The Maharashtra State Electricity}Distribution Company Ltd,}Circle Office, Latur,}Through its Executive Engineer } v. M/s. Navjeevan Tyres Pvt. Ltd

1 83-WP-1861-18 judgment.odtIN THE HIGH COURT OF JUDICATURE AT BOMBAYBENCH AT AURANGABAD83 WRIT PETITION NO. 1861 OF 2018 The Maharashtra State Electricity}Distribution Company Ltd,}Circle Office, Latur,}Through its Executive Engineer } Petitioner (Orig. Respondent)VersusM/s. Navjeevan Tyres Pvt. Ltd.,}Plot No.F-8, Kallam Road,}MIDC Latur Tq. District Latur-431512,}Through its Authorized Signatory} Respondent (Orig. Complainant)...Advocate for the Petitioner : Mr. A. S. Shelke Advocate for Respondent : Mr. J. R. Shah...CORAM: SIDDHESHWAR S. THOMBRE, J.DATE:02.04.2026JUDGMENT : 1.Rule. Rule made returnable forthwith. Heard finally with theconsent of the parties at the stage of admission. 2.The petitioner is aggrieved by the order dated 03.10.2017 passedby the Electricity Ombudsman, Nagpur in Representation No. 35 of 2017,more particularly to the extent of clauses (c) and (d) of the operativeorder.3.The brief facts of the case:-3.1It is the case of the petitioner that the petitioner is an authority of 2 83-WP-1861-18 judgment.odtthe Maharashtra State Electricity Distribution Company Limited, engagedin distribution and supply of electricity under the provisions of theElectricity Act, 2003 (for short, “the Act”). The respondent is a consumer,carrying on business of tyre re-treading. The respondent obtainedelectricity supply on 16th September, 1989. As per Commercial CircularNo.243 dated 3rd July, 2015, the activity of Tyre re-treading falls underLT-II (Non-Residential / Commercial) category. 3.2On 23.02.2016, the Flying Squad, Ratnagiri, inspected the premisesof the respondent and, upon verification of the installation, noticedirregularities. It was observed that the respondent was being billed underIndustrial Tariff instead of Commercial Tariff. Accordingly, the concernedSub-Division of the petitioner issued an assessment bill dated 10.03.2016for an amount of Rs.6,17,870/-. Being aggrieved thereby, the respondentapproached the Internal Grievance Redressal Cell (IGRC) on 21stSeptember, 2016. After considering the contentions of both sides, thegrievance came to be rejected, holding that categorization of theconsumer was proper in view of Circular Nos.175 and 243. Being furtheraggrieved, the respondent approached the Consumer Grievance RedressalForum (CGRF), Latur. The CGRF, after hearing both sides, partly allowedthe grievance and directed the petitioner to revise the assessment bill ofRs.6,17,870/-. It further directed that recovery be restricted to a period oftwo years prior to 24.02.2016 i.e. till 24.02.2014 without application ofdelayed payment charges (DPC) and interest. 3 83-WP-1861-18 judgment.odt3.3Being aggrieved by the said order, the respondent preferredRepresentation No.35/2017 before the Electricity Ombudsman, Nagpur.The petitioner appeared and supported the order of CGRF, Latur. TheElectricity Ombudsman, Nagpur, by the impugned order, directed thepetitioner to charge the differential amount between LT-II (Commercial)and LT-V (Industrial) tariff only for the period from 24.02.2016 (date ofinspection) to 30.10.2016, without imposing any delayed paymentcharges (DPC) or interest. It was further directed to revise the billsaccordingly and refund the excess amount after re-calculation, if any. Thepetitioner thereafter filed Review Application No.05/2017 beforeElectricity Ombudsman, Nagpur which came to be rejected on09.02.2018. Being aggrieved by the said order, the present petition isfiled. 4.The learned counsel for the petitioner, Mr. Shelke submits that theimpugned order passed by the Electricity Ombudsman is contrary to thefacts on record. He submits that the respondent is carrying on thebusiness of Tyre re-treading, which is classified under the Commercialcategory as per Circular Nos.175 and 243. However, the respondent-consumer was erroneously billed under the Industrial tariff category sincethe year 2012. This irregularity came to be noticed on 23.02.2016 duringinspection carried out by the Flying Squad, Ratnagiri.5.Pursuant to the inspection, the petitioner-company issued anassessment bill towards differential charges for the period from August, 4 83-WP-1861-18 judgment.odt2012 till 24.02.2016. It was the contention of the petitioner that thoughjudgments of the this Court and the Hon’ble Apex Court were cited beforethe Electricity Ombudsman, the same were not considered. It wascontended that the bar of two years under Section 56(2) of the ElectricityAct, 2003 would not apply to such recovery, even if the period exceedstwo years. 6.The learned counsel for petitioner further submits that theElectricity Ombudsman, Nagpur has relied on an order passed by theMaharashtra Electricity Regulatory Commission dated 11.02.2003 in CaseNo.24 of 2001, which was rendered prior to the coming into force of theAct. He submits that the present assessment has been made under theprovisions of the Act and, therefore, such reliance is misplaced and notsustainable in law. The learned counsel for the petitioner, therefore,submits that the impugned order passed by the Electricity Ombudsmandeserves to be quashed and set aside.7.In support of his submissions, the learned counsel relies upon thefollowing judgments:—i)Maharashtra State Electricity Distribution Company Limited v. Suhasini D. Naik, AIR Online 2024 BOM 1209.ii)Maharashtra State Electricity Distribution Company Limited v. Electricity Ombudsman and ors., 2019 AIR (Bom) 113.iii)Assistant Engineer (D1), Ajmer Vidyut Vitran Nigam Limited and Another v. Rahamatullah Khan alias Rahamjulla, 2020 (4) SCC 650.iv)Prem Cottex v. Uttar Haryana Bijli Vitran Nigam Limited, 2021 5 83-WP-1861-18 judgment.odtDGLS(SC) 564v)Maharashtra State Electricity Distribution Company Limited v. M/s. Jamiya Mohamad Education Society, AIR 2024 Bombay 379.8. Per contra, the learned counsel for the respondent, Mr. J. R. Shah,supports the impugned order passed by the Electricity Ombudsman. Hesubmits that the respondent is running a Tyre re-treading unit, which isan industrial undertaking, and has been regularly paying electricity billsunder the Industrial tariff category.9.He submits that the primary activity of the respondent falls withinthe ambit of industrial activity involving a manufacturing process.According to him, till the inspection conducted by the Flying Squad on23.02.2016, the petitioner had consistently billed the respondent underthe Industrial tariff category, which was appropriate and justified.10.It is further submitted that the change in tariff category fromIndustrial to Commercial, pursuant to the inspection dated 23.02.2016,and issuance of the assessment bill with retrospective effect from August,2012, is illegal and unsustainable. The respondent, therefore, approachedthe Internal Grievance Redressal Cell contending that the unit is amanufacturing unit and does not involve any commercial activity.11.The learned counsel submits that there was no fault ormisrepresentation on the part of the respondent. The respondent hadbeen continuously charged under the Industrial tariff category since 1989 6 83-WP-1861-18 judgment.odttill February, 2016, and only after the inspection by the Flying Squad, thetariff category came to be changed.12.It is further submitted that such reclassification of tariff cannot beequated with a case of escaped billing or clerical error. Therefore,recourse to recovery under Section 56 of the Act is not permissible. Hesubmits that the Electricity Ombudsman has rightly appreciated theseaspects and has correctly directed revision of bills and refund of excessamount recovered pursuant to the assessment bill. In view of theaforesaid submissions, the learned counsel for the respondent prays fordismissal of the writ petition.13. Having heard the learned counsel for the parties at length, there isno dispute that the respondent has been carrying on the business since1989. Upon considering the nature of activities of the respondent, theFlying Squad submitted its report and, based thereon, the assessment billcame to be issued to the respondent on the premise that the respondent’sclassification falls under Commercial use.14.This Court in the case of Maharashtra State Electricity DistributionCompany Limited (supra) has held in paragraph nos.8, 9 and 10, whichread thus:-“8.CGRF then has taken into consideration the Judgment of the Hon’bleSupreme Court in the case of Prem Cottex (supra) and has held that theelectricity company can recover electricity bill for bonafide mistake and it isfurther held that the mistake in this case is not bonafide and therefore thejudgment has no application thereto. With this discussion the grievanceCase No. 071 of 2022 was partially allowed. Electricity company wasdirected to revise supplementary bill issued in June -2022 considering 793 7 83-WP-1861-18 judgment.odtunits for the month of November- 2020 after adjusting the payment madeby the consumer and the interest was also directed be waived.9. At this stage, it would be relevant to take note of the Judgment of a threeJudge Bench of Hon’ble Supreme Court in the case of K.C.Ninan Vs. KeralaState Electricity Board and Others (2023 SCC OnLine SC 663), after takinginto consideration judgment in case of Prem Cottex (Supra) and AssistantEngineer (D1), Ajmer Vidyut Vitran Nigam Limited and Anr. Vs.Rahamatullah Khan has passed judgment and it would be fruitful to refer tothe relevant paragraph Nos. 122 to 136 thereof which read thus:“122…………….129.The second issue pertains to the implication of the periodof two years provided in Section 56(2) on the civil remedies ofUtilities to recover electricity dues. Section 56(2), which beginswith a non obstante clause, provides a limitation of two years forrecovery of dues by the licensee through the means ofdisconnecting electrical supply. It puts a restriction on the rightof the licensee to recover any sum due from a consumer underSection 56 after a period of two years from the date when suchsum became first due. If this provision is invoked against aconsumer after two years, the action will be permissible whenthe sum, which was first due, has been shown continuously asrecoverable as arrears of charges for electricity supplied. UnderSection 56, the liability to pay arises on the consumption ofelectricity and the obligation to pay arises when a bill is issuedby the licensee for the first time. Accordingly, the period oflimitation of two years starts only after issuance of the bill.130. Before we deal with the implication of Section 56(2) on thecivil remedies available to a licensee, it is important to clarifythat when the liability incurred by a consumer is prior to theperiod when the 2003 Act came into force, then the bar oflimitation under Section 56(2) is not applicable. In KusumamHotels Pvt Ltd v. Kerala State Electricity Board, this Court hasheld that Section 56(2) applies after the 2003 Act came intoforce and the bar of limitation under Section 56(2) would notapply to a liability incurred by the consumer prior to theenforcement of the Act. In terms of Section 6 of the GeneralClauses Act 1897, the liability incurred under the previousenactment would continue and the claim of the licensee torecover electricity would be governed by the regulatoryframework which was in existence prior to the enforcement ofthe 2003 Act.131………..”10.It is thus clear from this judgment, that it is open for the electricitycompany to issue a revised bill if it is found that the previous bill issued isunder bonafide mistake. In the instant case, revised bill has been issuedwith specific contention that multiplying factor 1 instead of 20 was applied.There is no dispute made by the consumer with regard to this fact. If it isso, it does not stand to any reason or justification to hold that this is notbonafide mistake of the electricity company, as observed by CGRF. In view 8 83-WP-1861-18 judgment.odtof the judgment of the Hon’ble Supreme Court in the case of K. C.Ninan(supra), the electricity company is within its right to issue revised billonce such bonafide mistake is found out.”15.The Hon’ble Apex Court in the case of Prem Cottex (supra),particularly in paragraph nos.23 to 25, has stated as follows:-“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 neglects to payany charge for electricity or any some other than a charge for electricitydue from him.24. Sub-section (2) uses the words “no sum due from any consumerunder this Section”. Therefore, the bar under Sub-section (2) is relatable tothe sum due under Section 56. This naturally takes us to Sub-section(1)which deals specifically with the negligence on the part of a person to payany 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 onthe part of a person to pay for electricity and not anything else nor anynegligence on the part of the licensee.25. In other words, the negligence on the part of the licensee which ledto short billing in the first instance and the rectification of the same afterthe 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 theirmistake, may not fall within the mischief, namely, “no sum due from anyconsumer under this Section”, appearing in Sub-section (2).” 16. Considering the issue involved, it is necessary to refer to Section 56of the Electricity Act, 2003, which reads thus:—“56. Disconnection of supply in default of payment.–(1)Where any person neglects to pay any charge for electricity or any sumother than a charge for electricity due from him to a licensee or thegenerating company in respect of supply, transmission or distribution orwheeling of electricity to him, the licensee or the generating company may,after giving not less than fifteen clear days’ notice in writing, to suchperson and without prejudice to his rights to recover such charge or othersum by suit, cut off the supply of electricity and for that purpose cut ordisconnect any electric supply line or other works being the property ofsuch licensee or the generating company through which electricity mayhave been supplied, transmitted, distributed or wheeled and maydiscontinue the supply until such charge or other sum, together with anyexpenses incurred by him in cutting off and reconnecting the supply, arepaid, but no longer:Provided that the supply of electricity shall not be cutoff if such person deposits, under protest,–(a)an amount equal to the sum claimed from him, or 9 83-WP-1861-18 judgment.odt(b)the electricity charges due from him for each month calculated onthe basis of average charge for electricity paid by him during thepreceding six months,whichever is less, pending disposal of any disputebetween him and the licensee.(2)Notwithstanding anything contained in any other law for the time beingin force, no sum due from any consumer, under this section shall berecoverable after the period of two years from the date when such sumbecame first due unless such sum has been shown continuously asrecoverable as arrear of charges for electricity supplied and the licenseeshall not cut off the supply of the electricity.”17. Upon perusal of Section 56(2) of the Act, it is evident that the barcontained therein is not only in respect of disconnection of supply butalso operates against recovery of dues beyond the prescribed period,unless the conditions stipulated therein are satisfied.18.In the present case, it is an admitted position that the respondentobtained electricity supply on 16th September, 1989. As per CommercialCircular No.175 dated 05th September, 2012 and Commercial CircularNo.243 dated 03rd July, 2015, the activity of Tyre re-treading falls underLT-II (Non-Residential / Commercial) category.19.Merely because the respondent was erroneously billed under theIndustrial tariff due to certain irregularities, the same cannot be a groundto continue such classification, if in fact the activity falls within theCommercial category. Once the activity of Tyre re-treading is classified asCommercial, the respondent is liable to pay charges in accordance withthe applicable Commercial tariff.20.It is necessary to note that the petitioner is bound to follow theregulations and tariff classifications framed by the Maharashtra Electricity 10 83-WP-1861-18 judgment.odtRegulatory Commission. Once the activity of the respondent iscategorized as Commercial, the billing must necessarily be aligned withsuch classification.21.In that view of the matter, the assessment bill issued in the year2016, pursuant to the Flying Squad inspection, for recovery of differentialcharges on account of wrong tariff application, cannot be said to beillegal merely because the respondent was previously billed under theIndustrial category. 22.In view of the aforesaid discussion, this Court finds that theElectricity Ombudsman has committed an apparent error while allowingthe representation filed by the respondent. The impugned order,therefore, warrants interference. Hence, I proceed to pass followingorder:-ORDERi.The writ petition is allowed.ii.The order dated 03.10.2017 passed by Electricity Ombudsman, Nagpur in Representation No.35/2017 is hereby quashed and set aside.iii. Rule is made absolute in the above terms.iv.Pending Civil Applications, if any, stand disposed of. [ SIDDHESHWAR S. THOMBRE ] JUDGE