THE MADHYA PRADESH MADHYA KSHETRA VIDYUT VITRAN COMPANY LIMITED & ORS.versusBAPUNA ALCOBREW PRIVATE LIMITED & ANR.

                 [2024] 11 S.C.R. 340 : 2024 INSC 829

       The Madhya Pradesh Madhya Kshetra Vidyut Vitran
                  Company Limited & Ors.
                             v.
            Bapuna Alcobrew Private Limited & Anr.
                       (Civil Appeal No. 1095 of 2013)
                              04 November 2024
              [Dipankar Datta* and Pankaj Mithal, JJ.]

                            Issue for Consideration
       Issue arose as to whether s.56(2) of the Electricity Act, 2003 has
       application to a demand raised by appellants-distributor on the first
       respondent for recovery of sums payable under the Electricity Act,
       1910 and, whether demand, if it be treated as one under the 1910
       Act, is sustainable having regard to long delay.

                                  Headnotes†
       Electricity Act, 2003 – s.56(2) – Electricity Act, 1910 – Limitation
       Act, 1963 – Matter pertaining to electricity consumption –
       Appellants-distributor and first respondent entered into
       an agreement for supply of electrical energy to the first
       respondent’s unit, with the first respondent guaranteeing a
       minimum consumption – Also permission accorded to the
       respondent to install turbo generating set on the condition
       that it would be used only as a stand-by and not parallel
       with the appellants’ supply system – However, on failure to
       abide the condition, appellant issued a notice, cancelling the
       permission – Writ petition filed wherein the High Court stayed
       the notice, subject to respondent depositing the minimum
       guarantee charges – Thereafter, appellant issued notice
       demanding Rupees seventy lakh, for not having utilised the
       minimum guaranteed consumption for the period between
       June 1996 and May 2000 – Respondent filed miscellaneous
       petition in the first writ petition, which was disposed of holding
       the first respondent liable to pay the ‘minimum guarantee
       charges’, irrespective of electricity consumed – However,
       later the respondent withdrew the writ petition – Issuance
       of second show cause notice for the same amount – Writ

* Author
[2024] 11 S.C.R.                                                             341

     The Madhya Pradesh Madhya Kshetra Vidyut Vitran Company
       Limited & Ors. v. Bapuna Alcobrew Private Limited & Anr.

     petition thereagainst, partly allowed – Thereafter, writ appeal
     allowed quashing the second show cause notice upon
     application of s.56(2) of the 2003 Act, claim being time barred,
     as it was issued beyond the two years period of limitation –
     Sustainability:
     Held: Limitation period of two years prescribed for recovery of
     dues u/s.56 of the 2003 Act would apply to liabilities arising under
     the 2003 Act, and not prior to the enforcement thereof – Thus,
     Division Bench erred in holding that the liability incurred by the
     first respondent prior to the enforcement of the 2003 Act would
     still be barred by the provisions of s.56(2) thereof – Furthermore,
     orders having become final, leave no room for the first respondent
     to escape its statutory liability by arguing bar of limitation, when
     the statute itself did not prescribe such bar – Challenge to the first
     show cause notice having failed the principle of issue estoppel
     operated as a bar for the first respondent to raise a challenge to
     the second show cause notice, which had been issued for precisely
     the same due amount – Also, point even if wrongly decided binds
     the party against whom it is decided and the same point cannot
     be urged in a subsequent suit or proceeding at the same level –
     Issue of liability accruing to the first respondent for non-payment
     of minimum guarantee charges had been decided previously and
     such decision, not being subjected to any appeal, had attained
     finality in the eyes of law estopping the first respondent from
     reagitating the issue – Second writ petition at the instance of the
     first respondent was not maintainable and, ought not to have been
     entertained at all – However, since the appellants accepted the
     order of the Single Judge and issued fresh demand for reduced
     amount and which has since been recovered by encashing
     the bank guarantee, no order made for changing the position
     flowing from the said order – Thus, on conjoint reading of all the
     orders, the liability of the first respondent to pay the minimum
     guarantee charges is clear and such orders having attained
     finality, bound the first respondent; and no submission by the
     first respondent, either on delay in raising the demand or merit-
     based review of the action of the appellants, in the second writ
     petition was open to persuade the High Court to hold in favour
     first respondent – Thus, the impugned judgment and order of the
     High Court being unsustainable in law and set aside – Electricity
     (Supply) Act, 1948. [Paras 13, 24-40]
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       Electricity Act, 1910 – s.24 – Discontinuance of supply to
       consumer neglecting to pay charge – Limitation period:
       Held: Although s.24 prescribes no period of limitation, it does allow
       the licensee to discontinue supply of energy upon a consumer
       neglecting to pay charges that are demanded by raising a bill,
       irrespective of the fact that a suit for recovery of unpaid charges
       would be barred if not instituted within three years of the liability
       accruing – There appears to be no limitation as regards the period
       within which notice u/s.24(1) has to be issued, evincing the intention
       of the licensee to disconnect supply for non-payment of claimed
       dues – However, if in case, despite the consumer not paying
       the charges demanded and the notice thereunder is not issued
       within a reasonable period or at any time within which a suit for
       recovery could be instituted, whether the right of the licensee to
       claim the unpaid charges would lapse will have to be decided by
       the court before whom the lis is brought upon consideration of
       the defence that is raised and the explanation for the delay – It
       must depend on the facts of each particular case whether the
       demand by reason of mere delay should be interdicted or not –
       Furthermore, s.17 of the 1963 Act is meant to save suits from
       being dismissed as time-barred, which could not be filed due to
       bona fide mistakes or errors – If a suitor alleges that the suit could
       not be instituted by him within the prescribed period of limitation
       because of some mistake, which came to be discovered beyond
       the period prescribed for institution of a suit, it is open to such
       suitor to claim exemption from limitation in terms of Ord. VII r. 6
       CPC and such exemption can be granted in an appropriate case –
       However, if a suitor alleges to have discovered a mistake later
       but it is proved on evidence being led that exercise of reasonable
       diligence could have resulted in the mistake being discovered on
       an earlier date, limitation would begin to count from that earlier
       date; and, in case, the count from the said earlier date takes
       the date of institution of the suit beyond the prescribed period of
       limitation, the bar of limitation would get attracted – Mistake is,
       thus, not a circumstance which can be used as a shield to save
       negligence in all cases – Absence of due diligence or lack of bona
       fides would not clothe suitor to take undue advantage of beneficent
       provision like s.17 – Limitation Act, 1963 – s.17 – Electricity Act,
       2003 – s.56(2). [Paras 16, 17, 19, 20]
[2024] 11 S.C.R.                                                            343

     The Madhya Pradesh Madhya Kshetra Vidyut Vitran Company
       Limited & Ors. v. Bapuna Alcobrew Private Limited & Anr.

                              Case Law Cited
     Raymond Limited v. State of M.P. [2000] Supp. 4 SCR 668 :
     (2001) 1 SCC 534; K.C. Ninan v. Kerala SEB [2023] 9 SCR 637 :
     2023 SCC OnLine SC 663; Kusumam Hotels (P) Ltd. v. Kerala
     SEB [2008] 9 SCR 752 : (2008) 13 SCC 213; Ajmer Vidyut Vitran
     Nigam Ltd. v. Rahamatullah Khan [2020] 2 SCR 929 : (2020) 4
     SCC 650; Prem Cottex v. Uttar Haryana Bijli Vitran Nigam Ltd.
     [2021] 8 SCR 645 : (2021) 20 SCC 200; State of Orissa v. Madan
     Gopal Rungta [1952] 1 SCR 28 : 1951 SCC 1024; Hope Plantations
     Ltd. v. Taluk Land Board [1998] Supp. 2 SCR 514 : (1999) 5 SCC
     590; Bhanu Kumar Jain v. Archana Kumar [2004] Supp. 6 SCR
     1104 : (2005) 1 SCC 787 – referred to.

                                List of Acts
     Companies Act, 1956; Electricity Act, 2003; Electricity (Supply) Act,
     1948; General Clauses Act, 1897; Electricity Act, 1910; Limitation
     Act, 1963.

                             List of Keywords
     Delay; Electricity consumption; Agreement for supply of electrical
     energy; Guaranteed minimum consumption; Install turbo generating
     set; Minimum guarantee charges; Limitation; Recovery of dues;
     Liability; Estoppel; Discontinuance of supply to consumer neglecting
     to pay charge; Bona fide mistakes or errors; Mistake; Absence of
     due diligence or lack of bona fides.

                            Case Arising From
     CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1095 of 2013
     From the Judgment and Order dated 13.10.2011 of the High Court of
     M.P. at Gwalior in WA No.550 of 2009

                         Appearances for Parties
     Ms. Liz Mathew, Sr. Adv., Rohit K. Singh, Uday Nath Tiwari, Prakhar
     Srivastava, Advs. for the Appellants.
     Jayant K. Mehta, Sr. Adv., Kuber Dewan, Ms. Anuradha Dutt,
     Ms. Neeharika Aggarwal, Kaushtubh Srivastava, Raghav Dutt,
     Ms. B. Vijayalakshmi Menon, Raghav Sharma, Jaskirat Pal Singh,
     Pranjal Pandey, Salvador Santosh Rebello, Advs. for the Respondents.
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                       Judgment / Order of the Supreme Court
                                        Judgment
        Dipankar Datta, J.
        THE CHALLENGE
1.      The final judgment and order dated 13th October, 20111 of the High
        Court of Madhya Pradesh,2 allowing the writ appeal3 presented by
        the first respondent, is under assail in the present appeal by special
        leave.
        BRIEF RESUME OF FACTS
2.      The factual matrix of the case, insofar as is relevant for the purpose
        of deciding the present appeal, is noted hereinbelow:
        I.      The first appellant is the state electricity distribution utility for
                the State of Madhya Pradesh, while the second and the third
                appellants are its officers. The first respondent is a company
                registered under the Companies Act, 1956. It is engaged in
                the business of manufacturing rectified spirit, extra neutral
                alcohol and bottling of Indian made foreign liquor. The second
                respondent is the Madhya Pradesh Pollution Control Board,
                which had asked the first respondent to submit a proposal with
                respect to its plans for a bio-gas electricity generation unit.
                The first respondent did not pursue any communication with
                the second respondent thereafter and, thus, no relief has been
                sought in this appeal against the latter.
        II.     The appellants and the first respondent entered into an
                agreement dated 18th November, 1991, for supply of electrical
                energy to the first respondent’s unit at Gwalior, with the first
                respondent guaranteeing a minimum consumption that would
                yield an annual revenue of Rs. 34,747/- (Rupees thirty four
                thousand seven hundred and forty seven rupees only).
        III.    Thereafter, supplementary agreements were executed
                between the appellants and the first respondent, increasing


1      impugned judgment, hereafter
2      High Court, hereafter
3      Writ Appeal No. 550/2009
[2024] 11 S.C.R.                                                          345

     The Madhya Pradesh Madhya Kshetra Vidyut Vitran Company
       Limited & Ors. v. Bapuna Alcobrew Private Limited & Anr.

             the consumption of electrical energy. Vide agreement
             dated 17th November, 1992, the quantum was initially increased
             from 136 kVA to 169 kVA and vide agreement dated 30th March,
             1995, there was a further increase to 305 kVA.
     IV.     The first respondent sought permission from the appellants
             to install and run an 807 kVA biogas turbo generating set4 for
             captive use. On 30th May, 1996, the second appellant granted
             permission to the first respondent on the condition that the TG
             set does not run parallel with the appellants’ supply system, and
             that the TG set would be used only as a stand-by measure upon
             the failure of the appellants to supply power. Most importantly,
             in what would give birth to the dispute, the first respondent
             was bound to a monthly minimum consumption of units, with
             35% load factor in case of no power cut, and 39% load factor
             in cases of power cut.
     V.      A third supplementary agreement was executed by and between
             the appellants and the first respondent on 01st June, 1996,
             which provided for supply of an additional 560 kVA to the
             first respondent thereby increasing the total contract demand
             to 1170 kVA.
     VI.     Alleging that the first respondent was running the TG set as a
             parallel source of power notwithstanding the supply of power
             provided by the first appellant, a notice dated 28th March, 20005
             was served by the appellants upon the first respondent
             cancelling the permission accorded to the first respondent to
             run the TG set.
     VII. Challenging the cancellation notice, the first respondent knocked
          the doors of the High Court by invoking its writ jurisdiction.
          On the writ petition,6 the High Court passed an interim order
          dated 04th May, 2000 staying operation of the cancellation notice,
          subject to the condition, inter alia, that the first respondent would
          deposit the ‘minimum guarantee charges’ payable as against
          the load of 807 kVA to be assessed by the appellants.



4   TG set, hereafter
5   cancellation notice, hereafter
6   W.P. No. 677/2000; first writ petition, hereafter
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        VIII. Consequently, the appellants issued a show cause notice7
              dated 14th July, 2000 to the first respondent quantifying its
              liability in a sum of Rs 70,50,000/- (Rupees seventy lakh fifty
              thousand only). The first show cause notice provided a time of
              fifteen (15) days to the first respondent to submit a representation
              with respect to the notice.
        IX.     The first respondent promptly challenged the first show cause
                notice by filing a miscellaneous petition8 in the first writ petition.
                The High Court, vide order dated 14th February, 2001, disposed
                of the miscellaneous petition by holding the first respondent
                liable to pay the ‘minimum guarantee charges’, irrespective
                of whether the corresponding amount of electricity had been
                consumed or not.
        X.      On 21st October, 2006, the first respondent withdrew the first writ
                petition, seeking to represent the matter before the appellants
                themselves on account of a change in the policy of the State
                Government, which no longer required a party to seek permission
                to install a T.G. set.
        XI.     After a long interlude of two years, new life was breathed into
                the dispute by the appellants vide issuance of a show cause
                notice dated 07th January, 20099 through Rs 70,50,000/- (Rupees
                seventy lakh fifty thousand only) was once again quantified as
                the first respondent’s liability for not having utilised the minimum
                guaranteed consumption for the period between June 1996 and
                May 2000. The second show cause notice provided a time of
                thirty (30) days to the first respondent to submit a representation
                in regard thereto, failing which demand would be raised without
                further communication.
        XII. Thereafter, demand was raised in the form of an energy bill
             dated 04th March, 2009, wherein the pre-existing liability of
             Rs 70,50,478/- (Rupees seventy lakhs fifty thousand four
             hundred and seventy eight only) was mentioned as “Other
             Chars. (sic, charges)”.



7      first show cause notice, hereafter
8      M(W)P No. 230 of 2000; miscellaneous petition, hereafter
9      second show cause notice, hereafter
[2024] 11 S.C.R.                                                            347

     The Madhya Pradesh Madhya Kshetra Vidyut Vitran Company
       Limited & Ors. v. Bapuna Alcobrew Private Limited & Anr.

      XIII.      Subsequently, the appellants issued a demand-cum-
                 disconnection notice dated 18th March, 200910 threatening
                 that if the amount of Rs 70,50,478/- (Rupees seventy lakhs
                 fifty thousand four hundred and seventy eight only) was not
                 paid within 15 days, the supply would be disconnected without
                 prior notice.
      XIV.       Aggrieved by the issuance of the second show cause notice,
                 the first respondent invoked the jurisdiction of the High Court
                 yet again vide a writ petition,11 seeking quashing of the second
                 show cause notice.
      XV.        A learned Single Judge of the High Court, vide interim order
                 dated 06th April, 2009, stayed operation of the second show
                 cause notice, conditional upon the first respondent furnishing
                 a bank guarantee of the equivalent amount. It is a matter
                 of record that bank guarantee was furnished by the first
                 respondent on 20th April, 2009.
      XVI. The learned Single Judge of the High Court, vide order
           dated 16th July, 2009,12 partly allowed the writ petition. His
           Lordship held that the first respondent was obligated to
           consume the monthly minimum units on the load factor
           since it had agreed to the terms and conditions laid down in
           the letter dated 30th May, 1996. However, the retrospective
           application of the enhanced contract demand13 was struck
           down and the appellants were directed to re-calculate the
           demand, with the enhanced demand being applicable only
           from 14th October, 1996.
      XVII. Consequently, vide communication dated 13th November, 2009,
            the appellants informed the first respondent that a revised
            demand of Rs 56,81,977.58P (Rupees fifty six lakh eighty
            one thousand nine hundred seventy seven and fifty eight
            paise only) had been raised, which would be recovered
            against the bank guarantee furnished by the first respondent.
            On 16th November, 2009, the appellants promptly encashed


10   disconnection notice, hereafter
11   Writ Petition No. 1382/2009; second writ petition, hereafter
12   writ court’s ’s order, hereafter
13   560 kVA enhanced to 1170 kVA w.e.f. 14th October, 1996
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                 the bank guarantee and issued a cheque refunding the excess
                 amount. Against such encashment, the first respondent had
                 initiated proceedings for contempt by filing a petition14 on
                 18th November, 2009.
        XVIII. Also, aggrieved by the writ court’s order, the first respondent
               carried the same to the Division Bench of the High Court by
               presenting the relevant intra-court appeal. It is the judgment
               and order of disposal of such appeal that has given rise to
               the present civil appeal.
        IMPUGNED JUDGMENT
3.      As noted at the beginning, the Division Bench allowed the writ appeal.
        The second show cause notice was quashed upon application of
        section 56(2) of the Electricity Act, 2003.15
        3.1 On the question of whether the first respondent was liable to
            pay the charges for minimum guaranteed consumption, the High
            Court relied upon the decision in Raymond Limited v. State
            of M.P.16 to observe that the first appellant was within its right
            to demand minimum guarantee charges but there also existed
            a corresponding duty upon such appellant to supply electrical
            energy to such an extent, fulfilment of which duty had not been
            proved in the present case.
        3.2 The High Court then embarked upon the issue of limitation,
            i.e., whether the appellants could recover dues for the period
            between June, 1996 and May, 2000, vide the second show
            cause notice. The question before the High Court was whether
            the liability which accrued to the first respondent under the
            Electricity (Supply) Act, 1948,17 i.e., when the first show cause
            notice was issued, could be enforced after coming into effect
            of the 2003 Act, i.e., when the second show cause notice was
            issued. The pivotal difference between the two legislations is
            that while the former did not prescribe a limitation period for the
            recovery of dues, the 2003 Act specifically prescribed such a
            period in the form of section 56(2), providing as follows:


14     Contempt Petition No. 559/2009
15     2003 Act, hereafter
16   [2000] Supp. 4 SCR 668 : (2001) 1 SCC 534
17     1948 Act, hereafter
[2024] 11 S.C.R.                                                        349

     The Madhya Pradesh Madhya Kshetra Vidyut Vitran Company
       Limited & Ors. v. Bapuna Alcobrew Private Limited & Anr.

                Section 56. Disconnection of supply in default
                of payment –
                (1) ***
                (2) Notwithstanding anything contained in any other
                law for the time being in force, 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 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.
     3.3 The High Court observed that since the 2003 Act had not been
         enforced retrospectively, the liability would continue to accrue
         to the first respondent well after the 2003 Act came into force.
         However, this liability, w.e.f. 10th June, 2003 could not have
         been enforced beyond a period of two (2) years, keeping in
         mind section 56(2) read with section 174 of the 2003 Act.
     3.4 Consequently, the High Court observed that the first respondent’s
         writ petition having been disposed on 21st June, 2006, a period
         of two (2) years therefrom would be 09th June, 2008 whereas
         the appellants had only issued the second show cause notice
         on 07th January, 2009, which was evidently beyond the period
         of limitation.
     3.5 In the result, the Division Bench reversed the judgment and order
         dated 16th July, 2009 passed by the writ court and quashed the
         second show cause notice issued by the appellants.
     CONTENTIONS OF THE PARTIES
4.   Ms. Liz Mathew, learned senior counsel for the appellants, in assailing
     the impugned judgment, advanced the following submissions:
     A.   The Division Bench erred in interpreting section 174 of the
          2003 Act to extend the applicability of such Act and its limitation
          clause to the existing proceedings.
     B.   The Division Bench erred in applying section 174 of the 2003 Act
          to the present case since this was not a case of inconsistency
          with any other law, rather, it concerned the liabilities incurred
          under the 1910 Act in view of section 185(5) of the 2003 Act.
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        C.      K.C. Ninan v. Kerala SEB18 was relied on to argue that section
                56(2) of the 2003 Act would not apply to a liability which was
                incurred prior to the enforcement of the 2003 Act.
        D.      The High Court erred in not appreciating the purport of
                section 185 of the 2003 Act which saved the application of
                section 6 of the General Clauses Act, 1897.19
5.      Mr. Jayant Mehta, learned senior counsel for the first respondent,
        while supporting the impugned judgment submitted as under:
        A.      The first and the second show cause notices were not ‘demands’
                but merely notices for the purposes of quantification and raising
                of demand in the future.
        B.      There was nothing which prevented the appellants from raising
                a demand during the pendency of the first writ petition since
                the High Court had not passed any order of stay.
        C.      Assuming that the 2003 Act had no application to dues arising
                during a period of time prior to its enforcement w.e.f. 10th June,
                2003 and even though section 24 of the Indian Electricity
                Act, 191020 did not prescribe a period of limitation, the process
                of recovery of dues, if any, had to be initiated within the period
                for institution of a suit, i.e., three (3) years from the date of
                the appellant’s awareness of the sum due, and, at any rate,
                must be initiated within a reasonable period, which cannot be
                nine (9) years.
        D.      Allowing the appellants to raise a demand nine (9) years later
                would lead to injustice and arbitrariness, more so when in the
                absence of any demand the question of the first respondent
                neglecting to pay charges did not arise.
        E.      Encashment of bank guarantee by the appellants immediately
                after the revised demand was raised on the first respondent
                without giving any opportunity to the first respondent to pursue
                legal remedies, in the circumstances, must be held to be
                arbitrary.


18   [2023] 9 SCR 637 : 2023 SCC OnLine SC 663
19     1897 Act, hereafter
20     1910 Act, hereafter
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     The Madhya Pradesh Madhya Kshetra Vidyut Vitran Company
       Limited & Ors. v. Bapuna Alcobrew Private Limited & Anr.

      ISSUES
6.    Not too many issues arise for decision on the facts of the present
      appeal. The task before us is limited to determining whether
      section 56(2) of the 2003 Act has any application to a demand raised
      by the appellants on the first respondent for recovery of sums payable
      under the 1910 Act and, hence, the impugned judgment is sustainable
      on this score; if not, whether the demand, if it be treated as one
      under the 1910 Act, is sustainable having regard to the long delay.
      ANALYSIS
7.    We have heard learned senior counsel for the parties and perused
      the impugned judgment as well as the other materials on record.
8.    An analysis of the enactments governing the dispute would be of profit.
9.    The 1910 Act came into force w.e.f. 01st January, 1911, with the objective
      of amending the law relating to supply and use of electrical energy.
      The 1948 Act, however, was enacted with the purpose of facilitating
      the establishment of regional co-ordination in the development of
      electricity, or as the long title of the said Act states, “to provide for
      the rationalisation of the production and supply of electricity, and
      generally for taking measures conducive to electrical development”.
      Thus, both these enactments had their own spheres of application,
      and existed concurrently. However, w.e.f. 10th June, 2003, the 2003
      Act came into force to “consolidate the laws relating to generation,
      transmission, distribution, trading and use of electricity and generally
      for taking measures conducive to development of electricity industry,
      promoting competition therein, protecting interest of consumers and
      supply of electricity to all areas, rationalisation of electricity tariff,
      ensuring transparent policies regarding subsidies, promotion of
      efficient and environmentally benign policies, constitution of Central
      Electricity Authority, Regulatory Commissions and establishment of
      Appellate Tribunal and for matters connected therewith or incidental
      thereto”.21 The 2003 Act, by virtue of section 185(1), repealed, inter
      alia, the 1910 Act and the 1948 Act. The 1948 Act, since it related
      primarily to the statutory powers of the central electricity authority,
      state electricity authorities and generating companies, would be of
      minimal relevance while deciding the present dispute.


21   Long title of 2003 Act
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10. We shall first answer the issue of applicability of section 56(2) of
    the 2003 Act raised by the appellants, which was the turning point
    of the decision of the Division Bench, i.e., whether the limitation
    period of two (2) years prescribed by section 56(2) of the 2003 Act
    bars the appellants from raising demand for the period between
    June 1996 and May 2000. Though the Division Bench answered
    this question in the affirmative, in light of two subsequent contrary
    decisions rendered by this Court precisely on the point, this finding
    is rendered indefensible and would necessarily have to be set aside.
11. In Kusumam Hotels (P) Ltd. v. Kerala SEB,22 this Court, while
    examining the issue of retrospective discontinuance of tariff
    concessions for the tourism industry, held that the liability accruing
    to the licensee being statutory in nature would continue to survive
    even after the enforcement of the 2003 Act in the following terms:
             “43. Whereas the bills are issued only in respect of the
             dues arising in terms of the law as was applicable prior to
             the coming into force of the 2003 Act, sub-section (2) of
             Section 56 shall apply after the said Act came into force.
             The Board could have even framed a tariff in terms of
             the provisions appended to Section 61 of the Act. The
             appellants incurred liability to pay the bill. The liability
             to pay electricity charges is a statutory liability. The Act
             provides for its consequences. Unless therefore, the 2003
             Act specifically introduced the bar of limitation as regards
             the liability of the consumer incurred prior to coming into
             force of the said Act; in our opinion, having regard to
             Section 6 of the General Clauses Act, the liability continues.
                                                    (emphasis supplied)
12. This decision has been affirmed by a decision of three (3) Judges
    in K.C. Ninan (supra) and is the sheet-anchor of the argument of
    Ms Mathew. There, this Court affirmed the principle that liabilities
    which arose prior to the 2003 Act coming into force would escape
    the limitation period prescribed by section 56(2) of the 2003 Act:
             “130. Before we deal with the implication of Section 56(2)
             on the civil remedies available to a licensee, it is important


22   [2008] 9 SCR 752 : (2008) 13 SCC 213
[2024] 11 S.C.R.                                                           353

     The Madhya Pradesh Madhya Kshetra Vidyut Vitran Company
       Limited & Ors. v. Bapuna Alcobrew Private Limited & Anr.

          to clarify that when the liability incurred by a consumer is
          prior to the period when the 2003 Act came into force, then
          the bar of limitation under Section 56(2) is not applicable. In
          Kusumam Hotels Pvt Ltd. v. Kerala State Electricity Board,
          this Court has held that Section 56(2) applies after the
          2003 Act came into force and the bar of limitation under
          Section 56(2) would not apply to a liability incurred by the
          consumer prior to the enforcement of the Act. In terms of
          Section 6 of the General Clauses Act, 1897, the liability
          incurred under the previous enactment would continue
          and the claim of the licensee to recover electricity would
          be governed by the regulatory framework which was in
          existence prior to the enforcement of the 2003 Act.
          134. The period of limitation under Section 56(2) is
          relatable to the sum due under Section 56. The sum due
          under Section 56 relates to the sum due on account of the
          negligence of a person to pay for electricity. Section 56(2)
          provides that such sum due would not be recoverable after
          the period of two years from when such sum became first
          due. The means of recovery provided under Section 56
          relate to the remedy of disconnection of electric supply.
          The right to recover still subsists.”
                                                  (emphasis supplied)
13. As settled by this Court, section 185(5) of the 2003 Act read with
    section 6 of the 1897 Act would lead to the inescapable conclusion
    that the limitation period of two (2) years prescribed for recovery of
    dues under section 56 of the 2003 Act would apply to liabilities arising
    under the 2003 Act, and not prior to the enforcement thereof. Thus,
    we hold that the Division Bench manifestly erred in holding that the
    liability incurred by the first respondent prior to the enforcement of
    the 2003 Act would still be barred by the provisions of section 56(2)
    thereof.
14. The first question is, thus, answered against the first respondent.
15. We now endeavour to examine, whether the demand raised by
    the appellants ought to fail on the ground of delay and/or whether
    the amount due is still recoverable in the manner ordained by
    section 24 of the 1910 Act. Imperative for us to complete this exercise
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        of analysing the legal position is to read the section itself. To the
        extent relevant, it reads:
                  24. Discontinuance of supply to consumer neglecting
                  to pay charge.
                  (1) Where any person neglects to pay any 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 charger or other
                  sum, together with ally expenses incurred by him in cutting
                  off and reconnecting the supply, are paid, but no longer.
                  (2) ***
16. Section 24 in clear terms authorised a licensee to disconnect
    supply of energy to any person, if he neglected to pay any charge
    for energy or sum, other than a charge for energy, due from him.
    The condition precedent for such disconnection was issuance of a
    clear seven days’ prior notice. This, in our opinion, is an in terrorem
    measure which is apart from the right of the licensee to recover the
    sum due by instituting a suit. Noticeably, section 24 did not refer to
    any period of limitation as in section 56(2) of the 2003 Act. If the
    licensee were to opt for institution of a suit, it cannot be contended
    with any degree of conviction that since section 24 does not prescribe
    a period of limitation or does not refer to the Limitation Act, 1963,23
    a suit can be instituted at any time as per the convenience of the
    licensee. Electrical energy is a saleable commodity or goods, which
    we find usually to be sold on credit. That is, the licensee first supplies
    the energy and a bill is raised by the licensee specifying the date
    by which the charges are to be paid, whereafter it is the liability of
    the consumer to pay it. On neglect to pay, the consequences in
    section 24(1) are attracted. Having regard to such state of affairs, a


23     1963 Act
[2024] 11 S.C.R.                                                            355

      The Madhya Pradesh Madhya Kshetra Vidyut Vitran Company
        Limited & Ors. v. Bapuna Alcobrew Private Limited & Anr.

      suit for recovery of the price of electrical energy supplied, or sold,
      by the licensee and consumed by the consumer would be governed
      by Article 15 of the 1963 Act, reading as follows:
                             Part II – Suits relating to Contracts

        Description of suit                 Period of     Time from which period
                                            Limitation    begins to run
        15. For the price of goods          Three years   When the period of
        sold and delivered to be                          credit expires.
        paid for after the expiry
        of a fixed period of credit.

17. The position in law would have been otherwise, if section 24(1) itself
    had prescribed a period of limitation different from the one in Article 15
    (supra). Since section 24 does not prescribe any period of limitation
    than that prescribed by the 1963 Act, as is done by the new avatar
    thereof in the 2003 Act, limitation would set in immediately upon the
    consumer’s neglect to pay the amount mentioned in the bill raised
    by the licensee. This Court, in Ajmer Vidyut Vitran Nigam Ltd. v.
    Rahamatullah Khan,24 followed by Prem Cottex v. Uttar Haryana
    Bijli Vitran Nigam Ltd.,25 has held that a consumer can be said
    to have neglected to pay any sum due to the licensee only after a
    demand is raised by the licensee and if no demand is raised by the
    licensee, the question of a consumer neglecting to pay any sum due
    to the licensee does not and cannot arise. Thus, a licensee acquires
    the right of action to institute a suit immediately after the consumer
    neglects to pay the amount mentioned in the bill raised by it.
18. There could be situations like the one in Rahamatullah Khan (supra)
    where the licensee might have committed a mistake. In such a case,
    the period of limitation would begin only from the point of discovery
    of the mistake and not earlier; and, such a case could be covered
    by section 17 of 1963 Act.
19. It cannot be overemphasized that section 17 of the 1963 Act is meant
    to save suits from being dismissed as time-barred, which could not


24   [2020] 2 SCR 929 : (2020) 4 SCC 650
25   [2021] 8 SCR 645 : (2021) 20 SCC 200
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       be filed due to bona fide mistakes or errors. If a suitor alleges that
       the suit could not be instituted by him within the prescribed period
       of limitation because of some mistake, which came to be discovered
       beyond the period prescribed for institution of a suit, it is open to
       such suitor to claim exemption from limitation in terms of Order VII
       Rule 6 of the Code of Civil Procedure, 1908 and such exemption
       can be granted in an appropriate case. However, if a suitor alleges
       to have discovered a mistake later but it is proved on evidence
       being led that exercise of reasonable diligence could have resulted
       in the mistake being discovered on an earlier date, limitation would
       begin to count from that earlier date; and, in case, the count from
       the said earlier date takes the date of institution of the suit beyond
       the prescribed period of limitation, the bar of limitation would get
       attracted. Mistake is, thus, not a circumstance which can be used as
       a shield to save negligence in all cases. Absence of due diligence or
       lack of bona fides would not clothe a suitor to take undue advantage
       of a beneficent provision like section 17; it is for the relevant court
       to separate the grain from the chaff.
20. The upshot of the aforesaid discussion is that although section 24
    of the 1910 Act prescribes no period of limitation, it does allow the
    licensee to discontinue supply of energy upon a consumer neglecting
    to pay charges that are demanded by raising a bill, irrespective of the
    fact that a suit for recovery of unpaid charges would be barred if not
    instituted within three (3) years of the liability accruing. There appears
    to be no limitation as regards the period within which notice under
    section 24(1) has to be issued, evincing the intention of the licensee
    to disconnect supply for non-payment of claimed dues. However, if
    in case, despite the consumer not paying the charges demanded
    and the notice thereunder is not issued within a reasonable period
    or at any time within which a suit for recovery could be instituted,
    whether the right of the licensee to claim the unpaid charges would
    lapse will have to be decided by the court before whom the lis is
    brought upon consideration of the defence that is raised and the
    explanation for the delay. We only say that it must depend on the
    facts of each particular case whether the demand by reason of mere
    delay should be interdicted or not.
21. Be that as it may, in this case, no suit was instituted within the period
    of limitation or beyond. We need not examine here whether the remedy
    by way of a suit for the appellants stood foreclosed, because of the
[2024] 11 S.C.R.                                                              357

     The Madhya Pradesh Madhya Kshetra Vidyut Vitran Company
       Limited & Ors. v. Bapuna Alcobrew Private Limited & Anr.

     contention of the first respondent that no demand had been raised and
     the show cause notices cannot be construed as demands. However,
     did issuance of the second show cause notice (on 07th January, 2009)
     afford a fresh cause of action for the first respondent to invoke the
     writ jurisdiction of the High Court and did it turn out to be fatal for the
     appellants? We shall endeavour to find an answer to this question
     by first reading the show cause notices issued by the appellants.
22. The operative portion of the first show cause notice (dated 14th July,
    2000) is extracted hereinbelow:
          “On going through the past consumption, i.e. w.e.f. June
          1996 to till date it is observed that units consumed by
          you are not up to the mark as units worked out on 35%
          or 39% load factor as and when applicable.
          It shows that you fails (sic, failed) to fulfil the condition no.5
          of the said permission letter dt. 30.5.96 by not consuming
          units equivalent to units worked out on load factor as above.
          The consumption found is on The consumption found is
          on lower side in various months. The liability accrued on
          this account comes to Rs. 70.50.lacs. Statement of liability
          is enclosed.
          Therefore, please take this as Notice of Show Cause
          as to why not the supplementary demand towards less
          consumption, as per statement enclosed, be raised against
          your HT connection.
          Your representation in this regard, may be please be
          submitted within 15 days from the date of receipt of this
          letter”
                                                    (emphasis supplied)
23. Thereafter, the second show cause notice was issued on 07th January,
    2009, the operative portion whereof is extracted hereinbelow:
          “It shows that you fails (sic, failed) to fulfil the condition
          no.5 of the said permission letter dt. 30.5.96 by not
          consuming units equivalent to units worked out on load
          factor as above. The consumption found is on lower side
          in various months. The liability accrued on this account
          comes to Rs. 70.50.lacs. Statement of liability is enclosed.
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          Therefore, please take this as Notice of Show Cause
          as to why not the supplementary demand towards less
          consumption, as per statement enclosed, be raised against
          your HT connection.
          You had earlier filed W.P. No. 677/2000 before Hon’ble
          High Court in connection with some other dispute relating
          to TG set permission. You had withdrawn aforesaid writ
          petition with liberty to represent the matter before the
          respondent (Board) and in case further grievances are
          left liberty to assail the same in accordance with law.
          Accordingly Hon’ble High Court had disposed off (sic, of)
          the same on 21.2.2006 with the aforesaid liberty to you.
          Your reply / representation, if any, in this regard, may be
          please be submitted within 30 days from the date of issue
          of this letter, failing which the demand shall be raised
          without any further communication.”
                                                 (emphasis supplied)
24. Ironing out the creases of when the amount first became due for the
    first respondent to pay, upon a demand being raised by the appellants,
    need not detain us for long having regard to certain admitted facts, to
    which we turn at this juncture. Perusal of two orders passed by the
    High Court, which intervened in course of the longstanding litigation
    between the parties, is essential. These orders passed on the first
    writ petition and an interlocutory petition filed therein, seemingly
    innocuous, have a decisive influence in the present appeal.
25. The first of these is the interim order dated 04th May, 2000 of the
    High Court on the first writ petition, reading as follows:
          “Heard.
          Admit.
          Issue notice returnable at an early date.
          Requisite steps in this regard be taken within 3 days.
          The question in regard to the grant of interim relief will be
          considered after notices are served.
          In the meanwhile, considering the facts and circumstances
          as brought on record, it is directed that the operation of
[2024] 11 S.C.R.                                                          359

     The Madhya Pradesh Madhya Kshetra Vidyut Vitran Company
       Limited & Ors. v. Bapuna Alcobrew Private Limited & Anr.

          the impugned order dated 28.3.2000 a true copy of which
          has been filed as annexure P/1 to the writ petition shall
          remain stayed till the next date of listing subject to the
          following conditions:
          The petitioner shall deposit the minimum guarantee
          charges payable as against the load of 807kVA which
          shall be assessed by the respondent Board and intimated
          to the petitioner within a week.
          ***”
                                                 (emphasis supplied)
26. The position that emerges from the above extract is that the order
    dated 28th March, 2000 cancelling permission to run the T.G. set
    was stayed, subject to the first respondent depositing the minimum
    guarantee charges. It was open to the first respondent not to pay
    but that would have involved the risk of not operating the T.G. set.
    If, indeed, the first respondent was not interested in running the T.G.
    set, it could have withdrawn the writ petition then and there; or, it
    could have subjected such order to an appeal. The first respondent
    did not carry the order in appeal and, thus, the order attained finality.
27. That the first respondent was duly interested in the outcome of the
    first writ petition and to obtain an order for running the T.G. set is
    clear from what happened thereafter. The first show cause notice
    was issued demanding Rs 70,50,478/- (Rupees seventy lakhs
    fifty thousand four hundred and seventy eight only). This was the
    trigger for the miscellaneous petition which the first respondent filed,
    subjecting the first show cause notice to challenge. Although the
    miscellaneous petition is not on record, the first respondent in its
    ‘List of Dates’ handed over to us at the time of hearing conceded that
    the “Respondent Company challenged the First Show Cause Notice
    by way of M(W)P 230/2000 in WP 677/2000, which was disposed
    of vide Order dated 14 February 2001 ...”. While disposing of the
    miscellaneous petition in favour of the appellants and against the
    first respondent, the High Court vide its order dated 14th February,
    2001 held as follows:
          “Earlier on 4.5.2000 this court has categorically ordered that
          petitioner shall pay the respondents minimum guarantee
          charge as per agreement with respondents. The petitioner
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          is bound to pay the minimum guarantee amount whether
          electricity is consumed or not. This order is subject to
          modification if some rules for generating sets are framed
          by the respondents electricity board. The question of
          recovery of bill on T.G. set is not warranted unless the
          rules for recovery are produced.
          Petition is disposed of.”
                                                 (emphasis supplied)
28. This order too went unchallenged by the first respondent and was
    allowed to attain finality with the effect that the first show cause
    notice stood upheld by the High Court, though by an interim order.
29. There is, also, no record of the first respondent having made payment
    pursuant to the aforementioned orders, despite acceptance thereof
    (the orders) by conduct. In fact, it is an undisputed position as would
    appear from the aforesaid factual narrative that the first respondent
    did not obey the orders foisting liability on it for payment of the
    minimum guarantee charges; on the contrary, on 21 st February,
    2006, the first respondent withdrew the first writ petition, with liberty
    to represent the matter before the appellants owing to some change
    in policy with regard to running of T.G. sets. In effect, despite the
    orders dated 04th May, 2000 and 14th February, 2001 staring at its
    face, the first respondent avoided a decision on the merits of the
    writ petition and effectively foreclosed its right to have the demand
    towards minimum guarantee charges nullified. As per the counter
    affidavit, which the appellants as respondents filed in the second
    writ petition, no representation was also filed by the first respondent
    for which leave was obtained as recorded in the order passed on
    21st February, 2006. Thus, the orders having become final, leave
    no room for the first respondent to escape its statutory liability by
    arguing a bar of limitation, when the statute itself did not prescribe
    such a bar.
30. There cannot be any doubt that once an interim order is passed in
    a suit or a proceeding, the interim relief granted to the party seeking
    interim relief could either be confirmed or vacated at the time of
    final disposal of the suit or proceedings, as the case may be. If the
    disposal is by way of an order of dismissal, interim relief which is
    granted as an aid of or ancillary to the final relief cannot continue
[2024] 11 S.C.R.                                                         361

      The Madhya Pradesh Madhya Kshetra Vidyut Vitran Company
        Limited & Ors. v. Bapuna Alcobrew Private Limited & Anr.

      beyond termination of such suit or proceedings. This is the position
      of law flowing from the decision in State of Orissa v. Madan Gopal
      Rungta.26
31. However, if in a particular suit or proceeding, interim relief is sought
    in respect of a development subsequent to institution of the suit/
    proceedings, as in the present case (where the first show cause
    notice came into existence after the first writ petition was filed), and
    the challenge to such subsequent development is spurned, the party
    who has approached the court cannot be heard to say that the effect
    of spurning of the challenge would come to an end with the disposal
    of the suit/proceedings. The effect of the challenge being spurned
    would continue till such time it is reversed in appeal or reviewed in
    a manner known to law.
32. The situation in such a case, adversely affecting the party whose
    challenge has been spurned, cannot be sought to be overcome
    by contending that the suit or proceedings has/have not been
    dismissed on merits but was/were merely withdrawn. By seeking a
    withdrawal, the Court before whom the lis was brought is requested
    not to decide the lis and if the Court while granting the prayer for
    withdrawal does not grant leave for institution of a fresh suit on the
    same cause of action, or even if leave is granted and a fresh suit/
    proceeding is instituted, that would not have the effect of negating
    the order spurning challenge passed in the earlier suit/ proceedings.
    The same would remain operative till set aside or varied.
33. It was, therefore, incumbent upon the first respondent to challenge
    the order dated 14th February, 2001; and having failed to do so, it
    would not be of any merit for the first respondent to contend that until
    the disconnection notice had been issued on 18th March, 2009, the
    liability had not crystallised so as to render the first respondent liable
    to pay the same. The challenge to the first show cause notice having
    failed, as noticed above, the principle of issue estoppel operated
    as a bar for the first respondent to raise a challenge to the second
    show cause notice, which had been issued for precisely the same
    due amount of Rs 70,50,478/- (Rupees seventy lakhs fifty thousand
    four hundred and seventy eight only).



26   [1952] 1 SCR 28 : (1951) SCC 1024
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34. We consider it apposite to refer to a three-Judge Bench decision of
    this Court in Hope Plantations Ltd. v. Taluk Land Board,27 where
    the principle of issue estoppel was expounded thus:
             “26. It is settled law that the principles of estoppel and res
             judicata are based on public policy and justice. Doctrine
             of res judicata is often treated as a branch of the law
             of estoppel though these two doctrines differ in some
             essential particulars. Rule of res judicata prevents the
             parties to a judicial determination from litigating the same
             question over again even though the determination may
             even be demonstratedly wrong. When the proceedings
             have attained finality, parties are bound by the judgment
             and are estopped from questioning it. They cannot
             litigate again on the same cause of action nor can they
             litigate any issue which was necessary for decision in the
             earlier litigation. These two aspects are ‘cause of action
             estoppel’ and ‘issue estoppel’. These two terms are of
             common law origin. Again, once an issue has been finally
             determined, parties cannot subsequently in the same suit
             advance arguments or adduce further evidence directed
             to showing that the issue was wrongly determined. Their
             only remedy is to approach the higher forum if available.
             The determination of the issue between the parties gives
             rise to, as noted above, an issue estoppel. It operates in
             any subsequent proceedings in the same suit in which the
             issue had been determined. It also operates in subsequent
             suits between the same parties in which the same issue
             arises. Section 11 of the Code of Civil Procedure contains
             provisions of res judicata but these are not exhaustive
             of the general doctrine of res judicata. Legal principles
             of estoppel and res judicata are equally applicable in
             proceedings before administrative authorities as they are
             based on public policy and justice.”
                                                    (emphasis supplied)



27   [1998] Supp. 2 SCR 514 : (1999) 5 SCC 590
[2024] 11 S.C.R.                                                            363

      The Madhya Pradesh Madhya Kshetra Vidyut Vitran Company
        Limited & Ors. v. Bapuna Alcobrew Private Limited & Anr.

35. Another bench of three Judges of this Court in Bhanu Kumar Jain
    v. Archana Kumar 28 had the occasion to survey several decisions
    of English courts and explained that there was a distinction between
    res judicata and issue estoppel in the following words:
             “30. Res judicata debars a court from exercising its
             jurisdiction to determine the lis if it has attained finality
             between the parties whereas the doctrine issue estoppel
             is invoked against the party. If such an issue is decided
             against him, he would be estopped from raising the same
             in the latter proceeding. ***”
                                                    (emphasis supplied)
36. To recount, the order of the High Court dated 14th February, 2001,
    though interim in the sense that it disposed of an interlocutory
    application, was a conclusive determination of the issue raised by
    the first respondent itself and which went against it. The first and
    second show cause notices were similarly worded and identical in
    the demands that they raised on the first respondent. Challenge to
    the first show cause notice having failed and notwithstanding that the
    appellants did not require payment by threatening the first respondent
    with disconnection of supply, which the appellants were authorised
    as per section 24(1), the first respondent was certainly estopped
    from agitating the same issue of demand vide its second writ petition.
37. The issue of demand arising from the first respondent’s failure to
    consume the monthly minimum units may have been decided vide
    the order dated 04th May, 2000 without assigning sufficient reasons or,
    for that matter, even wrongly. The learned Single Judge simply went
    by the terms of the contract between the parties without examining
    whether there was any substantial ground for the first respondent to
    urge that the jurisdictional fact for demanding payment of minimum
    guarantee charges did not exist and, hence, it was not liable to
    pay. Such order had also been reiterated by the subsequent order
    dated 14th February, 2001 of another learned Single Judge, again
    without due examination of what the case was on behalf of the first
    respondent and without assignment of any reason. However, does
    anything turn on it? The answer is an emphatic ‘NO’. As has been


28   [2004] Supp. 6 SCR 1104 : (2005) 1 SCC 787
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                           Digital Supreme Court Reports


       held in Hope Plantations (supra) and Bhanu Kumar Jain (supra),
       a point even if wrongly decided binds the party against whom it is
       decided and the same point cannot be urged in a subsequent suit
       or proceeding at the same level. The crux of the matter is that the
       issue of liability accruing to the first respondent for non-payment of
       minimum guarantee charges had been decided previously and such
       decision, not being subjected to any appeal, had attained finality in the
       eyes of law estopping the first respondent from reagitating the issue.
       In our considered opinion, the second writ petition at the instance
       of the first respondent was not maintainable and, accordingly, ought
       not to have been entertained at all.
38. However, since the appellants accepted the order of the learned
    Single Judge dated 16th July, 2009 and issued a fresh demand for a
    reduced amount and which has since been recovered by encashing
    the bank guarantee, we make no order for changing the position
    flowing from the said order.
       CONCLUSION
39. The inevitable result, on conjoint reading of all the judicial orders
    on/in connection with the first writ petition together with the conduct
    of the first respondent, is that the orders dated 04th May, 2000 and
    14th February, 2001, so to say, judicially crystallised the liability of the
    first respondent to pay the minimum guarantee charges and such
    orders having attained finality, bound the first respondent; and no
    amount of argument by the first respondent, either on the point of
    delay in raising the demand or a merit-based review of the action
    of the appellants, in the second writ petition was open to persuade
    the High Court hold in its (first respondent) favour by allowing the
    intra-court appeal.
40. The impugned judgment and order of the High Court allowing the
    intra-court appeal being unsustainable in law has to be and is,
    accordingly, set aside with the result that the civil appeal stands
    allowed. Parties are, however, left to bear their own costs.

       Result of the case: Appeal allowed



       †
           Headnotes prepared by: Nidhi Jain