Full Text
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 1745 OF 2018
Maharashtra State Electricity Distribution Company
Limited (MSEDCL)
Office of the Superintending Engineer
Rural Circle, Admin Building, 1st
Floor, Vidhyut
Bhavan, Nashik Road, Nashik – 422 101
) Petitioner
Chandanpuri, Manmad Chowfuli, Malegaon, Nashik – 423 203
)
)
) Respondent
………...
Mr. Rahul Sinha i/b. DSK Legal, Advocate for the Petitioner.
Mr. Jayendra Khairnar a/w. Mufeez Ansari, Advocate for Respondent.
JUDGMENT
1. Both the Writ Petitions involve similar question of facts and law and hence by consent of both the sides these Petitions are heard together and finally decided at the stage of admission.
2. There is no dispute with regard to the facts involved in these petitions. However for the sake of convenience, the same are reproduced herein below.
3. Respondent, an Education Institution, is consumer of Electricity SATISH KILAJE and was given two electricity connections under Consumer Nos. 065748000199 and 065740001463, having 5 HP load under residential tariff as per the then prevailing tariff order. On 27.08.2015 petitioners flying squad conducted an inspection in the premises of the respondent, wherein it was found that the electricity connection is being used for running college as well as other public utility services. Hence, it was suggested that the tariff category of the respondent should be changed from LT-VA to LT-XA( Public Service) as per then prevailing tariff. The Petitioner company considering the inspection report issued supplementary bills of Rs.9,50,902.05 dated 08.09.2015 and Rs.1,27,000/- dated 30.03.2016.
4. Respondent being aggrieved by the said supplementary/ differential bill challenged the same before Internal Grievance Redressal Cell (IGRC). After hearing both the sides IGRC has rejected the complaint of the respondent. Respondent being aggrieved by the said order dated 23.03.2016 passed by IGRC, challenged the same before the Consumer Grievance Redressal Forum (for short “CGRF”). On 24.06.2016, the said complaint was allowed by passing impugned order, hence these Petitions.
5. Learned counsel for the Petitioner by relying upon the Judgment of the Full Bench of this Court has sought to canvass that there is no embargo on the petitioner company to issue bill, once it is found that the category of tariff was wrongly applied to the respondent. It is submitted that the said mistake has been realised to the petitioner only after the flying squad inspected the premises of the respondent. Thus it is his submission that there cannot be any restriction on the petitioner in not only issuing the bill for the difference of amount but also to recover the same. It is submitted that the case of the petitioner is squarely covered by the judgment of the Full Bench of this Court and Judgment of Hon’ble Supreme Court in the date of Prem Cottex Vs. Uttar Haryana Bijli Vitran Nigam Ltd. and Ors.1. He submitted that the bill has been issued on 08.09.2015 and 30.03.2016 and as per the law settled by this Court as well as Hon’ble Supreme Court, the bill becomes due as on the date of issuance of the same and not on the date of consumption of the electricity and as such the bills issued in question are recoverable against respondent.
6. Learned counsel for the respondent, however, opposed the said submission by contending that the law on the point of recovery of the bill under Section 56 of the Electricity Act has been settled to say that the electricity bill cannot be recovered for the period of two years prior to the issuance of the bill. It is thus his submission that in any case the electricity has been consumed prior to year 2015 and 2016 and as such it is not open for the petitioner company to raise and recover the bill on the ground that the incorrect tariff has been applied. It is his submission that the impugned order is just legal and proper and does not require any interference. Without prejudice to his submissions, it is argued that the respondent in any case is entitled to raise issue with regard to the applicability of tariff applied to the respondent institute. The said contention is opposed by the learned counsel for the petitioner on the ground that this issue was never raised before the forum nor has been considered and hence it is not open for the respondent to raise the said issue for the first time in these petitions.
7. A Three Judges Bench of Hon’ble Supreme Court in the case of K.C.Ninan Vs. Kerala State Electricity Board and Others 2, after taking into consideration judgment in case of Prem Cottex (Supra) and Assistant Engineer (D[1]), Ajmer Vidyut Vitran Nigam Limited and Anr. Vs. Rahamatullah Khan has passed judgment and it would be fruitful to refer to the relevant paragraph Nos. 122 to 136 thereof which read thus:
124. The statutory right of the licensee or the generating company to disconnect the supply of electricity is subject to the period of limitation of two years provided by Section 56(2). Section 56(2) provides that 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 a 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 and the licensee shall not cut off the supply of electricity. The limitation of two years is limited to recovery of sums under Section 56. This is evident by the use of the expression, “under this section”.
125. The first issue pertains to the simultaneous exercise of statutory and civil remedies by the licensing authority to recover electricity arrears. The liability to pay electricity charges is a statutory liability and Section 56 provides the consequences when a consumer neglects to pay any charge for electricity or any sum other than a charge for electricity due from him. Section 56(1) provides that the power of the licensee to disconnect electrical supply when a consumer is in default of payment is “without prejudice to his rights to recover such charge or other sum by suit”. This means that the licensee can exercise both its statutory remedy to disconnect as well as a civil remedy to institute a suit for recovery against the consumer since the licensee will not necessarily obtain the amount due from the consumer by disconnecting the supply. In its decision in Bihar SEB v. Iceberg Industries Ltd., this Court has held that the power to disconnect supply under Section 56 is a special power given to the supplier in addition to the normal mode of recovery by instituting a suit. The power to disconnect the supply of electricity as a consequence of the non-payment of dues and as a method to recover dues is supplemental to the right of the licensee to institute a suit or other proceedings for the recovery of dues on account of electrical charges.
126. Section 56(1) of the 2003 Act is pari materia to Section 24 of the 1910 Act. Section 24 of the 1910 Act empowered the Electricity Board to issue a demand and to discontinue supply to consumers who neglected to pay charges, without prejudice to the right to recover such charges or other sums by way of a suit. The import of Section 24 was considered by this Court in Isha Marbles (supra), where it was observed that the action of cutting off electricity supply after service of the notice as prescribed under Section 24 was in addition to the general remedy of filing a suit for recovery.
127. In Swastic Industries v. Maharashtra State Electricity Board, this Court held that the right to discontinue supply of energy under Section 24 was not taken away by Section 60A of the 1948 Act, which provided an option to the Electricity Board to file a suit within the period of limitation stipulated there. This Court observed that:
128. Hence, the power to initiate recovery proceedings by filing a suit against the defaulting consumer is independent of the power to disconnect electrical supply as a means of recovery.
129. The second issue pertains to the implication of the period of two years provided in Section 56(2) on the civil remedies of Utilities to recover electricity dues. Section 56(2), which begins with a non obstante clause, provides a limitation of two years for recovery of dues by the licensee through the means of disconnecting electrical supply. It puts a restriction on the right of the licensee to recover any sum due from a consumer under Section 56 after a period of two years from the date when such sum became first due. If this provision is invoked against a consumer after two years, the action will be permissible when the sum, which was first due, has been shown continuously as recoverable as arrears of charges for electricity supplied. Under Section 56, the liability to pay arises on the consumption of electricity and the obligation to pay arises when a bill is issued by the licensee for the first time. Accordingly, the period of limitation of two years starts only after issuance of the bill.
130. Before we deal with the implication of Section 56(2) on the civil remedies available to a licensee, it is important to clarify that when the liability incurred by a consumer is prior to the period when the 2003 Act came into force, then the bar of limitation under Section 56(2) is not applicable. In Kusumam Hotels Pvt Ltd v. Kerala State Electricity Board, this Court has held that Section 56(2) applies after the 2003 Act came into force and the bar of limitation under Section 56(2) would not apply to a liability incurred by the consumer prior to the enforcement of the Act. In terms of Section 6 of the General Clauses Act 1897, the liability incurred under the previous enactment would continue and the claim of the licensee to recover electricity would be governed by the regulatory framework which was in existence prior to the enforcement of the 2003 Act.
131. In its report dated 19 December 2002, the Standing Committee of Energy opined that the restriction for recovery of arrears under Section 56 was considered necessary to protect the consumer from arbitrary billings. In other words, the enactment of Section 56(2) was to address the mischief of arbitrary billings. Hence, Section 56(2) was incorporated to ensure that a licensee does not abuse its special power of disconnection of electrical supply. Section 56(2) ensures that a licensee does not have the liberty to arbitrarily impose a bill after a long period and then recover such a huge amount through the drastic step of disconnection of electrical supply.
132. In Rahamatullah Khan (supra), a two judge Bench of this Court dealt with the applicability of the period of limitation provided by Section 56(2) on an additional or supplementary demand raised by the licensee. A consumer was billed under a particular tariff but after an audit, it was discovered that a different tariff code should have been applied. An additional bill was subsequently raised in 2014 for the period from July 2009 to September 2011. Section 56(2) was interpreted not to preclude the licensee from raising a supplementary demand after the expiry of the period of limitation under Section 56(2) in the case of a mistake or a bonafide error. However, it did not empower the licensee to take recourse to the coercive measure of disconnection of electricity supply for recovery of the additional demand. This Court held that the bar of limitation of two years does not preclude the licensee from resorting to other modes of recovery of electricity arrears. The court observed: “7.[4] 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.[5] 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).
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 18-3-2014 for the period July 2009 to September 2011. The licensee company discovered the mistake of billing under the wrong Tariff Code on 18-3-2014. The limitation period of two years under Section 56(2) had by then already expired.
9.1. Section 56(2) did not preclude the licensee company from raising an additional or supplementary demand after the expiry of the limitation period under Section 56(2) in the case of a mistake or bona fide error. It did not, however, empower the licensee company to take recourse to the coercive measure of disconnection of electricity supply, for recovery of the additional demand.”
133. The exposition of law by this Court in Rahamatullah Khan (supra) was considered by a coordinate bench in Prem Cortex (supra). A consumer was served with a short assessment notice and the Court had to consider whether short billing and the subsequent raising of an additional demand would tantamount to a deficiency of service. This Court observed that the bar contemplated in Section 56 operates on two distinct rights of the licensee, namely, the right to recover and the right to disconnect. This Court observed that under the law of limitation, the remedy and not the right is extinguished. The bar with reference to the remedy of disconnection was held to be an exception to the law of limitation. This Court further considered the impact of Section 56(1) on Section 56(2) and observed: “15. Therefore, the bar actually operates on two distinct rights of the licensee, namely, (i) the right to recover; and (ii) the right to disconnect. The bar with reference to the enforcement of the right to disconnect, is actually an exception to the law of limitation. Under the law of limitation, what is extinguished is the remedy and not the right. To be precise, what is extinguished by the law of limitation, is the remedy through a court of law and not a remedy available, if any, de hors through a court of law. However, section 56(2) bars not merely the normal remedy of recovery but also bars the remedy of disconnection. This is why we think that the second part of Section 56(2) is an exception to the law of limitation. ….
23. Coming to the second aspect, namely, the impact of Sub-section (1) on Sub- section (2) of Section 56, it is seen that the bottom line of Subsection (1) is the negligence of any person to pay any charge for electricity. Sub-section (1) starts with the words “where any person neglects to pay any charge for electricity or any sum other than a charge for electricity due from him”.
24. Sub-section (2) uses the words “no sum due from any consumer under this Section”. Therefore, the bar under Sub-section (2) is relatable to the sum due under Section 56. This naturally takes us to Sub-section (1) which deals specifically with the negligence on the part of a person to pay any charge for electricity or any sum other than a charge for electricity. What is covered by section 56, under sub-section (1), is the negligence on the part of a person to pay for electricity and not anything else nor any negligence on the part of the licensee.”
134. The period of limitation under Section 56(2) is relatable to the sum due under Section 56. The sum due under Section 56 relates to the sum due on account of the negligence of a person to pay for electricity. Section 56(2) provides that such sum due would not be recoverable after the period of two years from when such sum became first due. The means of recovery provided under Section 56 relate to the remedy of disconnection of electric supply. The right to recover still subsists.
135. We may also briefly deal with the objection of the auction purchasers that the conditions of supply cannot be used to resurrect time barred debts. Counsel placed reliance on VT Kallianikutty (supra), where it was held that a time barred debt cannot be recovered by taking recourse to the provisions of the Kerala Revenue Recovery Act. This decision is not helpful to the auction purchasers in the present batch of cases. In that case, a three-judge Bench of this Court while dealing with agricultural loans extended by the Kerala Finance Corporation, held that since the Kerala Revenue Recovery Act does not create a new right, a person could not claim the recovery of amounts which are not legally recoverable. In reaching its decision, this Court, however, reasoned that the statute of limitation bars the remedy by way of a suit beyond a certain time period, without touching the right to recover the loan. The right remains untouched and it can be exercised in any other suitable manner provided.
136. We therefore, reject the submission of the auction purchasers that the recovery of outstanding electricity arrears either by instituting a civil suit against the erstwhile consumer or from a subsequent transferee in exercise of statutory power under the relevant conditions of supply is barred on the ground of limitation under Section 56(2) of the 2003 Act. Accordingly, while the bar of limitation under Section 56(2) restricts the remedy of disconnection under Section 56, the licensee is entitled to recover electricity arrears through civil remedies or in exercise of its statutory power under the conditions of supply.
8. The law on the point of right of Electricity company for recovery of outstanding electricity arrears by instituting Civil Suit is now settled to say that though it is not open for the Electricity company to adopt coercive measure under Section 56 of the Act of disconnection of electric supply for non payment of arrears of electricity charges for period beyond two years, however, right to recover such amount by filing of civil suit is not barred on the ground of limitation under Section 56(2) of the Act.
9. Here in this case, bills in question are issued on 08.09.2015 and 30.03.2016. Section 56(2) of the Electricity Act prohibits disconnection of electricity for recovery of any amount from the consumer for the period of more than two years prior to the issuance of the bill i.e. preceding two years of the bill when it becomes due. In the result though petitioner herein would not be able to disconnect the electricity supply of the respondent for non-payment of the electricity charges for the period beyond two years preceding of the date of issuance of bill, but that does not preclude petitioner to initiate any appropriate proceedings as provided by law for the recovery of the said amount.
10. As far as the contention of the respondent about remitting the respondents to raise issue in respect of the applicability of tariff itself is concerned, this issue was neither raised before the IGRC or CGRF, nor in these Petitions by way of reply. Hence, this Court is not inclined to go into the said issue. Needless to say that if it is permissible in law, it is open for the respondent to raise such issue before appropriate forum.
11. As a result of above discussion, impugned orders cannot sustain and hereby set aside. It is held that petitioner would not be allowed to take coercive action under Section 56 of the Act, of disconnection of electric supply for non payment of electricity bills due (in question), for the period two years preceding date of issuance of bill, however it would be within its right to recover amount involved in bills in question, by following due procedure of law.
12. Both the Writ Petitions therefore are partly allowed in the above terms. ( R. M. JOSHI, J.)