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The Supreme Court has held that charging an additional amount from a consumer after noticing a wrongly recorded "Multiply Factor" (MF) is not barred under Section 56 of the Electricity Act, 2003 which states that no amount due from a customer is recoverable after a period of two years from the date on which it became first due.

With this view, the court went on to dismiss an appeal filed by a cotton manufacturer challenging the additional demand raised by the Uttar Haryana Bijli Vitran Nigam Ltd.

The appellant had gotten an extension to his electricity connection in 2006.

After three years of the grant of extension, the appellant was served with a memo in September, 2009  namely a “short assessment notice”, which claimed that though the MF was 10, it was wrongly recorded in the bills for the three year period as 5 and as a consequence there was short billing to the tune of Rs.1,35,06,585/­- which was demanded from the appellant subsequently.

An aggrieved appellant moved the National Consumer Disputes Resolution Commission (NCDRC) which dismissed the complaint on the ground that it was a case of "escaped assessment" and not a case of “deficiency in service”.

A bench of Justices Hemant Gupta and V Ramasubramanian held that raising an additional demand would not amount to "deficiency of service". It added,

"This court also held that Section 56(2) does not preclude   the   licensee   from   raising   an   additional   or   supplementary demand after the expiry of the period of limitation in the case of a mistake or bonafide error. To come to such a conclusion, this Court also referred to Section 17(1)(c) of the Limitation Act, 1963 and the decision of   this   Court   in Mahabir   Kishore   &   Ors.   vs.   State   of   Madhya Pradesh."

Moving away from the decision rendered in Ajmer Vidyut Vitran Nigam Limited and Anr. vs. Rahamatullah Khan alias Rahamjulla, the bench said that the licensee may take recourse to any remedy available in law for the recovery of the additional demand, but was barred from taking recourse to disconnection of supply under Section 56(2).

Agreeing with the view of the consumer forum, the bench added,

"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, cannot tantamount to deficiency in service. 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. 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."

It was further clarified that Section 56, under sub­section (1) covered the negligence on the part of a person to pay for electricity and not anything else, nor any negligence on the part of the licensee.

With this view, the instant appeal was dismissed with a direction to the appellant to pay the additional bill in full, in eight weeks.

Cause Title: M/s Prem Cottex v. Uttar Haryana Bijli Vitran Nigam Ltd.

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