# ASSISTANT ENGINEER (D1), AJMER VIDYUT VITRAN NIGAM LIMITED & ANR v. RAHAMATULLAH KHAN ALIAS RAHAMJULLA

- **Citation:** [2020] 2 S.C.R. 929
- **Court:** Supreme Court of India
- **Decided:** 2020-02-18
- **Case number:** Civil Appeal No. 1672 of 2020
- **Bench:** Uday Umesh Lalit, Indu Malhotra
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/assistant-engineer-d1-ajmer-vidyut-vitran-nigam-limited-anr-v-rahamatullah-khan-34256
- **Pages:** 15

## Headnote

Electricity Act, 2003: s. 56(2) - Disconnection of supply in
default of payment - Term 'first due' in s.56(2) - Meaning of -
Commencement limitation period of two years, when - Held:
Electricity charges would become "first due" only after the bill is
issued to the consumer, even though the liability to pay may arise
on the consumption of electricity - Period of limitation of two years
would commence from the date on which the electricity charges
became "first due" u/s. 56(2) - This provision restricts the right of
the licensee company to disconnect electricity supply due to nonpayment of dues by the consumer, unless such sum has been shown
continuously to be recoverable as arrears of electricity supplied, in
the bills raised for the past period - Furthermore, s. 56(2) does not
preclude the licensee company from raising an additional or
supplementary demand after the expiry of the limitation period u/s.
56(2) in the case of a mistake or bona fide error - However, licensee
company cannot take recourse to the coercive measure of
disconnection of electricity supply, for recovery of the additional
demand - As per s. 17(1)(c) of the Limitation Act in case of a mistake,
the limitation period begins to run from the date when the mistake is
discovered for the first time - On facts, licensee company discovered
the mistake of billing under wrong tariff Code on 18.03.2014 and
raised an additional demand on 18.03.2014 for the period July,
2009 to September, 2011 - Limitation period of two years u/s. 56(2)
had by then already expired - Period of limitation would commence
from the date of discovery of the mistake - Licensee company may
take recourse to any remedy available in law for recovery of the
additional demand, but is barred from taking recourse to
disconnection of supply of electricity u/s. 56(2) - Limitation Act,
1963 - s. 17(1)(c).
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Disposing of the appeals, the Court
HELD: 1.1 Section 56 of the Electricity Act, 2003 provides
for disconnection of supply in the case of default in payment of
electricity charges. The obligation of a consumer to pay electricity
charges arises after the bill is issued by the licensee company.
The bill sets out the time within which the charges are to be paid.
If the consumer fails to pay the charges within the stipulated
period, they get carried forward to the next bill as arrears. [Para
6.2, 6.3][938 E-H]
1.3 The proviso to Section 56(1) carves out an exception
by providing that the disconnection will not be effected if the
consumer either deposits the amount "under protest", or deposits
the average charges paid during the preceding six months. Subsection (2) of Section 56 by a non obstante clause provides that
notwithstanding anything contained in any other law for the time
being in force, no sum due from any consumer, shall be
recoverable under Section 56, after the expiry of two years from
the date when the sum became "first due", unless such sum was
shown continuously recoverable as arrears of charges for the
electricity supplied, nor would the licensee company disconnect
the electricity supply of the consumer. [Paras 6.4 and 6.5][938H; 939 A-C]
Chandavarkar Sita Ratna Rao v. Ashalata S. Guram.
(1986) 4 SCC 447 : [1986] 3 SCR 866 - referred to.
1.4 The liability to pay arises on the consumption of
electricity. The obligation to pay would arise when the bill is issued
by the licensee company, quantifying the charges to be paid.
Electricity charges would become "first due" only after the bill is
issued to the consumer, even though the liability to pay may arise
on the consumption of electricity. [Para 6.6][939 F-H]
1.5 Sub-section (1) of Section 56 confers a statutory right
to the licensee company to disconnect the supply of electricity, if
the consumer neglects to pay the electricity dues. This statutory
right is subject to the period of limitation of two years provided
by sub-section (2) of Section 56 of the Act. The

## Text

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ASSISTANT ENGINEER (D1), AJMER VIDYUT VITRAN
NIGAM LIMITED & ANR.
v.
RAHAMATULLAH KHAN ALIAS RAHAMJULLA
(Civil Appeal No. 1672 of 2020)
FEBRUARY 18, 2020
[UDAY UMESH LALIT AND INDU MALHOTRA, JJ.]
Electricity Act, 2003: s. 56(2) - Disconnection of supply in
default of payment - Term 'first due' in s.56(2) - Meaning of -
Commencement limitation period of two years, when - Held:
Electricity charges would become "first due" only after the bill is
issued to the consumer, even though the liability to pay may arise
on the consumption of electricity - Period of limitation of two years
would commence from the date on which the electricity charges
became "first due" u/s. 56(2) - This provision restricts the right of
the licensee company to disconnect electricity supply due to nonpayment of dues by the consumer, unless such sum has been shown
continuously to be recoverable as arrears of electricity supplied, in
the bills raised for the past period - Furthermore, s. 56(2) does not
preclude the licensee company from raising an additional or
supplementary demand after the expiry of the limitation period u/s.
56(2) in the case of a mistake or bona fide error - However, licensee
company cannot take recourse to the coercive measure of
disconnection of electricity supply, for recovery of the additional
demand - As per s. 17(1)(c) of the Limitation Act in case of a mistake,
the limitation period begins to run from the date when the mistake is
discovered for the first time - On facts, licensee company discovered
the mistake of billing under wrong tariff Code on 18.03.2014 and
raised an additional demand on 18.03.2014 for the period July,
2009 to September, 2011 - Limitation period of two years u/s. 56(2)
had by then already expired - Period of limitation would commence
from the date of discovery of the mistake - Licensee company may
take recourse to any remedy available in law for recovery of the
additional demand, but is barred from taking recourse to
disconnection of supply of electricity u/s. 56(2) - Limitation Act,
1963 - s. 17(1)(c).
 [2020] 2 S.C.R. 929
929
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Disposing of the appeals, the Court
HELD: 1.1 Section 56 of the Electricity Act, 2003 provides
for disconnection of supply in the case of default in payment of
electricity charges. The obligation of a consumer to pay electricity
charges arises after the bill is issued by the licensee company.
The bill sets out the time within which the charges are to be paid.
If the consumer fails to pay the charges within the stipulated
period, they get carried forward to the next bill as arrears. [Para
6.2, 6.3][938 E-H]
1.3 The proviso to Section 56(1) carves out an exception
by providing that the disconnection will not be effected if the
consumer either deposits the amount "under protest", or deposits
the average charges paid during the preceding six months. Subsection (2) of Section 56 by a non obstante clause provides that
notwithstanding anything contained in any other law for the time
being in force, no sum due from any consumer, shall be
recoverable under Section 56, after the expiry of two years from
the date when the sum became "first due", unless such sum was
shown continuously recoverable as arrears of charges for the
electricity supplied, nor would the licensee company disconnect
the electricity supply of the consumer. [Paras 6.4 and 6.5][938H; 939 A-C]
Chandavarkar Sita Ratna Rao v. Ashalata S. Guram.
(1986) 4 SCC 447 : [1986] 3 SCR 866 - referred to.
1.4 The liability to pay arises on the consumption of
electricity. The obligation to pay would arise when the bill is issued
by the licensee company, quantifying the charges to be paid.
Electricity charges would become "first due" only after the bill is
issued to the consumer, even though the liability to pay may arise
on the consumption of electricity. [Para 6.6][939 F-H]
1.5 Sub-section (1) of Section 56 confers a statutory right
to the licensee company to disconnect the supply of electricity, if
the consumer neglects to pay the electricity dues. This statutory
right is subject to the period of limitation of two years provided
by sub-section (2) of Section 56 of the Act. The period of limitation
of two years would commence from the date on which the
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electricity charges became "first due" under sub-section (2) of
Section 56. This provision restricts the right of the licensee
company to disconnect electricity supply due to non-payment of
dues by the consumer, unless such sum has been shown
continuously to be recoverable as arrears of electricity supplied,
in the bills raised for the past period. If the licensee company
were to be allowed to disconnect electricity supply after the expiry
of the limitation period of two years after the sum became "first
due", it would defeat the object of Section 56(2). Section 56(2)
however, does not preclude the licensee company from raising a
supplementary demand after the expiry of the limitation period
of two years. It only restricts the right of the licensee to disconnect
electricity supply due to non-payment of dues after the period of
limitation of two years has expired, nor does it restrict other
modes of recovery which may be initiated by the licensee company
for recovery of a supplementary demand. Section 56(2) does not
preclude the licensee company from raising an additional or
supplementary demand after the expiry of the limitation period
under Section 56(2) in the case of a mistake or bona fide error. It
however, does not empower the licensee company to take
recourse to the coercive measure of disconnection of electricity
supply, for recovery of the additional demand. As per Section
17(1)(c) of the Limitation Act, 1963 in case of a mistake, the
limitation period begins to run from the date when the mistake is
discovered for the first time. [Para 7.3, 7.4, 8, 9][941 D-H; 942
A-B; 942 D-F]
Mahabir Kishore and Ors. v. State of Madhya Pradesh
(1989) 4 SCC 1 : [1989] 3 SCR 596 - referred to.
2. In the instant case, the licensee company raised an
additional demand on 18.03.2014 for the period July, 2009 to
September, 2011. The licensee company discovered the mistake
of billing under the wrong Tariff Code on 18.03.2014. The
limitation period of two years under Section 56(2) had by then
already expired. The period of limitation would commence from
the date of discovery of the mistake i.e. 18.03.2014. The licensee
company may take recourse to any remedy available in law for
recovery of the additional demand, but is barred from taking
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recourse to disconnection of supply of electricity under sub-section
(2) of Section 56 of the Act. [Para 9][942 B-C; 943 B-D]
Tata Powers v. Reliance Energy, (2008) 10 SCC 321 :
[2008] 10 SCR 293; State of Andhra Pradesh v.
National Thermal Power Corporation Ltd. (2002) 5 SCC
203 : [2002] 3 SCR 278; Swastic Industries v.
Maharashtra State Electricity Board (1997) 9 SCC 465
: [1997] 1 SCR 532 - referred to.
Case Law Reference
[2008] 10 SCR 293
referred to
Para 1
[2002] 3 SCR 278
referred to
Para 6.1
[1986] 3 SCR 866
referred to
Para 6.5
[1997] 1 SCR 532
referred to
Para 7.2
[1989] 3 SCR 596
referred to
Para 9
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1672
of 2020.
From the Judgment and Order dated 28.05.2018 of the National
Consumer Disputes Redressal Commission at New Delhi in Revision
Petition No. 2739 of 2017.
 With
Civil Appeal No. 1673 of 2020.
Devashish Bharuka, Adv. (Amicus Curiae).
Puneet Jain, Ms. Christi Jain, Harsh Jain, Harshit Khanduja, Pankaj
Sharma, Abhinav Deshwal, Ms. Pratibha Jain, Ravi Bharuka, Ms.
Sarvshree, Justine George, Advs. for the appearing parties.
The Judgment of the Court was delivered by
INDU MALHOTRA, J.
Delay condoned. Leave granted.
a) The issues which have arisen for consideration in the present
Civil Appeal are : -
b) What is the meaning to be ascribed to the term "first due"
in Section 56(2) of the Electricity Act, 2003?
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c) In the case of a wrong billing tariff having been applied on
account of a mistake, when would the amount become "first
due"?
d) Whether recourse to disconnection of electricity supply may
be taken by the licensee company after the lapse of two
years in case of a mistake?
1. The factual matrix in which the aforesaid issues have arisen
for our consideration is : -
1.1 In the present case, for the period July, 2009 to September,
2011, the Respondent along with other consumers were
billed by the licensee company (the Appellant herein) under
Tariff Code 4400 @Rs.1.65 per unit.
1.2 During the course of a regular audit being conducted by
the Internal Audit Party, it was discovered that in 52 cases,
including that of the Respondent, the bills were raised under
the wrong Tariff Code 4400, instead of Tariff Code 9400,
under which the prescribed tariff rate was Rs.2.10p. per
unit.
1.3 On 18.03.2014, the licensee company issued a show cause
notice to various consumers, including the Respondent,
raising an additional demand for consumption of electricity
for the past period from July, 2009 to September, 2011. It
was mentioned in the notice that the amount was payable
in view of the internal audit conducted by the department.
1.4 On 25.05.2015, the licensee company raised a bill
demanding payment of Rs.29,604/- from the Respondent
under Tariff Code 9400 for the period July, 2009 to
September, 2011.
1.5 Aggrieved by the said demand, the Respondent filed a
Consumer Complaint before the District Consumer Forum,
Ajmer.
The District Forum vide Order dated 21.06.2016, allowed
the Consumer Complaint, and held that the additional
demand was time-barred.
1.6 Thereafter, the State Commission vide Order dated
30.05.2017, allowed the Appeal of the licensee company,
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and set aside the Order dated 21.06.2016 passed by the
District Forum.
1.7 In the Revision Petition filed by the Respondent before the
National Consumer Disputes Redressal Commission, the
Order passed by the State Commission was set aside. The
National Commission held that the additional demand was
barred by limitation under Section 56(2) of the Electricity
Act, 2003 ("the Act").
1.8 The licensee company has filed the present Civil Appeals
before this Court to challenge the final judgment dated
28.05.2018 passed by the National Commission.
1.9 This Court vide Order dated 05.03.2019 appointed Mr.
Devashish Bharuka as Amicus Curiae to assist this Court
on the issues raised for determination.
 It was further directed that the Appellant -
Corporation would not be entitled to recover the additional
demand from the Respondent in this case, and only the
questions of law would be determined.
2. We have heard the learned Counsel on behalf of the Appellant
- Corporation and the learned Amicus Curiae.
3. Mr. Puneet Jain represented the licensee company, and
submitted that the power to disconnect electricity supply under
Section 56(1) of the Act may be exercised by the licensee
company when a consumer neglects to pay the electricity
charges, or any other sums due and payable by him. The neglect
to pay the "sum due" by a consumer, necessarily requires that
there should be a "demand" of the sum due from the consumer,
which he is required to pay within the period stipulated. If the
demand is not paid within the stipulated time, then the power
of disconnection under Section 56(1) may be resorted to.
3.1 It was furthersubmitted that when a bill or demand is raised,
which is disputed by the consumer, he may raise the dispute
before the Authorities as provided by Section 42(5) or
42(6) of the Act, or avail such other remedies as may be
available in law, such as a suit for declaration and
injunction; consumer dispute before the consumer fora;
arbitration if provided by the governing agreement.
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3.2 Section 56(1) of the Act confers the power of
disconnection of electricity supply for default of payment
upon a licensee, and provides the conditions when such a
power may be invoked, the procedure and manner of the
exercise of such power, the period for which such power
can remain effective, and the circumstances under which
such a power cannot be exercised.
3.3 Sub-section (2) of Section 56 bars the remedy of
disconnection of supply for default of payment, if the
consumer deposits the amount demanded under protest,
or if the demand has been raised two years after the sum
became "first due", albeit the same had been continuously
shown to be recoverable as arrears of charges.
3.4 The word "due" has been used under Section 56(1) as
well as under Section 56(2). The term "due" refers to the
amount for which the demand is raised by way of a bill.
The term "first due" would therefore imply when the
demand is raised for the first time. The bill raised by the
licensee company would be the starting point for the
exercise of power under sub-section (1) of Section 56.
3.5 The starting point of limitation would be from the date
when the bill is raised by the licensee company. The bar
of limitation is applicable only on the exercise of power of
disconnection. As per sub-section (2) of Section 56, the
bar of limitation would be two years from the date when
the first bill is raised.
3.6 It was further submitted that in case of a mistake, the
starting point of limitation should be the date when the
mistake is discovered.
 In the present case, during a regular internal audit
conducted on 18.03.2014, it was discovered that a mistake
had occurred in 52 cases, including that of the Respondent,
as the bills were raised under the wrong Tariff Code. The
Appellant-Corporation raised additional demands on
25.05.2015, i.e., within two years from the discovery of
the mistake.
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4. The learned Amicus Curiae submitted that Section 56(1) of
the Act empowers the licensee to disconnect the electricity
supply if the consumer neglects to pay his dues. The
disconnection would take place only after the consumer has
consumed the electricity, and the bill has been generated. If
the consumer neglects to pay the bill served on him within the
stipulated period, the licensee can resort to coercive modes of
recovery provided in the Act.
4.1 The words "first due" used in the first part of sub-section
(2) of Section 56 is used in the context of the sum quantified
by the licensee in the bill; while the second part of subsection (2) of Section 56 indicates the date when the first
bill for the supply of electricity was raised by the licensee
under the applicable State Electricity Supply Code.
4.2 By treating the words "first due" to mean the date of
detection of mistake, would dilute the mandate of the two
year limitation period provided by Section 56(2), since a
mistake may be detected at any point of time. Furthermore,
the words "recoverable as arrears of charges" would be
rendered completely otiose and nugatory.
4.3 The period of limitation under Section 56(2) cannot be
extended by raising a supplementary bill. The "sum due"
raised in the original bill, and not paid by the consumer,
must be continuously shown as arrears of charges in
subsequent bills, for it to become recoverable by taking
recourse to the coercive mode of disconnection of
electricity supply.
4.4 If after the expiry of two years of the original demand,
any genuine or bona fide mistake is detected by the
licensee in the original bill, it would be entitled to raise a
supplementary bill. The licensee company would be entitled
to resort to other modes of recovery, but not by
disconnection of supply under sub-section (1) of Section
56 of the 2003 Act.
6.
Findings andAnalysis
The Electricity Act, 2003 is a consumer-friendly statute.1
The Statement of Objects and Reasons to the Act notes that
1 Tata Powers v. Reliance Energy, (2008) 10 SCC 321.
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over a period of time, the performance of State Electricity
Boards had deteriorated on account of various factors, and
the need was felt to frame a self-contained comprehensive
legislation, which led to the enactment of the Electricity Act,
2003.
6.1
Electricity has been held to be "goods" by a Constitution
Bench in State of Andhra Pradesh v. National Thermal
Power Corporation Ltd.2 Under the Sale of Goods Act,
1930 a purchaser of goods is liable to pay for it at the time of
purchase or consumption. The quantum and time of payment
may be ascertained post facto either by way of an agreement
or the relevant statute.
In the case of electricity, the charges are ascertained
and recovered as per the tariff notified by the State Electricity
Board, or under an electricity supply agreement between
the parties read with the tariff under Section 62(1)(d), and
the Electricity Supply Code framed under Section 50.
6.2
The present Civil Appeal pertains to the interpretation of
Section 56 of the Act which reads as follows : -
"Section 56. Disconnection of supply in default of
payment -
(1) Where any person neglects to pay any charge for
electricity or any sum other than a charge for electricity
due from him to a licensee or the generating company in
respect of supply, transmission or distribution or
wheeling of electricity to him, the licensee or the
generating company may, after giving not less than fifteen
clear days' notice in writing, to such person and without
prejudice to his rights to recover such charge or other
sum by suit, cut off the supply of electricity and for that
purpose cut or disconnect any electric supply line or
other works being the property of such licensee or the
generating company through which electricity may have
been supplied, transmitted, distributed or wheeled and
may discontinue the supply until such charge or other
2 (2002) 5 SCC 203.
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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."
(emphasis supplied)
Section 56 provides for disconnection of supply in the
case of default in payment of electricity charges. Sub-section
(1) of Section 56 provides that 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 generating
company, the licensee after giving 15 days' written notice,
may disconnect the supply of electricity, until such charges
or other sums due, including the expenses incurred, are paid.
However, the disconnection cannot continue after the amounts
are paid.
6.3 The obligation of a consumer to pay electricity charges arises
after the bill is issued by the licensee company. The bill sets
out the time within which the charges are to be paid. If the
consumer fails to pay the charges within the stipulated period,
they get carried forward to the next bill as arrears.
6.4 The proviso to Section 56(1) carves out an exception by
providing that the disconnection will not be effected if the
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consumer either deposits the amount "under protest", or
deposits the average charges paid during the preceding six
months.
6.5 Sub-section (2) of Section 56 by a non obstante clause provides
that notwithstanding anything contained in any other law for
the time being in force, no sum due from any consumer, shall
be recoverable under Section 56, after the expiry of two years
from the date when the sum became "first due", unless such
sum was shown continuously recoverable as arrears of
charges for the electricity supplied, nor would the licensee
company disconnect the electricity supply of the consumer.
The effect of a non obstante clause was explained by
this Court in Chandavarkar Sita Ratna Rao v. Ashalata S.
Guram.3 It was held that : -
"69. A clause beginning with the expression
'notwithstanding anything contained in this Act or in some
particular provision in the Act or in some particular Act or
in any law for the time being in force, or in any contract' is
more often than not appended to a section in the beginning
with a view to give the enacting part of the section in case
of conflict an overriding effect over the provision of the
Act or the contract mentioned in the non-obstante clause.
It is equivalent to saying that in spite of the provision of
the Act or any other Act mentioned in the non-obstante
clause or any contract or document mentioned the
enactment following it will have its full operation or that
the provisions embraced in the non-obstante clause would
not be an impediment for an operation of the enactment."
(emphasis supplied)
6.6. The liability to pay arises on the consumption of electricity.
The obligation to pay would arise when the bill is issued by
the licensee company, quantifying the charges to be paid.
Electricity charges would become "first due" only after
the bill is issued to the consumer, even though the liability to
pay may arise on the consumption of electricity.
3 (1986) 4 SCC 447.
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7.
The next issue is as to whether the period of limitation of two
years provided by Section 56(2) of the Act, would be applicable
to an additional or supplementary demand.
7.1 Prior to the coming into force of the Electricity Act, 2003, the
Indian Electricity Act, 1910 governed the law pertaining to
the use and supply of electricity in India. Section 24 of the
Indian Electricity Act, 1910 read as follows :-
"24. Discontinuance of supply to consumer neglecting to
pay charge.
(1) Where any person neglects to pay any charge for energy
or any sum, other than a charge for energy, due from him
to a licensee in respect of the supply of energy to him, the
licensee may, after giving not less than seven clear days'
notice in writing to such person and without prejudice to
his right to recover such charge or other sum by suit, cut
off the supply and for that purpose cut or disconnect any
electric supply-line or other works being the property of
the licensee, through which energy may be supplied, and
may discontinue the supply until such charger or other
sum, together with ally expenses incurred by him in cutting
off and reconnecting the supply, are paid, but no longer.
(2) Where any difference or dispute which by or under
this Act is required to be determined by an Electrical
Inspector, has been referred to the Inspector before notice
as aforesaid has been given by the licensee, the licensee
shall not exercise the powers conferred by this section until
the Inspector has given his decision:
Provided that the prohibition contained in this subsection
shall not apply in any case in which the licensee has made
a request in writing to the consumer for a deposit with the
Electrical Inspector of the amount of the licensee's charges
or other sums in dispute or for the deposit of the licensee's
further charges for energy as they accrue, and the
consumer has failed to comply with such request."
The Standing Committee of Energy in its Report dated 19.12.2002
submitted to the 13th Lok Sabha, opined that Section 56 of the 2003 Act
is based on Section 24 of the 1910 Act.
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The Standing Committee further opined that a restriction has been
added for recovery of arrears pertaining to the period prior to two years
from consumers, unless the arrears have been continuously shown in
the bills. Justifying the addition of this restriction, the Ministry of Power
submitted that : -
"It has been considered necessary to provide for such a
restriction to protect the consumers from arbitrary billings."
7.2 In Swastic Industries v. Maharashtra State Electricity
Board,4 this Court while interpreting Section 24 of the Indian
Electricity Act, 1910 held that : -
"5. It would, thus, be clear that the right to recover the
charges is one part of it and right to discontinue supply of
electrical energy to the consumer who neglects to pay
charges is another part of it."
(emphasis supplied)
7.3 Sub-section (1) of Section 56 confers a statutory right to the
licensee company to disconnect the supply of electricity, if
the consumer neglects to pay the electricity dues.
This statutory right is subject to the period of limitation
of two years provided by sub-section (2) of Section 56 of the
Act.
7.4 The period of limitation of two years would commence from
the date on which the electricity charges became "first due"
under sub-section (2) of Section 56. This provision restricts
the right of the licensee company to disconnect electricity
supply due to non-payment of dues by the consumer, unless
such sum has been shown continuously to be recoverable as
arrears of electricity supplied, in the bills raised for the past
period.
If the licensee company were to be allowed to disconnect
electricity supply after the expiry of the limitation period of
two years after the sum became "first due", it would defeat
the object of Section 56(2).
4 (1997) 9 SCC 465.
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SUPREME COURT REPORTS
[2020] 2 S.C.R.
8.
Section 56(2) however, does not preclude the licensee
company from raising a supplementary demand after the
expiry of the limitation period of two years. It only restricts
the right of the licensee to disconnect electricity supply due
to non-payment of dues after the period of limitation of two
years has expired, nor does it restrict other modes of recovery
which may be initiated by the licensee company for recovery
of a supplementary demand.
9.
Applying the aforesaid ratio to the facts of the present case,
the licensee company raised an additional demand on
18.03.2014 for the period July, 2009 to September, 2011.
The licensee company discovered the mistake of billing
under the wrong Tariff Code on 18.03.2014. The limitation
period of two years under Section 56(2) had by then already
expired.
Section 56(2) does not preclude the licensee company
from raising an additional or supplementary demand after the
expiry of the limitation period under Section 56(2) in the case
of a mistake or bona fide error. It however, does not empower
the licensee company to take recourse to the coercive measure
of disconnection of electricity supply, for recovery of the
additional demand.
As per Section 17(1)(c) of the Limitation Act, 1963 in
case of a mistake, the limitation period begins to run from the
date when the mistake is discovered for the first time.
In Mahabir Kishore and Ors. v. State of Madhya
Pradesh,5 this Court held that :-
"Section 17(1)(c) of the Limitation Act, 1963, provides that
in the case of a suit for relief on the ground of mistake, the
period of limitation does not begin to run until the plaintiff
had discovered the mistake or could with reasonable
diligence, have discovered it. In a case where payment has
been made under a mistake of law as contrasted with a
mistake of fact, generally the mistake become known to
the party only when a court makes a declaration as to the
5 (1989) 4 SCC 1.
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invalidity of the law. Though a party could, with reasonable
diligence, discover a mistake of fact even before a court
makes a pronouncement, it is seldom that a person can,
even with reasonable diligence, discover a mistake of law
before a judgment adjudging the validity of the law."
(emphasis supplied)
In the present case, the period of limitation would
commence from the date of discovery of the mistake i.e.
18.03.2014. The licensee company may take recourse to any
remedy available in law for recovery of the additional demand,
but is barred from taking recourse to disconnection of supply
of electricity under sub-section (2) of Section 56 of the Act.
10. We extend our appreciation to Mr. Devashish Bharuka,
Advocate who has very ably assisted this Court as Amicus
Curiae.
The present Civil Appeals are accordingly disposed of in the
aforesaid terms.
All pending Applications, if any, are accordingly disposed of.
Ordered accordingly.
Nidhi Jain
Appeals disposed of.