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TMI Blog2024 (11) TMI 113X X X X Extracts X X X X X X X X Extracts X X X X ..... d not prior to the enforcement thereof. Thus, the Division Bench manifestly erred in holding that the liability incurred by the first respondent prior to the enforcement of the 2003 Act would still be barred by the provisions of section 56(2) thereof. Whether the demand, if it be treated as one under the 1910 Act, is sustainable having regard to the long delay? - HELD THAT:- Section 24 did not refer to any period of limitation as in section 56(2) of the 2003 Act. If the licensee were to opt for institution of a suit, it cannot be contended with any degree of conviction that since section 24 does not prescribe a period of limitation or does not refer to the Limitation Act, 1963 a suit can be instituted at any time as per the convenience of the licensee. Electrical energy is a saleable commodity or goods, which we find usually to be sold on credit. That is, the licensee first supplies the energy and a bill is raised by the licensee specifying the date by which the charges are to be paid, whereafter it is the liability of the consumer to pay it. On neglect to pay, the consequences in section 24(1) are attracted. Although section 24 of the 1910 Act prescribes no period of limitation, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... first respondent to submit a proposal with respect to its plans for a biogas electricity generation unit. The first respondent did not pursue any communication with the second respondent thereafter and, thus, no relief has been sought in this appeal against the latter. II. The appellants and the first respondent entered into an agreement dated 18th November, 1991, for supply of electrical energy to the first respondent s unit at Gwalior, with the first respondent guaranteeing a minimum consumption that would yield an annual revenue of Rs. 34,747/- (Rupees thirty four thousand seven hundred and forty seven rupees only). III. Thereafter, supplementary agreements were executed between the appellants and the first respondent, increasing the consumption of electrical energy. Vide agreement dated 17th November, 1992, the quantum was initially increased from 136 kVA to 169 kVA and vide agreement dated 30th March, 1995, there was a further increase to 305 kVA. IV. The first respondent sought permission from the appellants to install and run an 807 kVA biogas turbo generating set TG set, hereafter for captive use. On 30th May, 1996, the second appellant granted permission to the first respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the first respondent withdrew the first writ petition, seeking to represent the matter before the appellants themselves on account of a change in the policy of the State Government, which no longer required a party to seek permission to install a T.G. set. XI. After a long interlude of two years, new life was breathed into the dispute by the appellants vide issuance of a show cause notice dated 07th January, 2009 second show cause notice, hereafter through Rs 70,50,000/- (Rupees seventy lakh fifty thousand only) was once again quantified as the first respondent s liability for not having utilised the minimum guaranteed consumption for the period between June 1996 and May 2000. The second show cause notice provided a time of thirty (30) days to the first respondent to submit a representation in regard thereto, failing which demand would be raised without further communication. XII. Thereafter, demand was raised in the form of an energy bill dated 04th March, 2009, wherein the pre-existing liability of Rs 70,50,478/- (Rupees seventy lakhs fifty thousand four hundred and seventy eight only) was mentioned as Other Chars. (sic, charges) . XIII. Subsequently, the appellants issued a dem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l that has given rise to the present civil appeal. IMPUGNED JUDGMENT 3. As noted at the beginning, the Division Bench allowed the writ appeal. The second show cause notice was quashed upon application of section 56(2) of the Electricity Act, 2003 2003 Act, hereafter . 3.1 On the question of whether the first respondent was liable to pay the charges for minimum guaranteed consumption, the High Court relied upon the decision in Raymond Limited v. State of M.P. (2001) 1 SCC 534 to observe that the first appellant was within its right to demand minimum guarantee charges but there also existed a corresponding duty upon such appellant to supply electrical energy to such an extent, fulfilment of which duty had not been proved in the present case. 3.2 The High Court then embarked upon the issue of limitation, i.e., whether the appellants could recover dues for the period between June, 1996 and May, 2000, vide the second show cause notice. The question before the High Court was whether the liability which accrued to the first respondent under the Electricity (Supply) Act, 1948 1948 Act, hereafter , i.e., when the first show cause notice was issued, could be enforced after coming into effect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch was incurred prior to the enforcement of the 2003 Act. D. The High Court erred in not appreciating the purport of section 185 of the 2003 Act which saved the application of section 6 of the General Clauses Act, 1897 1897 Act, hereafter . 5. Mr. Jayant Mehta, learned senior counsel for the first respondent, while supporting the impugned judgment submitted as under: A. The first and the second show cause notices were not demands but merely notices for the purposes of quantification and raising of demand in the future. B. There was nothing which prevented the appellants from raising a demand during the pendency of the first writ petition since the High Court had not passed any order of stay. C. Assuming that the 2003 Act had no application to dues arising during a period of time prior to its enforcement w.e.f. 10th June, 2003 and even though section 24 of the Indian Electricity Act, 1910 1910 Act, hereafter did not prescribe a period of limitation, the process of recovery of dues, if any, had to be initiated within the period for institution of a suit, i.e., three (3) years from the date of the appellant s awareness of the sum due, and, at any rate, must be initiated within a reaso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of Appellate Tribunal and for matters connected therewith or incidental thereto Long title of 2003 Act . The 2003 Act, by virtue of section 185(1), repealed, inter alia, the 1910 Act and the 1948 Act. The 1948 Act, since it related primarily to the statutory powers of the central electricity authority, state electricity authorities and generating companies, would be of minimal relevance while deciding the present dispute. 10. We shall first answer the issue of applicability of section 56(2) of the 2003 Act raised by the appellants, which was the turning point of the decision of the Division Bench, i.e., whether the limitation period of two (2) years prescribed by section 56(2) of the 2003 Act bars the appellants from raising demand for the period between June 1996 and May 2000. Though the Division Bench answered this question in the affirmative, in light of two subsequent contrary decisions rendered by this Court precisely on the point, this finding is rendered indefensible and would necessarily have to be set aside. 11. In Kusumam Hotels (P) Ltd. v. Kerala SEB (2008) 13 SCC 213 , this Court, while examining the issue of retrospective discontinuance of tariff concessions for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 56(2) provides that such sum due would not be recoverable after the period of two years from when such sum became first due. The means of recovery provided under Section 56 relate to the remedy of disconnection of electric supply. The right to recover still subsists. (emphasis supplied) 13. As settled by this Court, section 185(5) of the 2003 Act read with section 6 of the 1897 Act would lead to the inescapable conclusion that the limitation period of two (2) years prescribed for recovery of dues under section 56 of the 2003 Act would apply to liabilities arising under the 2003 Act, and not prior to the enforcement thereof. Thus, we hold that the Division Bench manifestly erred in holding that the liability incurred by the first respondent prior to the enforcement of the 2003 Act would still be barred by the provisions of section 56(2) thereof. 14. The first question is, thus, answered against the appellants. 15. We now endeavour to examine, whether the demand raised by the appellants ought to fail on the ground of delay and/or whether the amount due is still recoverable in the manner ordained by section 24 of the 1910 Act. Imperative for us to complete this exercise of analysing t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 15. For the price of goods sold and delivered to be paid for after the expiry of a fixed period of credit. Three years When the period of credit expires. 17. The position in law would have been otherwise, if section 24(1) itself had prescribed a period of limitation different from the one in Article 15 (supra). Since section 24 does not prescribe any period of limitation than that prescribed by the 1963 Act, as is done by the new avatar thereof in the 2003 Act, limitation would set in immediately upon the consumer s neglect to pay the amount mentioned in the bill raised by the licensee. This Court, in Ajmer Vidyut Vitran Nigam Ltd. v. Rahamatullah Khan (2020) 4 SCC 650 , followed by Prem Cottex v. Uttar Haryana Bijli Vitran Nigam Ltd. (2021) 20 SCC 200 , has held that a consumer can be said to have neglected to pay any sum due to the licensee only after a demand is raised by the licensee and if no demand is raised by the licensee, the question of a consumer neglecting to pay any sum due to the licensee does not and cannot arise. Thus, a licensee acquires the right of action to institute a suit immediately after the consumer neglects to pay the amount mentioned in the bill raised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nable period or at any time within which a suit for recovery could be instituted, whether the right of the licensee to claim the unpaid charges would lapse will have to be decided by the court before whom the lis is brought upon consideration of the defence that is raised and the explanation for the delay. We only say that it must depend on the facts of each particular case whether the demand by reason of mere delay should be interdicted or not. 21. Be that as it may, in this case, no suit was instituted within the period of limitation or beyond. We need not examine here whether the remedy by way of a suit for the appellants stood foreclosed, because of the contention of the first respondent that no demand had been raised and the show cause notices cannot be construed as demands. However, did issuance of the second show cause notice (on 07th January, 2009) afford a fresh cause of action for the first respondent to invoke the writ jurisdiction of the High Court and did it turn out to be fatal for the appellants? We shall endeavour to find an answer to this question by first reading the show cause notices issued by the appellants. 22. The operative portion of the first show cause not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a demand being raised by the appellants, need not detain us for long having regard to certain admitted facts, to which we turn at this juncture. Perusal of two orders passed by the High Court, which intervened in course of the longstanding litigation between the parties, is essential. These orders passed on the first writ petition and an interlocutory petition filed therein, seemingly innocuous, have a decisive influence in the present appeal. 25. The first of these is the interim order dated 04th May, 2000 of the High Court on the first writ petition, reading as follows: Heard. Admit. Issue notice returnable at an early date. Requisite steps in this regard be taken within 3 days. The question in regard to the grant of interim relief will be considered after notices are served. In the meanwhile, considering the facts and circumstances as brought on record, it is directed that the operation of the impugned order dated 28.3.2000 a true copy of which has been filed as annexure P/1 to the writ petition shall remain stayed till the next date of listing subject to the following conditions: The petitioner shall deposit the minimum guarantee charges payable as against the load of 807kVA wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, though by an interim order. 29. There is, also, no record of the first respondent having made payment pursuant to the aforementioned orders, despite acceptance thereof (the orders) by conduct. In fact, it is an undisputed position as would appear from the aforesaid factual narrative that the first respondent did not obey the orders foisting liability on it for payment of the minimum guarantee charges; on the contrary, on 21st February, 2006, the first respondent withdrew the first writ petition, with liberty to represent the matter before the respondents owing to some change in policy with regard to running of T.G. sets. In effect, despite the orders dated 04th May, 2000 and 14th February, 2001 staring at its face, the first respondent avoided a decision on the merits of the writ petition and effectively foreclosed its right to have the demand towards minimum guarantee charges nullified. As per the counter affidavit, which the appellants as respondents filed in the second writ petition, no representation was also filed by the first respondent for which leave was obtained as recorded in the order passed on 21st February, 2006. Thus, the orders having become final, leave no room f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so as to render the first respondent liable to pay the same. The challenge to the first show cause notice having failed, as noticed above, the principle of issue estoppel operated as a bar for the first respondent to raise a challenge to the second show cause notice, which had been issued for precisely the same due amount of Rs 70,50,478/- (Rupees seventy lakhs fifty thousand four hundred and seventy eight only). 34. We consider it apposite to refer to a three-Judge Bench decision of this Court in Hope Plantations Ltd. v. Taluk Land Board (1999) 5 SCC 590 , where the principle of issue estoppel was expounded thus: 26. It is settled law that the principles of estoppel and res judicata are based on public policy and justice. Doctrine of res judicata is often treated as a branch of the law of estoppel though these two doctrines differ in some essential particulars. Rule of res judicata prevents the parties to a judicial determination from litigating the same question over again even though the determination may even be demonstratedly wrong. When the proceedings have attained finality, parties are bound by the judgment and are estopped from questioning it. They cannot litigate again on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ped from agitating the same issue of demand vide its second writ petition. 37. The issue of demand arising from the first respondent s failure to consume the monthly minimum units may have been decided vide the order dated 04th May, 2000 without assigning sufficient reasons or, for that matter, even wrongly. The learned Single Judge simply went by the terms of the contract between the parties without examining whether there was any substantial ground for the first respondent to urge that the jurisdictional fact for demanding payment of minimum guarantee charges did not exist and, hence, it was not liable to pay. Such order had also been reiterated by the subsequent order dated 14th February, 2001 of another learned Single Judge, again without due examination of what the case was on behalf of the first respondent and without assignment of any reason. However, does anything turn on it? The answer is an emphatic NO . As has been held in Hope Plantations (supra) and Bhanu Kumar Jain (supra), a point even if wrongly decided binds the party against whom it is decided and the same point cannot be urged in a subsequent suit or proceeding at the same level. The crux of the matter is that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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