AMICUS AI
Citation Codes
Neutral Citations
1997 INSC 57
Equivalent Citations
citation codes
Case Number
Disposition
Attorney(S)
Judges
Acts
  • Consumer Protection Act
  • Section 5, Subsection 2 of the 1983 Income Tax Act
  • Section 60-A of the Electricity (Supply) Act, 1948
  • Section 24, Electricity Act, 1910
  • Section 60-A, Electricity (Supply) Act, 1948
  • Section 24 of the Indian Electricity Act, 1910
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Cites
Cited by
Citation Codes
Neutral Citations
1997 INSC 57
Equivalent Citations
citation codes
Case Number
Disposition
Attorney(S)
Judges
Acts
  • Consumer Protection Act
  • Section 5, Subsection 2 of the 1983 Income Tax Act
  • Section 60-A of the Electricity (Supply) Act, 1948
  • Section 24, Electricity Act, 1910
  • Section 60-A, Electricity (Supply) Act, 1948
  • Section 24 of the Indian Electricity Act, 1910
Smart Summary

Factual and Procedural Background

The respondent–Electricity Board issued a supplementary bill on 5-2-1993 demanding Rs 3,17,659 from the petitioner. The petitioner objected on 16-2-1993 but ultimately paid the amount under protest. He then filed a consumer complaint before the State Consumers’ Disputes Redressal Commission, which on 24-5-1995 allowed the complaint, holding the claim barred by the three-year limitation period. The Electricity Board appealed. On 30-8-1996, the National Consumers’ Disputes Redressal Commission set aside the State Commission’s order, relying on Bombay High Court precedent and holding that no limitation applied to such supplementary demands under Section 24 of the Indian Electricity Act, 1910. The petitioner sought relief before the Supreme Court through a special leave petition (SLP).

Legal Issues Presented

  1. Whether Section 60-A of the Electricity (Supply) Act, 1948 imposes a three-year limitation period that bars the Electricity Board from issuing a supplementary bill after that period.
  2. Whether the Board can rely on its statutory power under Section 24 of the Indian Electricity Act, 1910 to demand payment and disconnect supply irrespective of the limitation applicable to filing a suit for recovery.

Arguments of the Parties

Petitioner's Arguments

  • Section 60-A of the Electricity (Supply) Act, 1948 prescribes a three-year limitation for the Board to institute any suit for recovery of arrears; by analogy, the same limitation should restrict the Board from issuing a supplementary demand.
  • Allowing the Board to act under Section 24 of the 1910 Act would negate the statutory limitation in Section 60-A, effectively permitting recovery of stale claims.

The opinion does not contain a detailed account of the respondent’s legal arguments.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Bharat Barrel & Drum Manufacturing Co. (P) Ltd. v. Municipal Corporation of Greater Bombay, AIR 1978 Bom 369 No statutory limitation period restricts the issuance of supplementary demands where the governing statute confers an independent power to recover charges. The National Commission—and the Supreme Court in affirming it—relied on this case to hold that the Electricity Board’s power under Section 24 to demand payment and disconnect supply is unaffected by the limitation applicable to filing suits.

Court's Reasoning and Analysis

The Supreme Court distinguished between two separate statutory powers:

  • Power to file a suit: Section 60-A of the Electricity (Supply) Act, 1948 merely enlarges the period within which a suit may be brought for recovery of dues in specific circumstances following constitution of the Board.
  • Power to demand payment and disconnect supply: Section 24 of the Indian Electricity Act, 1910 independently authorises the Board to issue a demand notice and, upon non-payment after seven days, discontinue electricity supply without first resorting to litigation.

The Court reasoned that the existence of a limitation period for filing a suit does not curtail the Board’s statutory right under Section 24. The relationship between the Board and the consumer is reciprocal: the Board supplies energy; the consumer must pay for it. When a consumer neglects or refuses to pay a valid supplementary bill, the Board may exercise its disconnection power. Accordingly, the National Commission correctly applied the Bombay High Court precedent and found no deficiency in service merely because a supplementary demand was raised for previously unbilled consumption.

Holding and Implications

The special leave petition is dismissed.

Direct Effect: The order of the National Consumers’ Disputes Redressal Commission stands affirmed, and the petitioner obtains no relief; the supplementary demand and any consequent disconnection remain valid.

Broader Implications: The decision underscores that the Electricity Board’s statutory power under Section 24 of the 1910 Act to issue supplementary bills and disconnect supply operates independently of the limitation period governing suits under Section 60-A of the 1948 Act. No new precedent is set, but existing jurisprudence is reinforced.

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    Swastic Industries v. Maharashtra State Electricity Board .

    Order

    1. The petitioner is canvassing the correctness of the decision of the National Consumers' Disputes Redressal Commission, New Delhi, made on 30-8-1996 in Appeal No. 520 of 1995.

    2. The admitted position is that the respondent-Electricity Board had issued a supplementary bill to the petitioner on 5-2-1993 demanding payment of Rs 3,17,659. The petitioner objected to the bill by his letter dated 16-2-1993. However, when a letter was issued for payment of the said amount, the petitioner paid it under protest and filed the complaint before the State Consumers' Disputes Redressal Commission. The Commission by order dated 24-5-1995 allowed the complaint and held that the claim was barred by limitation of 3 years. Feeling aggrieved, the Electricity Board filed an appeal. The National Commission relying upon the judgment of a Division Bench of the Bombay High Court in Bharat Barrel & Drum Manufacturing Co. (P) Ltd. v. Municipal Corpn. of Greater Bombay AIR 1978 Bom 369 has held that there is no limitation for making the demand by way of supplementary bill. Section 24 of the Electricity Act, 1910 gives power to the Board to issue such demand and to discontinue the supply to a consumer who neglects to pay the charges. It is contended by the learned counsel for the petitioner that Section 60-A of the Electricity (Supply) Act, 1948 prescribes a limitation of 3 years for the Board to institute any suit, after its constitution, for recovery of the arrears. Thereby the limitation of 3 years is required to be observed. The Board in negation of Section 60-A of the Electricity (Supply) Act cannot be permitted to exercise the power under Section 24 of the Indian Electricity Act, 1910. We find no force in the contention.

    3. Section 60-A of the Electricity (Supply) Act, 1948 envisages the enlargement of the period of limitation in certain circumstances, i.e, intervening period of the constitution of the Board, and the right of the State to recover the amounts due to the State for consumption of electricity delegating the power to the Board. In that behalf, clauses (i) and (ii) therein operate as under:

    “(i) where it has been constituted before the commencement of the Electricity (Supply) Amendment Act, 1966 (3 of 1966) within three years of such commencement; and
    (ii) where it has been constituted after such commencement, within three years of its constitution.”

    4. This is an enabling provision to recover the amounts due by way of suit, despite the fact that Section 24 of the Indian Electricity Act clearly empowers the Board to demand and collect any charge from the consumer and collect the same towards the electrical energy supplied by the Board in the following terms:

    “Where any person neglects to pay the charge for energy or any sum, other than a charge for energy, due from him to a licensee in respect of the supply of energy to him, the licensee may, after giving not less than seven clear days' notice in writing to such person and without prejudice to his right to recover such charge or other sum by suit, cut off the supply and for that purpose cut or disconnect any electric supply-line or other works, being the property of the licensee, through which energy may be supplied, and may discontinue the supply until such charge or other sum, together with any expenses incurred by him in cutting off and reconnecting the supply, are paid, but no longer.”

    5. It would, thus, be clear that the right to recover the charges is one part of it and right to discontinue supply of electrical energy to the consumer who neglects to pay charges is another part of it. The right to file a suit is a matter of option given to the licensee, the Electricity Board. Therefore, the mere fact that there is a right given to the Board to file the suit and the limitation has been prescribed to file the suit, it does not take away the right conferred on the Board under Section 24 to make demand for payment of the charges and on neglecting to pay the same they have the power to discontinue the supply or cut off the supply, as the case may be, when the consumer neglects to pay the charges. The intendment appears to be that the obligations are mutual. The Board would supply electrical energy and the consumer is under corresponding duty to pay the sum due towards the electricity consumed. Thus the Electricity Board, having exercised that power, since admittedly the petitioner had neglected to pay the bill for the additional sum, was right in disconnecting the supply without recourse to filing of the suit to recover the same. The National Commission, therefore, was right in following the judgment of the Bombay High Court and allowing the appeal setting aside the order of the State Commission. Moreover, there is no deficiency of service in making supplementary demand for escaped billing. There may be negligence or collusion by subordinate staff in not properly recording the reading or allowing pilferage to the consumers. That would be deficiency of service under the Consumer Protection Act. We do not find any illegality warranting interference.

    6. The special leave petition is accordingly dismissed.

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    Comments

    Swastic Industries v. Maharashtra State Electricity Board .
    (Jan 24, 1997)