Error leads to ₹54 lakh shortfall in electricity bill but Allahabad HC grants relief to consumer: Read why

The Allahabad High Court recently granted relief to a food manufacturer facing electricity disconnection by Uttar Pradesh Power Corporation Limited (UPPCL) over non-payment of ₹54 lakh bill [Om Food Manufacturing Center v State of UP & Ors].

A Bench of Justices Arindam Sinha and Satya Veer Singh found that UPPCL's billing mistake had led to a lesser amount being charged initially.

The power distributer issued a notice about its mistake after a lapse of two years and demanded additional payment of ₹54 lakh bill which it should have recovered initially but for the billing error.

The Court directed UPPCL to present the discovery of its mistake and proper calculation to the consumer, with applicable rebate, for payment within the prescribed time.

However, it said that as per settled law, no coercive action can be taken against the consumer since the claim was made after two years.

UPPCL would have to move a civil court for recovery in case of non-payment, the Bench added.

"In this case we direct the supply company to present the discovery of mistake and proper calculation, with applicable rebate given to petitioner, for payment within the prescribed time. In event of non-payment, the supply company has to resort to civil remedy, to recover," the Court ordered.

The Court further said that once the demand is made, the supply company cannot claim more charges.

"There cannot be upward revision in the demand, after it is made. The supply company cannot progressively increase its demand," the order said.

The power company had earlier increased the demand to ₹62 Lakh.

The petitioner, Om Food Manufacturing Center, a commercial electricity connection holder, had applied for load enhancement in July 2023. After the increased load was supplied, the petitioner regularly paid the demanded amount.

After two years, the electricity supply company issued a notice demanding an outstanding charge of ₹54 lakh on the ground that it had made a mistake in calculating the applicable rates.

The Court found that as per Supreme Court ruling in Assistant Engineer, Ajmer Vidyut Vitran Nigam Limited v. Rahamatullah Khan alias Rahamjulla, Section 56(2) of the Electricity Act does not preclude the licensee company from raising an additional or supplementary demand after the expiry of the limitation period in the case of a mistake or bona fide error.

However, it added that there cannot be recovery to the distress of the consumer.

"Section 56(1) provides for procedure of 15 clear days' notice in writing, to recover the charge, including by cutting off supply of electricity. Sub-section (2) provides for limitation. Rahamatullah Khan (supra) says, coercive action cannot be taken. In other words, the supply company not having recourse to coercive steps for recovery, must obtain civil remedy on a principal sum and action," the Bench added

Advocate Kumar Ankit Srivastava represented the petitioner.

Standing Counsel Piyush Shukla appeared for the State.

Advocate Udit Chandra appeared for the power company.

[Read Judgment]