Case Note & Summary
The case originated from a writ petition challenging an order of the Electricity Ombudsman regarding recovery of electricity dues for a period beyond two years. The distribution licensee had applied a wrong multiplier factor, leading to issuance of a differential bill for the period from September 2003 to December 2010. The Ombudsman restricted recovery to two years preceding the demand, i.e., from December 2008 onwards, relying on Section 56(2) of the Electricity Act, 2003. The licensee contended that the bar did not apply because the initial under-billing was due to an error, and relied on a Division Bench judgment in Rototex Polyester. The core issue was the interpretation of the limitation under Section 56(2) and whether it precludes recovery of dues beyond two years when the sum had not been continuously shown as arrears. A conflict existed between two Division Bench judgments of the Bombay High Court: Rototex Polyester (which held that the bar applies) and Awadhesh S. Pandey (which was interpreted differently). The licensees argued that when an error in billing is corrected, the limitation should not apply retrospectively, citing Rototex. The consumers and Ombudsman argued that the plain language of Section 56(2) restricts recovery to two years unless continuously shown as arrears, citing Pandey. The Learned Single Judge noted the conflict and observed prima facie that recovery beyond two years is barred if the amount was not continuously shown as recoverable. He referred the matter to a Full Bench to resolve the divergence. The Full Bench heard the matter on October 31, 2018, and pronounced judgment on March 12, 2019, but the text of the judgment provided ends before the final decision is revealed. Therefore, the substantive ruling of the Full Bench is not included in the excerpt.
Headnote
A) Electricity Law - Limitation for Recovery of Dues - Interpretation of Section 56(2) Electricity Act, 2003 - Whether a distribution licensee can recover electricity charges beyond two years from the date they became first due where the sum was not continuously shown as recoverable as arrears - The Division Bench in Rototex Polyester (2010 (4) BCR 456) held that the bar applies, while another Division Bench in Awadhesh S. Pandey (AIR 2007 Bombay 52) had a different view - The Full Bench was called upon to resolve the conflict (Paras 1-7)
Issue of Consideration
Whether the bar under Section 56(2) of the Electricity Act, 2003 prevents a distribution licensee from recovering electricity charges for a period beyond two years from the date they became first due, where the sum had not been continuously shown as recoverable as arrears of charges for electricity supplied
Law Points
- Interpretation of Section 56(2) of the Electricity Act
- 2003
- limitation period for recovery of electricity dues
- meaning of 'first due'
- requirement of continuous demonstration as arrears
- bar on cutting supply
