In a landmark ruling, the National Consumer Disputes Redressal Commission (NCDRC) clarified that electricity charges become payable only when a bill is issued, irrespective of when the electricity was consumed. The ruling came as the NCDRC dismissed a revision petition filed by the State Bank of India (SBI) against Jaipur Vidyut Vitran Nigam Limited (JVVNL) in a dispute concerning delayed billing for arrears.
Presiding Member AVM J. Rajendra (Retd.) issued the judgment, upholding JVVNL’s demand for ₹5,81,893, originally raised in August 2019 for electricity consumed during 2013-2015. The NCDRC reaffirmed established legal principles on billing and payment obligations under the Indian Electricity Act, 2003, offering clarity on the interpretation of limitation periods.
Case Background
The dispute originated when JVVNL issued a demand notice to SBI in 2019 for arrears from May 2013 to September 2013 and November 2013 to July 2015. According to JVVNL, the arrears arose due to a defective electricity meter during that period. The demand was reflected in subsequent bills, culminating in a final notice of ₹5,81,893 in August 2019.
SBI challenged the demand, arguing it was time-barred under Section 56(2) of the Indian Electricity Act, 2003. This section limits the recovery of arrears to two years from the date the charges become “first due,” unless previously reflected in a bill. SBI contended that the delayed demand violated this provision and sought compensation for alleged deficiency in service.
Legal Journey
1. District Consumer Forum Ruling (2021):
The District Consumer Disputes Redressal Forum, Sawai Madhopur, initially ruled in favor of SBI. It held that JVVNL’s demand for arrears was barred by limitation under Section 56(2). The forum quashed the demand notice and directed JVVNL to issue a revised bill while awarding nominal compensation to SBI.
2. State Commission Ruling (2022):
JVVNL appealed the decision to the State Consumer Disputes Redressal Commission, Rajasthan. The State Commission overturned the District Forum’s order, holding that the limitation period began only when the bill was issued, not when the electricity was consumed.
3. NCDRC Ruling (2024):
Dissatisfied with the State Commission’s order, SBI filed a revision petition before the NCDRC. The commission’s ruling dismissed the petition, upholding the principle that charges become “first due” only upon the issuance of a bill.
Key Legal Issues
The case revolved around two pivotal legal questions:
1. When Do Electricity Charges Become Payable?
The NCDRC relied on Supreme Court precedents, including Assistant Engineer (D1), Ajmer Vidyut Vitran Nigam Ltd. v. Rahamatullah Khan (2020), which established that payment obligations arise only when a bill is issued, even if liability for consumption exists earlier.
2. Limitation Period for Recovery of Dues:
Section 56(2) of the Indian Electricity Act restricts recovery of arrears to within two years from when the charges become “first due.” The NCDRC clarified that the limitation period begins when the bill is raised, not when the electricity is consumed.
NCDRC Observations
Presiding Member AVM J. Rajendra (Retd.) dismissed the revision petition with detailed observations:
– “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,” the commission observed, quoting the Supreme Court’s judgment in M/s Prem Cottex v. Uttar Haryana Bijli Vitran Nigam Ltd..
– It was further noted that the limitation period under Section 56(2) commences only from the date of the bill’s issuance. The delayed issuance of a demand does not constitute a “deficiency in service” by the electricity provider.
– Rejecting SBI’s claims, the commission concluded that the charges were legally recoverable as they were billed within the permissible limitation period starting from August 2019.
Outcome
The NCDRC upheld JVVNL’s demand for arrears and dismissed the complaint. It also reaffirmed that delayed billing, when legally justified, does not amount to a deficiency in service.
