M/S PREM COTTEXversusUTTAR HARYANA BIJLI VITRAN NIGAM LTD. & ORS.

                        [2021] 8 S.C.R. 645                              645


                       M/S PREM COTTEX                                   A
                                  v.
   UTTAR HARYANA BIJLI VITRAN NIGAM LTD. & ORS.
                   (Civil Appeal No. 7235 of 2009)
                        OCTOBER 05, 2021                                 B

  [HEMANT GUPTA AND V. RAMASUBRAMANIAN, JJ.]
       Consumer Protection Act, 1986 – 2(1)(g) – Deficiency in
service – When not – Additional demand raised by respondent no.3
alleging short billing in view of wrong multiply factor (MF) applied     C
in the bills raised for particular period – Challenged by appellant
inter alia pleading bar u/s.56, 2003 Act – Complaint dismissed by
National Consumer Dispute Redressal Commission – On appeal,
held: Before going into the question of bar u/s.56(2), the consumer
forum is obliged to find out at the threshold whether there was any
deficiency in service – Raising of an additional demand in the form      D
of short assessment notice, on the ground that the multiply factor
was wrongly mentioned in the bills raised during particular period,
does not tantamount to deficiency in service – If a licensee discovers
in the course of audit or otherwise that a consumer has been short
billed, it is entitled to raise a demand – So long as the consumer       E
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 – Appellant never disputed the
correctness of the respondents’ claim that the MF to be applied was
10, but it was wrongly applied as 5 – National Commission correctly
pointed out that it is a case of “escaped assessment” and not            F
“deficiency in service” – Respondents not guilty of any deficiency
in service – Complaint rightly dismissed – Electricity Act, 2003 –
s.56(2).
       Electricity Act, 2003 – s.56(2) – Bar under – Held: Bar u/
s.56(2) operates on two distinct rights of the licensee, (i) the right   G
to recover (ii) the right to disconnect – Bar with reference to the
enforcement of the right to disconnect, is an exception to the law of
limitation – Limitation Act, 1963.
     Electricity Act, 2003 – s.56(1) – Impact of, on s.56(2) –
Discussed.                                                               H
                                 645
646            SUPREME COURT REPORTS                        [2021] 8 S.C.R.


A           Dismissing the appeal, the Court
             HELD: 1.1 The appellant never disputed the correctness
      of the claim of the respondents that the multiply factor (MF) to
      be applied was 10, but it was wrongly applied as 5. A careful
      reading of Section 56(2), Electricity Act, 2003 would show that
B     the bar contained therein is not merely w ith respect to
      disconnection of supply but also with respect to recovery. If Sub-
      section (2) of Section 56 is dissected into two parts it will read as
      follows :-(i) No sum due from any consumer under this Section
      shall be recoverable after the period of two years from the date
      when such sum became first due; and (ii) the licensee shall not
C     cut off the supply of electricity. Therefore, the bar actually operates
      on two distinct rights of the licensee, namely, (i) the right to
      recover; and (ii) the right to disconnect. The bar with reference
      to the enforcement of the right to disconnect, is actually an
      exception to the law of limitation. Under the law of limitation,
D     what is extinguished is the remedy and not the right. What is
      extinguished by the law of limitation, is the remedy through a
      court of law and not a remedy available, if any, de hors through a
      court of law. However, section 56(2) bars not merely the normal
      remedy of recovery but also bars the remedy of disconnection.
      The second part of Section 56(2) is an exception to the law of
E     limitation. Once it is held that the term “first due” would mean
      the date on which a bill is issued, (as held in para 6.9 of
      Rahamatullah Khan) and once it is held that the period of
      limitation would commence from the date of discovery of the
      mistake (as held in paragraphs 9.1 to 9.3 of Rahamatullah Khan),
F     then the question of allowing licensee to recover the amount by
      any other mode but not take recourse to disconnection of supply
      would not arise. But Rahamatullah Khan says in the penultimate
      paragraph that “the licensee may take recourse to any remedy
      available in law for recovery of the additional demand, but barred
      from taking recourse to disconnection of supply under sub-section
G     (2) of section 56 of the Act”.The decision in Rahamatullah Khan
      is distinguishable on facts. [Paras 9, 14-16 and 18][652-G-H;
      653-A-F; 654-B]
            Assistant Engineer (D1), Ajmer Vidyut Vitran Nigam
            limited and Anr. vs. Rahamatullah Khan alias
H
 M/S PREM COTTEX v. UTTAR HARYANA BIJLI VITRAN NIGAM                    647
                         LTD

      Rahamjulla (2020) 4 SCC 650:[2020] 2 SCR 929 –                    A
      distinguished.
      1.2 Even otherwise there are two things in this case, which
cannot be overlooked. The first is that the question whether the
raising of an additional demand, by itself would tantamount to any
deficiency in service, clothing the consumer fora with a power to       B
deal with the dispute, was not raised or considered in
Rahamatullah Khan. The second is the impact of Sub-section (1)
of Section 56 on Sub-section (2) thereto. The fora constituted
under the Consumer Protection Act, 1986 is entitled to deal with
the complaint of a consumer, either in relation to defective goods
or in relation to deficiency in services. The word “deficiency” is      C
defined in Section 2(1)(g) of the Consumer Protection Act, 1986.
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             D
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. This is why, the National Commission,         E
in the impugned order correctly pointed out that it is a case of
“escaped assessment” and not “deficiency in service”. [Paras
19-21][654-C-H]
      1.3 In fact, even before going into the question of Section
56(2), the consumer forum is obliged to find out at the threshold       F
whether there was any deficiency in service. It is only then that
the recourse taken by the licensee for recovery of the amount,
can be put to test in terms of Section 56. The respondents cannot
be held guilty of any deficiency in service and hence dismissal of
the complaint by the National Commission is perfectly in order.
                                                                        G
With respect to the second aspect, namely, the impact of Sub-
section (1) on Sub-section (2) of Section 56, it is seen that the
bottom line of Sub-section (1) is the negligence of any person to
pay any charge for electricity. Sub-section (1) starts with the words

                                                                        H
648            SUPREME COURT REPORTS                      [2021] 8 S.C.R.


A     “where any person neglects to pay any charge for electricity or any
      some other than a charge for electricity due from him”. Sub-section
      (2) uses the words “no sum due from any consumer under this
      Section”.Therefore, the bar under Sub-section (2) is relatable to
      the sum due under Section 56. Sub-section (1) deals specifically
      with the negligence on the part of a person to pay any charge for
B
      electricity or any sum other than a charge for electricity. What is
      covered by section 56, under sub-section (1), is 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. [Paras 22-24][655-A-E]
               1.4 In other words, the negligence on the part of the
C     licensee which led to short billing in the first instance and the
      rectification of the same after the mistake is detected, is not
      covered by Sub-section (1) of Section 56. Consequently, any claim
      so made by a licensee after the detection of their mistake, may
      not fall within the mischief, namely, “no sum due from any
D     consumer under this Section”, appearing in Sub-section (2). Sub-
      section (1) of Section 56 deals with the disconnection of electric
      supply if any person “neglects to pay any charge for electricity”.
      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
E     electricity. Sub-section (2) of Section 56 has a non-obstante clause
      with respect to what is contained in any other law, regarding the
      right to recover including the right to disconnect. Therefore, if
      the licensee has not raised any bill, there can be no negligence
      on the part of the consumer to pay the bill and consequently the
F     period of limitation prescribed under Sub-section (2) will not start
      running. So long as limitation has not started running, the bar for
      recovery and disconnection will not come into effect. Hence the
      decision in Rahamatullah Khan and Section 56(2) will not go to
      the rescue of the appellant. The National Commission was justified
      in rejecting the complaint and there is no reason to interfere
G     with the said Order. However, since the appellant has already
      paid 50% of the demand amount pursuant to an interim order
      passed by this Court on 19.08.2014, eight weeks time given to
      the appellant to make payment of the balance amount. [Paras 22-
      27][655-E-H; 656-A-C]
H
 M/S PREM COTTEX v. UTTAR HARYANA BIJLI VITRAN NIGAM                          649
                         LTD

       Mahabir Kishore & Ors. vs. State of Madhya Pradesh                     A
       (1989) 4 SCC 1 : [1989] 3 SCR 596 – referred to.
                         Case Law Reference
[2020] 2 SCR 929                  distinguished             Para 8
[1989] 3 SCR 596                  referred to               Para 12           B
       CIVIL APPELLATE JURISDICTION: Civil Appeal No.7235 of
2009
     From the Judgment and Order dated 01.10.2009 of National
Consumer Disputes Redressal Commission, New Delhi in Consumer
Complaint No.156 of 2009.                                                     C
       K. C. Mittal, Arvind Jain, Harish Pandey, Amresh Anand, Advs.
for the Appellant.
      Arun Bhardwaj, Addl. AG, Rahul Kumar Sharma, Ms. Gauraan
Bhardwaj, Abhishek Sharma, Vishwa Pal Singh, Brijender Singh Dhull,
                                                                              D
Ashish Pandey, Advs. for the Respondents.
       The Judgment of the Court was delivered by
       V. RAMASUBRAMANIAN, J.
       1. Challenging an Order of the National Consumer Disputes
Redressal Commission (for short “National Commission”), dismissing            E
their consumer complaint on the ground that there was no deficiency in
service on the part of the licensee (electricity distribution company), the
consumer of electricity has come up with the above statutory appeal.
       2. We have heard Sh. K.C. Mittal, learned counsel for the appellant
and Mr. Arun Bhardwaj, learned Additional Advocate General for the            F
State of Haryana, appearing for the respondents.
      3. The appellant is carrying on the business of manufacturing cotton
yarn in Panipat, Haryana. The appellant is having a L.S. connection,
which got extended from 404.517 KW to 765 KW with C.D 449 KVA
to 850 KVA, on 3.08.2006.                                                     G
       4. After 3 years of the grant of extension, the appellant was served
with a memo dated 11.09.2009 by the third respondent herein, under the
caption “short assessment notice”, claiming that though the multiply
factor (MF) is 10, it was wrongly recorded in the bills for the period
                                                                              H
650               SUPREME COURT REPORTS                          [2021] 8 S.C.R.


A     from 3.08.2006 to 8/09 as 5 and that as a consequence there was short
      billing to the tune of Rs.1,35,06,585/-. The notice called upon the appellant
      to pay the amount as demanded, failing which certain consequences
      would follow.
              5. Aggrieved by the said notice, the appellant gave a representation
B     on 22.09.2009 and then filed a consumer complaint before the National
      Commission, contending inter alia that the demand made by the
      respondents is the outcome of a glaring mistake and gross negligence on
      their part and that under Section 56 of the Electricity Act, 2003 (for
      short “the Act”), no amount due from a customer is recoverable after a
      period of two years from the date on which it became first due.
C
              6. By an Order dated 1.10.2009, the National Commission
      dismissed the complaint on the ground that it is a case of “escaped
      assessment” and not a case of “deficiency in service”. Aggrieved by
      the said Order, the appellant is before us.
              7. While ordering notice in the above appeal on 13.11.2009, this
D     Court granted interim stay of the impugned order. However, on an
      application filed on behalf of the respondents for vacating the interim
      order, this Court modified the stay Order on 19.08.2014 directing the
      appellant to pay to the first respondent herein, 50% of the demand amount
      within six weeks with a condition that in case the appellant succeeded,
E     the said amount shall be refunded with interest @ 9% p.a. Accordingly,
      the appellant has paid a sum of Rs.54,03,293/-, on 24.09.2014. The
      appellant claims to have already paid a sum of Rs.13,50,000/- on 9.10.2009
      itself and this amount, together with the amount deposited on 24.09.2014
      pursuant to the interim order of this Court, constituted 50% of the amount
      as demanded in short assessment notice dated 11.09.2009.
F             8. The sheet anchor of the case of the appellant is Section 56(2)
      of the Act and the exposition of law made by this Court in the decision in
      Assistant Engineer (D1), Ajmer Vidyut Vitran Nigam limited and
      Anr. vs. Rahamatullah Khan alias Rahamjulla1.
              9. Before we proceed to consider the statutory provision and the
G     decision of this Court relied upon by the appellant, it is relevant to take
      note of the fact that the appellant never disputed the correctness of the
      claim of the respondents that the multiply factor (MF) to be applied was
      10, but it was wrongly applied as 5. The only grievance raised by the
      appellant both in their representation and in their consumer complaint
H     1
          (2020) 4 SCC 650
 M/S PREM COTTEX v. UTTAR HARYANA BIJLI VITRAN NIGAM                            651
             LTD [V. RAMASUBRAMANIAN, J.]

was that they cannot be made to suffer on account of the negligence on          A
the part of the respondents and that on the basis of the bill already raised,
they have charged their customers and that it may not be possible for
them to go back to their customers with an additional demand now. In
addition, the bar under Section 56 was also pleaded.
       10. Section 56 of the Electricity Act, 2003 reads as under:-             B
      “56. Disconnection of supply in default of payment. - (1)
      Where any person neglects to pay any charge for electricity
      or any sum other than a charge for electricity due from him to
      a licensee or the generating company in respect of supply,
      transmission or distribution or wheeling of electricity to him,
                                                                                C
      the licensee or the generating company may, after giving not
      less than fifteen clear days’ notice in writing, to such person
      and without prejudice to his rights to recover such charge or
      other sum by suit, cut off the supply of electricity and for that
      purpose cut or disconnect any electric supply line or other
      works being the property of such licensee or the generating               D
      company through which electricity may have been supplied,
      transmitted, distributed or wheeled 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:
                                                                                E
             Provided that the supply of electricity shall not be cut
      off if such person deposits, under protest, -
      (a)    an amount equal to the sum claimed from him, or
      (b)    the electricity charges due from him for each month
             calculated on the basis of average charge for electricity          F
             paid by him during the preceding six months,
           whichever is less, pending disposal of any dispute
      between him and the licensee.
            (2) Notwithstanding anything contained in any other
      law for the time being in force, no sum due from any consumer,            G
      under this section shall be recoverable after the period of
      two years from the date when such sum became first due unless
      such sum has been shown continuously as recoverable as
      arrear of charges for electricity supplied and the licensee
      shall not cut off the supply of the electricity.”
                                                                                H
652               SUPREME COURT REPORTS                          [2021] 8 S.C.R.


A            11. In Rahamatullah Khan (supra), three issues arose for the
      consideration of this Court. They were (i) what is the meaning to be
      ascribed to the term “first due” in Section 56(2) of the Act; (ii) in the
      case of a wrong billing tariff having been applied on account of a mistake,
      when would the amount become first due; and (iii) whether recourse to
      disconnection may be taken by the licensee after the lapse of two years
B
      in the case of a mistake.
             12. On the first two issues, this Court held that though the liability
      to pay arises on the consumption of electricity, the obligation to pay
      would arise only when the bill is raised by the licensee and that,
      therefore, electricity charges would become “first due” only after
C     the bill is issued, even though the liability would have arisen on
      consumption. On the third issue, this Court held in Rahamatullah Khan
      (supra), that “the period of limitation of two years would commence
      from the date on which the electricity charges became first due under
      Section 56(2)”. This Court also held that Section 56(2) does not preclude
D     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 2.
E            13. Despite holding that electricity charges would become first
      due only after the bill is issued to the consumer (para 6.9 of the SCC
      Report) and despite holding that Section 56(2) does not preclude the
      licensee from raising an additional or supplementary demand after the
      expiry of the period of limitation prescribed therein in the case of a
      mistake or bonafide error (Para 9.1 of the SCC Report), this Court
F     came to the conclusion that what is barred under Section 56(2) is only
      the disconnection of supply of electricity. In other words, it was held by
      this Court in the penultimate paragraph that the licensee may take
      recourse to any remedy available in law for the recovery of the additional
      demand, but is barred from taking recourse to disconnection of supply
G     under Section 56(2).
             14. But a careful reading of Section 56(2) would show that the
      bar contained therein is not merely with respect to disconnection of
      supply but also with respect to recovery. If Sub-section (2) of Section 56
      is dissected into two parts it will read as follows:-
H     2
          (1989) 4 SCC 1
 M/S PREM COTTEX v. UTTAR HARYANA BIJLI VITRAN NIGAM                          653
             LTD [V. RAMASUBRAMANIAN, J.]

      (i)    No sum due from any consumer under this Section shall be         A
             recoverable after the period of two years from the date
             when such sum became first due; and
      (ii)   the licensee shall not cut off the supply of electricity.
        15. Therefore, the bar actually operates on two distinct rights of
the licensee, namely, (i) the right to recover; and (ii) the right to         B
disconnect. The bar with reference to the enforcement of the right to
disconnect, is actually an exception to the law of limitation. Under the
law of limitation, what is extinguished is the remedy and not the right. To
be precise, what is extinguished by the law of limitation, is the remedy
through a court of law and not a remedy available, if any, de hors through    C
a court of law. However, section 56(2) bars not merely the normal remedy
of recovery but also bars the remedy of disconnection. This is why we
think that the second part of Section 56(2) is an exception to the law of
limitation.
      16. Be that as it may, once it is held that the term “first due”        D
would mean the date on which a bill is issued, (as held in para 6.9 of
Rahamatullah Khan) and once it is held that the period of limitation
would commence from the date of discovery of the mistake (as held in
paragraphs 9.1 to 9.3 of Rahamatullah Khan), then the question of
allowing licensee to recover the amount by any other mode but not take
recourse to disconnection of supply would not arise. But Rahamatullah         E
Khan says in the penultimate paragraph that “the licensee may take
recourse to any remedy available in law for recovery of the
additional demand, but barred from taking recourse to disconnection
of supply under sub-section (2) of section 56 of the Act”.
       17. It appears from the narration of facts in paragraph 2 of           F
Rahamatullah Khan (supra) that this Court was persuaded to take the
view that it did, on account of certain peculiar facts. The consumer in
that case was billed under a particular tariff code for the period from
July-2009 to September-2011. But after audit, it was discovered that a
different tariff code should have been applied. Therefore, a show cause       G
notice was issued on 18.03.2014 raising an additional demand for the
period from July-2009 to September-2011. Then a bill was raised on
25.05.2015 for the aforesaid period. Therefore, the consumer successfully
challenged the demand before the District Consumer Forum, but the
Order of the District Forum was reversed by the State Commission on
an appeal by the licensee. The National Commission on a revision filed        H
654            SUPREME COURT REPORTS                           [2021] 8 S.C.R.


A     by the consumer, set aside the order of the State Commission and restored
      the order of the District Forum. It was this Order of the National
      Commission that was under challenge before this Court in Rahamatullah
      Khan (supra).
             18. Eventually, this Court disposed of the appeals, preventing the
B     licensee from taking recourse to disconnection of supply, but giving them
      liberty to take recourse to any remedy available in law for recovery of
      the additional demand. Therefore, the decision in Rahamatullah Khan
      (supra) is distinguishable on facts.
             19. Even otherwise there are two things in this case, which we
C     cannot overlook. The first is that the question whether the raising of an
      additional demand, by itself would tantamount to any deficiency in service,
      clothing the consumer fora with a power to deal with the dispute, was
      not raised or considered in Rahamatullah Khan (supra). The second is
      the impact of Sub-section (1) of Section 56 on Sub-section (2) thereto.
D             20. The fora constituted under the Consumer Protection Act, 1986
      is entitled to deal with the complaint of a consumer, either in relation to
      defective goods or in relation to deficiency in services. The word
      “deficiency” is defined in Section 2(1)(g) of the Consumer Protection
      Act, 1986 as follows:-
E           “2(1)(g) “deficiency” means any fault, imperfection,
            shortcoming or inadequacy in the quality, nature and manner
            of performance which is required to be maintained by or under
            any law for the time being in force or has been undertaken to
            be performed by a person in pursuance of a contract or
            otherwise in relation to any service;
F
            21. 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
G
      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. This is why, the National Commission, in the
      impugned order correctly points out that it is a case of “escaped
H     assessment” and not “deficiency in service”.
 M/S PREM COTTEX v. UTTAR HARYANA BIJLI VITRAN NIGAM                            655
             LTD [V. RAMASUBRAMANIAN, J.]

       22. In fact, even before going into the question of Section 56(2),       A
the consumer forum is obliged to find out at the threshold whether there
was any deficiency in service. It is only then that the recourse taken by
the licensee for recovery of the amount, can be put to test in terms of
Section 56. If the case on hand is tested on this parameter, it will be
clear that the respondents cannot be held guilty of any deficiency in
                                                                                B
service and hence dismissal of the complaint by the National Commission
is perfectly in order.
       23. Coming to the second aspect, namely, the impact of Sub-
section (1) on Sub-section (2) of Section 56, it is seen that the bottom
line of Sub-section (1) is the negligence of any person to pay any charge
for electricity. Sub-section (1) starts with the words “where any person        C
neglects to pay any charge for electricity or any some other than a
charge for electricity due from him”.
        24. Sub-section (2) uses the words “no sum due from any
consumer under this Section”. Therefore, the bar under Sub-section
(2) is relatable to the sum due under Section 56. This naturally takes us       D
to Sub-section (1) which deals specifically with the negligence on the
part of a person to pay any charge for electricity or any sum other
than a charge for electricity. What is covered by section 56, under
sub-section (1), is the negligence on the part of a person to pay for
electricity and not anything else nor any negligence on the part of             E
the licensee.
       25. In other words, the negligence on the part of the licensee
which led to short billing in the first instance and the rectification of the
same after the mistake is detected, is not covered by Sub-section (1) of
Section 56. Consequently, any claim so made by a licensee after the             F
detection of their mistake, may not fall within the mischief, namely,”no
sum due from any consumer under this Section”, appearing in Sub-
section (2).
       26. The matter can be examined from another angle as well. Sub-
section (1) of Section 56 as discussed above, deals with the disconnection      G
of electric supply if any person “neglects to pay any charge for
electricity”. 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.
Sub-section (2) of Section 56 has a non-obstante clause with respect to
what is contained in any other law, regarding the right to recover including    H
656             SUPREME COURT REPORTS                           [2021] 8 S.C.R.


A     the right to disconnect. Therefore, if the licensee has not raised any bill,
      there can be no negligence on the part of the consumer to pay the bill
      and consequently the period of limitation prescribed under Sub-section
      (2) will not start running. So long as limitation has not started running,
      the bar for recovery and disconnection will not come into effect. Hence
      the decision in Rahamatullah Khan and Section 56(2) will not go to the
B
      rescue of the appellant.
             27. Therefore, we are of the view that the National Commission
      was justified in rejecting the complaint and we find no reason to interfere
      with the Order of the National Commission. Accordingly, the appeal is
      dismissed. However, since the appellant has already paid 50% of the
C     demand amount pursuant to an interim order passed by this Court on
      19.08.2014, we give eight weeks time to the appellant to make payment
      of the balance amount. There shall be no order as to costs.

      Divya Pandey                                                 Appeal dismissed.
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