Raising Demand For Undisputed Consumption Of Electricity Not Deficiency In Service: NCDRC

Brief Facts of the Case

The complainant, SBI, is a consumer of electricity supplied by Jaipur Vidyut Vitran Nigam Limited/electricity company. The electricity company issued a notice demanding ₹5,81,893 for dues from specific past periods. These charges were repeatedly reflected in the bank's bills. SBI argued that, under Section 56(2) of the Indian Electricity Act, arrears could only be recovered within two years of billing. The bank claimed this was a deficiency in service and sought compensation before the District Commission. The District Commission allowed the complaint and directed the electricity company to pay compensation of Rs. 3000 along with Rs. 3,000 as litigation costs. Being aggrieved, the electricity company filed an appeal before the State Commission of Rajasthan, which allowed the appeal. Consequently, the complainant approached the National Commission with a revision petition.

Contentions of the Electricity Company

The electricity company claimed the bank's meter was faulty between November 2013 and July 2015. It calculated the demand using an average from May to September 2013 and charged ₹5,81,893. The company asked for the complaint to be dismissed on the said grounds.

Observations by the National Commission

The National Commission observed that the primary burden of proving deficiency in service or unfair trade practices lies on the complainant. The complainant argued, under Section 56 of the Indian Electricity Act, 2003, that the electricity bill demanded by the electricity company was barred by limitation. The electricity company countered, stating the bill was based on a later demand due to a defective meter. The Commission noted that raising an additional demand for undisputed consumption does not amount to deficiency in service. Section 56(1) applies only when a consumer neglects payment, not due to the negligence of the electricity company. Citing M/S Prem Cottex v. Uttar Haryana Bijli Vitran Nigam Ltd. & Ors, the Supreme Court clarified that limitation begins only when a demand is raised, as negligence cannot exist without a demand. In Assistant Engineer, Ajmer Vidyut Vitran Nigam Ltd. v. Rahamatullah Khan, the Supreme Court held that electricity charges become “first due” only after a bill is issued, even though liability arises on consumption. Here, the electricity company first raised the bill on 29.08.2019, and the limitation period started from that date. The bill was for recovering a pending assessment and not a deficiency in service. Hence, the National Commission dismissed the revision petition and upheld the State Commission's order.

Case Title: State Bank Of India Vs. Jaipur Vidyut Vitran Nigam Limited

Case Number: R.P. No. 1309/2022

Click Here To Read/Download The Order