Madras High Court
M/S.Ratna Cafe vs The Chairman And Managing ... on 1 December, 2021
W.P.No.14601 of 2017
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 01.12.2021
CORAM
THE HONOURABLE MR.JUSTICE KRISHNAN RAMASAMY
W.P.No.14601 of 2017
and W.M.P.No.15826 of 2017
M/s.Ratna Cafe,
A/c.No.123-047-3
No.2, Chinnappa Rawther Street,
Royapettah, Chennai
Rep. by its Senior Manager
R.Somasundaram. ... Petitioner
Versus
1.The Chairman and Managing Director,
Tamil Nadu Generation and Distribution
Corporation (TANGEDCO),
No.144, Anna Salai,
Chennai 600 002.
2.Director of Finance,
Tamilnadu Generation and Distribution,
Corporation (TANGEDCO),
No.144, Anna Salai, Chennai 600 002.
3.The Executive Engineer,
Mylapore Revenue Branch,
Chennai Electricity Distribution Circle/South,
110, K.V.S.S. Complex
Nungambakkam,
Chennai - 600 034 ... Respondents
1/10
https://www.mhc.tn.gov.in/judis
W.P.No.14601 of 2017
PRAYER : Writ Petition filed under Article 226 of the Constitution of India,
for the issuance of Writ of Certiorari, to call for the records of the third
respondent in Lr.No.EE/O&M/MyL/AAO/RB/A2/F. BOAB/D1240/2017
dated 09.03.2017 and quash the same as illegal, arbitrary, untenable under
law and barred by limitation under Section 56(2) of the Electricity Act 2003
and against the provisions of Tamil Nadu Electricity Supply Code 2004 and
violative of Principles of natural justice.
For Petitioner : Mr.K.Seshadri
For Respondents : Mr.L.Jai Venkatesh
Standing Counsel
ORDER
This Writ Petition has been filed seeking for the issuance of Writ of
Certiorari, to call for the records of the third respondent in
Lr.No.EE/O&M/MyL/AAO/RB/A2/F. BOAB/D1240/2017 dated 09.03.2017
and quash the same as illegal, arbitrary, untenable under law and barred by
limitation under Section 56(2) of the Electricity Act 2003 and against the
provisions of Tamil Nadu Electricity Supply Code 2004 and violative of
Principles of natural justice.
2.It is the case of the petitioner that the petitioner is doing high class
vegetarian hotel business for the last 60 to 70 years. The petitioner is regular
in payment of current consumption charges as demanded by the officers of
https://www.mhc.tn.gov.in/judis
W.P.No.14601 of 2017
the respondents. From the year 2007 onwards, the respondents were unable
to meet the required power supply on the State of Government of Tamilnadu
and on the request of the first respondent, the Government of Tamilnadu had
issued restriction and control orders and imposed quota in the use of power
supply by the H.T.Industrial and Commercial consumers apart from
scheduled and unscheduled power cut. While so, the third respondent issued
a show cause notice dated 09.03.2017 in Lr.No. EE / O&M / MyL / AAO /
RB / A2 / F. BOAB / D1240 / 2017, demanding a sum of Rs.71,724/-
towards short fall amount of current consumption charges for non-adoption
of correct average of current consumption during the meter defective period
from 2/2015 to 4/2015. Aggrieved by the show cause notice, the petitioner
filed the objection and requested to review the demand made by the third
respondent. However, there was not reply from the respondents. Therefore,
the present Writ Petition has been filed.
3.The learned counsel for the petitioner submits that the third
respondent claimed audit short fall of consumption charges for non-adoption
of correct average of current consumption during the meter defective period
between 02/2015 and 04/2015 belatedly, that too without providing proper
https://www.mhc.tn.gov.in/judis
W.P.No.14601 of 2017
opportunity to the petitioner. The learned counsel would further submit that,
in terms of Section 56(2) of the Electricity Act, 2003, the period of limitation
prescribed for collecting the arrears was prescribed as two years from the
date when such sum becomes first due. In the present case, since the demand
was made beyond the period of limitation and therefore, the impugned
demand cannot be sustained and the same is liable to be quashed.
4.Per contra, the learned Standing Counsel appearing for the
respondents would submit that admittedly, the petitioner has not paid the
shortfall for the period between 02/2015 and 04/2015 and therefore, the third
respondent has rightly issued the demand notice by furnishing all the details.
He would also submit that during audit inspection, it was found that the
petitioner was due to pay the arrears and as per audit report, the demand has
been made and without making the payment, the petitioner has approached
this Court and hence, he prayed to dismiss the Writ Petition.
5.Heard the learned counsel for the petitioner as well as the learned
Standing Counsel appearing for the respondents and perused the materials
available on records.
https://www.mhc.tn.gov.in/judis
W.P.No.14601 of 2017
6.It is relevant to extract Section 56(2) of the Electricity Act, 2003,
which reads as under:
“56 (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.”
7.A perusal of the above, it is clear that 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. Therefore, the provision of Section 56 of the Electricity Act, 2003,
(hereinafter referred to as 'the Act'), does not empower the third respondent
to recover any amount, if the period of two years has elapsed no electricity
supply be cut off for non-payment of those dues. In other words, what is
sought to be contended is that if the demand or part of the demand is time
barred the provisions of Section 56 of the Act would be attracted.
8.In the present case, admittedly, the impugned demand has been made
https://www.mhc.tn.gov.in/judis
W.P.No.14601 of 2017
after the prescribed period of two years for the month 2/2015. Therefore, it
is clearly barred by limitation by virtue of Section 56(2) of the Act. Further,
it is not the case of the respondents that such sum has been shown
continuously as recoverable as arrear of charges for electricity supplied in
the books of account. In this regard, it is also worthwhile to refer a decision
of the Hon'ble Supreme Court in C.A.No.1672 of 2020 dated 18.02.2020,
wherein, it was made it clear that no claim can be made beyond the period of
two years. The relevant portion of the judgment is extracted hereunder:
"9. Applying the aforesaid ratio to the facts of
the present case, the licensee company raised an
additional demand on 18.03.2014 for the period July,
2009 to September, 2011.
The licensee company discovered the mistake of
billing under the wrong Tariff Code on 18.03.2014.
The limitation period of two years under Section 56(2)
had by then already expired.
Section 56(2) did not preclude the licensee
company from raising an additional or supplementary
demand after the expiry of the limitation period under
Section 56(2) in the case of a mistake or bona fide
error. It did not however, empower the licensee
company to take recourse to the coercive measure of
disconnection of electricity supply, for recovery of the
additional demand.
As per Section 17(1)(c) of the Limitation Act,
1963, in case of a mistake, the limitation period begins
to run from the date when the mistake is discovered for
the first time.
https://www.mhc.tn.gov.in/judis
W.P.No.14601 of 2017
In Mahabir Kishore and Ors. v. State of
Madhya Pradesh,5 this Court held that :–
Section 17(1)(c) of the Limitation
Act, 1963, provides that in the case of a
suit for relief on the ground of mistake,
the period of limitation does not begin to
run until the plaintiff had discovered the
mistake or could with reasonable
diligence, have discovered it. In a case
where payment has been made under a
mistake of law as contrasted with a
mistake of fact, generally the mistake
become known to the party only when a
court makes a declaration as to the
invalidity of the law. Though a party
could, with reasonable diligence,
discover a mistake of fact even before a
court makes a pronouncement, it is
seldom that a person can, even with
reasonable diligence, discover a mistake
of law before a judgment adjudging the
validity of the law.”
(emphasis supplied)
In the present case, the period of limitation
would commence from the date of discovery of the
mistake i.e. 18.03.2014. The licensee company may
take recourse to any remedy available in law for
recovery of the additional demand, but is barred from
taking recourse to disconnection of supply of electricity
under sub-section (2) of Section 56 of the Act. "
9.In the light of the above discussion, the impugned demand made by
https://www.mhc.tn.gov.in/judis
W.P.No.14601 of 2017
the third respondent cannot be sustained for the month 2/2015. As far as the
demand for the month 3/2015 and 4/2015 is concerned, when the
respondents raising the demand, it is their duty to provide the reason for the
shortfall and the audit report, showing how they arrived the shortfall. In the
present case, the third respondent without providing the audit report and
proper opportunity to the petitioner has passed the demand notice, hence, the
same is liable to be set aside.
10.In view of the above, this Writ Petition is allowed and the
impugned demand notice bearing Lr.No.EE/O&M/MyL/AAO/RB/A2/F.
BOAB/D1240/2017 dated 09.03.2017, issued by the third respondent,
insofar as the audit amount of Rs.71,724/- is quashed. No costs.
Consequently, connected miscellaneous petition is closed.
01.12.2021
(2/2)
Index: Yes/No
Internet: Yes/No
Speaking Order/Non-Speaking Order
rst
https://www.mhc.tn.gov.in/judis
W.P.No.14601 of 2017
To:
1.The Chairman and Managing Director,
Tamil Nadu Generation and Distribution
Corporation (TANGEDCO),
No.144, Anna Salai,
Chennai 600 002.
2.Director of Finance,
Tamilnadu Generation and Distribution,
Corporation (TANGEDCO),
No.144, Anna Salai, Chennai 600 002.
3.The Executive Engineer,
Mylapore Revenue Branch,
Chennai Electricity Distribution Circle/South,
110, K.V.S.S. Complex
Nungambakkam,
Chennai - 600 034
https://www.mhc.tn.gov.in/judis
W.P.No.14601 of 2017
KRISHNAN RAMASAMY.J.,
rst
W.P.No.14601 of 2017
and W.M.P.No.15826 of 2017
01.12.2021
(2/2)
https://www.mhc.tn.gov.in/judis
