Dismissed

M/S Pizza Palace Pvt. Ltd. v. the Assam Power Distribution Company Limited and 4 Ors.

Gauhati HC7 May 2025WP(C)/3073/2015

Case brief

AI extract

What is this about?

A writ petition challenged a supplementary electricity bill raised after the licensee corrected an error in the Multiplying Factor. Applying Supreme Court precedent on Section 56(2), the High Court held supplementary demands are not barred and dismissed the petition, directing payment within two months but restraining disconnection.

What the court decided

AI extract

M/S Pizza Palace Pvt. Ltd. Vs the Assam Power… — Service and Employment | Gauhati HC (2025)

Page No.# 1/9

GAHC010116682015

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THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)

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Case No. : WP(C)/3073/2015

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M/S PIZZA PALACE PVT. LTD. B BARUA ROAD, ULUBARI, GHY - 7, DIST.- KAMRUP M, ASSAM, REP. BY ONE OF ITS DIRECTOR, SRI BIRENDRA KUMAR BERIA, S/O- LT. RAGHUNATH RAI BERIA.

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VERSUS

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THE ASSAM POWER DISTRIBUTION COMPANY LIMITED and 4 ORS BIJULEE BHAWAN, PALTAN BAZAR, GHY- 1, DIST.- KAMRUP M, ASSAM.

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2:THE GENERAL MANAGER COM REV APDCL BIJULEE BHAWAN PALTAN BAZAR GHY- 1 DIST.- KAMRUP M ASSAM.

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3:THE AREA MANAGER IRCA-1 APDCL LAR PALTAN BAZAR GHY- 1 DIST.- KAMRUP M ASSAM.

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4:THE ASSTT. GENERAL MANAGER IRCA-1 APDCL PALTAN BAZAR GHY- 1 DIST.- KAMRUP M ASSAM.

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5:THE CHIEF EXECUTIVE OFFICER APDCL GEC-1 ULUBARI GHY- 7 DIST.- KAMRUP M ASSAM

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BEFORE

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HON’BLE MR. JUSTICE MICHAEL ZOTHANKHUMA

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For the petitioner : Mr. O. P. Bhati.

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For the respondents : Mr. B. Choudhury. Date of hearing & judgment : 08.05.2025

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Judgment and order (oral)

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Heard Mr. O. P. Bhati, learned counsel for the petitioner and Mr. B. Choudhury, learned Standing Counsel for the APDCL.

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2. The petitioner is aggrieved with the impugned letter dated 22.11.2014, issued by the respondent No. 3 to the petitioner, by which a supplementary bill, amounting to Rs.24,64,222/-, for the period w.e.f. 21.06.2007 to 01.11.2012 and 22.04.2013 to 30.06.2014, has been served upon the petitioner, inasmuch as, the energy bill served upon the petitioner earlier for the above-said period, had been calculated with the Multiplying Factor of 1, which had been corrected by way of the supplementary bill, by using the correct Multiplying Factor of 15. The petitioner has also put to challenge the impugned letter dated 15.05.2015 issued by the respondent No. 5, which rejected the petitioner’s appeal for dismissing the supplementary bill.

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3. The petitioner’s case in brief is that the petitioner had been issued a supplementary bill dated 21.11.2014, for paying electricity bill amounting to Rs.24,64,222/-. The supplementary bill was for payment of electricity charges

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by applying the Multiplying Factor of 15 for two periods, i.e., from 21.06.2007 to 01.11.2012 and from 22.04.2013 to 30.06.2014.

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4. The petitioner’s counsel submits that the supplementary bill, pertaining to the 1^st period, i.e., 21.06.2007 to 01.11.2012, is hit by Section 56(2) of the Electricity Act, 2003 and as the said assessment for electricity has been made known to the petitioner only in the year 2014, the petitioner is not liable to pay the electricity bill for the said period, as it is hit by limitation. However, the petitioner is liable to pay the electricity charges, in terms of the supplementary bill for the 2^nd period, i.e., from 22.04.2013 to 30.06.2014, as the same is within two years from the date of receipt of the supplementary bill.

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5. The petitioner’s counsel submits that in terms of the judgment of the Supreme Court in the case of Assistant Engineer (D1), Ajmer Vidyut Vitran Nagam Limited and Another vs. Rahamatullah Khan Alias Rahamjulla , reported in (2020) 4 SCC 650 , the Supreme Court had held that in terms of Sub-Section (2) of Section 56 of the Electricity Act, 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 could the licensee/company disconnect the supply of the consumer.

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6. Mr. B. Choudhury, learned Standing Counsel for the APDCL, on the other hand, submits that the Supreme Court in the above case of Rahamatullah Khan (supra) has clarified as to when the electricity charges would become “first due”, to mean that it would become due only after the bill is issued to the consumer, even though the liability to pay may arise on the date of consumption

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of electricity. Further, the period of limitation of two years would commence from the date when the electricity charges became “first due” under Sub-Section (2) of Section 56 of the Electricity Act.

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7. In the present case, the supplementary bill with the Multiplying Factor of 15, had been issued only on 21.11.2014 and as such the electricity charges became “first due” from 21.11.2014. Thus, there was no question of the supplementary bill being hit by Section 56(2) of the Electricity Act. He submits that in any event, Section 56(2) of the Electricity Act is not with regard to the limitation being imposed on the payment of electricity bill, but only with regard to discontinuation of electricity to the consumer, if the payment for the bills is not made by the consumer within two years after the electricity charges became “first due”. He accordingly submits that the petitioner has to pay the electricity charges as per the supplementary bill. Mr. Choudhury also submits that the APDCL will not discontinue the electricity supply of the petitioner.

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8. I have heard the learned counsels for the parties.

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9. As can be seen from the judgment of the Supreme Court in the case of Rahamatullah Khan (supra) , the obligation of a consumer to pay the electricity charges arises after the bill is issued by the licensee company. The bill sets out the time within which the charges have to be paid and if the consumer fails to pay the charges within the stipulated period, the electricity charges can be carried forward to the next bills as arrears. Sub-Section (2) of Section 56 of the Electricity Act provides that 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

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recoverable as arrears of charges for the electricity supply nor would the licensee/company disconnect the electricity supply of the consumer.

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10. Para 6.9 of the judgment of the Supreme Court in the case of Rahamatullah Khan (supra) states that the liability to pay arises on the consumption of electricity. The obligation to pay would however arise when the bill is issued by the licensee company, quantifying the charges to be paid. The 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.

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11. Section 56 of the Electricity Act states as follows:-

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“56. Disconnection of supply in default of payment.–

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(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 sum, together with any expenses incurred by him in cutting off and reconnecting the supply, are paid, but no longer:

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Provided that the supply of electricity shall not be cut off if such person

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deposits, under protest,–

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(a) an amount equal to the sum claimed from him, or

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(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.

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(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.”

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12. Para 7.5, 8, 9.1 and 9.2 of the judgment of the Supreme Court in the case of Rahamatullah Khan (supra) states as follows:-

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“ 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).

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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 9 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.

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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.

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9.2. 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 v. State of M.P.7, this Court held that: (SCC p. 11, para 22)

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"22. 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 becomes known to the party only when a court makes a declaration as to the invalidity of the law. Though a party could, with reasonable diligence, discover a mistake of fact even

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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).”

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13. In the present case, the APDCL had apparently charged the petitioner electricity charges by using the Multiplying Factor of 1 and had realized it’s mistake only in the year 2014. As such, the supplementary demand had been made by way of the impugned letter dated 22.11.2014 and the consequential electricity bill dated 21.11.2014, by charging the petitioner’s electricity consumption as an industrial unit, by using the Multiplying Factor of 15. Thus, by applying Clause 8 & 9.1 of the decision of the Supreme Court in the case of Rahamatullah Khan (supra) , it is clear that the APDCL was not precluded from raising a supplementary demand, after the expiry of the limitation period under Section 56(2). It only barred the APDCL from disconnection of the electricity supply to the petitioner for recovery of the additional demand, as it had apparently made electricity bills mistakenly for the preceding years by using the Multiplying Factor of “1”. The period of limitation not having commenced from a date prior to the issuance of the impugned letter and bill dated 22.11.2014, the petitioner’s stand that the electricity charges for the period 21/06/2009 to 1/11/12 is hit by limitation is without substance. However, the APDCL is restrained from discontinuing the petitioner’s electricity, in terms of the submission made by the counsel for the APDCL. The APDCL having issued the impugned supplementary letter and supplementary bill on 21.11.2014 and the petitioner’s writ petition having been filed on 25.05.2015, there is nothing to show that the payment of the electricity charges is barred under Section 56(2) of the Electricity Act.

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14. In view of the reasons stated above, the petitioner would have to pay the electricity charges, as indicated in the supplementary demand dated 21.11.2014, which should be done within a period of two months from today. Any amount already paid by the petitioner pursuant to the supplementary bill shall be adjusted. The APDCL is however directed not to disconnect the electricity supply given to the petitioner, for recovery of the electricity dues, as provided in the supplementary demand.

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15. The writ petition is accordingly dismissed.

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JUDGE

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Comparing Assistant

M/S Pizza Palace Pvt. Ltd. v. the Assam Power Distribution Company Limited and 4 Ors.

Case brief

What is this about?

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M/S Pizza Palace Pvt. Ltd. v. the Assam Power Distribution Company Limited and 4 Ors.

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