In a notable ruling on the accrual of claims for interest and the scope of procedural bars, the High Court of Punjab and Haryana, presided over by Justice Tribhuvan Dahiya, has set aside an award of the Permanent Lok Adalat and directed the Punjab State Power Corporation Limited (PSPCL) to pay 6% per annum interest on an amount of ₹6,13,800 that had been wrongfully collected from a consumer and subsequently refunded. The Court clarified that making administrative representations does not constitute instituting legal proceedings under Order II Rule 2 of the Code of Civil Procedure (CPC), and limitation for claiming interest runs from the date the excess amount is actually refunded.
Background of the Case
The petitioner, M/s Sangrur Cold Storage, holds an electricity connection (bearing connection no. S46MS460073P and account no. 3002802541) under the Large Supply (LS) category. Beginning in April 2011, the Corporation wrongfully levied additional supply units on the petitioner at the rate of three per cent.
The petitioner lodged an objection against the wrongful levy through a letter dated October 13, 2014, followed by successive reminders dated March 4, 2016, July 5, 2016, and February 14, 2020. The Corporation subsequently conceded its error in its response to a legal notice dated April 28, 2021, and refunded the wrongfully charged amount of ₹6,13,800 on April 5, 2022.
Because the Corporation refunded the principal sum without interest, the petitioner issued a representation demanding interest on April 27, 2022, and thereafter approached the Permanent Lok Adalat (Public Utility Services), Sangrur, on July 1, 2022, by filing an application under Section 22-C of the Legal Services Authorities Act, 1987.
The Permanent Lok Adalat dismissed the application vide an award dated February 4, 2026, ruling that:
- Having failed to demand interest at the initial stage when submitting representations for refund, the petitioner was deemed to have waived its rights under Order II Rule 2 CPC; and
- The refund claim pertained to the period between May 2011 and March 2017, rendering the claim barred by the law of limitation.
Aggrieved by this rejection, the petitioner approached the High Court seeking a writ of mandamus directing the payment of 18% per annum interest on the refunded amount and the quashing of the Permanent Lok Adalat’s award.
Submissions of the Parties
Advocate Sparsh Chibber, appearing for the petitioner through video conferencing, argued that the additional amount had been illegally charged and retained by the Corporation without any lawful justification, thereby entitling the consumer to the payment of interest on the retained funds.
Advocates Priyanka Malik and Mehak Kanwar, appearing for the respondent Corporation, were not in a position to dispute the factual matrix presented before the Court.
Court’s Analysis and Observations
Examining the record, Justice Dahiya observed that the Corporation had unlawfully retained and utilized the consumer’s money for its own ends. Highlighting the admission of liability by conduct, the Court observed:
“The wrong committed by the Corporation stands admitted by refund of the amount on 05.04.2022.”
Addressing the findings of the Permanent Lok Adalat on limitation, the Court held that the petitioner had promptly asserted its rights after the refund was made, noting:
“In these facts, it cannot be said that his claim is time barred, as the cause of action for claiming interest accrued only upon refund of the amount on 05.04.2022.”
The Court also rejected the invocation of Order II Rule 2 CPC against the petitioner, emphasizing that administrative grievance redressal cannot be equated with court action:
“Further, the petitioner cannot be said to have instituted any proceedings before any Court of law or Tribunal by simply making representations with the respondents seeking refund. Therefore, provisions of Order II Rule 2 CPC would have no application.”
Decision
In view of these findings, the High Court disposed of the writ petition and set aside the impugned award dated February 4, 2026. The Court directed the respondents to pay interest at the rate of six per cent per annum on the total refunded amount from May 2011 up to the date of refund (April 5, 2022) within four weeks of receiving a certified copy of the order.
Case Details
Case Title: M/s Sangrur Cold Storage v. Punjab State Power Corporation Limited and another
Case No.: CWP-15813-2026
Bench: Justice Tribhuvan Dahiya
Date: 01.09.2026
