Madras High Court
Sri Jayajothi & Co. Ltd. vs Tamil Nadu Electricity ... on 1 December, 2021
W.P.No.7498 of 2017
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 01.12.2021
CORAM
THE HONOURABLE MR.JUSTICE KRISHNAN RAMASAMY
W.P.No.7498 of 2017
and W.M.P.Nos.8188 & 8189 of 2017
Sri Jayajothi & Co. Ltd., HTSC No.9,
70, Alagai Nagar, Rajapalayam -17,
Rep. by its Authorized Signatory
B.Seenivasagam ... Petitioner
Versus
1.Tamil Nadu Electricity Regulatory
Commission,
Rep. by its Secretary.
No.19-A, Rukmani Lakshmipathy Salai,
(Marshall's Road),
Egmore, Chennai - 600 008.
2.The Tamilnadu Generation and Distribution,
Corporation Ltd., (TANGEDCO)
Rep. by its Chairman
No.144, Anna Salai,
Chennai 600 002.
3.Director of Finance,
Tamilnadu Generation and Distribution,
Corporation Ltd.,
No.144, Anna Salai,
Chennai 600 002.
1/10
https://www.mhc.tn.gov.in/judis
W.P.No.7498 of 2017
4.The Superintending Engineer,
Virudhunagar Electricity Distributing Circle,
TANGEDCO,
Virudhunagar. ... Respondents
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's impugned Circular Memo CFC/R/FC/R/DFC-R1/F.HTLT-
RTI/D.30/2015, dated 03.02.2016 in so far as the para 3(iii) is concern and
the consequential impugned demand notice bearing
Lr.No.SE/VREDC/DFC/AO/Rev/AAO/HT/AS.6/F.HTAudit(BOAB).D.No./
2017 dated 28.01.2017 issued by the fourth respondent and quash the same
as illegal, arbitrary and without authority of law and against the Clause 33 of
the TNERC - Grid Connectivity and Intra State Open Access Regulation
2014 and Tariff orders of the first respondent made in T.P.No.1 of 2013
dated 20.06.2013 and SMT No.9 of 2014 dated 11.12.2014 and the
Electricity Act, 2003.
For Petitioner : Mr.S.P.Parthasarathy
For Respondents : Mr.L.Jai Venkatesh
Standing Counsel
ORDER
This Writ Petition has been filed seeking for the issuance of Writ of
Certiorarified Mandamus, to call for the records of the third respondent's
impugned Circular Memo CFC/R/FC/R/DFC-R1/F.HTLT-RTI/D.30/2015,
dated 03.02.2016 in so far as the para 3(iii) is concern and the consequential
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W.P.No.7498 of 2017
impugned demand notice bearing Lr.No. SE/ VREDC/ DFC/AO/Rev/
AAO/HT/AS.6/F.HT Audit(BOAB). D.No./2017 dated 28.01.2017 issued by
the fourth respondent and quash the same as illegal, arbitrary and without
authority of law and against the Clause 33 of the TNERC - Grid Connectivity
and Intra State Open Access Regulation 2014 and Tariff orders of the first
respondent made in T.P.No.1 of 2013 dated 20.06.2013 and SMT No.9 of
2014 dated 11.12.2014 and the Electricity Act, 2003.
2.It is the case of the petitioner that the petitioner industry is a Textile
manufacturing industry and is producing cotton fabric mostly for exports.
Since the respondents board was not able to provide sufficient power, the
petitioner was compelled to purchase power from third party sources to
achieve the production target. Accordingly, the petitioner made use of such
power procured after paying the applicable charges to the respondents under
the provisions of Electricity Act, 2003. In the months of April/2013 and
May/2013, the petitioner has purchased power from third party viz., Cauvery
Power Generation Chennai (P) Ltd., and the quantum of power purchased
from such third party sources was deducted from the petitioner's total
industrial consumption and the balance energy and demand consumed from
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W.P.No.7498 of 2017
the respondent alone was billed in the respective monthly CC bills and the
petitioner has paid the same without any default. While so, the fourth
respondent issued a demand notice dated 14.12.2016 and 28.01.2017 for a
sum of Rs.30,04,382/- towards outage units for the period from 04/2013 to
5/2013. Aggrieved over the same, the present Writ Petition has been filed.
3.The learned counsel for the petitioner submits that the fourth
respondent claimed audit short fall for the consumption of outage units for
the period between 04/2013 to 05/2013 belatedly, that too after a lapse of 3
years, in the year 2017. 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 04/2013 and 05/13 and therefore, the fourth
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W.P.No.7498 of 2017
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.
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.”
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W.P.No.7498 of 2017
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 second
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
after the prescribed period of two years. 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
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W.P.No.7498 of 2017
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.
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
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W.P.No.7498 of 2017
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
the fourth respondent cannot be sustained and 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. SE/ VREDC/ DFC/AO/ Rev/AAO
/HT/AS.6/ F.HTAudit(BOAB). D.No./2017 dated 28.01.2017, issued by the
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W.P.No.7498 of 2017
fourth respondent, insofar as the audit amount of Rs.30,04,382/- is quashed.
No costs. Consequently, connected miscellaneous petitions are closed.
01.12.2021
Index: Yes/No
Internet: Yes/No
Speaking Order/Non-Speaking Order
rst
To:
1.Tamil Nadu Electricity Regulatory
Commission,
Rep. by its Secretary.
No.19-A, Rukmani Lakshmipathy Salai,
(Marshall's Road),
Egmore, Chennai - 600 008.
2.The Tamilnadu Generation and Distribution,
Corporation Ltd., (TANGEDCO)
Rep. by its Chairman
No.144, Anna Salai, Chennai 600 002.
3.Director of Finance,
Tamilnadu Generation and Distribution,
Corporation Ltd.,
No.144, Anna Salai, Chennai 600 002.
4.The Superintending Engineer,
Virudhunagar Electricity Distributing Circle,
TANGEDCO,
Virudhunagar.
https://www.mhc.tn.gov.in/judis
W.P.No.7498 of 2017
KRISHNAN RAMASAMY.J.,
rst
W.P.No.7498 of 2017
and W.M.P.Nos.8188 & 8189 of 2017
01.12.2021
https://www.mhc.tn.gov.in/judis
