Arrears of electricity charges under the Electricity Act, 2003; Supreme Court's judgments.

 Power of Distribution Licensee under the Electricity Act, 2003 to recover the Electricity dues;                                     Supreme Court's latest view.

  To recover the arrears of the electricity consumption is always prime concern of the  distribution companies under the regime of the electricity law.  section 56 of the Electricity Act, 2003 provides for the disconnection of supply in default of payment  wherein it is mentioned that where any person neglects to  pay any charges 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. 

Section 56(2) of the  Act, still confuse  which says that 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. 

the question arises here that is there is only two year limitation period for the recovery of the electricity  charges or otherwise.   this issue, whether the distribution licensee can recover the past due which are much older than two years i.e. 10 years or more,  the issue has been settled by  the  Hon'ble Supreme Court in the case titled as Assistant Engineer (D1) Ajmer Vidyut Vitran Nigam Limited and another versus Rahamatullah Khan @ Rahamjullah (2020) 4 SCC 650, wherein the Hon'ble Supreme Court held that the obligation to pay would arise when the bill is issued by the licensee company, quantifying the charges to be paid and 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 the electricity.   so far as the period of limitation is concerned the Hon'ble Court held that the period of limitation of two years would commence from the date on which  the  electricity charges become 'first due' under sub-section (2) of section 56. this provision restricts the right of 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 part period. 

The licensee company is empowered to issue supplementary bill/demand after the  limitation period of two years  and section 56(2) does not preclude to do the same. only bar which has been created by the section 56(2) that after the expiry of the period of limitation of two years, licensee cannot take coercive action i.e. disconnection of the supply. 

further this judgment was relied upon by the subsequent decision of the Hon'ble Apex Court in M/S Prem Cottex Ltd versus Utter Haryana Bijli Vitran Nigam Limited reported in 2021 SCC Online SC 870, decided on October 5, 2021, wherein the court  after applying the ratio of the Ramatullah  Khan's Judgment, held that  in  case of the 'bonafide mistake' or 'error' supplementary demand/bill can be raised by the distribution company to consumer.  but after the detection of the bonafide mistake or error, the  electricity dues must be shown as arrear in the regular electricity bill and the the sum due for first time would be the date when such mistake or error stands detected by the licensee (such as audit).

 So, in the concluding remarks it can be said that the above law of the Supreme Court will definitely help the distribution licensee for the purpose of the effecting recovery of the past dues.