12 WP 4588-2023.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 4588 OF 2023 1. M/s. The Kothari Wheels Ltd. 24B, Hadapsar Industrial Estate, Hadapsar Pune 411 013. 2. M/s. The Maharashtra Light Industries 24B, Hadapsar Industrial Estate, Hadapsar Pune 411 013 ... Petitioners. Versus 1. Executive Engineer Maharashtra State Electricity Distribution Company Ltd. (MSEDCL) Bund Garden Division St. Mary’s substation premises, Exhibition Road, opposite Bishop School, Camp, Pune – 411 011 2. The Addl. Executive Engineer, M.S.E.D.C.Ltd., Hadapsar Sub – Div. (4603) Dist. - Pune 411 013 ... Respondents. ————— Mr. Abhishek Pungliya, Advocate for the Petitioners. Mr. Rahul Sinha a/w. Mr.Soham Bhalerao and Harshit Tyagi i/by DSK Legal for the Respondents. ————— Coram : Sharmila U. Deshmukh, J. Reserved on : March 23, 2026 Pronounced on : March 27, 2026 sa_mandawgad 1 of 13 2026:BHC-AS:14837 12 WP 4588-2023.doc JUDGMENT : 1. Rule. With consent of parties, Rule made returnable forthwith and taken up for >nal hearing. 2. By the present Petition >led under Article 227 of the Constitution of India, the challenge is to the judgment and order dated 15th May, 2019 passed by the Electricity Ombudsman (Mumbai), the order dated 7th February, 2019 passed by the Consumer Grievance Redressal Forum (“CGRF”) and order dated 12th June, 2018 issued by the Additional Executive Engineer of the Respondents’ Flying Squad only to the extent that it directs retrospective recovery from Petitioner No.2. 3. The facts necessary to be exposited is that the Gying squad of the Respondent visited the Petitioner’s premises on 15th May, 2018 and the report was that the tariH being applied was for industrial use whereas the activity being carried out was of automobile repairs workshop/maintenance centre of Maruti Suzuki. Pursuant to the spot inspection as communication dated 18th May, 2018 was addressed by the Gying squad to the Additional Executive Engineer to issue bills under Section 126 of Electricity Act, 2003 (“Electricity Act”). 4. Accordingly, the Additional Executive Engineer issued provisional assessment bill of Rs.23,65,340/- on 21st May, 2018 to which a detailed reply was submitted by the Petitioner on 7th June, sa_mandawgad 2 of 13 12 WP 4588-2023.doc 2018. After hearing the Petitioners, the Additional Executive Engineer on 7th June, 2018 in his capacity as Assessing OJcer ordered that the bill issued under Section 126 be cancelled and plain tariH diHerence for the period of one year prior to the date of change of tariH by charged from the consumer. 5. Accordingly, revised bill of Rs.3,61,320/- was issued to the Petitioner No.1 towards the diHerence in tariH between industrial and commercial category for the period June 2017 to June 2018 which was paid under protest. The Petitioners >led grievance with the Consumer Grievance Redressal Forum on 13th November, 2018 which dismissed the grievance. The order of dismissal came to be challenged before the Electricity Ombudsman and was dismissed vide impugned order dated 15th May, 2018. Hence, the present Petition has been >led. 6. Learned counsel appearing for the Petitioners submit that by order of 12th June, 2018, as the Assessing Authority cancelled the bill issued under Section 126 of Electricity Act, there could not have any retrospective imposition of tariH diHerence of one year. He would submit that the CGRF has held that the consequence of the order of 12th June, 2018 is that the revised bill was required to be issued considering the actual activity carried out by the consumer without noticing that the issuance of revised bill for one year was under sa_mandawgad 3 of 13 12 WP 4588-2023.doc Section 126(5) of Electricity Act. He would further point out the order of the Electricity Ombudsman and would submit that the impugned order of 15th May, 2019 erroneously records that the case involves an error through oversight in not making the appropriate changes in the system. 7. He would further submit that the present case is not a case of raising additional or supplementary demand beyond the period of limitation due to mistake or negligence. He would point out the order of this Court passed on 1st April, 2014 in the petition >led by Petitioner No.1 against the Respondents where this Court had held that the activities of Petitioner No.1 is manufacturing activity and that the >nding of the Superintendent Engineer therein that the Respondent No.1 had used electricity for commercial purposes cannot be faulted with. He submits that the Respondents did not initiate any proceedings under Section 126 of the EC Act and did not change the applicable tariH after the spot inspection which was conducted on 9th August, 2016 by reason of the order of this Court dated 1st April, 2014. He submits that the same is con>rmed by the fact that the second spot inspection dated 15th May, 2018 led to Section 126 proceedings only after the commercial Circular No.302 was made applicable from 1st April, 2018. He submits that as the amount of Rs.3,61,320/- was paid under protest, the said amount be refunded. sa_mandawgad 4 of 13 12 WP 4588-2023.doc 8. Per contra, learned counsel appearing for the Respondents submits that the challenge before the Bombay High Court in Writ Petition No.11197 of 2013 was by reason of categorising the Petitioners’ Chinchwad plan which is unrelated to the subject petition. He submits that as per commercial Circular No.284 dated 3rd November, 2016, the Petitioners’ activities namely automobile and other types of repairs fall under the commercial category. He submits that by way of commercial Circular No.302 dated 31st March, 2018, there was a revision in tariH order by MERC and that the circular did not make any changes in reference to the tariH category and the Petitioners’ activity remained under commercial category as applicable from 1st April, 2017. He submits that order of 12th June, 2018 was issued by the statutory Assessing Authority under Section 126 of the EC Act, who also assumes the role of an oJcer of the Respondent-Company having designation as Additional Executive Engineer and that both the directions though issued in a single document are liable to be read separately and independently. 9. He further submits that a supplementary bill for the period of June, 2017 till June, 2018 came to be issued by the Respondents as per the said order dated 12th June, 2018. He submits that the Additional Executive OJcer acting as an Assessing OJcer ordered cancellation of the bill issued under Section 126 of the EC Act holding sa_mandawgad 5 of 13 12 WP 4588-2023.doc it to not be an unauthorized use of electricity however, as an Additional Executive Engineer, he had all the powers to issue diHerential bill for the period preceding the date of knowledge. He submits that it was always the case of the Respondents that the Additional Executive Engineer has considered the commercial Circular No.284 dated 3rd November, 2016 whereby the Petitioners’ activity was categorized under the commercial tariH category and accordingly, the Petitioners were issued the supplementary bill dated 6th July, 2018 for the amount of Rs.3,61,320/- for a period from June, 2017 to June, 2018. 10. He submits that under the provisions of Section 56(2) of the EC Act, it is permissible to recover the diHerential arrears within a period of two years from when it is >rst due i.e. the date of raising a valid bill upon a consumer. He would submit that although the Assessing Authority would not have the power to direct issuance of a diHerential bill without a case of unauthorized usage, the directions appears to be stray remark in the order dated 12th June, 2018 and the supplementary bill has been issued under Section 56(2) of the Electricity Act. He submits that the proceedings pertaining to issuance of tariH diHerence bill operates independently from the proceedings under Section 126 of which is well settled. He would submit that the contentions raised now were not raised before the CGRF as well as sa_mandawgad 6 of 13 12 WP 4588-2023.doc the Electricity Ombudsman. He submits that there is no embargo on the Respondents to issue a fresh supplementary bill for the applicable period independent of the assessment proceedings under Section 126 of the Electricity Act and accordingly liberty be allowed. 11. Rival contentions now fall for determination. 12. It is an undisputed position that the Petitioners connection was classi>ed as industrial by the Respondents. Though the learned counsel for the Petitioners would refer to the spot inspections of the year 2016, perusal of the impugned orders does not indicate any reference to the earlier spot inspections. The order of Electricity Ombudsman records the submission of the Petitioners as regards the order passed by this Court in Writ Petition No.11197 of 2013, which was also not pressed before the Electricity Ombudsmen. 13. The issue is therefore required to be considered on the basis of spot inspection of 15th May, 2018 and the order of Assessing Authority dated 12th June, 2018. 14. The Assessing Authority by order of 12th June, 2018 considered the spot inspection report of 15th May, 2018 as well as the commercial Circular No.302 of 31st May, 2018.The Assessing Authority vide order dated 12th June, 2018 noted that the premises was taken on rent by the Petitioner No 1 from the Petitioner No.2 and there is no agreement placed on record. It noted that the Petitioner No.2 was sa_mandawgad 7 of 13 12 WP 4588-2023.doc carrying out manufacturing activities whereas the Petitioner No.1 is carrying on business of service and repairs of automobiles alongwith >xing of new spare parts and denting and painting. It noted that there is no authorisation letter as regards the Petitioner No.1 being authorised service station of Maruti Suzuki. It was held by the Assessing Authority that though the premises of the consumer was behind the MSEDCL Sub Division OJce of Hadapsar Industrial Sub Division till date of inspection by Flying Squad no action for tariH change or under Section 126 was initiated. The Assessing Authority’s conclusion reads as under: “Thus, the exact date of, period of occupying said premises by M/s Kothari Wheels cannot be concluded. Hence, I as an assessing oJcer comes to a conclusion that the tariH of the said consumer should be immediately changed from LT V B II to LTII Commercial and the bill issued u/s 126 be cancelled and plain tariH diHerence for the period of 1 year prior to the date of change of tariH be charged from the said consumer. The consumer should be given 10 equal installments for this plain tariH diHerence and if he fails to pay the instalments and tariH diHerence amount the action as per prescribed procedure of MSEDCL should be taken from your end for disconnection.” 15. What was challenged before the Assessing Authority was the provisional bill issued under Section 126 of the EC Act, which provides sa_mandawgad 8 of 13 12 WP 4588-2023.doc for provisional assessment upon arriving at a >nding that the consumer is indulging in unauthorised use of electricity after conducting an inspection. Sub section (5) of Section 126 provides that if the Assessing Authority comes to a conclusion that unauthorized use of electricity has taken place, the assessment shall be made for the entire period during which such unauthorized use of electricity has taken place and if however the period cannot be ascertained it shall be limited to period of 12 months preceding the date of inspection. 16. The provisions of section 126 therefore make it clear that it is only where there is an unauthorized use of electricity and it is diJcult to ascertain the period during which the unauthorized use of electricity has taken place, that the period shall be con>ned to a period of 12 months immediately preceding the date of inspection. The order of the Assessing Authority records a categorical >nding that the period of taking premises on rent cannot be concluded. After arriving at the said >nding it orders that the bill issued under Section 126 be cancelled. After having ordered the cancellation of bill under Section 126, it was thereafter not open for the Assessing Authority to further direct the plain tariH diHerence to be charged for a period of one year prior to the date of change of tariH from the consumer. The Assessing Authority while exercising powers under Section 126 was sa_mandawgad 9 of 13 12 WP 4588-2023.doc deciding the issue of correctness of the provisional assessment bill and was required to pass a >nal order of assessment after hearing the objections as contemplated under Section 126(3) of the EC Act. The order of cancellation the bill under section 126, constitutes setting aside of the provisional assessment and thereafter there was no question of issuing any further directions for charging the tariH diHerence for period of one year prior to the date of change of tariH. The wordings of the order of the Assessing Authority are in terms of Section 126(5) of EC Act, which directions could not have been issued once the provisional bill has been ordered to be cancelled. 17. Though it is sought to be contended by learned counsel appearing for the Respondents that two diHerent directions have been passed by the Assessing Authority in two diHerent capacities as Assessing Authority and Additional Executive Engineer respectively and that the directions for issuance of a diHerential bill could be directed in the capacity as an Additional Executive Engineer can only be stated to be rejected. The proceedings which were being conducted before the Assessing Authority was under Section 126(3) of the EC Act in the capacity as an Assessing OJcer and there was no question of diHerent directions being passed in diHerent capacity in a composite order passed under Section 126(3) of the EC Act. The revised bill which was subsequently issued makes a speci>c reference sa_mandawgad 10 of 13 12 WP 4588-2023.doc to the order of 12th June, 2018 and was therefore passed not on the basis of the applicability of the wrong tariH code and relatable to Section 56(2) of the Electricity Act but was in furtherance of the order of 12th June, 2018 which was an order passed by the Assessing Authority. 18. The CGRF has held that the activity of the petitioner No.1 falls in commercial activity and the said change of establishment were not informed to the utility properly. The CGRF accepts the submission of the Petitioners that the proceedings under Section 126 of the EC Act is cancelled by the order of 12th June, 2018, however, erroneously holds that a consequence of the order is that revised bill will have to be issued considering the actual activity carried out by the consumer between the period June 2017 to June 2018. The CGRC has therefore conGated the powers under Section 126 of the EC Act and Section 56(2) of the EC Act to uphold the directions passed in the order of 12th June, 2018. Neither the Assessing Authority nor the CGRC has based on its >ndings on the applicability of commercial Circular No.284 and even accepting the applicability of the said commercial circular, the revised bill in accordance with the commercial circular could not have been directed by the order passed under Section 126 (3) of the EC Act. 19. The Electricity Ombudsman has considered the submissions of the Petitioners that as per the tariH order of 3rd November, 2016, the sa_mandawgad 11 of 13 12 WP 4588-2023.doc commercial Circular No.284 was issued which directed the proper categorization by actual >eld inspection. It held that inadvertently due to oversight the tariH was not changed and that it is not an abrupt change to tariH category but an error through oversight and the Respondent is entitled to recover the arrears to the extent of two years prior to the date of detection. The Electricity Ombudsman failed to consider the submissions of the Petitioners that the action under Section 126 was dropped by the order of 12th June, 2018 and has erroneously held that through oversight an appropriate change was not made by the Respondents in the appropriate tariH. 20. The >ndings of the Electricity Ombudsman is contrary to the material on record as regards the order of 12th June, 2018 and the revised bill which clearly states that the same is in furtherance of the order dated 12th June, 2018. It was therefore not a case of issuance of a bill as per the revised tariH category but issuance of a bill in furtherance of order of 12th June, 2018, which could not have been issued once the Assessing Authority orders the cancellation of the provisional assessment bill. 21. In light of the above discussion, the impugned dated 15th May, 2019 passed by the Electricity Ombudsman, Mumbai, the impugned order dated 7th February, 2019 passed by the CGRC and the directions in the order of 12th June, 2018 directing levying of tariH diHerence for sa_mandawgad 12 of 13 12 WP 4588-2023.doc the period of one year prior to the date of change of tariH are clearly unsustainable and are hereby quashed and set aside. 22. The Assessing Authority could not have passed the direction of levying plain tariH diHerence while adjudicating the objections against the provisional assessment bill under Section 126 of EC Act. It is open for the Respondents to issue a fresh diHerential bill in accordance with law notwithstanding the fact that the impugned orders are being quashed and set aside. In event such a diHerential bill is raised, the same if challenged, be considered on its own merits and in accordance with law and uninGuenced by the quashing and setting aside of the impugned orders in the present proceedings. As the Petitioner have paid the amount of Rs.3,61,320/- under protest, the Respondents are directed to refund the sum of Rs 3,61,320/ within a period of eight weeks from date of uploading of the order failing which the amount to carry interest @ 6% p.a. till payment or realisation. 23. The Petition is allowed. Rule is made absolute in the above terms. [Sharmila U. Deshmukh, J.] sa_mandawgad 13 of 13 Signed by: Sanjay A. Mandawgad Designation: PA To Honourable Judge Date: 27/03/2026 17:26:17