TaxTMI 
TaxTMI 
2020 (2) TMI 1764
X X X X Extracts X X X X
X X X X Extracts X X X X
....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, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ment. 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 ra....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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 and Analysis The Electricity Act, 2003 is a consumer-friendly statute [Tata Powers v. Reliance Energy, (2008) 10 SCC 321]. The Statement of Objects and Reasons to the Act notes that 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. [(2002) 5 SCC 203]. 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 Electri....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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 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 arrear....
X X X X Extracts X X X X
X X X X Extracts X X X X
....onnect 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 o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t 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) 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. 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 [(1989) 4 SCC 1] 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 reas....