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Assistant Engineer (D1), Ajmer Vidyut Vitran Nigam Limited v. Rahamatullah Khan alias Rahamjulla

Civil Appeal · 2020 INSC 205Decided 18 Feb 2020
Civil Appeal No. 1672 of 2020
Justice Uday Umesh Lalit · Justice Indu Malhotra

Background

A consumer was billed under the wrong, lower electricity tariff code for over two years due to an internal error by the electricity distribution company. When an audit later discovered the mistake, the company issued a demand for the shortfall years after the original billing period, well past the two-year limitation period under Section 56(2) of the Electricity Act, 2003. The consumer successfully challenged the demand before consumer fora, leading the licensee company to appeal to the Supreme Court.

Decision Breakdown

The Court held that a sum becomes "first due" under Section 56(2) on the date the bill demanding it is first raised, not the date the mistake is discovered. It clarified that the two-year limitation only bars the company from disconnecting the electricity supply to recover old or corrected dues: it does not stop the company from raising a supplementary bill or pursuing other legal remedies (such as a civil suit) to recover a genuine shortfall discovered later. On the facts, since the additional demand here was raised more than two years after the original bill, the company could pursue recovery through other means but could not disconnect supply.

Lesson Learnt

If an electricity company realizes years later that it undercharged you due to its own mistake, it can still ask you to pay the difference through other legal means, but it cannot cut off your electricity supply to force recovery if more than two years have passed since the original bill.

Official source (sci.gov.in)View Judgment (PDF)

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