If a licensee discovers in the course of audit or otherwise that a consumer has been short billed, the licensee is certainly entitled to raise a demand.: Supreme Court
So long as the consumer does not dispute the correctness of the claim made by the licensee that there was short assessment, it is not open to the consumer to claim that there was any deficiency as held by the Hon’ble Court through the bench lead by Justice V. Ramasubramanian, in the case of M/S Prem Cottex v. Uttar Haryana Bijli Vitran Nigam Ltd. &amp; Ors. (CIVIL APPEAL NO.7235 OF 2009).  The brief facts of the case are the Appellant is carrying on the business of manufacturing cotton yarn in Panipat, Haryana. He is having an L.S. connection, which got extended from 404.517 KW to 765 KW with C.D 449 KVA to 850 KVA, on 3.08.2006. After 3 years of the grant of extension, the appellant was served with a memo dated 11.09.2009, claiming that though the multiply factor is 10, it was wrongly recorded in the bills for the period from 3.08.2006 to 8/09 as 5 and that as a consequence there was short billing to the tune of Rs.1,35,06,585/. Aggrieved by the said notice, the appellant filed a consumer complaint before the National Commission, contending inter alia that the demand made by the respondents is the outcome of a glaring mistake and gross negligence on their part and that under Section 56 of the Electricity Act, 2003, no amount due from a customer is recoverable after a period of two years from the date on which it became first due. By an Order dated 1.10.2009, the National Commission dismissed the complaint on the ground that it is a case of “escaped assessment” and not a case of “deficiency in service”. Aggrieved by the said Order, the appellant is before the Hon’ble Court. The Hon’ble Court on 13.11.2009 granted an interim stay on the order and following on 19.08.2014, modified the stay by directing the appellant to pay to the first respondent herein, 50% of the demand amount within six weeks with a condition that in case the appellant succeeded, the said amount shall be refunded with interest @ 9% p.a. After a careful reading and examination of Section 56 of the Electricity Act, 2003 and the cases of Assistant Engineer (D1), Ajmer Vidyut Vitran Nigam limited and Anr. vs. Rahamatullah Khan and Mahabir Kishore &amp; Ors. vs. State of Madhya Pradesh, the Hon’ble Court held, “So long as the consumer does not dispute the correctness of the claim made by the licensee that there was short assessment, it is not open to the consumer to claim that there was any deficiency. This is why, the National Commission, in the impugned order correctly points out that it is a case of “escaped assessment” and not “deficiency in service”. We are of the view that the National Commission was justified in rejecting the complaint and we find no reason to interfere with the Order of the National Commission. Accordingly, the appeal is dismissed. However, since the appellant has already paid 50% of the demand amount pursuant to an interim order passed by this Court on 19.08.2014, we give eight weeks’ time to the appellant to make payment of the balance amount.”
Challenging an Order of the National Consumer Disputes Redressal Commission dismissing service on the part of the licenseethe 2. We have heard Sh. K.C. Mittal learned counsel for the appellant and Mr. Arun Bhardwaj learned Additional Advocate General for the yarn in Panipat Haryana. The appellant is having a L.S. connection 3.08.2006 to 8 09 as 5 and that as a consequence there was short billing to the tune of Rs.1 35 06 585 ­. The notice called upon the appellant to pay the amount as demanded failing which certain 22.09.2009 and then filed a consumer complaint before the National Commission contending inter alia that the demand made by the their part and that under Section 56 of the Electricity Act 2003 no amount due from a customer is recoverable after a 7. While ordering notice in the above appeal on 13.11.2009 this Court granted interim stay of the impugned order. However on an appellant to pay to the first respondent herein 50% of the demand amount within six weeks with a condition that in case the appellant succeeded the said amount shall be refunded with interest @ 9% p.a Accordingly the appellant has paid a sum of Rs.54 03 293 ­ on 24.09.2014. The appellant claims to have already paid a sum of Rs.13 50 000 ­ on 9.10.2009 itself and this amount together with the Act and the exposition of law made by this Court in the decision in Assistant Engineer Ajmer Vidyut Vitran Nigam limited and Before we proceed to consider the statutory provision and the 4 SCC 650 the part of the respondents and that on the basis of the bill already raised they have charged their customers and that it may not be possible for them to go back to their customers with an additional 10. Section 56 of the Electricity Act 2003 reads as under:­ “56. Disconnection of supply in default of payment. ­ 1) Where any person neglects to pay any charge for 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 been supplied transmitted distributed or wheeled and may discontinue the supply until such charge or other sum reconnecting the supply are paid but no longer if such person deposits under protest ­ the electricity charges due from him for each month whichever is less pending disposal of any dispute between for the time being in force no sum due from any consumer such sum has been shown continuously as recoverable as In Rahamatullah Khan three issues arose for the consideration of this Court. They were what is the meaning to be 12. On the first two issues this Court held that though the liability that therefore electricity charges would become “first due” only Khan that “the period of limitation of two years would preclude the licensee from raising an additional or supplementary demand after the expiry of the period of limitation in the case of a of this Court in Mahabir Kishore & Ors. vs. State of Madhya 13. Despite holding that electricity charges would become first due 4 SCC 1 the period of limitation prescribed therein in the case of a mistake or bonafide error this Court came to the conclusion that what is barred under Section 56(2) is only the but is barred from taking recourse to disconnection of supply under 14. But a careful reading of Section 56(2) would show that the bar contained therein is not merely with respect to disconnection of supply but also with respect to recovery. If Sub­section of Section 56 is 15. Therefore the bar actually operates on two distinct rights of the licensee namely the right to recover andthe right to disconnect actually an exception to the law of limitation. Under the law of precise what is extinguished by the law of limitation is the remedy through a court of law and not a remedy available if any de hors through a court of law. However section 56(2) bars not merely the This is why we think that the second part of Section 56(2) is an 16. Be that as it may once it is held that the term “first due” would mean the date on which a bill is issued then the question of recourse to disconnection of supply would not arise. But Rahamatullah Khan says in the penultimate paragraph that “the It appears from the narration of facts in paragraph 2 of period from July­2009 to September­2011. Then a bill was raised on 25.05.2015 for the aforesaid period. Therefore the consumer successfully challenged the demand before the District Consumer a revision filed by the consumer set aside the order of the State 18. Eventually this Court disposed of the appeals preventing the licensee from taking recourse to disconnection of supply but giving of the additional demand. Therefore the decision in Rahamatullah 19. Even otherwise there are two things in this case which we cannot overlook. The first is that the question whether the raising of an additional demand by itself would tantamount to any deficiency in service clothing the consumer fora with a power to deal with the 20. The fora constituted under the Consumer Protection Act 1986 is defective goods or in relation to deficiency in services. The word “2(1)(g) “deficiency” means any fault imperfection of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a 21. The raising of an additional demand in the form of “short assessment notice” on the ground that in the bills raised during a particular period of time the multiply factor was wrongly mentioned there was any deficiency. This is why the National Commission in the impugned order correctly points out that it is a case of “escaped In fact even before going into the question of Section 56(2) the clear that the respondents cannot be held guilty of any deficiency in service and hence dismissal of the complaint by the National 23. Coming to the second aspect namely the impact of Sub­sectionis the negligence of any person to pay any charge for electricity. Sub­section starts with the words “where any person neglects to pay any charge for electricity or any some other than a 24. Sub­section uses the words “no sum due from any consumer under this Section”. Therefore the bar under Sub­section is Sub­section which deals specifically with the negligence on the than a charge for electricity. What is covered by section 56 under to short billing in the first instance and the rectification of the same their mistake may not fall within the mischief namely “no sum due 26. The matter can be examined from another angle as well. Sub­ section of Section 56 as discussed above deals with the disconnection of electric supply if any person “neglects to pay any charge for electricity”. The question of neglect to pay would arise only after a demand is raised by the licensee. If the demand is not raised there is no occasion for a consumer to neglect to pay any charge for respect to what is contained in any other law regarding the right to not raised any bill there can be no negligence on the part of the consumer to pay the bill and consequently the period of limitation prescribed under Sub­section will not start running. So long as limitation has not started running the bar for recovery and disconnection will not come into effect. Hence the decision in 27. Therefore we are of the view that the National Commission was dismissed. However since the appellant has already paid 50% of the