Electricity Billing Errors and Consumer Rights: Supreme Court Ruling in Assistant Engineer, Ajmer Vidyut Nigam v. Rahamatullah Khan

The case of Assistant Engineer (D1), Ajmer Vidyut Vitran Nigam Ltd. v. Rahamatullah Khan revolves around the issue of incorrect electricity billing and whether a distribution company can recover charges after a prolonged delay. The Supreme Court examined the applicability of Section 56(2) of the Electricity Act, 2003, which sets a two-year limitation period for recovering electricity dues.

The dispute arose when an internal audit discovered that the respondent, along with several other consumers, had been incorrectly billed at a lower tariff from July 2009 to September 2011. The power company issued a supplementary bill in 2015 to recover the shortfall, which was challenged by the consumer before the Consumer Forum.

Arguments by the Petitioner

The power distribution company argued that they had the legal authority to recover the outstanding amount and that the limitation period should start from the date the error was discovered. They contended:

“The period of limitation should begin from the date when the mistake is discovered, and the power company should be entitled to recover the charges due.”

They also asserted that the consumer was legally bound to pay for the electricity consumed, even if the billing was incorrect.

Arguments by the Respondent

The consumer argued that the additional demand was barred by limitation under Section 56(2) of the Electricity Act. They contended:

“No electricity charges shall be recoverable after two years from the date when such sum first became due unless it was continuously shown as recoverable arrears in the bills.”

They further claimed that the demand notice was arbitrary and should be quashed.

Supreme Court’s Analysis

The Supreme Court interpreted Section 56(2) and clarified the meaning of “first due.” It held:

“The liability to pay arises on consumption, but the limitation period starts from the date of the first bill. If the power company fails to claim the amount within two years, it cannot disconnect electricity for non-payment.”

However, the Court also ruled that the power company could still pursue other legal remedies to recover the amount.

Final Verdict

The Supreme Court dismissed the appeal of the power company and ruled that it could not disconnect the electricity supply for an old billing error. However, it allowed the company to use other legal methods to recover the dues. This judgment upholds consumer rights and prevents arbitrary billing practices.

Petitioner Name: Assistant Engineer (D1), Ajmer Vidyut Vitran Nigam Ltd..
Respondent Name: Rahamatullah Khan alias Rahamjulla.
Judgment By: Justice Uday Umesh Lalit, Justice Indu Malhotra.
Place Of Incident: Ajmer, Rajasthan.
Judgment Date: 18-02-2020.

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