Case Note & Summary
The petitioner, M/s Channagiri Cements Pvt. Ltd., a cement manufacturing company, filed two writ petitions challenging the demand for arrears of electricity charges raised by the Hubli Electricity Supply Company Ltd. (HESCOM). The first petition (WP No.61555/2011) sought to quash an order dated 02/02/2011 demanding arrears, and the second petition (WP No.84387/2013) sought a refund of Rs.68,96,044/- collected under protest, along with interest, and to quash subsequent orders dated 07.08.2013 and 02.08.2013. The dispute arose from alleged discrepancies in meter readings between 2005 and 2010, where the licensee claimed that the meter was not recording correctly and raised a supplementary bill. The petitioner contended that the demand was barred by limitation under Section 56 of the Electricity Act, 2003, which prohibits recovery of sums due beyond two years from the date they became first due. The court analyzed the provisions of Section 56 and noted that the licensee failed to provide any inspection report or evidence that the meter readings were verified. The court held that the demand was arbitrary and without authority of law, as the licensee did not follow the proper procedure or principles of natural justice. Consequently, the court allowed both writ petitions, quashed the impugned orders, and directed the respondents to refund the amount of Rs.68,96,044/- with interest at 12% per annum from the date of payment until realization.
Headnote
A) Electricity Law - Recovery of Arrears - Section 56 of the Electricity Act, 2003 - Limitation - The court considered whether the demand for arrears of electricity charges for the period from 2005 to 2010 was barred by limitation under Section 56 of the Electricity Act, 2003, which provides that no sum due from any consumer shall be recoverable after a period of two years from the date when such sum became first due. The court held that the demand was not sustainable as the licensee failed to show that the meter readings were verified or that the inspection report was provided to the consumer. (Paras 1-10) B) Electricity Law - Unverified Meter Readings - Natural Justice - The court examined the validity of the demand based on unverified meter readings and without affording the consumer an opportunity to inspect the meter. The court held that the licensee cannot rely on unverified readings and must follow principles of natural justice before raising a demand. (Paras 1-10) C) Constitutional Law - Writ Jurisdiction - Articles 226 and 227 of the Constitution of India - The court exercised its writ jurisdiction to quash the impugned orders and direct the respondents to refund the amount collected, as the demand was arbitrary and without authority of law. (Paras 1-10)
Issue of Consideration
Whether the demand for arrears of electricity charges based on unverified meter readings and without proper inspection report is sustainable in law, and whether the licensee can recover arrears beyond the period of limitation under Section 56 of the Electricity Act, 2003.
Final Decision
Both writ petitions are allowed. The impugned orders dated 02/02/2011, 07.08.2013, and 02.08.2013 are quashed. The respondents are directed to refund the amount of Rs.68,96,044/- to the petitioner along with interest at 12% per annum from the date of payment until realization.
Law Points
- Electricity Act
- 2003
- Section 56
- Limitation for recovery of arrears
- Unverified meter readings
- Natural justice
- Writ jurisdiction under Articles 226 and 227 of the Constitution of India
