bill is issued.    Such  interpretation  will lead  to absurd
results.
  
11 Therefore, both on account of the fact that I am
unable to agree with the view taken by the Division Bench
in the case of Rototex Polyester (supra) and particularly,
the observations made in paragraphs 14 and 18 of the
said   Judgment   and   also   on   account   of   the   fact   that
according   to   me,   there   is   a   direct   conflict   of   opinion
between the earlier Judgment of the Division Bench in the
case of Awadesh S. Pandey   (supra) and the subsequent
Judgment of the Division Bench in the case of Rototex
Polyester (supra), I deem it fit that the issue will have to
be referred to the Larger Bench of this Court, consisting of
atleast 3 Judges.
12 Hence, I deem it necessary to request the Hon'ble the
Chief Justice to refer the following issues to the Larger
Bench   consisting   of   atleast   3   Judges.   The   issues   to   be
referred is as under:­
(i) Whether irrespective of the provisions of
Section   56(2)   of   the   Electricity   Act,   2003,
Distribution   Licensee   can   demand   charges   for
consumption of electricity for a period of more than
two years preceding the date of the first demand of
such charges;
(ii) Whether   the   charges   for   electricity
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consumed   become   due   only   after   a   demand   bill
issued by the Distribution Licensee and whether the
Distribution Licensee can issue a demand bill even
for the period preceeding more than two years from
the date of issuance of demand bill notwithstanding
the provision of Sub­Section 2 of Section 56 of the
Electricity Act, 2003;
(iii) Which of the Judgments of the Division
Bench namely Awadesh S. Pandey v/s. Tata Power
Co. Ltd., reported in AIR 2007 Bombay 52 or the
Judgment   of   the   Division   Bench   in   the   case   of
Rototex Polyester & Another, reported in 2010(4)
have correctly interpreted the provisions of Section
56(2) of the Electricity Act.
13 The Registrar (Judicial) is directed to take further
follow up action.”
2. From a reading of the above order, it appears that
the Learned Judge was of the opinion that there are conflicting
views   of   this   Court   in   the   Judgments   delivered   by   the   two
Division Benches. It is in these circumstances that the Larger
Bench was constituted and a reference has been made.
3. Further, on 9­7­2014 a Division Bench was pleased
to pass the following order in Civil Writ Petition No.6783 of
2009:­
“1. Not on Board. Taken on Board.
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2. This petition was disposed of by the learned Single
th
Judge of this Court on 5   March, 2010. The petitioner
challenged the order of the learned Single Judge by filing
an Appeal before the Apex Court. By the judgment and
th
order dated 19  February, 2014, the Appeal was disposed
of. The writ petition has been remanded to this Court.
Paragraphs 7 to 9 of the order of the Apex Court read
thus:
“7.   It is not necessary for us to decide the issue
involved in the facts of the present case. We find
that the High Court in the impugned judgment has
referred to its earlier Division Bench judgment in
Awadesh  S.  Pandey  vs.   Tata   Power  Co.  Ltd  AIR
2007 Bombay 52. However, Mr Altaf Ahmed, the
learned senior counsel appearing for the appellant
drew   our   attention   to   another   Division   Bench
judgment in the case of M/s Rototex Polyster & Anr
vs.   Administrator,   Administration   of   Dadra   &
Nagar Haveli (UT) Electricity Department, Silvasa
& Ors, 2009 (5) ALL MR 579, and argued that
diametric opposite view is taken therein, which is in
favour of the appellant. In a matter like this, when
there   are   two   conflicting   judgments   of   the
coordinate   Benches   of   the   same   High   Court,   the
Bench which decided the Writ Petition in question,
should have referred the matter to the larger Bench.
8.   Mr. Deepak Bhattacharya, the learned counsel
for   the   respondent   was   candid   in   accepting   the
aforesaid legal position.
9.   In the circumstances, it is desirable that the
Division Bench of the High Court may reconsider
the whole case and it must refer the same to the
larger Bench. As the matters are pending since long
we request the High Court to decide these matters
expeditiously   preferably   within   a   period   of   six
months.
           (Underlines Added)”
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th
3. Our   attention   is   invited   to   the   order   dated   24
January, 2012 passed by the learned Single Judge of this
Court in Writ Petition No.10764 of 2011. The learned
Single Judge has observed that the three questions which
are framed by him deserve to be considered by a Larger
Bench   consisting   of   at   least   three   Judges.   There   is   no
dispute   that   the   same   issue   is   involved   in   the   present
petition.
4. Considering the directions of the Apex Court and
especially paragraphs 7 to 9 thereof and considering the
th
order dated 24   January, 2012 passed by this Court in
Writ Petition No.10764 of 2011, we direct the Registrar
(Judicial­I) to place this petition along with the order of
the Apex Court as well as the Writ Petition No.10764 of
2011   before   the   Hon'ble   Chief   Justice   on   the
Administrative Side to enable the Hon'ble Chief Justice to
pass an appropriate order.”
Pertinently, these two petitions are filed by Maharashtra State
Electricity Distribution Company Limited.
4. The order of the Learned Single Judge referred three
issues formulated by him.
5. However, a request was made to recast these issues.
On that as well we find the parties are not  ad idem . We would,
therefore, prefer to rely on the issues formulated by the Learned
Single Judge.
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6. Civil Writ Petition No.10764 of 2011, in which the
order   was   made,   came   to   be   filed   in   the   following   factual
background.
7. The petitioner is the Maharashtra State Electricity
Distribution   Company   Limited   (“MSEDCL”   for   short),
constituted pursuant to an order dated 6­6­2005 which divided
the Maharashtra State Electricity Board into the Generating and
Distribution companies.
8. The   second   respondent   to  that   writ   petition  is   a
consumer using the industrial connection of Three Phase since
9­9­2003.
9. The first respondent to this petition is an Authority
constituted   under   the   Maharashtra   Electricity   Regulatory
Commission   (Consumer   Grievance   Redressal   Forum   and
Electricity   Ombudsman)   Regulations,   2006.   The
petitioner/MSEDCL   does   not   dispute   that   the   second
respondent­consumer has been paying electricity bills regularly.
However, in the month of December, 2010, upon checking the
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meter   installed   at   the   premises   of   the   second   respondent­
consumer,   it   was   noticed   that   there   were   errors   in   the
multiplying factor. The petitioner issued a monthly bill dated
8­2­2011 for Rs.17,91,410/­. Thereafter, on 10­5­2011 a letter
enclosing   a   final   bill   for   the   differential   amount   of
Rs.28,37,845.25, after deducting the amount already paid, was
raised for the period September, 2003 to December, 2010. That
is stated to be the said bill. It was said to be the final bill and the
manual bill raised after this final bill is irrelevant and should be
ignored.
10. Being aggrieved and dissatisfied with this bill, an
application was filed before the first respondent­Forum. There,
reliance was placed on Section 56 of The Electricity Act, 2003.
That provision 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
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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 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. On 13­7­2011, the first respondent passed an order
by majority rejecting the prayer of the second respondent and
held that this differential amount claimed is payable and that
the said bill is legal and proper. There were certain other issues
but eventually the order is that the grievance of the consumer is
rejected.
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12. Being   aggrieved   and   dissatisfied   with   this,   the
second   respondent   filed   a   Representation   bearing   No.119  of
2011   before   the   Electricity   Ombudsman/respondent   No.1,
seeking to quash and set aside the bills.
13. On   12­10­2011,   the   first   respondent   allowed  this
Representation and a copy of that order is at Exhibit­D to the
petition.
14. To the extent that is relevant for our purpose, the
same reads as under:­
“7. It is clear from the above that the Honorable High
Court   allowed   the   Distribution   Licensee   to   recover   the
arrears only for two years preceding the date of demand
and not for 26 months. The ratio of this judgment of
honorable division bench of the High Court was further
affirmed by the Honorable High Court, in the cases of
MSEDCL versus M/s. Green World Magnum Enterprises
(Writ Petition no.2894 of 2007 decided on 07.09.2007)
and MSEDCL versus Venco Breeding Farms Pvt. Ltd. (Writ
Petition   no.6783  of  2009,  decided  on  05.03.2010).  In
view of this the Respondent   is entitled  to  recover past
arrears  only to the extent  of maximum two (2) years
preceding December, 2010, in which the Respondent issued
the impugned supplementary bill.
8. In the result, the Representation is allowed. Forum's
order is set aside. Respondent is not entitled to recover the
difference   amount   between   the   charges   of   electricity
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supplied and the amounts paid by the Appellant during the
period of more than two years, preceding December, 2010.
The   Appellant   is   liable   to   pay   the   difference   amount
between   the   charges   of   electricity   supplied   and   the
amounts paid by him during the period from January,
2009 to December, 2010 only. Excess amounts recovered
shall be refunded with interest as stipulated in section
62(6) of the Electricity Act, 2003. The Forum shall keep
this position of law in mind for deciding similar cases in
future.”
15. Aggrieved   and   dissatisfied   with   this   order   of   the
Electricity   Ombudsman,   MSEDCL   filed   a   writ   petition   under
Articles 226 and 227 of the Constitution of India. It is on such a
petition that the referring order has been passed by the Learned
Single Judge.
16. More or less, similar are the facts and circumstances
in   the   other   writ   petitions   filed   by   MSEDCL   and   by   the
consumers.
17. Notably, the consumers seek to support the view of
the Electricity Ombudsman and oppose the submissions to the
contrary of the MSEDCL.
18. Mr.   Kumbhakoni,   learned   Advocate   General
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appearing for the MSEDCL, would submit that the classes of
consumers which the MSEDCL caters to, and particularly in the
industrial sector requires installation of distribution equipments.
Pertinently, in the industrial units huge machines are installed
and they are operated with the electricity supplied at a very high
voltage and current. These High Tension consumers are supplied
electric   energy   with   voltage   as   high   as   about
11,000/22,000/33,000/EVH volts. If such high voltage/current
supply  is allowed  to  directly pass through  an  electric meter
installed for measuring the quantity of electricity supplied, the
electric meter may itself instantaneously burn or may explode.
Therefore,  it   is  not  possible   to  measure   the   quantity  of  the
electric   energy   so   supplied   at   very   high   voltage/current,   by
making it pass entirely through an electric meter and by looking
at the meter reading.
19. It   is,   therefore,   necessary   that   the   electricity   so
supplied is converted by transformation of current and voltage
by   providing   Current   Transformer   and   Voltage   Potential
Transformer units. In such cases, the actual electricity (with
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substantially reduced voltage and current) passes through the
electric meter. The same is though proportionate to the one
actually supplied, it is only a small portion of the electric energy
actually supplied (like a miniature image). Therefore, in such
cases   the   actual   meter   reading   does   not   reflect   the   correct
amount of electric energy supplied to the consumer. Resultantly,
it becomes necessary to apply to such actual meter reading a
proper multiplying factor so as to get the actual/correct amount
of electric energy supplied to the High Tension consumer. In
many such cases bills are raised, sometimes without applying the
requisite   multiplying   factor   or   by   applying   an   incorrect
multiplier, either through oversight or due to clerical errors or
for some other reasons. After such mistake is detected, bills are
raised   for   the   balance   amounts,   by   applying   the   correct
multiplying factor, for which the bills ought to have been raised
but are not raised, on account of such mistakes, etc.. In short,
such   supplementary   bills   are   issued   only   for   the   balance
amounts.
20. In   such   cases,   the   claims   under   these   bills   are
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opposed  on   the   ground,   inter   alia ,  that   such  claims   for  the
balance amounts are barred by sub­section (2) of Section 56 of
the 2003 Act. If action is proposed to be taken for disconnection
of the electricity supply, under sub­section (1) of Section 56
reproduced above, for non­payment of such balance amounts
claimed by the supplementary bills, then, these bills are also
opposed on similar ground of bar of limitation.
21. Mr. Kumbhakoni was at pains to point out that sub­
section (2) of Section 56 though separately numbered, it will
have   to   be   considered   not   as   an   independent   or   separate
provision, operating on its own but only as a proviso to sub­
section   (1)   of   Section   56.   The   words   employed   by   the
Legislature in sub­section (2) demonstrate that intention of the
Legislature.
22. Mr. Kumbhakoni then submits that, a   non obstante
clause ordinarily operates in close  proximity to the enacting
section and its amplitude is to be confined to the Legislative
policy. Its applicability cannot and need not be extended beyond
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the Parliamentary intention as such. 
23. Mr. Kumbhakoni then submits that, in the present
case   the   words  “Notwithstanding   anything   contained   in   any
other law for the time being in force”   needs to be appreciated as
against the words that are otherwise used by the Legislature viz.,
“Notwithstanding anything contained in this enactment and any
other law for the time being in force ” . The absence of the words
“in   this  enactment”   or   “in   this  Act”  clearly   demonstrate  the
intention of the Legislature that, the said  non obstante  clause is
not to override other provisions of the said Act itself. In such
cases a proviso does not and cannot deal with subjects that are
foreign to the main section itself. Therefore, the said sub­section
(2) will not operate where recoveries of sums due are to be
made under the other provisions of the said Act. 
24. Mr. Kumbhakoni then submits that, this provision
applies   only   and   only   when   an   action   is   being   taken   of
disconnection of supply, when the consumer  ' neglects to pay '  the
amount due in terms of the bills issued, for recovering amounts
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that are due to the licensee or the generating company. In those
cases where such an action of disconnection is  not  taken, the
said provision, including sub­section (2) thereof, cannot apply. 
25. Mr.   Kumbhakoni   then   submits   that,   the   words
“under this section shall be recoverable after the period of two
years”   make the said position very clear. Therefore, if amounts
are being recovered under any provision of the said Act other
than Section 56, the bar of two years cannot be invoked. 
26. Mr.   Kumbhakoni   then   submits   that,   the   said
provision deals with a  punitive  action to be taken by way of
disconnection of supply for non­payment of amounts that are
due and  payable. Therefore,  the intention  of the  Legislature
appears to be that in such cases, such action should not be
taken, if the licensee or the generating company has not been
itself vigilant in taking steps for claiming its dues. The said bar
of two years cannot be read into the provisions of the said Act
other   than   Section   56,   whereunder   amounts   are   being
recovered, without taking recourse to such punitive action. 
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27. Mr. Kumbhakoni then submits that, in other words,
the sub­section (2) of Section 56 only provides a limitation to
take recourse  ' to cutting of electricity supply '  and limits it for a
period of two years from the date when “the sum becomes due”.
Independent   of   such   an   action   and   rather   unconnected
therewith, the sum due can certainly be recovered by way of any
other method, such as a filing of suit. 
28. Mr. Kumbhakoni then submits that, Section 56 falls
in   Part   VI   of   the   said   Act   that   deals   with   “Distribution   of
Electricity”   and   falls   within   the   sub­heading   “Provision   with
respect   to   supply   generally”.   It   is   thus   clear   that   the   said
provision is not meant to deal with  ' the recovery '  of the charges
due from the consumers. Therefore, the provision of  ' cutting of
electricity supply '  for  ' neglecting '  to clear the arrears need not be
considered necessarily as a coercive mode of recovery of the
arrears,   though   from   the   consequences   flowing   from   it,
apparently it appears to be so.
29. Mr. Kumbhakoni then submits that, in the aforesaid
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regard it may kindly be appreciated that in terms of, generally
the scheme of the said Act and its provisions, such as Section 43,
the licensee or the generating company is under a statutory
obligation and it is its legal duty to supply electricity to everyone
who seeks to avail it. All that Section 56 does is that, it relieves
the   licensee   or   the   generating   company   from   its   statutory
obligation or its legal duty to do so, under the circumstances
contemplated by the said Section 56 and permits the licensee or
the generating company to cut the electricity supply and thereby
refuse   to   supply   the   electricity.   This   is   obviously   because   it
cannot happen that, even if the consumer neglects to make the
payment of the charges due to him/her/it towards the supply of
electricity, still the statutory obligation and/or the legal duty of
the licensee or the generating company to supply electricity to
such a defaulting consumer continues indefinitely. Thus, Section
56 strikes the balance between the mutual rights and obligations
of the consumers on one hand and the licensee or the generating
company on the other hand.
30. Mr. Kumbhakoni then submits that, in the light of
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the aforesaid, though the effect and the consequence of the
operation of Section 56 may result into the recovery of the
arrears   of   the   charges   due   from   the   consumer,   which   the
consumer  has neglected to pay,  the  said  provision  does not
appears to be meant or designed to be  ' a mode of recovery '  of
such overdue charges. Resultantly, there is no scope for reading
into the said provision anything more to spell out a period of
limitation,   to   recover   such   charges   that   are   due   from   the
consumer. 
31. Mr.   Kumbhakoni   then   submits   that,   even   in   this
regard,   the   time   of   two   years   will   start   to   run   against   the
licensee, to put it in the same words of the said section: from the
date when such sum became first due. Therefore, it is requisite
to find out when “sums become first due” from the consumer to
the licensee. 
32. Mr. Kumbhakoni then submits that, no doubt the
moment   electricity   is   consumed/used   by   the   consumer   the
liability of the consumer to pay for it starts. However, the sums
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do   not   become   due   and   payable   immediately   on   such
consumption.   This   is   principally   because   before   determining
such sums that would become due and payable by the consumer,
it is necessary for the licensee to calculate not only the exact
extent/amount of the electric energy so consumed/used but also
the rate at which the consumer has made itself liable to pay for
it.   This   involves   exercise   on   the   part   of   the   licensee   to   be
undertaken at the end of which a bill is generated, quantifying
the exact “sum that has become due” to it from the consumer.
Only upon service of such a bill, the sum set out therein becomes
due and payable by the consumer to the licensee. It is therefore
clear that only upon, not only preparation of a bill but also upon
its service on the consumer, that the “sum becomes first due”
and payable by the consumer and not till then. 
33. Mr. Kumbhakoni then submits that, from the over­all
scheme of the said Act it is also clear that it will be incorrect to
assume that the “sum becomes first due” immediately upon the
simplicitor   consumption   of   the   electricity.   The   word   ‘due’
appearing in Section 56 must mean “due and payable  after a
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valid   bill   has   been   sent   to   or   served   on   the   consumer.”
Otherwise,   the   amount   will   become   payable   the   moment
electricity is consumed and if charges in respect thereof are not
paid   then   even   without   the   bill   being   issued   a   notice   of
disconnection would be liable to be issued under Section 56. In
such case, even without issuing any bill and without knowing
the actual “sum due” and payable by it to the licensee, it will
have to be assumed that the consumer has become liable for
payment of an unascertained, unspecified amount. 
34. Mr. Kumbhakoni then submits that, if the bills are
not   sent   in   time   the   loser   is  obviously   the   licensee,   who  is
entitled to receive the money. It cannot be forgotten that, for the
delayed period of issuing the bill, in fact the consumer has used
the money due and payable to the licensee. A specific contention
that the consumer had based its own costing of fabrication,
production or other charges on the electricity bills send, which
had been duly paid and that consumer would not be entitled to
recover   the   supplementary   fabrication   charges   from   its
customers, which would lead to huge loss to the consumer was
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raised in one of the case, which has not been accepted by the
Court. 
35. Mr.   Kumbhakoni   then   submits   that,   there   is   no
warrant in the said Act to read the word ‘due’ in a narrower
sense and restrict it to only such amounts that have become
payable within the period of, so called limitation of two years.
There   is   also   no   warrant   for   considering   “the   sum   due”   as
restricted to a sum falling due within any specific period of time.
36. Mr. Kumbhakoni then submits that, the word “due”
always refers to a fixed and settled liability. The Courts have
always   recognized  a  difference   between   ' an   ascertained sum
presently due '   and claims which do not become due until the
liability is adjudicated and/or assessed. If a back billing claim,
on account of slow meter recording is made, it remains merely  ' a
claim '  and not ‘an amount due’ until determined by the licensee
and in regard to such  ' a claim '  Section 56 will not apply. 
37. Mr. Kumbhakoni then submits that, in the said Act,
Rules or the Supply Code there is no specific provision that
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firstly,   provides   for   a   specific   limitation   for   issuance   and/or
raising   of   bills   and   secondly,   provides   that   recovery   of   the
amounts   specified   in   the   bills   issued   after   specified   period,
starting from the actual consumption of electricity, is barred by
limitation. Therefore, there is no warrant to draw a conclusion,
on the basis of any provision of the said Act, Rules or Supply
Code, that bills cannot be legally issued and/or that amounts of
such bills cannot be recovered after a specific period of time. 
38. Mr. Kumbhakoni then submits that, The Electricity
Act, 2003 is a special statute within the meaning of Section 29
of the Limitation Act. The Limitation Act does not apply to the
said Act. In spite of various amendments, if the Legislature did
not think fit to make any provision prescribing any period of
limitation, particularly for raising/issuing bills, it is clear that, it
is not the intention of the Legislature to prescribe any statutory
period at all for the same.  
39. Mr. Kumbhakoni then submits that, until and unless
a statute limits right of an authority to assess, compute or to
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serve   a   bill   or   raise   a   demand,   it   cannot   be   said   that   the
authority loses its right, to demand the money due to it by
serving a bill. Only after service of a bill the period of limitation
for recovery of the sums claimed thereby would arise. Neither
the Electricity Act, 1910 nor The Electricity Act 2003 limit or
prescribe   a  time   for   raising  a  demand  and/or   for   serving a
demand notice. The recovery of the amount and serving of a
notice of demand are two different aspects and ought not to be
intermixed from the point of view of law of limitation.    
40. Mr. Kumbhakoni then submits that, every year the
MERC determines tariff. The same is determined after taking
into consideration the Annual Revenue Requirement (ARR) that
is   submitted   by   the   electricity   companies/licensees.   For
computing the ARR the licensees take into consideration the
number   of   consumers   belonging   to   various   categories
(Agriculture,   residential,   industrial   and   commercial).   The
revenue realized from each category of consumers is considered
for   determining   tariff   and   meeting   the   ARR   given   by   the
companies.   If   revenue   from   commercial   or   industrial   is   not
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realized to its fullest then the burden on other categories such as
residential, agriculture and public work increases. 
41. To support Mr. Kumbhakoni, the petitioners in O.S.
Writ Petition No.498 of 2009 and O.S. Writ Petition No.1850 of
2013 (The Municipal Corporation of Greater Mumbai through
the   General   Manager,   BSET   Undertaking)   made   additional
submissions. These are as under:­ 
“The petitioners state that under The Electricity
Act, 2003 the term “bill” has not been defined. However,
under   the   Maharashtra   Electricity   Regulatory
Commission Regulations, 2005, Rule 15 refers to billing
and Rule 15.2.1  refers to bill details  which  reads as
under:­
“ 15.2.1   The bill to the consumer shall include all
charges,   deposits,   taxes   and   duties   due   and
payable   by   the   consumer   to   the   Distribution
Licensee for the period billed. In accordance with
the provisions of the Act, these Regulations and
the   Schedule   of   charges   as   approved   by   the
Commissioner under Regulation 18.”
The petitioners  state  that  Rule 15.2.4  refers to
information that should be included in the bill and item
No.(i) thereof refers to multiplying factor of the meter.
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Admittedly, the monthly bill issued to respondent No.1
prior bill was issued on the basis of multiplying factor as
one, whereas in fact multiplying factor should be and
has to be two. Therefore, the bill earlier issued was only
for   the   50%   of   the   consumption   of   the   electricity.
Admittedly there was no bill raised for the balance 50%
of   the   electricity   consumed by  respondent   No.1.   The
error was purely an human error.
The petitioners state that respondent No.1 applied
for the electricity supply and agreement was also signed
by   respondent   No.1   with   the   petitioner/Undertaking
wherein   it   was   mentioned   that   it   is   also   the
responsibility of the consumer to ask for the bill from the
petitioner/Undertaking   for   the   consumption   of
electricity.
The petitioners state that Section 56(2) of The
Electricity Act has no application to the demand made
by the licensee or the Electricity Board for the unpaid
amount for the electricity consumed if the consumer was
under billed due to clerical mistake or human error or
such like mistake as has been held by this Hon'ble Court
in the matter being Judgment dated 20­8­2009 in Writ
Petition   No.7015   of   2008   between   M/s.   Rototex
Polyester & Anr. v/s Administrator, Administration of
Dadra and Nagar Haveli (U.T) Electricity Development,
Silvassa & Ors., passed by the Hon'ble Division Bench
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presided   over   by   Her   Ladyship   Smt.   Justice   Ranjana
Desai (as Her Ladyship then was) and His Lordship Mr.
Justice A.A. Sayed. The petitioners state that in the said
Judgment dated 20­8­2009, the Division Bench of this
Hon'ble Court, while discussing at length Section 56(2)
of The Electricity Act, 2003 was pleased to hold that the
bar of limitation cannot be raised by the consumer in
cases where the Department erroneously short billed the
consumer and further held that the “due” date as spelt
out under Section 56(2) shall be from the date of the
revised bill and not from the date of the consumption of
electricity and the period of two years shall be applicable
from the date of the revised bill.”
42 On   the   other   hand,   the   Senior   Counsel   for   the
respective respondents would urge that The Electricity Act, 2003
is a consolidating statute and repeals The Indian Electricity Act,
1910   and   The   Electricity   (Supply)   Act,   1948,   so   also   The
Electricity Regulatory Commissions Act, 1998. Sub­section (1) of
Section 24 of the 1910 Act is in  pari materia  with sub­section (1)
of Section  56  of the  2003 Act.  However,  sub­section (2) of
Section 56 of the 2003 Act was not a provision found in Section
24   of   The   Indian   Electricity   Act,   1910.   Thus   this   is   a   new
provision.
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43. In interpreting a new provision, this Court should
always   take   assistance   of   the   repealed  law   or   the   provision
appearing therein so that it is easy to deduce the mischief sought
to be remedied or removed. In that regard, the argument of the
Counsel for respondent No.1 in O.S. Writ Petition No.1850 of
2013 is as under:­
“1. It is settled law that to construe the statute in
question, it is not only legitimate but highly convenient
to refer both to the former Act and to ascertain evils to
which the former Act had given rise, and to the latter Act
which   provided   the   remedy   [In   re   Mayfair   Property
Company,   Bartlett   v.   Mayfair   Property   Company,   LR
(1898) 2 Ch 28 at p.35].
th
2. The Standing Committee on Energy (2002), 13
st
Lok   Sabha,   Ministry   of   Power,   31   Report   on   the
Electricity Bill, 2001,  inter alia , provides as follows:­
“J. Protection to consumers from arbitrary billings:
8.59 It may be seen that similar provision exists in the
Act of the present Bill except that now restrictions have
been   made   for   recovery   of   arrears   pertaining   to   the
period prior to two years from consumers unless the
arrears   have   been   continuously   shown   in   the   bills,
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justifying their stand the Ministry of Power in a note
stated:­
“It has been considered necessary to provide for
such a restriction to protect the consumers from
arbitrary billings.”
3. Thus, the enactment of sub­section (2) of Section
56 was to address the mischief of arbitrary billings and
not serving/raising of exorbitantly high electricity bills
on consumers for a long period (wrongfully,  wilfully
because of prevalent practices or due to other reasons).
The amount of the bill raised after the long period would
surely be beyond the consumer's paying capacity, non­
payment   of   which   would   automatically   lead   to
consequences   of   dis­connection.   Such   a   consequence,
where   huge   sums   are   wrongly   demanded   from
consumers, has been prohibited by sub­section (2) of
Section 56 as no sum can be claimed from a consumer
after the period of two years from the date “when such
sum become first due unless such sum has been shown
continuously   as   recoverable   as   arrear   of   charges   for
electricity supplied”.
4.   The words “first due” in sub­section (2) does not
appear in sub­section (1). If the words “first due” is to be
interpreted as the date of the bill then in that event a
sum claimed for consuming electricity a decade back or
two decades back will be recoverable within two years
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from the date of the bill/due date mentioned in the bill
(belatedly   raised).   This   interpretation   would   militate
against the objects sought to be achieved by the 2003
Act,  inter alia , viz., “protecting interest of consumers”.
5. If the words “first due” is to be interpreted as the
date when the electricity was first consumed then in that
event a bill is mandatorily raised within two years when
the  electricity   was  so  first  consumed.  Thereafter,  the
time bar of two years would trigger and no sum would
be recoverable. The saving provision  available to  the
distribution licensee is that the sum ought to have been
shown continuously as recoverable as arrear of charges
for electricity supplied.
6. The words “first due” appearing in sub­section (2)
must be distinguished from the word “due” appearing in
sub­section (1) of Section 56. The word “due” in sub­
section (1) would mean the due date mentioned in the
bill so that when the consumer neglects to pay the bill
then only the consequence of disconnection could be
effected. However, the words “first due” in sub­section
(2)   would   mean   the   date   when   the   electricity   was
consumed/used, so that without any valid bill having
been   raised   for   two   years   from   the   date   when   the
electricity was consumed/used, no sum is recoverable.
7. If the petitioner­licensee is allowed to recover the
sums after 17 years then the words “such sum ought to
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have been shown continuously as recoverable as arrears
of   charges   for   electricity   supplied”   appearing   in   sub­
section (2) of Section 56 would be rendered completely
otiose.
8. Hence, in the present case, the petitioner's claim
made after an inordinately long period of 17 years for
differential amount arising from the tariff applicable to
residential   category   and   commercial   category   is
completely time barred.”
44. The   counsel   appearing   for   the   first
respondent/consumer   in   O.S.   Writ   Petition   No.498   of   2009
would submit that the disputed bill period is from 25­6­1998 to
1­5­2001. However, the electricity bills raised from 18­12­1997
to 1­2­2009 are available. In the bill dated 13­2­2006 onwards
and for the period covered from 1­12­2005 to 1­1­2006, it would
be   apparent   that   the   distribution   licensee   did   not   send   any
amending bill for 7­years. The bills for 1998 to 2001 were raised
in May, 2005. Thus, the MSEDCL failed to correct the bill for a
period of 7­years and also failed to intimate the respondent. It
purported to send the amended bills for arrears on 6­5­2005,
which   is   after   7­years   from   the   date   when   the   meter   was
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undercharged. Mr. Khare would further submit as under:­ 
“1. It   is   observed   in   Rototex   Polyester   &   Anr.   v/s
Administrator,   Administration   of   Dadra   and   Nagar
Haveli (U.T)  Electricity  Development,  Silvassa  & Ors.
and Brihanmumbai Municipal Corporation 2009 (5) ALL
MR 579 v/s Yatish Sharma and Others, AIR 2007 Bom.
73 that, where the Petitioner has committed an error in
applying multiplier factor, the Petitioner can wake up
after several years, without there being any limitation on
the period within which said error can be noticed as is
contended by the Petitioner.
2. If the above interpretation observed in the said
two cases is considered results in a situation where the
Distribution   Licensee   can   wake   up   and   issue   a
supplementary bill after any number of years without
there being any limitation on the numbers of years after
which   said   supplementary   bill   is   issued   and   can
thereafter, claim that the amount becomes due from the
date   on   which   it   is   sought   to   have   been   levied   and
demanded   by   presenting   a   bill   by   claiming   that   the
amount becomes due only when the supplementary bill
is issued. Such interpretation will lead to absurd results.
(G.S. Godbole, J. Order, Para 10)
3. Correct interpretation as per Respondent No.1 in
the instant case is rather taken in the following cases:
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4. In Awadhesh S. Pandey v/s Tata Power Company
Limited, AIR 2007 Bom. 53, the Hon’ble Court held that
the   distribution   licensee   is   entitled   to   recover   the
amended   claim   by   correcting   multiplying   factor   but
limited to a period of two years back, from the date
when such demand was raised. Claim pertaining to the
period prior to two years were disallowed.
5. In  Maharashtra   State   Electricity   Distribution
Company Limited v/s The Electricity Ombudsman 606,
Keshava, W.P. No.10764 of 2011 (Bombay HC), it has
been observed that, the problem and dispute arises when
the Distribution Licensee like Petitioner seeks to recover
electricity   charges   and   dues   beyond   a   period   of   two
years.   In   a   case   where   such   dues   have   not   been
continuously shown as recoverable as arrears of charges
for electricity supplied, Section 56(2) bars the recovery. 
Thus, the Petitioner should be barred under Section 56
(2) of the Electricity Act, 2003 since recovery period has
expired.”
45. Mr.   Rahul   Narichania,   learned   Senior   Counsel
appearing for the petitioner(s) in Civil Writ Petition Nos.5367
and 9858 of 2016, who are the consumers, would urge that the
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first respondent/distribution company has for a period of more
than   20   years   charged   the   petitioner/company   in   Civil   Writ
Petition No.5367 of 2016 for the supply of electricity on the
basis of its categorisation (High Tension Industrial Consumer).
The officials from the Vigilance Department visited the plant
premises   to   carry   out   a   spot   inspection   on   18­12­2015   and
thereafter  issued/raised  the  supplementary  bills   charging the
petitioner/company at a commercial rate. The period was 2012
to 2016. Though the original bills have been paid on time and as
per the demand, this supplementary bills seek to reopen the
concluded issues and that is how the disconnection notice was
challenged   by   filing   these   petitions.   There   was   interim   stay
granted   to   the   recovery   under   the   supplementary   bills   but
during   the   pendency   of   the   writ   petitions,   another
supplementary bill for the period commencing from June, 2008
to July, 2012 was issued and disconnection was threatened. This
necessitated the further interim order granted by this Court on
30­8­2018. In Civil Writ Petition Nos.5367 and 9858 of 2016,
the broad submissions of Mr. Narichania are to the following
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effect:­
“1. The word “Payable” is not to be found in section
56(2) of the Indian Electricity Act, 2003.
2. The   words   “Due”   and   “Payable”   are   not
synonymous with each other in the context of this case.
3. What is due is not necessarily payable.
4. An   amount   may   become   due   by   virtue   of
usage/consumption of the goods/services but it may not
become   payable   until   an   Invoice   has   been   issued.
Therefore “due” must mean date of usage/consumption.
If it is to be construed as being due only on issuance of a
Bill, a Bill can be issued after 10 years thereby defeating
the objective of section 56.
5. Section   56(2)   non­obstante   clause:   The   words
unless   such   sum   has   been   shown   continuously   as
recoverable   as   arrears   and   charges   for   electricity
supplied and the licensee shall not cut off electricity
supply.
This shows that for the time bar not to apply:­
i. A   sum   must   be   shown   as   continuously
recoverable, this can only be by issuance of a bill.
ii. And if a bill is issued, then as long as the bill is
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unpaid (but the sum is shown recoverable) the
sum due can be recovered even after the expiry of
the 2 years period prescribed by section 56(2).
iii. Such bill however must be issued within 2 years
period   prescribed   under   section   56(2).   The
amount thereafter be shown as have been payable
in the books.
6. The word “due” appears in section 56(1). When
does the consumer become liable to pay? ­ this would
only be on receipt of the bill. How is a customer to know
how much electricity he has consumed and how much is
to be paid until a bill is issued?
7. The two years time bar must be given effect and it
cannot be rendered otiose.  Therefore if bill is issued
within 2 years, and the sum continues to be shown as
payable the time bar will not apply. But if the bill is
issued after 2 years then it is barred.
8. In the present case, bills were issued and paid on
time. After several years supplementary bills have been
issued despite of the original bills being paid. Therefore,
the debt has extinguished.”
46. The other Senior Counsel Mr. R.S. Apte, appearing
in   Civil   Writ   Petition   No.4573   of   2016,   supported
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Mr. Narichania and invited our attention to a Judgment of a
learned single Judge of the High Court of Calcutta in the case of
Abdul   Hamid   &   Anr.   v.   West   Bengal   State   Electricity
Distribution Company Limited & Others , reported in AIR 2017
Calcutta 274.
47. Mr. Abhay Nevagi, appearing for the petitioner in
Civil Writ Petition No.495 of 2015 would, however, urge that
the   Electricity   Act   was   brought   into   effect   to   improve   the
performance of the State Electricity Board which deteriorated on
account   of   various  factors.   The   changing  times  required the
concepts to be  modified  and  amplified.  There are  now new
concepts   put   into   effect,   namely,   power   distribution   with
peculiar facets such as open access and determination of tariff
by   the   Regulatory   Commissions.   It   is   that   intent   which   is
apparent from the language of Section 56. The broad basis on
which the section is worded, is that no one can take advantage
of his own wrong. The scope of Section 56 is confined to one
matter, namely, wrong classification of the consumer. The other
aspects, namely, unauthorised supply is governed by Section
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126, whereas theft is governed by Section 135. The other matter
of burning of meter or slow meter is governed by a supply code.
Mr. Nevagi, therefore, submits as under:­ 
1. The relevant provisions of E.A. need to be referred
are Sections 55, 56 and 62. Section 55(2) provides for
proper   accounting   and   audit   in   the   generation,
transmission and distribution or trading of electricity.
Section 55(3) provides for default in complying of the
provisions. Section 62 deals with determination of tariff. 
2. The   relevance   is   MSEDCL   after   audit   of   the
accounts is required to submit proposal of tariff based on
audited   financials   to   MERC.   That   means   loss   if   any
occurred to MSEDCL in the previous financial year need
to be considered by MERC for revision every year. 
3. As far as classification of consumer is concerned it
is prerogative of distribution licensee (refer pg. 43 of
compilation). Distribution Licensee is required to enter
into   agreement   (refer   pg.   36   of   compilation).   The
Agreement provides for purpose of usage of electricity
that means classification. 
4. The   Distribution   Licensee   is   required   to   visit
premises of the consumer for meter reading once every
two months (refer pg. 44 of the compilation [Regulation
14.3]) along with this read Regulation 15 Distribution
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Licensee is required to provide bill with details stated in
the said Regulations. The bill is supposed to provide
category of consumer, type of supply, multiplying factor,
last 6 months consumption, etc.
5. The   Commercial   Circular   No.175   dated
05/09/2012 Pg. 53 to 60 provides for classification of
consumers.   Pg.   60   Clause­4   specifically   provides   that
existing/prospective   consumers   should   be   properly
categorized by actual inspection immediately and data
to be immediately updated in IT data base. The said
Circular also provides for sensitizing staff about various
aspects of tariff order. 
6. Therefore, the mandate of law is if Distribution
Licensee   fails   to   discharge   its   legal   obligation   of
classifying consumer, cannot take advantage of its own
wrong and even go back to two years at the time of the
classification.  The  mandate  of  law  can  be seen  from
discussion paper in Parliament at pg. 14, para­J. 
7. In the present Petition supply was sanctioned on
07/01/2003 and additional power was sanctioned on
28/03/2011   under   HT­1   Industrial   Category.   The
category   was   changed   from   02/01/2012   and   HT­2
Commercial   tariff   was   applied.   17/07/2012   category
was again changed to HT­1 but bills were raised under
HT­2 commercial. 16/10/2014 Supplementary Bill for
497449/­ was issued seeking recovery of tariff difference
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from June, 2008 to December, 2011. This is against the
law. MSEDCL started supply in 2003 while additional
supply placed in HT­1 Industrial Category. It changed
category   to   HT­2   Commercial   and   raised   bill   on
16/10/2014. This is like taking advantage of own wrong
and in violation of mandate of E.A., 2003. 
8. Section 145 bars jurisdiction of Civil Court. This
contention based on legal proposition that in order to
invoke jurisdiction of Civil Court there has to be legal
right or contractual right. The said right is forfeited by
Section 56 based on legal proposition that you cannot
take advantage of your own wrong. 
9. Supreme Court Judgment in the matter of  State of
Kerala versus Mathia Verghese  1986 SCC (4) 746 may be
referred for interpretation of law. Therefore, keeping the
abovementioned submissions and submissions made in
the   course   of   argument   the   Petition   may   kindly   be
allowed.”
48. For appreciating the rival contentions, a reference
will have to be made to The Electricity Act, 2003, in detail.
49. The Statement of Object and Reasons leading to the
enactment read as under:­
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“STATEMENT OF OBJECTS AND REASONS
The Electricity Supply Industry in India is presently
governed   by   three   enactments   namely,   the   Indian
Electricity Act, 1910, the Electricity (Supply) Act, 1948,
the Electricity Regulatory Commission Act, 1998. 
1.1 The Indian Electricity Act, 1910 created the
basic framework for electric supply industry in India which
was then in its infancy. The Act envisaged growth of the
electricity industry through private licensees. Accordingly,
it provided for licensees who could supply electricity in a
specific area. It created the legal framework for laying
down of wires and other works relating to the supply of
electricity. 
1.2 The Electricity (Supply) Act, 1948 mandated
the   creation   of   a   State   Electricity   Board.   The   State
Electricity Board has the responsibility of arranging the
supply   of   electricity   in   the   State.   It   was   felt   that
electrification  which was limited  to cities  needed  to be
extended rapidly and the State should step in to shoulder
this   responsibility   through   the   State   Electricity   Boards.
Accordingly   the   State   Electricity   Boards   through   the
successive   Five   Year   Plans   undertook   rapid   growth
expansion by utilising Plan funds.
1.3. Over   a   period   of   time,   however,   the
performance   of   SEBs   has   deteriorated   substantially   on
account of various factors. For instance, though power to
fix tariffs vests with the State Electricity Boards, they have
generally   been   unable   to   take   decision   on   tariffs   in   a
professional   and   independent   manner   and   tariff
determination   in   practice   has   been   done   by   the   State
Governments. Cross­subsidies have reached unsustainable
levels. To address this issue and to provide for distancing
of government from determination of tariffs, the Electricity
Regulatory   Commissions   Act,   was   enacted   in   1998.   It
created the Central Electricity Regulatory Commission and
has   an   enabling   provision   through   which   the   State
Governments   can   create   a   State   Electricity   Regulatory
Commission. 16 States have so far notified/created State
Electricity Regulatory Commission either under the Central
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Act or under their own Reform Acts.
2. Starting   with   Orissa,   some   State
Governments have been undertaking reforms through their
own Reform Acts. These reforms have involved unbundling
of the State Electricity Boards into separate Generation,
Transmission   and   Distribution   Companies   through
transfer schemes for the transfer of the assets and staff into
successor Companies. Orissa, Haryana, Andhra Pradesh,
Karnataka,   Rajasthan   and   Uttar   Pradesh   have   passed
their Reform Acts and unbundled their State Electricity
Boards   into   separate   companies.   Delhi   and   Madhya
Pradesh have also enacted their Reforms Acts which, inter
alia, envisage unbundling/corporatisation of SEBs.
3. With the policy of encouraging private sector
participation in generation, transmission and distribution
and   the   objective   of   distancing   the   regulatory
responsibilities   from   the  Government   to   the   Regulatory
Commissions, the need for harmonising and rationalising
the   provisions   in   the   Indian   Electricity   Act,   1910,   the
Electricity   (Supply)   Act,   1948   and   the   Electricity
Regulatory Commission Act, 1998 in a new self­contained
comprehensive   legislation   arose.   Accordingly   it   became
necessary to enact  a new legislation for regulating  the
electricity   supply   industry   in   the   country   which   would
replace the existing laws, preserve its core features other
than those relating to the mandatory existence of the State
Electricity   Board   and   the   responsibilities   of   the   State
Government and the State Electricity Board with respect to
regulating   licensees.   There   is   also   need   to   provide   for
newer concepts like power trading and open access. There
is   also   need   to   obviate   the   requirement   of   each   State
Government to pass its own Reforms Act. The Bill has
progressive   features   and   endeavours   to   strike   the  right
balance given the current realities of the power sector in
India. It gives the State enough flexibility to develop their
power sector in the manner they consider appropriate. The
Electricity   Bill,   2001   has   been   finalised   after   extensive
discussions and consultations with the State and all other
stake holders and experts. 
4. The main features of the Bill are as follows :­
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(i) Generation   is   being   delicensed   and   captive
generation is being freely permitted. Hydro
projects would, however, need approval of the
State   Government   and   clearance   from   the
Central Electricity Authority which would go
into  the  issues  of  dam safety  and  optimal
utilisation of water resources.
(ii) There would be a transmission Utility at the
Central as well as State level, which would be
a   Government   company   and   have   the
responsibility   of   ensuring   that   the
transmission   network   is   developed   in   a
planned and coordinated manner to meet the
requirements of the sector. The load despatch
function could be kept with the Transmission
Utility or separated. In the case of separation
the   load   despatch   function   would   have   to
remain   with   a   State   Government
organisation/company.
(iii) There   is   provision   for  private   transmission
licensees.
(iv) There would be open access in transmission
from the outset with provision for surcharge
for   taking   care   of   current   level   of   cross
subsidy with the surcharge being gradually
phased out.
(v) Distribution   licensees   would   be   free   to
undertake   generation   and   generating
companies   would   be   free   to   take   up
distribution licensees.
(vi) The State Electricity Regulatory Commission
may   permit   open   access   in   distribution   in
phases with surcharge for ­
(a) current   level   of   cross   subsidy   to   be
gradually   phased   out   along   with   cross
subsidies; and
(b) obligation to supply.
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(vii) For   Rural   and   remote   areas   stand   alone
systems   for   generation   and   distribution
would be permitted.
(viii) For rural areas decentralised management of
distribution   through   Panchayats,   Users
Associations,   Cooperatives   or   Franchisees
would be permitted.
(ix) Trading   as   a   distinct   activity   is   being
recognised   with   the   safeguard   of   the
Regulatory Commissions being authorised to
fix ceiling on trading margins, if necessary.
(x) Where there is direct commercial relationship
between   a   consumer   and   a   generating
company or a trader the price of power would
not be regulated and only the transmission
and wheeling charges with surcharge would
be regulated.
(xi) There is provision for a transfer scheme by
which company/companies can be created by
the   State   Governments   from   the   State
Electricity   Boards.   The   State   Governments
have the option of continuing with the State
Electricity   Boards   which   under   the   new
scheme   of   things   would   be   a   distribution
licensee  and the State  Transmission  Utility
which   would   also   be   owning   generation
assets. The service conditions of the employees
would   as   a   result   of   restructuring   not   be
inferior. 
(xii) An Appellate Tribunal has been created for
disposal of appeals against the decision of the
CERC   and   State   Electricity   Regulatory
Commissions so that there is speedy disposal
of   such   matters.   The   State   Electricity
Regulatory   Commission   is   a   mandatory
requirement.
(xiii) Provisions relating to theft of electricity have
a revenue focus.
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5. The Bill seeks to replace the Indian Electricity
Act,   1910,   the   Electricity   (Supply)   Act,   1948   and   the
Electricity Regulatory Commissions Act, 1998.
6. The Bill seeks to achieve the above objects.”
50. Thus,   consistent   with   this   object,   the   Act   was
enacted by the Parliament and Sections 1 to 120 and Sections
122 to 185 thereof came into force on 10­6­2003.
51. The Preamble to the Act reads as under:­
“An Act to consolidate the laws relating to generation,
transmission, distribution, trading and use of electricity
and   generally   for   taking   measures   conducive   to
development of electricity industry, promoting competition
therein,  protecting  interest  of consumers   and supply of
electricity to all areas, rationalisation of electricity tariff,
ensuring   transparent   policies   regarding   subsidies,
promotion of efficient and environmentally benign policies,
constitution  of   Central   Electricity   Authority,   Regulatory
Commissions and establishment of Appellate Tribunal and
for matters connected therewith or incidental thereto.
       (underlining ours)”
52. This   Act   is   divided   into   several   Parts   and   to   be
precise, 18 in number. Part­I contains preliminary provisions.
Section 2, titled as “Definitions” falls in this preliminary Part and
some   of   the   definitions   are   absolutely   relevant.   They   are
reproduced hereinbelow for ready reference:
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“(2)  "appointed   date"   means   such   date   as   the   Central
Government may, by notification, appoint;
(3)  "area   of   supply"   means   the   area   within   which   a
distribution licensee is authorised by his licence to
supply electricity;
(4) to (14) …. ….
(15) "consumer" means any person who is supplied with
electricity   for   his   own   use   by   a   licensee   or   the
Government or by any other person engaged in the
business of supplying electricity to the public under
this Act or any other law for the time being in force
and includes any person whose premises are for the
time being connected for the purpose of receiving
electricity   with   the   works   of   a   licensee,   the
Government or such other person, as the case may
be;
(16)  "dedicated   transmission   lines"   means   any   electric
supply­line for point to point transmission which
are required for the purpose of connecting electric
lines or electric plants of a captive generating plant
referred   to   in   section   9   or   generating   station
referred to in section 10 to any transmission lines or
sub­stations   or   generating   stations,   or   the   load
centre, as the case may be;
(17) "distribution licensee" means a licensee authorised to
operate   and   maintain   a   distribution   system   for
supplying electricity to the consumers in his area of
supply;
(18) …. ….
(19) "distribution system" means the system of wires and
associated facilities between the delivery points on
the   transmission   lines   or   the   generating   station
connection   and   the   point   of   connection   to   the
installation of the consumers;
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(20) to (22) …. ….
(23)  "electricity" means electrical energy­­
(a)  generated, transmitted, supplied or traded for any
purpose; or
(b)  used for any purpose except the transmission of a
message;
(24) to (27) …. ….
(28)  "generating company" means any company or body
corporate   or   association   or   body   of   individuals,
whether incorporated or not, or artificial juridical
person,   which   owns   or   operates   or   maintains   a
generating station;
(29)  "generate"   means   to   produce   electricity   from   a
generating station for the purpose of giving supply
to any premises or enabling a supply to be so given;
(30)  "generating station" or "station", means any station
for   generating   electricity,   including   any   building
and   plant   with   step­up   transformer,   switch­gear,
switch yard, cables or other appurtenant equipment,
if any, used for that purpose and the site thereof; a
site intended to be used for a generating station,
and any building used for housing the operating
staff of a generating station, and where electricity is
generated by water­power, includes penstocks, head
and   tail   works,   main   and   regulating   reservoirs,
dams and other hydraulic works, but does not in
any case include any sub­station;
(31) to (37) …. ….
(38)  "licence" means a licence granted under section 14;
(39)  "licensee" means a person who has been granted a
licence under section 14;
(40) to (48) …. ….
(49)  "person"   shall   include   any   company   or   body
corporate   or   association   or   body   of   individuals,
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whether incorporated or not, or artificial juridical
person;
(50) …. ….
(51)  "premises" includes any land, building or structure;
(52) to (58) …. ….
(59)  "rules" means rules made under this Act;
(60) to (69) …. ….
(70)  "supply", in relation to electricity, means the sale of
electricity to a licensee or consumer;
(71) to (75) …. ….
(76)  "wheeling"   means   the   operation   whereby   the
distribution   system   and   associated   facilities   of   a
transmission licensee or distribution licensee, as the
case may be, are used by another person for the
conveyance of electricity on payment of charges to
be determined under section 62;
(77) …. ….”
53. Part­II contains Sections 3 to 6 and this Part is titled
as “National Electricity Policy And Plan”. A combined reading of
the sections in this Part would reveal as to how a National
Electricity Policy and Tariff Policy has to be prepared by the
Central Government in consultation with the State Governments
and the Authority for development of the power system based
on optimal utilisation of resources such as coal, natural gas, etc..
There is also an emphasis on rural electrification.
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54. Part­III is titled as “Generation Of Electricity” and
that is given a prominent place as is clear from a reading of
Sections 7 to 11.
55. Part­IV   is   equally   important   and   that   is   titled   as
“Licensing”. That contains Sections 12 to 24 and it is evident
from a perusal of Sections 12 and 14 that there is a licence
which is required to be obtained, or there is an exemption which
is  required   to   be   obtained  in   respect   of   the   requirement  of
holding a licence. The licence can be to transmit electricity, or
distribute electricity, or undertake trading in electricity. It is
evident   from   a   perusal   of   Section   14   that   if   the   licence   is
obtained   on   fulfilment   of   the   procedure   prescribed   in   that
behalf, if the licensee abides by the conditions of the licence,
then, he can, subject to the power of revocation  of licence,
undertake the activity of generating or distributing or trading in
electricity. Part­V is titled as “Transmission Of Electricity” and
that contains Sections 25 to 41. Thus, these sections permit
inter­State transmission, intra­State transmission, and then there
are other provisions relating to transmission. Pertinently, there
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are charges and which are required to be paid for intervening
transmission facilities. Section 36 provides for such charges and
the same reads as under:­
“36. Charges for intervening transmission facilities.­  
(1)  Every licensee shall, on an order made under section
35, provide his intervening transmission facilities at rates,
charges and terms and conditions as may be mutually
agreed upon:
Provided   that   the   Appropriate   Commission   may
specify rates, charges and terms and conditions if these
cannot be mutually agreed upon by the licensees.
(2)  The   rates,   charges   and   terms   and   conditions
referred to in sub­section (1) shall be fair and reasonable,
and may be allocated in proportion to the use of such
facilities.
Explanation:­ For the purposes of sections 35 and
36,   the   expression   "intervening   transmission   facilities"
means the electric lines owned or operated by a licensee
where such electric lines can be utilised for transmitting
electricity  for and on behalf of another  licensee  at his
request and on payment of a tariff or charge.”
56. For our purpose, Part­VI, titled as “Distribution Of
Electricity” is extremely relevant and naturally highlighted. This
Part is containing Sections 42 to 60. There are sub­heads of the
broad title Distribution of Electricity. There are provisions with
respect   to   distribution   licensees,   provisions   with   respect   to
electricity   traders   and   provisions   with   respect   to   supply
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generally.   Equally,   there   are   provisions   under   the   sub­head
Consumer protection: Standards of performance.
57. We would devote our special attention to this Part.
The duties of distribution licensees and open access are set out
in Section 42 and it reads as under:­
“42. Duties of distribution licensee and open access.­
(1)  It shall be the duty of a distribution  licensee  to
develop   and   maintain   an   efficient,   co­ordinated   and
economical distribution system in his area of supply and to
supply   electricity   in   accordance   with   the   provisions
contained in this Act.
(2)  The State Commission shall introduce open access in
such phases and subject to such conditions, (including the
cross subsidies, and other operational constraints) as may
be specified within one year of the appointed date by it
and in specifying the extent of open access in successive
phases and in determining the charges for wheeling, it
shall have due regard to all relevant factors including such
cross subsidies, and other operational constraints:
Provided that such open access shall be allowed on
payment of a surcharge in addition to the charges for
wheeling as may be determined by the State Commission:
Provided   further   that  such   surcharge   shall   be
utilised to meet the requirements of current level of cross
subsidy   within   the   area   of   supply   of   the   distribution
licensee:
Provided   also   that  such   surcharge   and   cross
subsidies shall be progressively reduced in the manner as
may be specified by the State Commission:
Provided   also   that  such   surcharge   shall   not   be
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leviable in case open access is provided to a person who
has established a captive generating plant for carrying the
electricity to the destination of his own use:
Provided also that the State Commission shall, not
later than five years from the date of commencement of the
Electricity   (Amendment)   Act,   2003   (57   of   2003),   by
regulations, provide such open access to all consumers who
require a supply of electricity where the maximum power
to be made available at any time exceeds one megawatt.
(3)  Where   any   person,   whose   premises   are   situated
within the area of supply of a distribution licensee, (not
being   a   local   authority   engaged   in   the   business   of
distribution   of   electricity   before   the   appointed   date)
requires a supply of electricity from a generating company
or any licensee other than such distribution licensee, such
person may, by notice, require the distribution licensee for
wheeling such electricity in accordance with regulations
made   by   the   State   Commission   and   the   duties   of   the
distribution licensee with respect to such supply shall be of
a   common   carrier   providing   non­discriminatory   open
access.
(4)  Where the State Commission permits a consumer or
class of consumers to receive supply of electricity from a
person other than the distribution licensee of his area of
supply, such consumer shall be liable to pay an additional
surcharge on the charges of wheeling, as may be specified
by the State Commission, to meet the fixed cost of such
distribution licensee arising out of his obligation to supply.
(5)  Every distribution licensee shall, within six months
from   the   appointed   date   or   date   of   grant   of   licence,
whichever  is earlier, establish  a forum for redressal of
grievances   of   the   consumers   in   accordance   with   the
guidelines as may be specified by the State Commission.
(6)  Any consumer, who is aggrieved by non­redressal of
his   grievances   under   sub­sec.   (5),   may   make   a
representation   for   the   redressal   of   his   grievance   to   an
authority to be known as Ombudsman to be appointed or
designated by the State Commission.
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(7)  The Ombudsman shall settle the grievance of the
consumer within such time and in such manner as may be
specified by the State Commission.
(8)  The provisions of sub­sections (5), (6) and (7) shall
be without prejudice to right which the consumer may
have apart from the rights, conferred upon him by those
subsections.”
58. A   perusal   of   the   sub­sections   of   Section   42   and
which would have to be read harmoniously and together reveals
that there is a duty cast on the distribution licensee to develop
and   maintain   an   efficient   coordinated   and   economical
distribution system in the area of supply and to supply electricity
in accordance with the provisions contained in the Act. Then
there is an obligation to introduce open access in phase­wise
manner and that is an obligation on the State Commission. By
sub­section (3) of Section 42, it is clear that any person whose
premises are situated within the area of supply of a distribution
licensee, and such person not being a local authority engaged in
the business of distribution of electricity before the appointed
date, requires a supply of electricity from a generating company
or any licensee other than such distribution licensee, then, such
a   person   has   a   discretion   to   issue   notice   requiring   the
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distribution licensee for wheeling such electricity in accordance
with regulations made by the State Commission and the duties
of the distribution licensee with respect to such supply shall be
of a common carrier providing non­discriminatory open access.
Then,   there   is   not   only   a   charge   of   wheeling   but   also   an
additional surcharge and which can be specified by the State
Commission. This is to meet the fixed cost of such distribution
licensee arising out of his obligation to supply.
59. Then comes Section 43 which reads as under:­
“43. Duty to supply on request.­  (1) Save as otherwise
Provided in this Act, every distribution licensee, shall, on
an application by the owner or occupier of any premises,
give   supply   of   electricity   to   such   premises,   within   one
month   after   receipt   of   the   application   requiring   such
supply:
Provided that where such supply requires extension
of   distribution   mains,   or   commissioning   of   new   sub­
stations,   the   distribution   licensee   shall   supply   the
electricity   to   such   premises   immediately   after   such
extension or commissioning or within such period as may
be specified by the Appropriate Commission:
Provided further that in case of a village or hamlet
or area wherein no provision for supply of electricity exists,
the Appropriate Commission may extend the said period as
it may consider necessary for electrification of such village
or hamlet or area.
Explanation.­   For the purposes of this sub­section,
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"application"   means   the   application   complete   in   all
respects   in   the   appropriate   form,   as   required   by   the
distribution   licensee,   along   with   documents   showing
payment of necessary charges and other compliances.
(2)  It shall be the duty of every distribution licensee to
provide, if required, electric plant or electric line for giving
electric supply to the premises specified in sub­section (1):
Provided that no person shall be entitled to demand,
or   to   continue   to   receive,   from   a   licensee   a   supply   of
electricity for any premises having a separate supply unless
he has agreed with the licensee to pay to him such price
determined by the Appropriate Commission.
(3)  If a distribution licensee fails to supply the electricity
within a period specified in sub­section (1), he shall be
liable to a penalty which may extend to one thousand
rupees for each day of default.”  
  
60. A bare perusal of this Section would indicate as to
how there is a duty to supply on request and that is of the
distribution   licensee.   The   failure   to  fulfil   this   duty   invites  a
penalty in terms of sub­section (3) of Section 43. It is only when
the distribution licensee is prevented from supplying electricity
to any premises by natural causes, then, the distribution licensee
is relieved of this duty. Then follows other important provisions
– Sections 45, 46, 47 and 48.
61. A   combined   reading   of   these   provisions   would
indicate as to how there is a power conferred on the distribution
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licensee to recover the price for supply of electricity, and there is
a power to recover expenditure and power to require security to
be furnished. Each of these provisions follow Section 43 and that
is to discharge  the duty to supply electricity on request. By
Section 48 there is a discretion in the distribution licensee who
may require a person desiring supply of electricity to accept
additional terms of supply. There is other business which the
distribution licensee can carry on in order to achieve optimum
utilisation of its assets. Then, there are certain provisions with
respect to electricity traders and we are not concerned with the
same. Section 53 sets out provisions with respect to supply and
these are general provisions. The control of transmission and use
of   electricity   is   with   the   Central   Transmission   Utility.   The
provision relating to safety and electricity supply enable  the
Authority to act in consultation with the State Government so as
to specify suitable measures relating to safety and electricity
supply. Section 55 is preceding Section 56 and by this section
installation of a correct meter in accordance with the regulations
is   possible.   That   is   for   proper   accounting   and   audit   in   the
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generation, transmission and distribution or trading of electricity
and therefore it is possible even for a generating company to
install meters. A default invites action in terms of sub­section (3)
of Section 55. It is thereafter that Section 56 follows and which
we have reproduced above.
62. By Section 57, standards of performance of licensee
are to be specified by the Appropriate Commission and there is
an information with respect to levels of performance which shall
be   provided   by   the   licensee   to   the   Appropriate   Commission
within   the   time   period   specified   by   the   Commission.   Even
market domination is a malady which is sought to be remedied
in terms of Section 60. Part­VII is titled as “Tariff” and the
Appropriate Commission shall, subject to the provisions of this
Act, specify the terms and conditions for the determination of
tariff, and in doing so, it is guided by the principles set out in
Section 61, Clauses (a) to (i). Section 62 is important for our
purpose and reads as under:­
“62.   Determination   of   tariff.­   (1)  The   Appropriate
Commission shall determine the tariff in accordance with
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the provisions of this Act for­
(a)  supply of electricity by a generating company to a
distribution licensee:
Provided   that  the   Appropriate   Commission
may, in case of shortage of supply of electricity, fix
the minimum and maximum ceiling of tariff for sale
or   purchase   of   electricity   in   pursuance   of   an
agreement,   entered   into   between   a   generating
company and a licensee or between licensees, for a
period not exceeding one year to ensure reasonable
prices of electricity;
(b)  transmission of electricity;
(c)  wheeling of electricity;
(d)  retail sale of electricity:
Provided that in case of distribution of electricity in
the same area by two or more distribution licensees, the
Appropriate   Commission   may,   for   the   promoting
competition   among   distribution   licensees,   fix   only
maximum ceiling of tariff for retail sale of electricity.
(2)  The Appropriate Commission may require a licensee
or a generating company to furnish separate details, as
may be specified in respect of generation, transmission and
distribution for determination of tariff.
(3)  The   Appropriate   Commission   shall   not,   while
determining   the   tariff   under   this   Act,   show   undue
preference   to   any   consumer   of   electricity   but   may
differentiate   according   to   the   consumer's   load   factor,
power   factor,   voltage,   total   consumption   of   electricity
during any specified period or the time at which the supply
is required or the geographical position of any area, the
nature of supply and the purpose for which the supply is
required.
(4)  No tariff or part of any tariff may ordinarily be
amended, more frequently than once in any financial year,
except in respect of any changes expressly permitted under
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the   terms   of   any   fuel   surcharge   formula   as   may   be
specified.
(5)  The   Commission   may   require   a   licensee   or   a
generating  company  to  comply with  such procedure   as
may be specified for calculating the expected revenues from
the   tariff   and   charges   which   he   or   it   is   permitted   to
recover.
(6)  If any licensee or a generating company recovers a
price or charge exceeding the tariff determined under this
section,   the   excess   amount   shall   be   recoverable   by   the
person   who   has  paid   such  price   or  charge   along  with
interest equivalent to the bank rate without prejudice to
any other liability incurred by the licensee.”
63. Thus   there   is   a   scientific   method   adopted   for
determination of tariff, and by the Parts following Part­VII it is
the Authorities set up under the Act, including the Tribunal, who
have to monitor the discharge of duties by the functionaries
under the statute. The Authorities and the Tribunal ensure that
these duties are discharged in such a manner so as to achieve
the object and purpose of the enactment. The other Parts are but
aiding and assisting all concerned to work the enactment itself. 
64. Section 56 would require a closer look but before we
do that, we must deal with one argument of Mr. Nevagi. Mr.
Nevagi relied upon Part XIV of the Act, titled as “Offences And
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Penalties”, and particularly the section pertaining to theft of
electricity. His emphasis was that Section 56 is confined to one
issue, namely, wrong classification of the consumer. We do not
think that the argument is sound for the simple reason that by
Part­XII,   titled   as   “Investigation   And   Enforcement”,   the   law
permits an assessment to be made of the charges payable by the
person or any other person benefited by use of electricity. Thus
if on an inspection of any place or premises or after inspection of
the equipments, gadgets, machines, etc., found connected or
used, or after inspection of records maintained by any person,
the Assessing Officer comes to the conclusion that such person is
indulging   in   unauthorised   use   of   electricity,   then   he   can
provisionally assess to the best of his judgment the electricity
charges   payable   and   such   a   provisional   assessment   can   be
finalised on compliance with the principles of natural justice
which are inbuilt in the sub­sections of Section 126. There is a
remedy of an appeal to the Appellate Authority in the event the
person is aggrieved by the final order made under Section 126.
There   is   a   power   to   secure   compliance   of   the   terms   and
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conditions   based   on   which   the   licence   is   obtained   by   the
licensee. However, the powers of investigation and enforcement
conferred by Part­XII are distinct than those provisions which set
out the offences and penalties, that is to take care of theft of
electricity. There is a theft of electricity contemplated and which
is taken care of by Section 135 whereas theft of electric lines and
materials is taken care of by Section 136. These are thus penal
provisions   which   ensure   that   there   is   no   obstruction   or
hindrance to supply of electricity nor such supply can be abused
or   misused.   In   that   event,   the   provisions   referred   by   us
hereinabove enable taking penal action.
65. Section   56   deals  with  disconnection   of  supply   in
default of payment. Now, where the 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, then the power to disconnect is conferred and
which power has to be exercised in the manner set out by sub­
section (1). This indeed is a drastic power and that can be
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resorted to only to take care of a neglect to pay the charge. If
there   is   neglect,   then,   naturally   in   a   consolidating   statute
enough provision has to be made to ensure that the charges are
paid regularly. Electricity is a material resource and belongs to
the public. It is very difficult for the State to ensure regular
electricity supply to those who require the same regularly. In
fact, equal distribution of material resources so as to achieve
common good is the constitutional goal. That is enshrined in
Article 39(b) and (c) of the Constitution of India. Thus material
resources   have   to  be   evenly   distributed   and   merely   because
those who cannot afford to pay for these resources, the State, by
stepping in, has to ensure that they are not deprived of the use
and enjoyment of the same. For ensuring that the constitutional
goal is truly fulfilled that the Authorities have been conferred
with   such   powers.   That   would   ensure   maintenance   of
compliance, in the sense that the electricity supply would be
assured on payment of charges and regularly. Those who neglect
to pay the charge cannot as a matter of right claim the supply of
electricity to their premises or establishments. By continuing to
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supply electricity to such defaulters, the Authorities would not
be   in   a   position   to   ensure   continuity   in   the   said   supply.
Eventually,   breaks   and   interruptions   in   supply   or   lack   of
regularity of supply affects the public at large. It is in public
interest and for public good that defaulters are to be deprived of
the   supply   of   electricity.   To   enable   that,   this   distinct   and
separate power is conferred in the licensee or the generating
company.   The   first   limb   of   the   section   [sub­section   (1)]   is
expansive and covers charges for supply of electricity or any
other   sum.   The   reason   for   that   is   obvious   and  namely,   the
neglect to pay any charge for electricity or any sum other than a
charge for electricity which may be due from any person to a
licensee or the generating company. This may be due in respect
of supply, transmission or  distribution or wheeling of electricity
to him. It is bearing in mind the various facets of the services
rendered that the charge or any sum other than a charge for
electricity may be due. To enable the disconnection of supply in
default of payment, that the power in terms of sub­section (1) is
conferred. Pertinently, it is without prejudice to the rights to
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recover such charge or other sum by Suit. Further, it is not only
the supply of electricity but for that purpose disconnection or
cutting   electric   supply   line   or   other   works   which   are   the
property  of the  licensee or the generating  company through
which   the   electricity   may   have   been   supplied,   transmitted,
distributed or wheeled, that the power has been conferred. The
discontinuation   will   go   on   until   such   charge   or   other   sum
together   with   any   expenses   incurred   in   cutting   off   or   re­
connecting the supply are paid but no longer.  Thus this is not a
permanent disconnection in that sense. It is possible to obtain a
reconnection after payment. Further, the proviso says and in
clearest terms that the supply of electricity shall not be cut­off if
such person deposits, under protest, the  amount or the charges
in terms of Clause (a) or (b) of the proviso. The word  ' neglect '
having been employed in the section, that connotes something
which is not legally supportable. The word neglect has been
legally interpreted to mean something more than mere want of
the discretion. Something like the breach of a duty or legal
obligation existing at the time. In Advanced Law Lexicon by P.
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Ramanatha  Aiyar,   3rd  Edition,   Volume­3,   Reprint  2007,  this
expression/word is defined with reference to decided cases as an
omission to pay without a reasonable cause. Hence, the proviso
clarifies that when there is a dispute between the parties, then, a
bona fide  dispute comprehends no neglect to pay. If sub­section
(1) is read in this manner, it presents no difficulty and a balance
can be struck. If there is a neglect to pay, then the consequences
may   be   visited.   These   consequences   can   be   visited   if   the
conferment of power to disconnect is exercised in terms of sub­
section   (1)   and  not   otherwise.   There   has  to  be   a  notice   in
writing of fifteen clear days and then only the cutting off or
disconnection is possible. Besides this, the foundation for such
an exercise of power is neglect to pay. So long as there is no
neglect but a   bona fide   dispute is raised, and if the notice of
disconnection   is   issued,   then,   by   the   proviso   opportunity   or
chance is given to bring in the sum and deposit it under protest
pending disposal of the dispute. If such a deposit is made, even
if it is under protest, the supply of electricity cannot be cut­off.
66. By sub­section (2), the category or the beneficiary of
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electric supply, namely, the consumer, is covered. As far as that
consumer is concerned, by an overriding effect, sub­section (2)
says that Section 56, which may have a marginal heading as
disconnection of supply in default of payment, but so far as the
consumer is concerned, no sum due from him under Section 56
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  arrears  of  charges for
electricity supplied. If this condition is satisfied, then alone the
licensee shall cut­off the supply of electricity and not otherwise.
Now the issue raised before us is very specific. We do not think
that there is any difficulty or confusion in understanding the
ambit and scope of the section. Sub­section (2), which is not in
the nature of a proviso, as contended by the learned Advocate
General, but is an independent provision which applies only to
consumers. All the words and expressions that are employed and
used   in   the   section   in   hand   have   been   defined.   Unless   the
context otherwise requires, the definition is as set out in Section
2 and its clauses. In the case of sub­section (2) of Section 56, it
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is the consumer to whom the electricity is supplied. He cannot
be vexed in the event the licensee is negligent in recovering the
amount due. The licensee can recover the amount due from the
consumer only for a period of two years when such sum became
first due. In the event, after two years the licensee wants to
recover the amount, then it is the obligation and duty of the
licensee   as   well   to   show   the   sum   due   from   the   consumer
continuously   as   recoverable   as   arrears   of     charges   for   the
electricity supplied to the consumer. The supply may be already
effected   and   the   charges   may   be   unpaid.   However,   in   the
running/monthly bills which are despatched to the consumer,
such sum has to be continuously shown as recoverable as arrears
of charges of electricity and then alone, after the period of two
years,   the   recovery   is   permissible.   The   precondition   for
disconnection   of   electricity   in   the   case   of   any   consumer   is
distinctly set out. In addition to a fifteen days' clear notice in
writing before disconnection, the licensee must also satisfy the
Court or the Legal Forum that there was not only a neglect to
pay on the part of the consumer but additionally the licensee has
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initiated the steps in terms of this provision before the expiry of
two years. In case this section is invoked against any consumer
after two years, then, action in terms thereof will be permissible
only   after   the   sum   which   was   first   due   has   been   shown
continuously or carried as recoverable as arrears of charges for
the electricity supplied. This is ordinarily done by intimating or
notifying to the consumer, in the running or monthly bills, such
arrears together with the charges for the electricity supplied in
the given month.
67. So understood, we do not see any difficulty or any
conflict and if the action is challenged in a Court of law, that
Court will have to decide the issue on a case­to­case basis. The
fulfilment of condition as set out in the sub­sections will be an
issue to be decided on the basis of the facts and circumstances
in each case. No general rule can be laid down. In terms of the
specific conditions of the provision, the fulfilment thereof, in a
given case, can be determined, decided and adjudicated upon.
If   the   action   is   challenged   on   the   ground   that   the
preconditions are not satisfied, then as well, a decision will
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depend   on   the   facts   and   circumstances   of   each   case.   There
cannot   be   any   conflict   or   confusion   once   the   matter   is
approached in this manner.
68. However, the Learned Single Judge in the referring
order opined that there is a conflict between the two Division
Bench Judgments of this Court. Hence the reference.
69. For   that   purpose,   we   will   closely   scrutinize   both
Judgments.
70. In the first Judgment from which the Learned Judge
found the latter view to be departed from was delivered in the
case of  Awadesh S. Pandey v. Tata Power Co. Ltd. & Others ,
reported in AIR 2007 Bombay 52. There the facts were peculiar.
The Division Bench had a writ petition before it of Awadesh
Pandey.   He   applied   for   electric   connection   from   Tata
Power/respondent No.1. The respondent No.1 commissioned a
meter on Awadesh Pandey's premises on 3­1­2003 for a certain
load. The said Pandey started using electricity since 30­8­2003.
The   bills   for   the   period   30­8­2003   to   30­10­2003,   as   also
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subsequent bills till November, 2005 were sent to the petitioner­
Pandey   indicating   multiplying   factor   of   one.   Tata   Power,
sometime   in   November,   2003   or   thereabout,   conducted   an
energy audit during the course of which Tata Power found that
the petitioner was billed by applying incorrect multiplying factor
since   beginning.   The   correct   multiplying   factor   being   40.   A
supplementary   bill   was   raised   in   January,   2006   for
Rs.12,33,328/­.
71. This bill was contested by filing a complaint before
the Consumer Redressal Forum on 6­3­2006. On 25­3­2006 and
as the petitioner had not paid the electricity dues in terms of the
bill, Tata Power issued notice of disconnection but withdrew it.
On 5­5­2006 the Consumer Redressal Forum passed an order
against   Mr.   Pandey,   the   petitioner   before   this   Court.   The
petitioner/Mr. Pandey preferred an appeal before the Electricity
Ombudsman.   He   partly   allowed   the   appeal   and   directed   to
recover the amended dues under Section 56(2) of the Electricity
Act, 2003. Tata Power on 24­7­2006 made a demand for the
sum   of   Rs.11,48,844/­   and   on   that   day   itself   a   notice   of
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disconnection was issued demanding arrears of Rs.13,17,141.13
paisa.   There   was   no   relief   given   to   the   petitioner   though
correspondence continued. The petitioner filed Writ Petition [L]
No.1866 of 2004 challenging the notice of disconnection. In the
meantime,   on   16­8­2006   Tata   Power   amended   the   earlier
demand/bill as that was not in conformity with the order of the
Electricity Ombudsman. Since the petition became infructuous,
liberty   was   granted   to   withdraw   with   liberty   to   file   fresh
petition. The petitioner once again by letter dated 30­8­2006
called upon Tata Power and respondent No.2 to withdraw the
claim.   Since   the   petitioner   received   a   third   notice   of
disconnection   issued   by   respondent   No.1/Tata   Power   on
4­9­2006, that the fresh writ petition came to be filed.
72. In  paragraphs 4,  5,  6  & 7  of  the  Judgment, the
Division Bench held as under:­
“4.  At the hearing of this petition, the learned Counsel
for the petitioner has submitted as under: 
(i)  Whether   Electricity   Ombudsman   can   pass   order
retrospectively   covering   a   period   from   December,
2003   when   the   Electricity   Ombudsman   is
established in the month of December, 2004?
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(ii)  Whether the Electricity Ombudsman has jurisdiction
to   pass   impugned   order   dated   18th   July,   2006
allowing back billing for 23 months by amending
bills   and   the   regulation   system   of   MERC
Regulations, 2006 or part of the disputes have been
referred to MERC?
5.  For the purpose of considering the controversy what
is   relevant   are   the   provisions   of   Section   56   of   the
Electricity Act which we are gainfully reproducing for the
purpose of deciding the issues that have been raised by the
petitioner herein.
[Reproduction of the Section is omitted]
6.  Insofar   as   first   issue   is   concerned,   the   power   to
recover   is   under   Section   56   of   the   Act.   A   temporary
absence or non­appointment of an Electricity Ombudsman
cannot defeat the right which otherwise can be claimed by
respondent No. 1. Once there be a power and assuming
that   vacancy   of   Electricity   Ombudsman   or   Electricity
Ombudsman itself has been appointed in December, 2004,
would not mean that the authority having jurisdiction is
precluded or prohibited from effecting recoveries for the
period   prior   to   its   appointment.   The   recovery   will,
however, be subject to the bar of limitation as contained in
Section 56. The Electricity Ombudsman therefore would
while exercising jurisdiction, issue an order even in respect
of dues which have become due and payable before the
establishment   of   the  post   of   Electricity   Ombudsman   in
December,   2004.   The   first   issue,   therefore,   has   to   be
rejected.
7.  We then come to the next issue as to whether the
demand   made   by   respondent   No.1   is   contrary   to   the
provision of Section 56 of the Electricity Act. We have
already narrated the facts. The Electricity Ombudsman by
his order of 18th July, 2006 held that the respondent No.
1 is entitled to recover past dues by correcting multiplying
factor. The question posed by the Electricity Ombudsman
to itself was whether the recovery could be made for the
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entire period of 26 months i.e. for a period from October,
2003   to   November,   2005   and   that   too   belatedly   in
January, 2006. After considering the various provisions
including   the   regulations,   the   Ombudsman   held,   only
those charges for a period of two years previous to the
demand could be recovered and that the arrears for the
consumption   in   January,   2004   became   first   due   in
February, 2004 as supplementary bill was raised in 2006
and   these   dues   having   been   within   two   years   are
recoverable under the provisions of   Section 56(2)   of the
Electricity Act.
Submission   of   counsel   for   the   petitioner   is   that   the
provisions of  Section 56  do not empower respondent No.1
to recover  any  amount  if the period  of two years has
elapsed   no   can   electricity   supply   be   cut   off   for   non­
payment of those dues. In other words what is sought to be
contended is that if the demand or part of the demand is
time barred the provisions of   Section 56   would not be
attracted.   We   are   afraid,   we   cannot   subscribe   to   that
proposition.  Section 56(1)  is a special provision, enabling
the generating company or the licensee to cut­off supply of
electricity until such charges or sum as demanded under
Section 56(1)  is paid. Relying on sub­section (2), it was
strenuously urged that  Section 56(1)  cannot be resorted to
after the period of two years from the date when such
demand became first due. In our opinion, sub­section (2)
only provides a limitation, that the recourse to recovery by
cutting of electricity supply is limited for a period of two
years from the date when such sum became due. As long a
sum is due, which is within two years of the demand and
can be recovered, the licensee or the generating company
can exercise its power of coercive process of recovery by
cutting­of electricity supply. This is a special mechanism
provided to enable the licensee or the generating company
to recover its dues expeditiously.   The Electricity Act   has
provided that mechanism for improvement of supply of
electricity   and   to   enable   the   licensee   or   generating
company   to   recover   its   dues.   Apart   from   the   above
mechanism, independently it can make recovery by way of
a   suit.   In   our   opinion,   therefore,   the   impugned   order
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passed by the Electricity Ombudsman does not suffer from
any   error   apparent   on   the   face   of   the   record   and
consequently there is no merit in this petition.”
On the first issue the Court was against the petitioner.
73. As far as the second issue is concerned, the Division
Bench opined that the arrears for the consumption in January,
2004 became first due in February, 2004 as the supplementary
bill was raised in 2006 and the dues being within two years are
recoverable under Section 56(2) of The Electricity Act, 2003.
There the question of giving relief by the Writ Court to the
petitioner did not arise. The Electricity Ombudsman himself had
given substantial relief. He did not allow Tata Power to recover
anything beyond what is prescribed by sub­section (2) of Section
56 of the Act. Meaning thereby, the dues for the entire period of
26 months were not allowed to be recovered. However, it is the
latter part which presents a difficulty, according to the referring
order, in understanding the legal provision. 
74. The conflict that was noticed in the referring order is
that, in another Judgment of a Division Bench of this Court
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which is reported in 2010 (4) BCR 456  [M/s. Rototex Polyester
& Anr. v. Administrator, Administration of Dadra & Nagar
Haveli (U.T.) Electricity Department, Silvassa & Others] , the
Division Bench there was approached in a writ petition by a
proprietary   concern   carrying   on   business   at   Dadra   &   Nagar
Haveli (U.T.).    The Electricity Department, Silvassa had served a
demand notice and informed the petitioners that the CT ratio of
their metering installation was changed vide office report dated
11­7­2003. That is why the multiplication factor was changed
with effect from 11­7­2003. This demand notice of 3­10­2007
stated that, by oversight the Department issued bills for the
period July, 2003 to July, 2007 with an incorrect multiplication
factor. Hence all the bills for this period are revised by applying
the correct multiplication factor. The detailed statement of the
revised   bills   was   enclosed   to   the   demand   notice.   The   total
amount   of   the   revised   bills   was   Rs.2,60,17,001/­.   Thus   the
revised   bills   for   the   period   July,   2003   to   July,   2007   were
directed to be cleared within fifteen days of the receipt of that
demand notice. On 12­11­2007, the petitioners replied to this
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notice   and   stated   that   they   received   the   energy   bill   dated
11­1­2008 and that was inclusive of arrears for the period July,
2003 to July, 2007 for a total amount of Rs.2,77,34,867.43.
That is how the first writ petition was filed but the Division
Bench of this Court disposed it of by saying that this revised bill
can be challenged  by way of an appeal. Pursuant to that liberty
granted   by   the   Division   Bench,   the   petitioners   preferred
Electricity Appeal No.11 of 2008 and that was dismissed on
12­9­2008 by a reasoned order. Hence the writ petition.
75. The Division Bench noted the controversy in paras 7
and 8 and in paras 9, 10, 11 to 18 observed as under:­  
            
“7.  Learned   counsel   for   the   petitioners   urged   that
assuming that the said amount is due from the petitioners,
the said amount first time became due in July, 2003, but
the claim for July, 2003 to July, 2007 is raised only on
3/10/2007  and,  therefore,  under   Section   56(2)   of the
Electricity Act, 2003, the claim raised by the respondents is
time barred. He submitted that therefore the revised bill is
liable to be quashed and set aside. 
8.  As against this, learned counsel for the respondents
drew our attention  to the judgments  of learned  Single
Judge of this court in   U.A. Thadani & Anr. v. B.E.S.T .
Undertaking   &  Anr., 2000  Vol.102(2)  Bom.L.R.  502  :
[2000 (2) All MR 266] and in Brihanmumbai Municipal
Corporation v. Yatish Sharma & Ors., 2007 (3) Bom.C.R.
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659 : [2007 (4) All MR 509] and submitted that the
present case is squarely covered by the said judgments. He
submitted that inasmuch as there is wrong billing due to
clerical mistake, limitation period of two years does not
apply to this case.
 
9.  Section 56  of the Electricity Act, 2003 provides for
disconnection  of supply in default of payment.  We are
concerned in this case with  Section 56(2)  and hence, it is
necessary to quote it.
[Reproduction of the Section is omitted] 
10.  Sub­section (2) of  Section 56  provides for limitation
of two years. It introduces the concept of "the date when
such sum becomes first due". In short, a sum which is due
can be recovered within a period of two years from the
date it became first due and not thereafter. The only sum
which   is   left   out   of   this   is   the   sum   which   is   shown
continuously   as   recoverable   as   arrears   of   charges   of
electricity.
11.  Section 26  of the Indian Electricity Act, 1910 deals
with meters. Sub­section (6) thereof is material. It reads
thus: 
"26. Meters :­ 
                      (1)    xxx        xxx      xxx
                      (2)    xxx        xxx      xxx
                      (3)    xxx        xxx      xxx
                      (4)    xxx        xxx      xxx
                      (5)    xxx        xxx      xxx
(6) Where any difference or dispute arises as to
whether any meter referred to in sub­section (1) is
or is not correct, the matter shall be decided, upon
the  application  of   either   party,   by   an   Electrical
Inspector; and where the meter has, in the opinion
of   such   Inspector   ceased   to   be   correct,   such
Inspector shall estimate the amount of the energy
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supplied to the consumer or the electrical quantity
contained   in   the   supply,   during   such   time,   not
exceeding six months, as the meter shall not, in the
opinion of such Inspector, have been correct; but
save as aforesaid, the register of the meter shall, in
the absence of fraud, be conclusive proof of such
amount or quantity: 
Provided that before either a licensee or a consumer
applies to the Electrical Inspector under this sub­
section, he shall give to the other party not less
than seven days' notice of his intention so to do." 
12.  In Bharat Barrel & Drum Manufacturing Company
Private Limited v. The Municipal Corporation  for Greater
Bombay, AIR 1978 Bom. 369, a Division Bench of this
court was concerned with a situation where additional
amounts for eleven years period were claimed from the
consumer on the basis of failure to multiply the reading by
2 (two) and not on the basis of faulty meter. The question
was whether the licensee had to restrict its claim to six
months. The Division Bench observed that under   Section
26  of the Indian Electricity Act, 1910 restriction as to six
months does not seem to apply to a claim made by the
licensee on the ground that there was a failure to multiply
the reading by the changed multiplication factor.
 
13.  In U.A. Thadani's case (supra), learned Single Judge
of this court was concerned with similar fact situation.
Two   bills   were   raised   on   the   consumer   demanding
additional   amounts   because   multiplying   factor   was
wrongly charged. It was argued by the consumer on the
basis of sub­section (6) of   Section 26   that the Electrical
Inspector   could   determine   the   quantum   of   electricity
consumed during the statutory period of six months and
for the period anterior to it the reading registered in the
disputed meter will have to be presumed to be correct.
Relying on the judgment of this court in Bharat Barrel,
learned Single Judge held that the restriction as to six
months' period provided in  Section 26  has no application
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to a demand made by the licensee or the Electricity Board
for the unpaid amount for the electricity consumed if the
consumer   was   under­billed   due   to   clerical   mistakes   or
human error or such like mistakes. 
 
14.  The principle which can be deduced from the above
judgments is that in case the consumer is under­billed on
account of clerical mistake such as the present case, where
the multiplication factor had changed from 500 to 1000,
but due to oversight, the department issued bills with 500
as   multiplication   factor   instead   of   1000,   the   bar   of
limitation   cannot   be   raised   by   the   consumer.   Though
Section 26(6)  of the Indian Electricity Act, 1910 is not in
pari materia  with   Section  56(2)   of the Electricity  Act,
2003, in our opinion, the present case would be governed
by the above principle and, hence, the challenge raised by
the petitioners must fail.
15.  The question raised in this petition can be examined
from   yet   another   angle   keeping   Section   56(2)   of   the
Electricity Act, 2003 with which we are concerned here in
the forefront.
16.  In Yatish Sharma's case tariff was changed from
GP1 to GP2. Between 19/1/2000 and 27/5/2000, the
readings   of   the   electronic   meter   were   not   taken.   A
supplementary   bill   was   raised   by   the   petitioner
Corporation therein on the basis of the average monthly
consumption.   By   the   supplementary   bill,   a   demand   of
Rs.78,187.17 was raised on the consumer and debited to
the amount of the bill for the month of April, 2004. The
consumer   raised   a   grievance   before   the   Consumer
Grievance Redressal Forum. The matter ultimately reached
the Ombudsman. He held that the supplementary bill was
raised after a period of four years from the date when it
became   first   due   and,   hence,   the   amount   was   not
recoverable   under   Section   56(2)   of   the   Electricity   Act,
2003.   The   Ombudsman's   order   was   challenged   in   this
court.
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17.  The issue which arose before learned Single Judge
was what interpretation should be placed on the words
"when   such   sum   becomes   first   due".   The   question   was
whether the Ombudsman's view that since the arrears for
consumption became due immediately upon the usage of
energy, the supplementary bill raised in August, 2004 for
the disputed period between January, 2000 to May, 2000
was barred under  Section 56(2) .
18.  While dealing with this submission, learned Single
Judge referred to Delhi High Court's judgment in H.D.
Shourie v. Municipal Corporation of Delhi, AIR 1987 Delhi
219,   where   the   Delhi   High   Court   was   considering   the
expression "due" appearing in  Section 24  of the Electricity
Act, 2003. The Delhi High Court observed that if the word
"due" is to mean consumption of electricity, it would mean
that electricity charges would become due and payable the
moment electricity is consumed and if charges in respect
thereof are not paid then even without a bill being issued,
a notice of disconnection would be liable to be issued under
Section 24 , which could not have been the intention of the
legislature. The Delhi High Court observed that the word
"due" in this context would mean due and payable after a
valid bill has been sent to the consumer. Learned Single
Judge followed this view and set aside the Ombudsman's
order   which   had   taken   a   contrary   view.   We   are   in
respectful agreement with learned Single Judge. In this
case, the demand notice with revised bill dated 3/10/2007
was,   according   to   the   petitioners,   served   on   them   on
9/11/2007.   Therefore,   the   revised   bill   amount   first
became due on 9/11/2007. Hence,   Section 56(2)   of the
Electricity Act 2003 would not come in the way of the
respondents from recovering the said amount under the
revised   bills.   The   impugned   order   dated   12/9/2008
warrants no interference.”
76. In our opinion, in the latter Division Bench Judgment
the issue was somewhat different. There the question arose as to
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what meaning has to be given to the expression “when such sum
became first due” appearing in sub­section (2) of Section 56.
77. There, the Division Bench held and agreed with the
Learned Single Judge of this Court that the sum became due and
payable after a valid bill has been sent to the consumer. It does not
become due otherwise. Once again and with great respect, the
understanding of the Division Bench and the Learned Single Judge
with whose Judgment the Division Bench concurred in    Rototex
Polyester   (supra) is that the electricity supply is continued. The
recording of the supply is on an apparatus or a machine known in
other words as an electricity meter. After that recording is noted
that the electricity supply company/distribution company raises a
bill. That bill seeks to recover the charges for the month to month
supply based on the meter reading. For example, for the month of
December, 2018, on the basis of the meter reading, a bill would be
raised in the month of January, 2019. That bill would be served on
the consumer giving him some time to pay the sum claimed as
charges for electricity supplied for the month of December, 2018.
Thus, when the bill is raised and it is served, it is from the date of
the service that the period for payment stipulated in the bill would
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commence. Thus, within the outer limit the amount under the bill
has to be paid else this amount can be carried forward in the bill
for the subsequent month as arrears and included in the sum due
or recoverable under the bill for the subsequent month. Naturally,
the bill would also include the amount for that particular month
and payable towards the charges for the electricity supplied or
continued to be supplied in that month. It is when the bill is
received that the amount becomes first due. We do not see how,
therefore,   there   was   any   conflict   for   Awadesh   Pandey's   case
(supra) was a simple case of threat of disconnection of electricity
supply for default in payment of the electricity charges. That was a
notice of disconnection under which the payment of arrears was
raised. It was that notice of disconnection setting out the demand
which   was   under   challenge   in   Awadesh   Pandey's   case.   That
demand was raised on the basis of the order of the Electricity
Ombudsman. Once the Division Bench found that the challenge to
the Electricity Ombudsman's order is not raised, by taking into
account the subsequent relief granted by it to Awadesh Pandey,
there was no other course left before the Division Bench but to
dismiss Awadesh Pandey's writ petition. The reason for that was
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obvious because the demand was re­worked on the basis of the
order of the Electricity Ombudsman. That partially allowed the
appeal of Awadesh Pandey. Once the facts in Awadesh Pandey's
case were clear and there the demand was within the period of
two years, that the writ petition came to be dismissed. In fact,
when such amount became first due, was never the controversy. In
Awadesh   Pandey's   case,   on   facts,   it   was   found   that   after   re­
working of the demand and curtailing it to the period of two years
preceding   the   supplementary   bill   raised   in   2006,   that   the   bar
carved   out   by   sub­section   (2)   of   Section   56   was   held   to   be
inapplicable.   Hence   there,   with   greatest   respect,   there   is   no
conflict found between the two Division Bench Judgments.
78. Assuming that it was and as noted by the Learned
Single  Judge  in  the  referring order,   still,   as  we  have  clarified
above, eventually this is an issue which has to be determined on
the facts and circumstances of each case. The legal provision is
clear   and   its   applicability   would   depend   upon   the   facts   and
circumstances of a given case. With respect, therefore, there was
no need for a reference. The para 7 of the Division Bench's order in
Awadesh Pandey's case and paras 14 and 17 of the latter Judgment
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in  Rototex Polyester's case should not be read in isolation. Both
the Judgments would have to be read as a whole. Ultimately,
Judgments   are   not   be   read   like   statutes.   The   Judgments   only
interpret statutes, for statutes are already in place. Judges do not
make law but interpret the law as it stands and enacted by the
Parliament. Hence, if the Judgments of the two Division Benches
are read in their entirety as a whole and in the backdrop of the
factual position, then, there is no difficulty in the sense that the
legal provision would be applied and the action justified or struck
down only with reference to the facts unfolded before the Court of
law. In the circumstances, what we have clarified in the foregoing
paragraphs would apply and assuming that from the Judgment in
Rototex   Polyester's   case   an   inference   is   possible   that   a
supplementary   bill   can   be   raised   after   any   number   of   years,
without specifying the period of arrears and the details of the
amount claimed and no bar or period of limitation can be read,
though provided by sub­section (2) of Section 56, our view as
unfolded   in  the  foregoing  paragraphs   would   be  the  applicable
interpretation of the legal provision in question. Unless and until
the preconditions set out in sub­section  (2) of Section 56 are
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satisfied, there is no question of the electricity supply being cut­off.
Further,   the   recovery   proceedings   may   be   initiated   seeking   to
recover amounts beyond a period of two years, but the section
itself imposing a condition that the amount sought to be recovered
as   arrears   must,   in   fact,   be   reflected   and   shown   in   the   bill
continuously as recoverable as arrears, the claim cannot succeed.
Even if supplementary bills are raised to correct the amounts by
applying accurate multiplying factor, still no recovery beyond two
years is permissible unless that sum has been shown continuously
as recoverable as arrears of charges for the electricity supplied
from the date when such sum became first due and payable.
79. As a result of the above discussion, the issues referred
for our opinion are answered as under:­
(A) The   issue   No.(i)   is   answered   in   the   negative.   The
Distribution   Licensee   cannot   demand   charges   for
consumption of electricity for a period of more than two
years preceding the date of the first demand of such charges.
(B) As regards issue No.(ii), in the light of the answer  to issue
No.(i)   above,   this   issue   will   also   have   to   be   answered
accordingly. In other words, the Distribution Licensee will
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have to raise a demand by issuing a bill and the bill may
include the amount for the period preceding more than two
years provided the condition set out in sub­section (2) of
Section 56 is satisfied. In the sense, the amount is carried
and shown as arrears in terms of that provision.
(C) The issue No.(iii) is answered in terms of our discussion in
paras 77 & 78 of this Judgment.
80. Though the Advocate General canvassed a submission
that sub­section (2) of Section 56 carves out a special period of
limitation and that would also govern a Suit which may be filed to
recover the amounts mentioned in sub­section (1) of Section 56,
but that issue having not been referred for our opinion in terms of
the referring order, we do not think any answer should be given to
the same. Hence, that issue is kept open for being urged in an
appropriate case.
81. In view of the above, the Registry to list the respective
writ   petitions   and   which   are   pending   for   disposal   before   the
appropriate Court and to be decided in the light of our answers as
above.
(SMT. BHARATI H. DANGRE, J.)        (A.M. BADAR, J.)         (S.C. DHARMADHIKARI, J.)
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