An unchallenged supplementary electricity bill attains finality and is recoverable through a civil suit.

The respondent–defendant owned land at Survey No. 51/1, Plot No. 1, opposite Shakkarbaugh, Junagadh.

During a surprise inspection on 20 April 2002, officers of the appellant electricity company allegedly found the defendant drawing electricity directly from an LT pole to operate a submersible pump and borewell without a lawful electricity connection.

A spot report, rojkam, and panchnama were prepared, and the seized meter was examined in the laboratory, where theft was allegedly confirmed.

The appellant issued a supplementary/non-consumer bill of ₹7,82,430.15 under Sections 34 and 35 and the applicable Conditions of Supply, calculated according to the ABCD formula.

The defendant did not challenge the bill before the departmental appellate authority and did not pay it despite notice.

The appellant therefore instituted Special Civil Suit No. 125 of 2004 for recovery.

The trial court dismissed the suit, holding that the electricity theft and bill had not been proved.

The appellant preferred the present first appeal.

1. Whether the trial court was justified in examining the legality and factual basis of the supplementary bill when the defendant had not challenged it before the prescribed appellate authority?

2. Whether the appellant proved its entitlement to recover the supplementary bill amount of ₹7,82,430.15 from the defendant?

3. Whether the appellant was entitled to interest at 24% per annum, or at some other rate, on the recoverable amount?

The Court applied the Conditions of Supply of Electrical Energy, including the mechanism requiring a consumer aggrieved by a supplementary bill to approach the designated appellate authority, and the assessment of additional charges under the ABCD formula for malpractice or theft.

It relied on Paschim Gujarat Vij Company Ltd. v. Bhikhabhia Arjanbhai Varu, Second Appeal No. 11 of 2012, and Gujarat Electricity Board, now Paschim Gujarat Vij Company Ltd. v. Pragjibhai Bhagwanbhai Patolia, Second Appeal No. 21 of 2005, for the principle that an unchallenged supplementary bill attains finality and cannot ordinarily be disputed for the first time as a defence in a recovery suit.

The Court also referred to Vrajlal Devjibhai v. Gujarat Electricity Board, First Appeal No. 2506 of 2003, and the Supreme Court decisions in Punjab State Electricity Board v. Ashwani Kumar, (1997) 5 SCC 120, and Hyderabad Vanaspathi Ltd. v. A.P. State Electricity Board, (1998) 4 SCC 470, concerning the efficacy of the statutory or departmental appellate mechanism and the enforceability of conditions governing electricity supply.

In relation to interest, the Court held that, absent a contractual stipulation binding a non-consumer, 24% interest could not be imposed merely by the electricity company; reasonable interest of 6% per annum was therefore appropriate.

The Court found that the documentary and oral evidence sufficiently established the inspection, preparation of the spot report and panchnama, illegal direct connection, and laboratory confirmation of theft.

However, it held that the trial court adopted an erroneous approach by independently reconsidering the theft and inspection proceedings, although the defendant had not invoked the prescribed appellate remedy against the supplementary bill.

Applying the binding coordinate-bench precedents, the Court held that the bill had attained finality and that the suit was essentially one for recovery of the amount assessed under that bill, rather than a proceeding to adjudicate its legality afresh.

The appellant’s ledger and supporting evidence established the amount claimed.

Nevertheless, because the defendant was treated as a non-consumer and no contractual basis for 24% interest was shown, the Court reduced the applicable interest to 6% per annum.

The suit was decreed in favour of the appellant for ₹7,82,430.15, together with 6% per annum interest from the date of the suit until realization from the defendant or the defendant’s property.

The connected civil application for stay was disposed of as having become infructuous.