A licensee cannot recover retrospective differential electricity charges without proving continuous underbilling.

The appellant, proprietor of M/s Shriram Wires and a consumer of CSPDCL under Connection No. 1002108243 with a sanctioned load of 90 HP, challenged a supplementary electricity demand of ₹26,88,265.

A 200/5 Ampere Current Transformer was installed at the premises on 16 June 2008 and the meter was replaced on 13 April 2011.

During an inspection on 3 April 2017, CSPDCL alleged that the appellant’s consumption had been billed using a Multiplying Factor of 1 instead of 2, resulting in under-billing.

The Electricity Consumer Grievance Redressal Forum initially dealt with the dispute, and the Electricity Ombudsman, by order dated 18 February 2020, restricted recovery in view of Section 56(2) of the Electricity Act, 2003.

CSPDCL challenged that order in W.P.(C) No. 2291 of 2020.

The learned Single Judge allowed the writ petition on 3 July 2026, holding that Section 56(2) did not apply to the supplementary demand and permitting recovery for the entire period.

The appellant thereafter preferred the present intra-court appeal.

Whether the Distribution Licensee could retrospectively recover the differential electricity charges for nearly nine years merely because an incorrect Multiplying Factor was detected during the 2017 inspection, without establishing that the error existed throughout the entire period?

Whether the licensee’s failure to conduct the mandatory periodic testing of HT/EHT meters under Clause 8.18(c) of the Chhattisgarh Electricity Supply Code, 2011 affected its entitlement to recover the entire retrospective demand?

Whether the supplementary demand was protected as a “mistake or bona fide error” under the principles stated in Assistant Engineer (D1), Ajmer Vidyut Vitran Nigam Ltd. v. Rahamatullah Khan and Prem Cottex v. Uttar Haryana Bijli Vitran Nigam Ltd.?

Whether the finding that an irregularity existed on the date of inspection automatically established the appellant’s liability for the entire preceding period?

Section 56(2) of the Electricity Act, 2003 bars recovery of a sum due from a consumer after two years from the date on which it first became due and also restricts disconnection of supply, subject to the recognised exception of an additional or supplementary demand arising from a genuine mistake or bona fide error, as explained in Assistant Engineer (D1), Ajmer Vidyut Vitran Nigam Ltd. v. Rahamatullah Khan and Prem Cottex v. Uttar Haryana Bijli Vitran Nigam Ltd.

The exception does not confer an unrestricted right to recover every belated demand; the licensee must establish the factual basis and duration of the alleged error.

Clause 8.18(c) of the Chhattisgarh Electricity Supply Code, 2011 requires HT and EHT meters and associated metering equipment to be tested once every year.

A statutory duty of care may arise from such provisions, and negligence includes careless acts or omissions involving breach of a recognised duty, as discussed in M/s Bajaj Trading Company v. Union of India, relying on Rajkot Municipal Corporation v. Manjulben Jayantilal Nakum.

A finding of an irregularity on one date does not, without cogent supporting evidence, prove that the same irregularity continuously existed throughout an earlier period.

The Court held that the material question was not merely whether CSPDCL could issue a supplementary bill after detecting an incorrect Multiplying Factor, but whether it could attribute that error retrospectively to the entire period from 2008 to 2017.

The Multiplying Factor was part of the metering and billing system controlled by CSPDCL, and the inspection report did not disclose tampering, broken seals, dishonest abstraction, or physical interference by the appellant; it recorded that the meter and display were functioning properly.

CSPDCL also failed to produce annual testing records, calibration reports, programming details, inspection reports, or other technical material proving that the incorrect factor had operated continuously for nearly nine years.

Consequently, the learned Single Judge erred in treating the Forum’s finding of an irregularity as conclusive proof of liability for the entire period, because the existence of an irregularity on 3 April 2017 was distinct from proof of its continuous existence since 2008.

The Court further held that CSPDCL could not rely on its own failure to comply with the mandatory periodic-testing obligation to impose the entire financial consequence upon the consumer.

The principles in Rahamatullah Khan and Prem Cottex did not authorise automatic or indefinite retrospective recovery; even where a supplementary demand is described as arising from a mistake or bona fide error, the licensee must establish the relevant period and evidentiary foundation.

The judgment dated 3 July 2026 in W.P.(C) No. 2291 of 2020 was set aside, and the Electricity Ombudsman’s order dated 18 February 2020 was restored.

Any consequential demand raised by CSPDCL was directed to be governed by the Ombudsman’s order, which restricted the recoverable amount to the permissible period.

No order as to costs was made.