1.       This revision petition has been filed under section 21(b) of the Act 1986 in challenge to the Order dated 06.03.2010 of the State Commission in appeal no. 262 of 2009 arising out of the Order dated 20.12.2008 of the District Commission in complaint no. 101 of 2008.    

2.       We have heard the learned senior counsel / learned counsel for the electricity distribution co. (the petitioner herein) and for the complainant (the respondent herein) and have perused the record including inter alia the Order dated 20.12.2008 of the District Commission, the impugned Order dated 06.03.2010 of the State Commission and the petition.

3.       Briefly, the complainant firm took a connection for supply of electricity from the electricity distribution co. in 2002. It had been regular in paying its electricity bills in the routine. However it received a belated supplementary demand on 30.01.2008 for the period from May 2002 to December 2007. The supplementary demand related to the period for which it had already paid the bills in the normal course as and when raised earlier at the relevant time. Feeling aggrieved, and the grievance having remained unaddressed, the complainant filed a complaint with the District Commission on 29.02.2008 challenging the supplementary demand.

4.       The District Commission partly allowed the complaint on contest. The State Commission vide its impugned Order dismissed the electricity distribution co.’s appeal finding “no substance in the matter”. As such this revision has been preferred apropos concurrent findings of the two fora below.

5.       The root of the matter is whether it was lawful and justified to raise the supplementary demand in such a manner with respect of consumption of electricity relating to an earlier period for which the bills as raised earlier had been paid at the relevant time.

6.       Learned senior counsel for the electricity distribution co. argues that there was a mistake in the bills raised earlier and the said mistake was subsequently rectified by way of the supplementary demand in question. It has been settled by Hon’ble Supreme Court vide its judgment dated 18.02.2020 in Assistant Engineer (D1), Ajmer Vidyut Vitran Nigam Limited & Anr. Vs. Rahamatullah Khan alias Rahamjulla, Civil Appeal No. 1672 of 2020 with C.A. No. 1673 of 2020 @SLP(C) No. 4721/2020 @D. No. 33892 of 2018 that supplementary demand can certainly be raised if a mistake in the earlier bills is subsequently detected. Learned senior counsel submits that the earlier bills were not calculated correctly and that as and when the mistake came to notice the same was rectified by way of the supplementary demand. Learned senior counsel dwells to explain the (correct) appreciation of Section 56(2) of The Indian Electricity Act, 1910. He argues that the State Commission in passing its impugned Order has misunderstood the law and has erred in ruling against the electricity distribution co. Learned senior counsel submits that in the light of Hon’ble Supreme Court’s afore-referred judgment dated 18.12.2020 the case of the complainant straightaway fails.

7.       Here for reference we may reproduce extracts from Hon’ble Supreme Court’s judgment dated 18.12.2020 referred to by learned senior counsel:

8.         Section 56(2) however, does not preclude the licensee company from raising a supplementary demand after the expiry of the limitation period of two years. It only restricts the right of the licensee to disconnect electricity supply due to non-payment of dues after the period of limitation of two years has expired, nor does it restrict other modes of recovery which may be initiated by the licencee company for recovery of a supplementary demand.

9.         - - -

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.

8.       Hon’ble Supreme Court has elucidated that Section 56(2) of The Indian Electricity Act, 1910 curtails the right of the electricity distribution co. to disconnect supply of electricity in case of non-payment of dues after the limitation period of two years provided therein has expired but it does not affect the right of the electricity distribution co. from raising supplementary demand in case of a mistake or bonafide error for which the limitation period begins to run from the date when the mistake was discovered for the first time.  

9.       Learned counsel for the complainant however argues that Section 56(2) of the Act 1910 is not central to the reasons and findings contained in the impugned Order of the State Commission. The essential question is not whether raising of supplementary demand was barred by the limitation period given in Section 56(2). The question actually is whether the supplementary demand was lawful and even otherwise factually justified at all. In the judgment of Hon’ble Supreme Court referred to by learned senior counsel it is laid down that supplementary demand can be raised in case of a mistake or bonafide error and the limitation will run from the date the mistake first came to notice. The submission is that the onus was on the electricity distribution co. to show that it was in fact a case of a bonafide error and also to maintain record of the date on which the mistake first came to notice which was necessary for the purpose of computing limitation. But the electricity distribution co. has not at all made it clear that it was actually a case of a bonafide error nor has it made available the specific date on which the mistake first came to notice to enable computation of limitation. Learned counsel argues that irrespective of whether it is a current demand raised at the relevant time or a supplementary demand raised subsequently, the consumer has the right to be informed of the rationale and calculations for raising such demand. The submission is that in a case like the present one when supplementary demand was being raised in respect of consumption for an earlier period for which the bills raised earlier had been regularly and scrupulously paid at the due time it was all the more necessary and important to provide to the consumer the calculations and the reasoning or rationale for arriving at the supplementary enhanced demand. However not only were the rationale and calculations not provided to the complainant, the same were also not dutifully placed before the State Commission even when specifically asked for by the State Commission to do so. Learned counsel draws our attention to the following excerpts of the State Commission’s impugned Order:

After notice, the appellant had appeared and submitted that while preparing the earlier bill, the divider was not properly applied and supplementary bill has been given. District Forum has found that while giving the bills reading of the meter was taken and thereafter, applying divider said bills were given. The question is in spite of the fact that we called upon the appellant, he did not point out that how supplementary bill is justifiable and time was granted for said purpose. Accordingly to submission of Learned counsel that instead of applying the divider MF2, MF1 was applied and therefore, supplementary bill was justifiable. We wanted to know the information in respect of the calculation system. It was not placed on record. Apart from that the electricity Act at the most permits recovery for six months. This is a bill for more than six months for no reasonable reasons. The bill cannot be corrected at any time as desired and at the sweet will of the appellant and thereby, consumer cannot be asked to suffer for the service because there is the monopoly of supplier. That does not mean that appellant can charge the bill at any point of time to consumers and more specifically the consumer, who is regular in making the payment. There is no dispute over the fact that the bill whenever tendered by the appellant were paid by the consumers/respondents. Apart from that even the District Forum order will show that question which was asked as to how reading was taken, how, divider was taken etc. said information was not placed before district forum. Therefore, it appears to be the view of the appellant that they are not answerable or suppose to explain anyone in what manner the supplementary bills are prepared by them.

10.     In our considered view, the electricity distribution co. was not prevented by Section 56(2) of the Act 1910 to raise supplementary demand in case of a mistake or bonafide error. It was however dutybound to show that it was in fact a case of a bonafide error and was also under obligation to maintain credible record of the specific date on which the mistake first came to notice so as to enable the computation of limitation, which onus it failed to discharge. It also owed a duty to provide the grounds or the logical basis, the salient rationale and syllogism of calculations to the consumer, moreso when it was an enhanced supplementary demand raised subsequently and it is admitted that the consumer had been regularly paying its bills to the electricity distribution co. as and when raised earlier without fail. This onus remained undischarged totally. We also note that as the information in respect of the rationale and calculations for raising the supplementary demand was not provided even to the State Commission and despite being specifically required to do so, the State Commission was constrained to observe “- - - The question is in spite of the fact that we called upon the appellant, he did not point out that how supplementary bill is justifiable and time was granted for said purpose.- - -”; “- - - We wanted to know the information in respect of the calculation system. It was not placed on record.- - -”; “- - - Therefore, it appears to be the view of the appellant that they are not answerable or suppose to explain anyone in what manner the supplementary bills are prepared by them.- - -”.

11.     As such we do not agree with learned senior counsel for the electricity distribution co. that the case of the complainant fails in the light of Hon’ble Supreme Court’s judgment referred to by him. On the contrary we notice that it flows from Hon’ble Supreme Court’s judgment as a necessary inferential corollary that in case the electricity distribution co. had occasion to raise a supplementary enhanced demand subsequent to the regular the then demand raised earlier at the relevant time when due, it had to establish that it was in fact a case of a bonafide error. It was also required to maintain and furnish credible record of the specific date on which the mistake first came to be discovered so as to enable computation of limitation period which may also be of crucial significance in a given case. The deficient electricity distribution co. has fallen short on both these counts.

12.     We notice that the rationale and calculations for raising supplementary demand were not provided to the complainant and were not placed even before the State Commission and that too despite being specifically asked to do so by the State Commission.

13.     As such the electricity distribution co. has miserably failed to demonstrate that the belatedly raised supplementary demand was lawful and justified.

On the contrary an air of capricious highhandedness and unilateral opacity is perceivable on the part of the electricity distribution co.

14.     Learned senior counsel also raises the question of maintainability, that the complainant was not a ‘consumer’ within the meaning of Section 2(1)(d) of The Consumer Protection Act, 1986 since he was doing a “commercial activity”. He admits that this preliminary objection was not taken in the written version before the District Commission but submits that this is a point of law and can be raised at any time and it was also argued before the State Commission in appeal.

15.     In rebuttal learned counsel for the complainant submits that Section 2(1)(d) of the Act 1986 precludes a person who hires or avails of any service for any “commercial purpose” but the explanation thereto makes it clear that “commercial purpose” does not include services availed exclusively for the purposes of earning livelihood by means of self-employment. Whether the services were availed for commercial purpose and if so whether the services were availed exclusively for the purposes of earning livelihood by means of self-employment were questions which required evidence to be led. The onus was on the electricity distribution co. to take such preliminary objection in its written version before the District Commission. However it took no such objection before the District Commission. The submission is that not having raised it before the District Commission at the due time it ought not be raised at later stages as and when the electricity distribution co. chooses to do so. Learned counsel also submits that the memorandum of appeal filed before the State Commission has not been placed by the electricity distribution co. with its petition and as such it is not feasible to say whether this point was included in the memorandum of appeal or was only argued at the stage of final hearing before the State Commission. Learned counsel draws attention to the following excerpt of the State Commission’s impugned Order and submits that the objection raised in arguments has been rightly dismissed by the State Commission:

Apart from above aspect Ld. Counsel for the appellant at the eleventh hours tried to raise the contention that respondent is not consumer since, he has carried out commercial activity of printing business. What we find is that whether the said activity was carried out for livelihood as self employment or it is a commercial activity is a mixed question of facts and law to be decided. Basically in reply version filed in District Forum such point was not taken by the appellant and thereby, respondent had no opportunity to lead their evidence in respect of this aspect. Even at the eleventh hour such ground which was not raised before District Forum, cannot be allowed to be raised. We do not find any substance in the matter.

16.     In our considered view, whether the services were availed for commercial purpose and if so whether the services were availed exclusively for the purpose of earning livelihood by means of self-employment was undoubtedly a question of fact and required evidence to be led. It was admittedly not raised in the written version before the District Commission. The memorandum of appeal before the State Commission has not been filed by the electricity distribution co. with its petition. Learned senior counsel has not been able to clarify whether this issue was in fact included in the memorandum of appeal. In other words, it is not being shown with any semblance of adequacy that the opportunity to rebut the same was duly provided to the complainant while filing its reply to the memorandum of appeal. Going by the observations made by the State Commission it appears that this objection was “tried” “at the eleventh hour” (“- - - at the eleventh hour tried to raise the contention that respondent is not consumer since, he has carried out commercial activity - - -”).

17.     We see no reason to take a view different from the one taken by the State Commission in dismissing this objection.

We may also observe that there may be cases where the legal issues raised are such as would not turn upon the nature of facts or are unalloyed points of law not having much nexus with the factual matrix of the case or its factual intricacies. But in matters where it is necessarily to be seen whether the activity undertaken was for commercial purpose and whether it was exclusively for the purpose of earning livelihood through self-employment much would depend upon the facts and as such adequate opportunity to both the sides must be made available so that they may furnish out the relevant facts and evidence on the basis of which the due inference may be drawn. In such cases if the plea is not raised at the appropriate stage when it ought to have been raised and where the opportunity to furnish an adequate rebuttal in that regard could have been availed by the other side, it becomes highly doubtful whether such a plea seeking ouster of the jurisdiction may be raised at a belated stage.

18.     Based on the examination made above we do not notice any jurisdictional error or material irregularity in the State Commission’s impugned Order. The electricity distribution co.’s petition fails.

19.     In a nutshell the electricity distribution co. was though within its right to raise a lawful and justified supplementary demand in case of a mistake or bonafide error, however the onus was on the electricity distribution co. to show that it was in fact a case of bonafide error and it was also dutybound to maintain credible record of the specific date on which the mistake first came to its notice so as to enable computation of limitation. It also owed a duty to provide the salient rationale and calculations to the consumer to clarify / explain the supplementary demand i.e. to clarify / explain the mistake made earlier and the rectification being made subsequently. In the present case it has failed to discharge its said duties.

During the litigation too the electricity distribution co. has disconcertingly not placed the relevant information regarding the rationale and calculations before the State Commission even when specifically asked to do so by the State Commission.

The Act 1986 is for better protection of the interests of consumers, in a fight which is recognizedly amongst unequals often. In the present case, we have an electricity distribution company, with wherewithal, on the one side, and an ordinary consumer, without wherewithal, on the other side.

The deficient and unfair & deceptive acts of the electricity distribution co. as evinced in this case contain ingredients of both ‘deficiency’ as well as ‘unfair trade practice’ under the Act 1986. Both terms (‘deficiency’ and ‘unfair trade practice’) are plainly defined in the Act itself (section 2(1)(g) and section 2(1)(r)). In respect of ‘unfair trade practice’ we may elaborate that the list provided under section 2(1)(r) of the Act 1986 is illustrative and not comprehensive or exhaustive. As such, an unfair method or unfair or deceptive practice, as may be judiciously determined on facts and reason after fair and objective appraisal of the evidence and material on record, would qualify as ‘unfair trade practice’ within the meaning of section 2(1)(r) .

The complaint was of 2008. The State Commission decided the appeal in 2009. The present revision petition was filed before this Commission in 2010. We are now in 2022. A perusal of the proceedings before this Commission from 2010 onwards reflects disfavourably on the way and manner in which the matter has been procrastinated till 2022. 

All this calls for reproval.

20.     The revision petition stands dismissed. An amount of Rs. 25,000/- shall be paid by the electricity distribution co. to the complainant within six weeks to defray litigation expenses of the revisional proceedings before this Commission. A cost of Rs. 1.00 lakh shall also be deposited by the electricity distribution co. in the ‘Consumer Legal Aid Account’ of the District Commission within six weeks. 

21.     The Registry is requested to send a copy each of this Order to the parties in the petition and to their learned counsel as well as to the District Commission immediately. The stenographer is also requested to upload this Order on the website of this Commission immediately.