Electricity Act – Additional Bill Raised By Distributor After Detecting Mistake Not Hit By 2 Years Limitation Under Section 56(2): Supreme Court

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Electricity Act – Additional Bill Raised By Distributor After Detecting Mistake Not Hit By 2 Years Limitation Under Section 56(2)

Case: M/S Prem Cottex v Uttar Haryana Bijli Vitran Nigam Ltd & Ors

Coram: Justice Hemant Gupta and Justice V Ramasubramanian

Case No: Civil Appeal Number 7235 of 2009

Court Observation: “The matter can be examined from another angle as well. Sub­section (1) 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 electricity. Sub­section (2) of Section 56 has a non­-obstante clause with respect to what is contained in any other law, regarding the right to recover including the right to disconnect. Therefore, if the licensee has 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 (2) will not start running. So long as limitation has not started running, the bar for recovery and disconnection will not come into effect”

“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 (2) of Section 56 is dissected into two parts it will read as follows:­

(i) 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; and (ii) the licensee shall not cut off the supply of electricity.

Therefore, the bar actually operates on two distinct rights of the licensee, namely, (i) the right to recover; and (ii) the right to disconnect. The bar with reference to the enforcement of the right to disconnect, is actually an exception to the law of limitation. Under the law of limitation, what is extinguished is the remedy and not the right. To be 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 normal remedy of recovery but also bars the remedy of disconnection. This is why we think that the second part of Section 56(2) is an exception to the law of limitation”

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Electricity Act, Detecting Mistake, 2 Years Limitation